Corporate Agriculture and Family Farms
John Ikerd
University of Missouri
Presented at National Conference of Block and Bridle, national collegiate academic organization, St. Louis, MO, January 20, 2001.
At the turn of the 20th century, America was still an agrarian nation. In 1900, over 40 percent of the people in the United States were still farmers and well over half still lived in rural areas. At the turn of the 21st century, a hundred years later, less than 2 percent of Americans called themselves farmers and only around 25 percent lived outside of major metropolitan areas. The number of farms in the US peaked out at around 6.6 million farms in the 1930s and has since dropped to less that 2 million. Even those families who live on farms today earn around 90 percent of their household income from sources other than farming. During the 20th century, America was transformed from an agricultural to an industrial nation.
Some scholars associate the word “industrialization” with the transformation of an economy from agriculture to manufacturing as the primary source of productivity. However, such a transformation is but a consequence of applying an industrial model or paradigm in the development of a nation’s resources. The fundamental characteristics of the industrial paradigm are specialization, standardization, and centralization of control. And the application of this paradigm leads some people to specialize in food and fiber production, “freeing” others to manufacture the things associated with an industrial economy.
In earlier times, specialization was referred to as “division of labor.” Early industrialists observed that if a group of laborers, who were each producing an item (i.e. transforming raw materials into finished products), would instead each specialized in performing only one or two functions in the production process, they could perform each task more efficiently. By specializing and working together, so that all functions were performed but by different people, the group of laborers could greatly increase their collective productivity. But to facilitate such specialization, each function in the production process had to be standardized so that each specialized step in the process would fit together with the others. Specialization and standardization then allowed production processes to be routinized, and some mechanized, which greatly simplified the production management process. This allowed control of production to be centralized or consolidated, with fewer people making decisions but with each manager controlling the use of more land, labor, and capital. Today, we commonly refer to the economic gains from industrialization as economies of scale.
The transformation of American agriculture has followed the classic industrialization process. Once diversified farming operations gradually become more specialized – first specializing in livestock or crops, then specializing in particular crops or species of livestock, and finally into specific phases of production for a specific crop or species of livestock. For example, today we have separated beef production into cow-calf, stocker cattle, and cattle feeder operations, which are separate from feed grain, soybean, and hay production, and from grain handlers, livestock truckers, etc. all of which are parts of beef cattle production. We have separated the functions that once were performed on a single diversified farm into a number of specialized, standardized processes that are performed by separate enterprises all across the country. And in the process, we have made it not only possible but also more economically efficient to consolidate the decisions that bring all of these specialized functions together under the control of far fewer decision makers who manage far larger business enterprises.
Industrialization also results in separation and specialization with respect to the basic economic resources – land, labor, capital, and management. Some own land, others work, others provide capital, and others manage. As agricultural operations have grown larger, they have required larger amounts of capital. First, family farms were incorporated so they could keep their capital intact as farms were transferred from one generation to the next. But eventually, the most economic size of an operation exceeds the financial capabilities of most family corporations. Publicly held corporations are able to assemble capital from many sources, providing almost unlimited ability to finance any economically successful operation. Thus, it is inevitable that an industrial agriculture ultimately will come under the control of publicly owned corporations. So today, American agriculture is in the final stage of industrialization – the corporatization of command and control.
In agriculture today, some are landowners, some are agricultural workers, some own stock in agricultural corporations, and others are managers of agribusiness enterprises, but there are relatively few real “farmers” left in America. Corporations are replacing farmers as the decision makers in more and more agricultural operations. The complete corporatization of agriculture – the final stage of industrialization – would mean the end of farming in America.
So what difference does it make whether farmers or corporations control American Agriculture? What’s the difference between farming and corporate agriculture? First, there is no useful “formal” definition of farming. The common sense representation of farming in America is the traditional “family farm.” However, there is no general agreement, even with regard to what constitutes a “family farm.” The most common definition of a family farm is one for which members of the same immediate family own the land, do most of the labor, and make all of the important management decisions. This definition would exclude many, probably most, farms today -- by one criterion or another. It most certainly would exclude corporate, contract production, where the “farmer” contributes very little, other than some low-skilled labor, with the corporation making virtually all of the important management decisions.
