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Facts are behind the figures

KANDIYOHI COUNTY, Minn. -- According to some, I am part of a giant agribusiness -- the worst kind of factory farmer. What qualifies me for this dubious distinction? Nothing except that, based on U.S. Department of Agriculture figures, my farm fal...

KANDIYOHI COUNTY, Minn. -- According to some, I am part of a giant agribusiness -- the worst kind of factory farmer.

What qualifies me for this dubious distinction? Nothing except that, based on U.S. Department of Agriculture figures, my farm falls in the biggest six percent of U.S. farms. And these farms account for the bulk of federal farm policy support.

It sounds pretty damning, which is why it is the top talking point used by opponents of farm policy looking to dismantle a system they say is too tilted to agribusinesses and oppresses small, family farms.

But there's a lot more to this story than a 10-second sound byte would let on. For example, USDA considers any entity with sales of more than $1,000 to be a farm, so that 6 percent figure is a little misleading.

The weekend grower on the side of the road selling tomatoes from her garden would be a farmer in the government's eyes. Ditto for the retiree trying his hand at wine-making.

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Ironically, my business probably is more in line with what most of us consider a farm. It is family run. It was passed down to me from my father and grandfather. It is a full-time effort to support my wife and kids.

And, to make it my livelihood, it has sales exceeding $500,000.

Again, that figure can be spun to sound really bad, since most people don't know the difference between revenue and profit. But remember, the $500,000 represents gross sales, not how much money the farm or farmer is making.

A farmer may produce half-a-million dollars worth of goods, but might have to spend just as much to grow the crop, making it a break-even proposition and sometimes a losing one.

Farming giants?

It seems odd to call these farms corporate titans, especially when you consider that the Small Business Administration classifies most businesses as "small" if their gross sales are less than $7 million a year.

How much profit can a "giant corporate farm" such as mine hope to generate? USDA puts profit margins in agriculture at 10 to 15 percent.

So under favorable circumstances -- Mother Nature cooperates, market prices are fair, oil doesn't spike and you don't run into any problems such as equipment breaking down and needing expensive repairs -- that $500,000 in sales could generate $50,000 to $75,000 in profit a year, according to the USDA's estimates.

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No corporate executive in his or her right mind would get into such a risky business with such little profit upside. That's why 97 percent of U.S. farms still are owned by families, not by corporations such as Cargill, ADM or Kraft.

I recognize that some may construe this column as a complaint about farm profits or an attack on smaller farm operations, but that is not my intent.

Farm prices are way up right now and near an all-time high -- and as a result, federal spending is way down. And I know that if America is going to meet tomorrow's food and fiber needs, it will take farms of all shapes and sizes.

Piece of the puzzle

Smaller, organic growers are part of this puzzle, as are larger, conventional operations such as mine, which supply more than three-quarters of our country's food and fiber.

Secretary of State Hillary Clinton said recently, "We must redouble our commitment to sustainable agriculture and food security."

She's right. If this nation is going to keep pace with an exploding global population, and if it's going to do it in a sustainable way, responsible farmers of all sizes have to come together in supporting and encouraging technology and best management practices.

In addition, America needs to urge the next generation to get involved in farming, despite the low profit margins and risk, and to replace aging growers who are retiring.

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Our farmers and ranchers are a thin green line standing between a prosperous nation and a hungry world. It's time to refocus on holding all parts of this thin green line instead of tearing it apart with manipulated numbers and disingenuous spin.

Editor's Note: Hultgren is a corn farmer from Kandiyohi County, Minn. This column first was written for The Hand That Feeds U.S. at www.thehandthatfeedsus.org .

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