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Farms of the Future

When I was a kid in Regent, North Dakota, then a town of 400 people, a local farmer by the name of Ernest had a heart attack one summer. It was near harvest time, but Ernest didn't lose his crop. His neighbors drove their combines over to his fields and did his harvest for him.

That wasn't unusual in a community based on family farms. People don't always like one another, but they do look out for one another. The economic textbooks call these farmers “competitors,” and if they were corporations they would act that way. But because they are real people, they act like neighbors instead.

You wouldn't know it from the media reports, but episodes like the one in Regent are a central issue in the disputes over agriculture that divide Europe and the US. When the two sides sit down together, as they did at the WTO meetings in Seattle, they talk about different things. The Europeans talk about something they call “multi-functionality,” by which they mean the way family-scale agriculture serves functions that go beyond the narrowly economic. This mode of agriculture promotes healthy rural communities and husbandry of the land as well.

The Americans, by contrast, talk the abstracted language of the economics texts – markets, prices, subsidies, and the rest. Our negotiators work themselves into a huff because the Europeans refuse to think within this narrow framework. They won't go by the “rules.” As an observer I couldn't help thinking, whose rules are these anyway? I thought about the thriving countryside in Europe and the desperation among farmers in the US. If the European values represent the problem, then what exactly is the solution? How did the Europeans become the Jeffersonians, and the US become the advocate for a corporatized agribusiness instead?

The question is of great urgency to America's farmers. Out beyond the prosperity of Silicon Valley and Wall Street, the producers in America's agricultural economy are struggling for survival. Prices for some commodities are at Depression-era levels. Imports are soaring thanks to recent trade deals, and thanks to lax anti-trust enforcement, giant agribusiness firms are squeezing out farmers for a bigger share of the food dollar.

In this setting, farm auctions have become a grim counterpoint to the mania on Wall Street. Suicides among farmers are at three times the national average. The nation's opinion establishment basically says, “So what?” It regards farmers as just poignant footnotes to the bright new economy, like the diners that got left behind on the old Route Ones when the interstates came in. Nicholas Kristof wondered in The New York Times why the US should spend tax dollars “fighting economic change.” Steven Blank, an economist at the University of California at Davis, went further: “The US no longer needs agriculture and is rapidly outgrowing it.”

This view isn't just distasteful, it is short sighted and wrong. The opinion establishment ignores what is probably the single most important economic question the nation faces: what is an economy for? For decades the nation has listened to a policy establishment that thinks the economy is just a sort of Stuff Olympics. The gold medal goes to the nation that consumes the most stuff and racks up the biggest GDP.

But what happens when we produce more stuff than we need but less of other things, such as community, that we need just as much? Do we continue to try to advance to tomorrow by solving yesterday's problem? Or do we start to ask a different question? If Americans say we need stronger families and communities, then don't we need to ask whether our economic arrangements are contributing to those ends? If we really believe in traditional family values, then should we not support the form of agriculture – and business generally – that is based upon those values?

There is a way to save family-based agriculture in America. It would be good economically, good for the environment, good in just about every way except for those who want to turn our agriculture into Monsanto-In-The-Fields. Harry Truman proposed the answer over 50 years ago. Put simply, it is to enact a farm program that focuses farm support on family-scale agriculture and let the others fend for themselves.

Before that can happen, though, we have to put aside a lot of myths. The foremost is that farmers just can't cut it in the marketplace today; their problems are Darwinian proof of their own unfitness to survive.

Efficient – at what?

As many who have worked in large corporations can attest, size does not automatically produce efficiency. McDonalds took over a year to develop a salad for its chain, something Joe's Diner can do in about seven minutes. Agriculture is much the same. Farms can reach peak efficiency – even in narrow economic terms – at well within the scale of a family operation. Michael Duffy, an agricultural economist at Iowa State University, has found that corn and soybean producers in that state reach the low point on the cost curve at between 300 and 500 acres. (The average farm unit in the US today is just under 500 acres; many family operations are double that or more.)

At the same time, the top 10 percent of pig producers, based on cost of production, averaged 164 sows. That's despite claims from so-called experts that corporate pig factories, with thousands of animals crammed together, represent the future. The belief that bigger corporate operations mean more productive agriculture, Duffy says, is a “bunch of crapola.” Moreover, such figures don't even begin to include the many costs that corporate agriculture inflict upon the rest of us – costs that most economists choose to ignore. There are severe environmental consequences, for example, from turning farms into agri-factories. The stench from pig and chicken factories is horrendous, and the mountainous wastes tend to find their way into local waterways. To raise animals in such close quarters requires massive use of antibiotics, and medical researchers worry that this is hastening the development of resistant bacterial strains.

But the biggest costs of corporate farming may be social. We need to stop and ask, what exactly does it mean to be “productive?” What does a farm produce? A family-based enterprise such as a farm produces more than corn or wheat. It also produces a community. One might say it has a social product as well as a material product; and this social product is especially significant in a country that has more stuff than it knows what to do with, but less community and social cohesion than it needs.

