The Global Challenge

Reed Jules Oppenheimer Foundation

The Disappearance of Family Farms and Why It Matters

Throughout American History, small and moderate- sized family farms and the resilient rural communities that support them have been seen as the very fabric of a strong democracy and a healthy society. The fierce independence and work ethic engendered by stewarding your own land has guided our Nation’s course from the time of the Minuteman and Colonial farmers up to the present day where lessons learned on the farm have propelled leadership careers from Wall Street and John Hopkins to Congress and the Pentagon, defining and shaping our national identity.

More than any other country, the United States is recognized as “The Bread Basket of the World”, and our precious agricultural land known as our greatest national treasure. This prized asset has been proudly handed down through private family ownership from generation to generation with conservation and preservation being primary drivers of their stewardship. We have traditionally entrusted these farming families to take care of and preserve the land for future generations. We expect them to take care of their animals properly and protect the environment. We expect them to be good citizens of their communities and provide us with healthy and nutritious food products for our table, durable fiber for our clothes, and strong materials for our shelter. But above all we expect our farmers to provide us with food security, the gold standard of every nation. They have historically fulfilled this mission and earned our enduring gratitude, while coining the international moniker of Rugged American Individualism.

Sadly, this proud segment of our population, while decreasing steadily over the history of our Nation, is now facing near extinction. Consider that 80% of the population in 1800 worked on the farm. By 1900 this was reduced to 45%. By 1930 the figure reached 22% and today represents less than 1% of the population. Certainly progress, the industrial revolution, explosive urbanization, and amazing innovations in agricultural technology account for most of this decline, however the recent decline over the last thirty years from 4% in 1980 to less than 1% today paints a more troubling picture.

We are now at a critical crossroads that goes well beyond saving the family farm. The decline in farm populations is closely linked to the structural changes in modern agriculture which drive that decline and could threaten to dramatically change the very landscape of rural America, jeopardize the future productivity of the land, risk the ecological stability of our environment, negatively impact public health, and severely impact our food sovereignty and security. Additionally, these structural changes over the last sixty years have greatly contributed to the Green House Gas effect and are credited with the release of more soil sequestered carbon into the air than our entire energy sector.

Problems with the Industrial Farming Model
What began as a pursuit of efficiency to improve production for all farmers, has unintentionally resulted in a decline in economic freedom for them and an imbalance of economic power favoring dominant agribusiness firms within the industry, rather than individual farmers. Giant consolidated food and fiber firms have now established complex supply chains that move bulk commodities around the globe to better serve their own interests. This new system has had a disastrous effect on the smaller independent farmers who have traditionally constituted the heart of American agriculture.

Advances in mechanization, chemical technology, and bio technology that seemed to increase efficiencies and maximize profits were capital intensive and those that adapted the technology to grow and survive had to utilize it at full capacity to achieve profits. In the past, when the demand for a commodity fell, farmers could simply produce less and diversify to maintain the correct balance of supply and demand. Since large, technologically invested farms, with few diversification alternatives, must produce at maximum capacity to make a profit, they maintain or even increase production in the face of falling demand, thus forcing smaller producers out of business, who would normally have simply lowered production. This is particularly true in intensive animal production.

One round of technological changes followed another, as publicly funded research, industry-funded research, and federal policies encouraged specialization, standardization, and consolidation. In order to survive, farmers needed to increase the amount of acreage farmed or the number of livestock produced. Lenders, government agencies, and land grant universities, heavily funded and influenced by major agribusiness players, all encouraged this transition. In the 1970’s, Secretary of Agriculture Earl Butz, who saw fewer farmers as a necessary step in making US agriculture globally dominant in a Cold War environment, famously told farmers to “get big or get out”. Farms got larger and larger and fewer and fewer, and ever more dependent on the mechanisms of the Industrial Farming Complex.

To minimize risk and to afford the technology, machinery and land necessary to grow and survive, farmers entered into production contracts or marketing contracts with large corporations creating vertical integration of the farm systems by which multinational companies control both upstream suppliers and downstream buyers, engaging in every aspect of their value chain from growing, processing, and transporting, to marketing and retailing. For the farmers, the trade-off for this security was losing their traditional economic freedom, autonomy, control, and decision making authority. They became more like employees of much larger organizations, motivated solely by maximized profits and no longer tied to the land. Under vertical integration, markets do not determine commodity prices, and internal decisions drive product transfer, growing bulk commodities for vast, captive supply chains. Often, the farmer’s payment is based on the cost of farmer-provided inputs, the quantity of production, or both, and usually resembles a fee paid for specific services instead of the market value of the crop. For these farmers, the open, competitive market no longer exists. For livestock producers under this contract system, success or failure often does not depend upon supply, demand, price, or efficiency, but rather upon whether a livestock processor agrees to continue doing business with the producer.