Some would exclude from the definition of “farms” in general those operations which report less that $50,000, or even $100,000 in annual sales. Anything smaller is not a real farm, they say, but a “hobby farm” or a “residence farm.” If we exclude these small farms from our definition of family farms, then there are virtually no family farms left in America. Nearly all larger farms either rely on rented land or hired labor, or are contract operations.
True family farming, however, can’t be defined in terms of dollars of sales or percentages of land, labor, capital, or management provided by a family. A true family farm is a farm where the farm and the family are inseparable parts of the same whole. If a farm is run as a separate business enterprise that simply earns income for the family, it is not a family farm. If the organization and management of the farm doesn’t reflect the preferences, abilities, and aspiration of all members of the family, it is not a family farm. If a farm is not managed in such as way as to reflect the concern of the family for their neighbors and the commitment of the family to the community, it is not a family farm. Finally, if the operation of the farm doesn’t reflect the ethical and moral value of the family, it is not a family farm. On the other hand, if the farm and the family are “one in the same,” then it’s a family farm, regardless of size and regardless of who provides what proportion of which factors of production.
A family farm can operate on rented land and borrowed money, but the family must put much of themselves into the farm, their labor and their management, if they are to truly be a part of the farm and the farm a part of them. The economic returns from a family farm may be far more than enough to meet the needs of the family, or alternatively, the farm may show no profit at all. Family farming is not a simple matter of economics. A family farm provides recreation, education, a place to live, a place to raise kids, a place to relax and to find harmony with nature. Such things would cost thousands of dollars for an urban resident, if they could be bought, but they all come as part of a family farm. A family farm also can help meet the social and spiritual needs of the family, regardless of whether it contributes to their economic well being. Perhaps most important, a family farm reflects the physical abilities, the mental capacities, and spiritual value of the family. The farm is as much a part of the family as the family is a part of the farm.
The process of industrialization has systematically destroyed family farms all across America. The sole focus of industrialization is on operational and economic efficiency. There is nothing in the industrial model to help build, or even maintain, the productive capacities of people. In fact, specialization and standardization diminish the mental capacities of people as they focus on doing fewer things by the same means as everyone else while simply responding to directions or orders given by someone else. With industrialization, few people are given the opportunity to think – to be creative and innovative.
There is nothing in the industrial model to help build, or even maintain, interpersonal relationships among people. In fact, specialization and separation virtually tears people apart, within families, within communities, and within society as a whole. Each person goes their own way, does their own thing, and only relates to others through markets rather than personal interaction. With industrialization, few people are given an opportunity to come up with new and different “right” answers, which arise from the synergy of people thinking together.
Perhaps most important, there is nothing in the industrial model to help build, or even to maintain, the ethical and moral values of individuals, families, communities, or society as a whole. In fact, once industrial operations come under corporate control, they systematically seek to destroy all social and moral constraints to their pursuit of self-interests and greed. Corporations are not people; they only exist on paper as legal, economic entities. They exist for the purpose of facilitating the accumulation of capital to finance large scale, industrial enterprises. Once the management of a corporation becomes separated from its corporate investors, as with most publicly-held corporations, the sole purpose of the corporation becomes to make profits and grow. Most stockholders have no commitment to nor real control over the companies in which they own shares, they invest only to earn dividends or profits from increases in stock values. The managers of such corporations have no choice but to maximize corporate profits and growth for their stockholders, otherwise they will be replaced. A corporation has no heart, it has no soul – it only knows profit and growth.
The complete corporatization of American agriculture would remove the last vestiges of the American family farm. Corporatization takes the family, and even the farmer, out of the agricultural production process. Farmers are inclined to do things “their” way, whereas with corporate production, it is the corporate way or no way. And there certainly is no place for wives or kids in a corporate business operation. The corporate producer can’t afford to give special consideration to neighbors or community, or to be good stewards of the environment. The profit margins are too thin. Contributions to civic or charitable causes must yield economic rewards in the form of fewer social or environmental constraints to the business.
In addition, corporate agriculture must deny all ethical and moral responsibility for its actions, because much of its economic advantage comes from its willingness and ability to exploit local workers and the natural environment. In fact, the economic advantages of corporate agriculture would largely disappear if corporations were required to pay living wages for labor and forced to dispose of their wastes by means that protected the natural environment and the health of their workers and neighbors. Corporate agriculture prospers by doing things that true family farmers simply would not do. People have hearts and souls, but corporations have neither.
