Farm Statistics and Incorporation Rates
Over 500,000 farms are scattered across Colombia. Most are small, family-owned farms. Some of the most biologically diverse landscapes exist in the coffee regions.
In 2011, Canada had 205,730 farms, down 10.3% since the previous census. The number of farms declined after 1941 due to urbanization. Only 5.06% of US farms are incorporated. Partnerships allow farmers to share resources for benefits like economies of scale.
The Incorporation Decision
Most farms are not incorporated, which provides limited liability. Incorporation can provide tax savings and liability protection. For high profits, incorporation allows lower individual taxes, with income kept in the corporation. This benefits farms reinvesting or paying debt. The small business tax rate applies to the first $500,000 in profit. If not incorporated, the farmer would pay 50% personal tax on that income.
Kim Gerencser said incorporate only if it fits your operations and finances, not just for taxes. The decision to incorporate considers operations, taxes, and family. Farms get 26% of the fair market value for property taxes versus 45% for residential.
Quality is unaffected by incorporation or size. Unchecked corporate power leaves farmers vulnerable. Processors can suppress prices offered to farmers.
US Farm Ownership
Bill Gates owns 269,000 acres of farmland as an investment. Overall, corporations are a small percentage of farms but a larger percentage of nurseries, vegetable, and cotton farms. Most U.S. farms are family-owned and operated. S Corporation eligibility requires U.S. citizen shareholders, one class of stock, and less than 100 shareholders. Texas has the most family-owned farms.
Farm Ownership and Production
Most farms are small family farms. They operate half of US farmland, generating 21% of production. Midsize and large family farms account for 66% of production. Non-family farms represent 2.1% of farms and 12% of production.
The 2012 census shows 5.06% of farms are corporations, including 4.51% family-owned and 0.55% non-family. Of family corporations, 98% are small with 10 or fewer shareholders.