Even as farming has changed markedly over the past century, so,
too, have farm households changedboth in the way they farm
and in the extent to which they participate in and identify with
nonfarm activities, such as off-farm work and investment opportunities.
Conventional wisdom has been slow to recognize this evolution.
Traditional assessments of the economic well-being of the farming
population focused on farm income. Earnings from farming, however,
are low for most farming households, and farm households have increasingly
turned to nonfarm-related sources of income. A
more accurate assessment of the well-being of those farming
today would incorporate farm households' income from farm and off-farm
sources. Wealthas reflected by farm and nonfarm assetsand
its role in shaping farm household consumption also need to be considered
in any assessment of household well-being.
Most farm households participate in nonfarm activities and earn
a major portion of their income from off-farm employment. (Actual
income levels vary with household characteristics, including age,
education, and family size.) Off-farm employment raises and stabilizes
farm household income. In fact, when both farm and off-farm activities
are considered, the average farm household has higher income, wealth,
and consumption levels than the average U.S. household. Nonetheless,
about 6 percent of farm households remain disadvantaged, having
lower average income and wealth than the average U.S. household.