Corporate agriculture seeks to discredit and destroy the concept of family farming in order to eliminate any viable alternative to their unrestricted pursuit of ever more profit and growth. Fortunately, a new model or paradigm for farming is emerging to address the growing deficiencies of industrial agriculture. This new paradigm is “sustainable agriculture.”
The issue of agricultural sustainability was first raised because of an increasing realization that agricultural industrialization was destroying the natural environment. Agriculture was destroying the resources upon which its future productivity must depend. Industrial farming methods were mining the soils of nutrients, allowing soils to erode, and depleting stocks of fossil energy and other non-renewable resources. The fundamental purpose of agriculture is to convert solar energy into energy forms that are useful to humans. But industrial agriculture uses up more energy, in the form of fossil fuels, than it captures from the sun, in the form of solar energy. In addition, inputs that are absolutely essential for industrial farming operations – commercial pesticides and fertilizers – were polluting groundwater and streams and were degrading the natural environment. In the process of producing the peoples’ food, industrial agriculture was poisoning the peoples’ environment. Some people were beginning to realize that an industrial agriculture was not ecologically sustainable.
Questions of ecological sustainability led to question of economic and social sustainability. Farmers began to realize that while new industrial technologies allowed them to cultivate more land or to raise more livestock, their profits per bushel or per head simply became narrower, leaving them no better off than before. They were farming more land, borrowing more money, hiring more laborers, and working harder, but they were earning no more for themselves than before. In addition, they realized that each round of new technology meant that some of their neighbors would have to go broke, so their farm would come up for sale. To survive, farmers had to be able to get their neighbor’s land. The survivors began to realize that sooner or later, it would be their farms on the auction block. People slowly began to see that an industrial agriculture is not economically sustainable – at least not for farmers.
Questions of economic viability were followed by questions of social sustainability. Life is not just about making money, and environmental stewardship is not just about preserving nature. The economy and the environment are important because they contribute to the quality of life of people. But, our quality of life also is affected by our relationships with other people – within families, communities, nations, and human society. Some common symptoms of a society that has lost its ability to relate to each other are loneliness, depression, and divorce. Competition, confrontation, laws suits, crime, and war characterize societies that have depleted their social capital. Industrialization encourages people to treat other people as faceless machines, as nameless factors of production, as adversaries to be conquered, as something to be used up, and if necessary, exploited. Human relationships are reduced to business transactions. There is no room for caring about, sharing with, for loving your neighbor in an industrialized society. Some people began to realize that industrial agriculture was destroying farm families and rural communities and was contributing to the degradation of American society – that industrial agriculture was not socially sustainable.
Some people contend that the concept of a “sustainable agriculture” is still undefined, that they can’t support it because no one really knows what it means. This quite simply is not true. People may disagree on the specific words, but there is a general consensus among all who take the issue seriously that a sustainable agriculture is “an agriculture that is capable of meeting the needs of the present while leaving equal or better opportunities for the future.” The concept of sustainability applies the Golden Rule across generations. We should do for those of future generations, as we would have them do for us, if we were of their generation and they were of ours. We must find ways to meet our needs, all of us who are here today, without diminishing the ability of those of future generations to meet their needs as well.
A sustainable agriculture must have three fundamental characteristics. It must be ecologically sound, economically viable, and socially responsible. Any system of farming that lacks any one of the three quite simply is not sustainable. This is not a matter for debate; it is just plain common sense. A sustainable agriculture must protect and maintain the productivity of its natural resource base. If the land won’t produce, the farm is not sustainable. A sustainable agriculture must make sufficient profits to remain economically solvent. If the farmer goes broke, the farm is not sustainable. Finally, a sustainable agriculture must provide for the food and fiber needs of people, but it also must provide people with opportunities to lead successful lives. Agriculture must do its part to support society or society will not support agriculture.
No one of the three dimensions is any more or less important to sustainability than the others. The ecological, economic, and social dimensions of sustainability are like the three dimensions of a box. A box that is lacking in height, width, or length quite simply is not a box. A farm that lacks economic viability, ecological integrity, or social responsibility quite simply is not sustainable. On this there is no credible disagreement. It’s just common sense.
This new paradigm for agriculture is being developed by thousands of farmers all across the American continent and all around the world. These farmers are developing the replacement for the industrial model of agriculture. They are developing the pattern for farming in the future. Farming sustainably is no simple task, but thousands of farmers are finding ways to succeed. They may carry the label of organic, low-input, alternative, biodynamic, holistic, permaculture, or no label at all, but they are all pursuing common economic, ecological and social goals. By their actions, these farmers are defining a new kind of farming.