Major corporations patent new advances, especially in biotechnology, allowing them government sanctioned monopolies to control farm inputs. At the same time scientists, particularly those affiliated with heavily corporate funded and subsidized land grant universities, are reluctant to focus on political issues in the agricultural industry reflecting a lack of independence from political and special interest influence as farmers and other rural residents feel they lack independent political and legal channels to redress their concerns. Tellingly, in thirteen states laws have been enacted that inhibit citizens from speaking freely about agriculture if remarks are deemed disparaging, and at the national level, the US Congress recently voted approval, in oppositions to 94% of their constituents, for the “Dark Act” which effectively would eliminate the possibility to enact labeling of the food we eat, and prohibit local states, counties, and regions from creating “GMO Free Zones” (Genetically Modified Organisms). While this bill most likely will not become law, the fact that it could pass Congressional approval at all demonstrates the power and influence of Agribusiness over the democratic process.

Remaining independent farmers find it difficult to compete as the industrialization of agriculture, often characterized for the individual farmer as falling agricultural prices and rising production costs, has moved from a quest for increased production efficiency to the restricting of market access and decline of open market volume through contracts which result in increased risk of price manipulation. The once greatly heralded agricultural production efficiency gains are less likely to be passed on to either farmers or consumers and are more likely to increase the profits of the concentrated dominant corporations as free markets disappear.

Further, the use of government subsidies, exploitive labor, and monopoly power serve to price more sustainable products out of the market, jeopardizing food security and food sovereignty both here and abroad. The loss of small family farms has dramatically reduced our supply of safe, fresh, sustainable and locally grown foods. With that loss we will also lose the diversity in our food supply and what we eat will be dictated to us by a few large corporations.

The Demise of Rural Communities
The polarizing effect of modern industrial farming and vertical integration has driven the small farmer out of business transforming rural America from an idyllic setting of many small, productive family farms and economically diverse, viable rural communities into relatively fewer, large industrial farms and dying communities. Studies find that farm size, gross farm sales, as well as high levels of mechanization significantly predict declining community conditions and depopulation.

Traditionally, American agriculture was characterized by diversified crop and livestock production on independent family farms. The industrial model, characterized by vertical integration, production contracts, marketing contracts, and integrated ownership, requires less and less labor and other local inputs per unit of output. This in turn insures diminishing social and economic support for local rural communities with fewer jobs, minimum pay, and reduced financial activity. Efficiencies in containing market costs inevitably come at the expense of traditional local businesses. Farmworkers associated with industrial farming earn about 58% as much as all wage and salary workers. 45% of all hired farmworkers aged 25 years or older earn less than the poverty threshold for a family of four, while over one-third have annual incomes of less than $15,000.

To take advantage of economies of scale and to buy in massive quantities, large farms purchase directly from suppliers. Farms with gross incomes of $100,000 make 95% of their expenditures locally, while farms with gross incomes higher than $900,000 spend less than 20% locally. Small farmers tend to circulate money within the community as a result of their increased interdependence. Money spent locally has a significant multiplier effect. A dollar spent at the local elevator or hardware store is more likely to be spent again at the local grocery store or restaurant. In more vertically integrated farming systems those dollars go to shareholders who likely do not live in a rural community.

Large farmers make business decisions that serve the interests of the consolidated firms with which they contract with little sensitivity to the needs and customs of the community in which the farm exists. Decisions regarding plant closings, mergers, sales and the like are typically made by people outside the community with no vested interest in the community itself. Consequently, studies have shown lower quality of life, poorer schools, greater poverty and crime, lack of social services, a dwindling middle-class, and lower civic participation in communities dominated by fewer, larger farms as opposed to communities with numerous small farms. Less local control over public decisions or a lack of democratic decision-making is also noted as local governments become prone to influence by outside agribusiness interests. Over and over again it has been observed that as farm size and absentee ownership increase, social conditions in the local community deteriorate.

A Sustainable Future is Threatened
The industrialization of agriculture is often times characterized as the best way to feed a growing global urban population, but all the discussion of higher yields and more efficient distribution systems fails to acknowledge that this system is unsustainable over the medium and long-term. Further, the vast majority of products grown through this mono cropping system do not actually feed humans at all, but rather are used for highly subsidized bio-fuels, animal feeds, and industrial products, with a significant proportion becoming excess waste. The industrialized farming model makes decisions based entirely on the bottom line, no longer related to the health of the community, the sustainability of the land, the welfare of the farmer, or in most cases even the national consumer markets, instead looking to inputs, outputs, and efficiencies completely dominated by the dictates of major agribusiness and obscure international value chains. Simply put, wherever economies of scale rule and quantity of profit easily supersedes quality of product, bio-engineered food will be grown in vast monocultures fueled by machines and agrochemicals.

