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Infrastructure improvements, technology important

Ag commish: Family farms have place in state

Even though the trend continues toward larger corporate farms, a recent pattern of new, smaller farms in which families benefit from a supplemental income has developed in Mississippi.

“The family farm does have a place in Mississippi’s future — whether the farm is self-sustaining or supplementary to a family’s income derived in a nearby town or city,” said Lester Spell Jr., state commissioner of agriculture and commerce. “It offers a place for on-the-ground innovation and practical application. It offers a favorable environment for the maintenance and development of the positive values so often ascribed to our rural areas. While change is inevitable and cannot be ignored, the challenge of agriculture and its leadership will be how to facilitate that change while preserving that which should not change.”

Dr. Robert Moore, assistant professor and member of the Mississippi State University Agribusiness Institute, said family farms could be assisted with infrastructure improvements, such as high-speed connection Internet access, a subject that’s rarely addressed.

“Do we have the capability of getting Internet access to some of the smaller farms in the state? Sometimes, getting a phone line in some of these areas is a major event. Having a high-speed connection is even more difficult,” said Moore. “Will it help smaller farms? Yes, but one of the problems with the agribusiness community is, ‘Here it is. How can we use it to our advantage?’ There’s a real lack of knowledge on how an Internet presence can be used effectively. For example, what happens if a farmer decides to sell his products over the Web and he gets an order from outside the country? Now he’s an exporter. Once you go online, you have to think about those issues. Another example, some states allow certain pesticides, some countries allow certain pesticides. A lot of it is available for purchase over the Web. It’s left up to the buyer to know the laws and regulations of certain purchases.”

In the last 20 years, the farm-based rural economy has changed dramatically, with trends toward mechanization and reduced labor requirements accelerating, Spell said.

“Computerization has shown up increasingly on the farms,” he said. “Even smaller farmer operations have had to bring in technology, whether by computers, genetic seeds or increasingly sophisticated chemicals. While less amounts of chemicals are being used, the costs of these have gone up so that the farmer has not actually realized savings.”

The business community can assist farmers by insuring legislative representation, both state and national, that will address issues such as estate taxes, property taxes and provide financial incentives beneficial to the farmer, Spell said.

“The farmer will need to work for the passage of legislation or regulations that will insure him a place at the table when it comes to negotiation of production contracts,” Spell said. “Many farmers today are finding themselves in contract situations in which, due to financial loans and other financial circumstances, they have no effective contract negotiating position. In such instances, a take-it-or-leave-it mentality can be wielded by a few unscrupulous companies who will take advantage of their bargaining situations. This results in the farmer really not being better off, or worse, losing money if he enters into a contract. This weakens the whole industry. In such instances, particularly if the state’s loan money is involved, legislation is needed which insures the ability of the farmer to repay the state its loan. Fairness at the contract table would be helpful, benefiting the farmer as well as the buyer of the product from the farmer. A steady supply of product benefits all and is in the state’s best interest.”

What happens to the family farm when it passes from one generation to another? Many generational farmers keep the farm going while others, who may have chosen different occupations or live a distance away, let someone else take over farming duties while they retain the land as an investment, said Steve Brunson, Mid-South vice president of Farmers National Co., the largest professional farm and ranch company in the U.S.

Since 1986, Brunson has amassed a farm management portfolio of mostly absentee landowners that includes 30,000 acres in Mississippi, with the majority in the Delta. FNC, an employee-owned corporation, was established in 1929 by a small group of farmers and investors, sold to Met Life in 1986 and was repurchased by FNC employees last month.

“Interest in turning over family farmland to management companies is growing all the time,” he said. “As farmland passes from one generation to another, families that don’t farm anymore but own the land are looking into professional farm management services. This service helps keep the family farms alive.”

In the past, farmland has not always been viewed as part of an investment portfolio, particularly for absentee owners who have relocated, Brunson said.

“Just as they are accustomed to professional help in other areas of their life, such as accounting or investing in the stock market, farm owners are looking to professional asset management for agriculture,” he said. “We let them know what possible extra investment needs to be made in the land to improve returns and how to evaluate the returns to the farmland compared to returns on other investments.”

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Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.

About Lynne W. Jeter

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