These farmers, not the experts or the scientists, are the ones on the new frontier – they are the explorers, the colonists, the revolutionaries, and the builders. As on any frontier, life is difficult because no one really knows how to do what these folks are trying to do – they are creating the future. They are getting little help from the government, their universities, or the agricultural establishment. They are doing it pretty much on their own. They will continue to confront hardships, frustrations, and there will be some failures along the road. But, more and more of these new farmers are finding ways to succeed.
These new farmers are diverse, but they also share much in common. First, they share a common pursuit of a higher self-interest. They are not trying to maximize profit, but instead are seeking sufficient profit for a desirable quality of life. They recognize the importance of relationships, of family and community, as well as income, in determining their overall well being. They accept the responsibilities of ethics and stewardship, not as constraints to their selfishness, but instead, as opportunities to lead successful lives.
There are no blueprints for this new way of farming. But a few fundamental principles are beginning to emerge. In general, the new farming opportunities arise directly from exploiting the weaknesses resulting from misuses of industrialization -- specialization, standardization, and centralized decision making. The new farm relies instead on the advantages of diversity, individuality, and decentralized networks of interdependent decision-makers.
New farmers focus on working with nature rather than against it. The natural resource base that ultimately must sustain productivity is inherently diverse. Industrial systems have had to bend nature – to augment, supplement, alter, and force it -- to create an allusion of conformity out of diversity in order to meet the demands of large-scale, industrial production. The ecological problems arising from industrialization are symptoms of natural resources being used in ways that are inherently degrading to their productivity. Thus, industrialization has created tremendous opportunities for farmers who learn to utilize the inherently productive capacity of a diverse natural resource base, rather than wasting time and money trying to force nature to conform.
These new farmers utilize practices such as management intensive grazing, integrated crop and livestock farming, diverse crop rotations, cover crops, and inter-cropping. They manage their land and labor resources to harvest solar energy, to utilize the productivity of nature, and thus, are able to reduce their reliance on external purchases inputs. They are able to reduce costs and increase profits while protecting the natural environment and supporting their local communities.
New farmers focus on value rather than costs. They realize that each of us values things differently, as consumers, because we have different needs and different tastes and preferences. Industrial methods are efficient only if large numbers of us are willing to settle for the same basic goods and services – so they can be mass-produced. So, industrialization has to treat us as if we are all pretty much the same. Customers have to be persuaded, coerced, and bribed to buy the same basic things rather than the things they really want. That’s why we pay more for packaging and advertising of food than we pay to the farmers who produce the food. The industrial system creates tremendous untapped opportunities for farmers who can tailor their products to conform to unique needs and preferences of individual customers, rather than try to bend the preferences of customers to conform to their products.
New farmers market in the niches. They market direct to customers through farmers markets, roadside stands, CSAs, home delivery, or by customer pick-up at the farm. They use everything from the Internet to word of mouth to advertise their services. They market to people who care where their food comes from and how it is produced – locally grown, organic, humanely raised, hormone and antibiotic free, etc. They are often able to avoid some or all of the processing, transportation, packaging and marketing costs that make up 80 percent of the total cost of mass marketed foods. They increase value, reduce costs, and increase profits while protecting the environment and helping to build stronger local communities.
New farmers focus on what they can do best. They realize that we are all different -- as producers as well as consumers. We have widely diverse skills, abilities, and aptitudes. Industrialization has had to bend people -- train, bribe, and coerce them -- to make people behave as coordinated parts of one big machine rather than as fundamentally different human beings. Many social problems of today are symptoms of people being used by industrial systems in ways that are inherently degrading to our uniquely human productive capacities. Thus, industrialization has left tremendous untapped economic opportunities for farmers and others who can use their unique capacities to be productive rather than attempt to conform to systems of production that just don’t fit.
These new farmers may produce grass finished beef, pastured pork, free range or pastured poultry, heirloom varieties of fruits and vegetables, dairy or milk goats, edible flowers, decorative gourds, or dozens of other products that many label as agricultural “alternatives.” They find markets for the things they want to grow and are able to grow well rather than produce for markets where they can’t compete. Or they may produce fairly common commodities by means that are uniquely suited to their talents. Their products are better, their costs are less, and their life is better because they are doing the things that they do best. New farmers focus on creating value through uniqueness – among consumers, among producers, and within nature.
