Illinois farmers are increasingly dependent on non-farm jobs

[July 20, 2023]  By Zeta Cross | The Center Square contributor

(The Center Square) – Agricultural communities depend on non-farm jobs to keep farming.

In rural America, people think that agriculture “drives the [economic] bus,” said Mark White, agricultural economics professor with the University of Illinois Extension. In reality, rural areas have complex, diverse economies that farm households depend on. Production agriculture is only one of many sources of economic activity in Illinois’ non-metro counties.

Ninety-two percent of family farms are small operations with less than $350,000 in gross cash farm income. Non-farm jobs give farmers needed income flow and stability, White said.

People are surprised to learn that “nearly 56% of principal farm operators have a main job off the farm,” White said. An even higher percentage of younger farmers, 63%, have payroll jobs off the farm.

The biggest reason for off-farm jobs is steady income, White said. Payroll income is steadier and more stable than farm income.

Family farmers also depend on off-farm jobs to provide benefits like health insurance and retirement benefits. Over half of farm households surveyed cited benefits as a reason for off-farm jobs, according to the report The Importance of Off Farm Income to the Agricultural Economy for CoBank.

Fifty-five percent of farm households get their health insurance from private employers. Eighteen percent purchase health insurance for self-employed people directly from providers. Retirees use public insurance.

Off-farm jobs include everything from teaching, health care and accounting to trucking and farm input sales. Most farm operators and their spouses work in managerial and professional jobs, the CoBank report said.

The local economy also provides jobs for the children of farm households, enabling them to stay in the community when they finish school, unless they decide to become farmers themselves, White said.

Earned pay from wages and self-employment make up the largest share, 59%, of non-farm income for Illinois family farmers. Unearned income from Social Security, pensions and investments provides other sources of non-farm income.

The importance of non-farm income for farmers means that the agricultural sector depends on a healthy regional economy in order to have a successful farm operation.

“If you have a local community that is really struggling, those job opportunities are not there,” White said. The health of local economies in non-farm activities is critical, he said.

“A thriving community supports a strong agricultural sector. A strong agricultural sector needs that other piece,” White said.