Social product is invisible to Washington policy experts because they can see only what they can count in dollars. But it is a daily fact of life in rural America. A small town café, for example, contributes much more to the life of a rural community than its financial balance sheet would suggest. It is a social hub that reinforces the civic infrastructure of the town, from the volunteer fire department to the PTA. Cafés are so important to the small-town life that in Havana, North Dakota (pop. 124), folks actually volunteer at the local café to keep it open.

This is social product, and family-based agriculture is a prolific source of it. Study after study has documented this. The most famous was that of Walter Goldschmidt of the University of California, who compared two California farm communities in the 1940s. One included mainly small and medium-sized family farms; the other, large-scale producers. The localities were similar in other respects.

Goldschmidt found that the family farms were more socially productive. People showed “a strong economic and social interest in their community,” he wrote. “Differences in wealth among them are not great, and the people generally associate in those organizations which serve the community.” The locality with larger farms, by contrast, had a more pronounced class structure, less stability, and less civic participation.

Since then, others have refined Goldschmidt's thesis, but the basic conclusion remains. This will come as no surprise to people who live in the vicinity of a corporate agri-factory today. Class differences tend to become larger in such places, and crime tends to increase.


Corporate farms or family farms

Jefferson was right. The kind of agriculture we choose affects the kind of communities we have and the kind of nation we are going to be. If we really believe that family and community values matter, how can we ignore the role of family-based enterprise in advancing these ends? A nation that tries to divorce the processes of production from larger social values and concerns – as policy experts do – eats its own seed corn. Neglect the social product of private enterprise, and we create the conditions for our own decline.

Generally speaking, a market is the best way devised so far to organize an economy. But there are some things a market does not do very well – as currently structured at least and one of these is to encourage the production of social product. No one compensates the farm families that look out for their elderly neighbors, serve on volunteer fire departments, get involved in local government and the rest. To the contrary, the market rewards the corporation that by its very nature gives short shrift to these. Farmers don't expect rewards for being neighbors. But they can't survive in a situation in which the rewards go to those who drive neighborly people into bankruptcy.

The federal government hasn't helped much in this regard. In recent years it has played the role of helpmate in the effort to drive out individual farm producers. Does anyone think it accidental, for example, that recent trade agreements have resulted in a flood of wheat coming across the Canadian border? This has been great for food processing giants, which get cheap grain. But it has been disaster for the family producers who have watched commodity prices plummet. (And no, prices haven't dropped correspondingly at the supermarket.)

It is understandable that family farmers might feel that the government and big business have ganged up on them. This feeling was not diminished by the Farm Bill of 1996. The congressional majority touted this bill as the “Freedom to Farm Act.” But it soon proved to be the “Get Out of Farming Act,” as many of us predicted. Stated briefly, the bill did away with the price support system that, in various forms, has enabled farmers to get through hard times since the Depression. Supposedly to ease the blow, it provided transition payments that phase out over seven years. But these go to farms according to acreage and without regard to need. The bigger you are the more you get, even if you are rolling in dough already. By one estimate, up to half the payments are going to absentee landowners who aren't even farmers.

In other words, the new law is really a grotesque version of the worst part of the old farm program – which also gave the most to those who had the most, and so encouraged farming on an ever-larger scale.
Predictably, we've had to enact “emergency” relief each year since the new law passed. The prevailing view in Washington is to buy a little silence and hope the problem – which means the farmers – will go away.

There are numerous steps we need to take to enable family-based agriculture to survive in America. We need trade negotiators who show as much concern for farmers as for corporate processors and multinational grain dealers. We need to enforce the antitrust laws. The Microsoft case has been a high-profile aberration. When Cargill, the nation's number one grain exporter, can buy the grain operations of Continental, which is number two, the cops aren't exactly walking tall on the antitrust beat. We also need to develop new uses for agricultural products, such as lubricants and building materials, along with more overseas markets.

But the central issue is the safety net. Farming is not like other forms of enterprise. Ever since it became part of a world marketplace early in the century, there's been a need for a support system of some kind to deal with the inevitable troughs. The question is what kind, and it ought to be the kind that Harry Truman proposed – that is a farm support system rather than a commodity support system. Truman wanted to target help to family-sized operations, and that's what we should do today. Beyond that scale, farm producers would be on their own. They could produce as much as they wanted. But they couldn't look to the federal government to support their ambitions; and they couldn't get rich farming the USDA.

Anyone who thinks a drift to corporate farming is going to mean less burden on taxpayers hasn't been paying much attention. It's the small who are permitted to fail in America. The very big get bail-outs, and farms are no different. Already, the corporate pig factories of North Carolina have asked Congress for millions of dollars to upgrade their waste lagoons in the wake of the hurricanes last fall.

We'll be paying for our farm system one way or another. Either we'll pay in the form of modest supports for family-based operations, or we'll pay in the form of social and environmental devastation wrought by corporate-agri-factories – and then for the government assistance they demand on top of that. That is a steep price for a corporate agriculture that – though billed as “progress” – gives us nothing we don't have already.

Is it really so unthinkable and outrageous that our modes of agricultural production should be consistent with our economic ideals and with our social needs? I don't see why.


A longer version of this article appeared in the January 2000 issue of the Washington Monthly.

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