November 9th John Ikerd, Professor Emeritus of Agricultural
Economics, University of Missouri, gave the keynote
address to the Tilth Producers conference in Yakima,
Washington. His talk, "The Family Farm on the Cutting
Edge," provides an incisive analysis of industrial
agriculture and the emergence of what he calls "the
New American farmer."
We've divided his address into three parts, which
will be featured over the next several weeks:
Part 2, December 3, 2002: A growing
interest among consumers in sustainable farming
Part 3, December 12, 2002: The emergence
of a new breed of farmers.
NOV. 27, 2002: American agriculture is in the midst
of a "great transition." Agriculture as we have known
it, with family farms and viable rural communities, is being rapidly
transformed into an industrial agriculture, with factory farms and
dying rural communities. Such times of change are times of great
risks but also times of great opportunity. There are no guarantees
of survival or success. But, an understanding of the forces of change
can be quite helpful in coping with the risks of change and in realizing
the opportunities. The forces driving change in American agriculture
today are the continuing forces of industrialization.
The industrialization of agriculture is not a new phenomenon. The
trend toward specialization, standardization, and consolidation-toward
industrialization-began around the turn of the 20th century, with
the mechanization of agriculture. However, the chemical technologies
that emerged from World War II, particularly commercial fertilizers
and pesticides, accelerated the industrialization process. Until
recently, the most obvious consequence of this process had been
larger farms, fewer farms, and fewer farm families. But, farmers
and families, real people, were still making the decisions concerning
what was produced, how it was produced, who it was produced for,
and they considered how their decisions might affect the land and
||"For the most part, contractual arrangements
determine who makes the decisions, leaving "producers"
as little more than landlords, tractor drivers, or hog house
janitors, but certainly not with the traditional role of "farmer."
The agri-business corporations dictating the terms of these
contracts are legal entities but they are not people. They have
no families, no friends, no communities, and increasingly, no
national citizenship. "
Until recently, the specialization, standardization, and consolidation
of farming had been driven by the decisions of individual, family
farmers. Farmers freely chose to adopt the new mechanical and chemical
technologies, many of which were developed through publicly supported
research, because they seemed to promise increased profits. These
technologies invariably promised greater production efficiency,
which would reduce cost per unit of production, leaving the farmer
with a wider profit margin. Increased efficiency generally meant
that each farmer could produce more than before, in fact, needed
to produce more to justify the new technological investment and
to realize the full benefit of the new technology.
However, the "early adopters" were the only farmers to
realize increased profits. As more and more farmers adopted a new
technology, a new kind of machine or agri-chemical, total production
invariably increased, because each farmer now was compelled to produce
more. The new technologies allowed farmers to reduce costs per unit,
but only if they produced more units. With increased production,
market prices invariably fell, leaving even the innovators no better
off than before. The later adopters rarely had a chance to recoup
their investment before prices fell and profits were gone. In cases
where the government supported commodity prices, land prices rose
instead, with the same net effect on profits. Eventually, technological
adoption was motivated by survival rather than profits, and those
farmers who adopted too late didn't survive.
Some farmers had to fail so others could expand-could farm more
land or produce more livestock-in order to realize the full benefits
of the new technologies. In fact, prices invariably stayed low enough
long enough to force enough farmers out of business to accommodate
the new industrial technologies. And, after each "technological
adjustment" was complete, there was always another round of
technology waiting for adoption. Chronic crisis and continuing farm
failures have been a necessary consequence of agricultural industrialization.
American farming: In the final throes
of the industrialization process
The current "corporatization" of agriculture is but the
final stage of the industrialization process. As the new technologies
have required larger and larger operations to justify the new investments,
capital requirements have exceeded the credit capacity of all but
the largest of individual farmers. Many farmers have formed family
corporations to enhance their ability to raise investment capital.
Increasingly, however, only the "publicly owned" corporations
are able to meet the agricultural capital requirements of an increasingly
industrial agriculture. Economists now proclaim corporate contracts
as farmers' only means of gaining access to the technology, capital,
and markets they will need to be competitive in the 21st century.
Most of the land and basic production facilities are still owned
by individual farmers and family corporations, but production increasingly
is carried out under direction of giant agribusiness corporations.
The industrialization and corporatization of American agriculture
has been supported by government policies-including government farm
programs and publicly supported research and education programs.
The overriding objective of such policies has been to increase the
efficiency of agriculture for the ultimate benefit of consumers,
in the form of lower food prices. The political rhetoric in support
of family farming has continued; but government programs obviously
have supported continued specialization, standardization, and consolidation,
which have ensured the demise of the family farm.
At the signing of the new "Farm Security and Rural Investment
Act of 2002," the President said, "The farm bill will
strengthen the farm economy...will promote farmer independence,
and preserve the farm way of life for generations." These same
kinds of claims have been made for every U.S. Farm Bill since the
1930s. Yet, the farm economy has continually floundered and American
agriculture has limped from one crisis to the next. And now, independent
family farmers are becoming a rarity. This New Farm® Bill will not
do any of the things promised. It simply continues the policies
of the past, which subsidize wealthy landowners and the agribusiness
corporations, at the expense of family farmers. The New Farm® Bill
won't promote farmer independence or preserve the farm way of life.