In general, the new farmers link people with purpose and place. By linking their unique productive capacities with unique sets of natural resources to serve the needs and wants of unique groups of customers they create unique systems of meeting human needs that cannot be industrialized. The more unique their combinations of person, purpose, and place, the more sustainable will be the value to customers and producers alike. The sameness of industrialization creates opportunities for unique farmers who can create unique linkages with both resources and customers.
Sustainable agriculture does not mean going back to the past; it is going forward to the future. The principles of diversification, individualization, and decentralization are no older or newer than are the principles of specialization, standardization, and centralization. The fundamental question is: “Which principles are more appropriate for solving the problems or realizing the opportunities of today?” The industrial era is of the past; the future belongs to post-industrial, knowledge-based systems. The future belongs to systems that empower people to be creative, innovative, productive individuals – not just cogs in some big industrial machine. Sustainable agriculture empowers “people” to be productive.
Some argue that people lack the ability to feed the world by working with nature rather than relying on current high-input, industrial systems. Or they claim that we must rely on biotechnology instead of basic biology. Such people are the “new Malthusians.’’ An economist by the name of Thomas Malthus claimed, more than 200 years ago, that humanity was destined to starve because food production couldn’t possibly keep pace with population growth. He underestimated human creativity. Those who say we can’t feed the world of the future without destroying the natural environment and human relationships quite simply are underestimating the capacity of people – when they are truly empowered to be productive.
Some argue that niche markets are limited and provide opportunities for only a few. But the fact is that all consumer markets are niche markets because we all have different tastes and preferences. The rest of the economy is already moving beyond industrial mass production with production tailored to the demands of narrow segments of markets. The question is not how many niche markets exist, but how many different markets to serve. There are plenty of niche markets to allow ecologically sustainable farming.
Others argue that sustainable agriculture will result in higher food costs. This is nothing more than a scare tactic to protect the interests of agribusiness. The farmer today gets less than a dime of each consumer dollar spent for food. The rest goes to pay for marketing costs and purchased inputs. So even if it were to cost ten percent more for farmers to produce food in ways that protect the natural environment and support human communities, food costs in the grocery store would only be one percent higher – one-tenth of the farmers’ dime. However, over time industrial systems will become less efficient, as the costs on non-renewable inputs rise and more environmental and social costs are internalized. And over time, sustainable systems will become more efficient than industrial systems, as more farmers become as efficient as are some of the “new farmers” today.
Whether America will have the wisdom to develop a sustainable system of farming is a question that only time will answer. However, sustainable agriculture represents the only hope for the future of “family farming, or even “farming,” in America. Those who pursue a future in farming must be willing to commit their bodies and minds to farming. Those parts of us of that work cannot be separated from those parts of us that think. Sustainable farmers will be “working thinkers” and “thinking workers.” Those who pursue a future in farming must be willing to commit their hearts and souls to farming. Those parts of us that love and believe cannot be separated from those parts that work and think. We must have the wisdom and courage to live as whole people, rather than allow ourselves to become compartmentalized and isolated into economic, ecological, and ethical boxes.
Our common sense tells us that we are made up of body, mind, and soul. Our common sense tells us that personal, interpersonal, and spiritual dimensions of our lives are inseparable and all three are important to our quality of life. Our common sense tells us that our farms must be economically viable, ecologically sound, and socially responsible – that all three are necessary and none alone is sufficient. Our common sense tells us that our quality of life is better when we care about others and when we are good stewards of nature, as we accept responsibility for taking care of ourselves. Those who want to pursue a future in farming need only rely on their common sense.
Wendell Berry, a Kentucky farmer, has clearly articulated the critical nature of connections among people and between people and the land that are necessary for farming sustainably.
"...if agriculture is to remain
productive, it must preserve the land and the fertility and ecological health
of the land; the land, that is, must be used well. A further requirement, therefore, is that if the land is to be
used well, the people who use it must know it well, must be highly motivated to
use it well, must know how to use it well, must have time to use it well, and
must be able to afford to use it well*.”
To sustain agriculture we must have successful farmers on the land, who understand the land, and are committed to caring for the land. The future of farming is in the hands of those farmers who are finding ways to make a decent living while loving each other, and loving the land. In a very real sense, the future of America is the hands of the “new family farmers.”