There are numerous ecological, socioeconomic and health costs associated with the industrialization of agriculture such as declining soil productivity, soil erosion, water pollution, disparate incomes, overuse of antibiotics and hormones in animal production, and overuse of harmful pesticides and herbicides in crop production. The heavy reliance on fossil fuels, the release of carbon into the air, the destruction of terrestrial and aquatic ecosystems, bio-engineering, and the loss of bio diversity through mono-cropping all contribute to the Green House Gas effect, climate change, environmental degradation, and global aquafer destruction. Since these adverse results may not have a direct immediate cost to the industrial production system, they are not necessarily viewed as problems and often times ignored. Accordingly, large Agribusiness hubs will tend to locate in counties, states and countries with the weakest environmental standards, and where a disadvantaged populace is less likely to oppose them.

Certainly our precious national resource of productive farm and grazing land is being threatened. Wes Jackson, the founder of The Land Institute, famously called for “a better ratio of eyes to acres as eyes tend to take better care of the acres they survey when there aren’t as many acres to look at”.

Traditionally, farmland agroecosystems consisted of diverse mixes of grazing land, crop land, orchards, wetlands, and managed forests, which could support a wide array of biological diversity. Now “fencerow to fencerow” planting employed by modern industrial mono-culture farming calls for ever increasing specialization with fewer crops, fewer breeds of livestock, and more uniform and standardized genetic make-up of those crops and breeds, not for quality or environmental compatibility characteristics, but rather for utility within the value chain. The FAO (Food and Agriculture Organization) has estimated that during the last century 75% of crop genetic diversity has been lost. This trend has only accelerated making our food supply more vulnerable and further imperiling the security of our food system.

Scientists and ecologists warn that richly diverse ecosystems of both flora and fauna are more resilient and better able to recover from such stresses as drought, pest infestation, blights, irregular weather patterns, and human induced habitat destruction than are less diverse systems. They warn that without this natural insurance a host of stressful events could have catastrophic consequences for mankind and our planet.

Why Agroecology?
For small farmers, Agroecology is a welcome competitive alternative to industrial commodity driven agriculture. Agroecology provides a sustainable farming methodology by which small farmers can regain their independence, build healthy soils, realize substantial per acre increased profit, reduce costs, eliminate environmentally damaging inputs, improve the utilization of water sources and insure a bio-diverse, sustainable ecological system. Agroecology will enable small farmers to regain their autonomous heritage producing nutritious, healthy and ethically grown food products for local, regional and national customers. The resulting land stewardship will mitigate the adverse impacts of industrialized farming and help communities thrive and flourish amidst an economically viable, socially just, and environmentally sound production system.

The timing is perfect for innovation and entrepreneurship as an increasingly knowledgeable, demanding, and conscious consumer is starting to reshape the food landscape. They want high-quality food, produced locally with farming practices they want to support and brought to them through a value chain they can trust. In many respects this consumer is looking for a relationship as much as a food product. They don’t want to get their hands dirty, but they want to shake the hand of someone that does.

Increasingly affluent consumers world-wide are demanding rare and specialized products tailored to their needs and desires, like organic, low-fat, high-protein, nutritionally complete non-bioengineered foods. New distribution channels through progressive grocers, specialty stores, farmers markets and on-line shopping tools are expanding rapidly to form the necessary linkages and a functioning value chain between this explosive consumer market and the small farmers capable of serving it. These farmers enjoy a comparative advantage in producing unique, specialized, and highly diversified products. Their smaller size and autonomy enables them to remain flexible, adapt to change, and be innovative enough to respond profitably to these highly differentiated markets.

Small Farmer Methodology
Using Agroecology principles, the Valley Park Agroecology Center will dedicate significant acreage to larger scale sustainable farming methodologies combining permaculture, agroforestry, bio-intensive, large scale composting, no till, polycropping, mob grazing, and silvopasture techniques in demonstration plots designed for local conditions in acreages of 10 acres and larger. Scalable models will be designed that can be easily replicated on acreages of 100 acres or more.

We will work closely with the USDA, and certain universities and private foundations who share our commitment to preserve the family farm, as well as with organizations dedicated to “farm-to-table” initiatives to develop the marketing, transportation, and distribution channels necessary for reaching local, regional, and national markets. Best Practices and Lesson Learned information will be disseminated through trade magazines and local publications. Outreach efforts to small farmers in the form of seminars, field clinics, and industry days will rely heavily on collaboration with the NRCS (National Resource Conservation Service), the Farm Credit Service, and rural community agricultural supply retailers, who will benefit greatly from the success of small scale farmers.