It most certainly will not provide for either "farm security"
or "food security," nor will it improve the lives of people
in rural America
With increasing corporate control of the food system, even those
independent producers with lower cost than the contract producers
are finding it difficult to compete. The corporations now control
much of the new technology, particularly biotechnology, to which
farmers can gain access only through contractual arrangements. Large
corporate processors increasingly procure nearly all of their raw
materials through contracts, thus denying market access, or at least
denying competitive markets, to non-contract producers. The corporatization
of agriculture is now driven much more by the quest for increased
market share and greater market power than for increased production
Family corporations are not all that different from individuals;
their decisions reflect the basic values of the family. Even with
"closely held" corporations, with few stockholders, decisions
can still reflect the basic social and ethical values of the owners.
However, once the number of stockholders becomes large, as in large
publicly held corporations, and management is essentially separated
from ownership, the motives for decision making become profits and
growth. Most of the stock in such corporations is owned by mutual
funds and pension funds, and the stockholders are concerned foremost,
if not completely, with growth in the value of their investment.
A corporately controlled agriculture is fundamentally different
from the agriculture we have known in the past.
Who owns the farm?
Americans have lost control over
their own food supply.
Americans are losing control over American agriculture. Increasingly,
the decisions concerning what will be produced, how much will be
produced, where it will be produced, how it will be produced, and
who will produce it, are being made, not by American citizens, but
by multinational corporations. The people who own the land and do
the work may still be Americans, but the decisions are being made
by someone else, somewhere else. For the most part, contractual
arrangements determine who makes the decisions, leaving "producers"
as little more than landlords, tractor drivers, or hog house janitors,
but certainly not with the traditional role of "farmer."
The agribusiness corporations dictating the terms of these contracts
are legal entities but they are not people. They have no families,
no friends, no communities, and increasingly, no national citizenship.
The people who work for these corporations are real people and are
citizens of some nation-with families, friends, and communities.
But, once corporate ownership is separated from management, as in
the case of most publicly held corporations, the people within corporations
have no choice but serve the economic needs of the corporation for
profits and growth. The multinational agribusiness corporations
that increasingly control American agriculture have stockholders
scattered throughout the world, and thus, have no citizenship.
||"Before corporate agriculture abandons
America, they will have turned much of rural America into a
'third-world' wasteland. Polluted streams and groundwater, abandoned
waste lagoons, eroded and depleted topsoil,
depleted aquifers, rural crime, a de-skilled workforce, and
decaying rural communities; these will be the legacies of the
corporatization of American agriculture. "
Increasingly, the multinational corporations will find it more
profitable to produce somewhere other than in America. Our land
and labor costs are simply too high for America to compete with
places such as South America, Australia, South Africa, or China
in production of basic agricultural commodities-corn, soybeans,
hogs, cattle, cotton, rice, etc. We have higher-paying employment
opportunities for our labor and higher-valued residential uses for
our land. Eventually, the agribusiness corporations, having no commitment
to producing in America, will simply move their operations elsewhere-to
somewhere that will give their stockholder a higher return on their
In their struggle to stay competitive in global markets, American
producers will feel compelled to accept contractual arrangements
that result in the exploitation of both land and people. The industrialization
of poultry and hog production, with large-scale confinement animal
feeding operations, provides a prime example of such exploitation.
These operations consistently pollute the rural environment with
odors and waste, yield minimum returns at best for laborers and
investors, and drive family farming operations out of business.
Even so, many producers see contracting as the only means by which
they can maintain access to markets. The same basic trend is already
well underway in dairy; and with genetic patenting and biotechnology,
corporate control of crop production will soon follow.
Rural America: Payig
the ultimate cost of industrial agriculture
Before corporate agriculture abandons America, they will have
turned much of rural America into a "third-world" wasteland.
Polluted streams and groundwater, abandoned waste lagoons, eroded
and depleted topsoil, depleted aquifers, rural crime, a de-skilled
workforce, and decaying rural communities; these will be the legacies
of the corporatization of American agriculture. Americans will fight
back with more environmental rules and regulations, but eventually,
short-run economic considerations will prevail. Ultimately, however,
the corporations will find it cheaper to produce food and fiber
elsewhere in the world. And with a global, "free market"
economy, there will be nothing to keep them from moving their agricultural
We don't need a lot of data, facts, or figures to understand what
is happing to American agriculture; it's just plain common sense.
In making agriculture more efficient, we have chosen industrial
technologies and methods, which have resulted in fewer, larger farming
operations, and now, in corporate control of agriculture. In the
process, we have lost both the security of our farms and the food
security of our nation. These outcomes are the logical consequences
of the objectives and strategies we have pursued. We have sacrificed
our security for the sake of efficiency. It's not all that difficult
to understand; it's just common sense.
Many economists, however, argue that we need not be concerned about
becoming dependent upon the rest of the world for our food. They
advise, it is only logical that America moves beyond farming in
the new global era of economic development, that we have higher
valued uses for our land and labor resources. We will be even better
fed at a lower cost, they say, because food can now be produced
cheaper elsewhere in the world. But in times of crisis, a nation
that can't feed itself is no more secure than is a nation that can't
defend itself. Perhaps we won't abandon agriculture completely,
but we could easily become as dependent on the rest of the world
for our food as we are today for our oil. Perhaps, we can keep our
food imports flowing, as we do for oil, but how large a military
force will it take, how many "small wars" will we have
to fight, and how many people will be killed.