Why Farmers Quit: A County-Level Analysis

We identify the effects of alternative explanatory variables on the propensity of U.S. farmers to cease farming, with a particular emphasis on understanding the roles of off-farm employment and federal farm program payments. Conventional ordinary least squares analysis using all counties suggests that off-farm employment has no statistical effect on the (net) number of farmers quitting between 1987 and 1997, ceteris paribus. A more refined analysis, which separates counties losing farmers from those that gained farmers, reveals subtle and less clear-cut effects of off-farm employment (and federal program payments) on farm exits.