Farms as factories

Published : Feb 27, 2004 00:00 IST

The disappearing family farm in the United States is the result of policies that subsidise the growth of industrial farms and consider making profit more important than feeding mouths.

SOME events are unforgettable. South of Iowa City, Iowa, along Highway 218, sits the small town of Hills. About 600 people live there now, and few of them can forget what happened in the winter of 1985. Dale Burr, 63, left a meeting with the manager of his bank, John Hughes. He had just been told that the bank would foreclose on his farm and sell his farm machinery and livestock. Forlorn, he went home, shot his wife Emily, returned to the bank and shot John Hughes. The killing did not stop. Burr had a long-standing land dispute with his neighbour, Richard Goody; he went to Goody's home and shot him. Within minutes, Burr shot himself. Four people died within the space of a few hours, all victims of the crisis that befell small farmers and farm workers.

The Reagan years ended the long tenure of the United States family farmer, the small farmers who had been rescued from the 1930s, during the Depression, by the long hand of the state. The state did act in the 1980s, but not to bolster the lives and labours of the small farmer: It now acted to benefit the large agricultural conglomerates that rapidly bought out the bankrupt farms and concentrated production in the hands of the giants, such as ConAgra and Cargill. With foreclosures came high suicide rates among men and women, higher rates of child abuse, alcoholism, and an increased production and use of crystal methamphetamine (speed) among those who had once been proud to work their own land.

When the Frenchman Alexis de Tocqueville wrote his Democracy in America (1835), he praised the ingenuity and productivity of the American family farm. Although most family farmers "make agriculture itself a trade", he wrote, many of them "combine some trade with agriculture" and so, demonstrate how "the Americans carry their business-like qualities into agriculture". In our time, the idea of "business-like qualities" in agriculture does not mean what it meant for de Tocqueville. For this aristocrat from the Old World, that the American small farmer in the northern territories hustled to make more than a living from the soil impressed him. In our time, "business-like qualities" have come to be represented not by the Dale Burrs of the world, but by the ConAgras and Cargills, the agro-businesses that make the fields into a factory.

At the close of John Steinbeck's The Grapes of Wrath (1939), he writes, "There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolise. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks, and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificates - died of malnutrition - because the food must rot, must be forced to rot."

During the Depression, those who worked the land did not have the money to buy its products, now owned by larger and larger agricultural industries. "The monster," Steinbeck wrote, "has to have profits all the time. When the monster stops growing, it dies. It can't stay one size." The "monster" is agricultural capitalism, the factory in the field, as socialist writer Carey McWilliams put it in the title of his own 1939 book. Industry had expanded onto the farms, and despite the "drought and dust" it was the new factory farms that intensified the depression for those who worked the soil.

President F. D. Roosevelt's New Deal responded to the Depression with an array of programmes collected in the Agricultural Adjustment Act of 1933. The Act allowed the government to get the farmers a controlled price for their products by three means. First, it paid a guaranteed minimum price for products through a "deficiency payment" to compensate for a drop in the market price (below the cost of production). Second, the state paid to decrease the land under cultivation and so, to keep a check on total production. Third, the state purchased cultivated crops to keep the price down, and then used those crops in urban areas to give to the indigent. Such price controls helped small farmers stay in business. Migrant workers, however, only enjoyed an indirect benefit - they found jobs.

The post-Depression protectionism of U.S. policy was replicated across Europe. Governments in the Old World increased tariffs to prevent the "dumping" of cheap commodities from elsewhere and initiated price controls to protect farmers. From the 1950s to the 1970s, the massive growth in U.S. maize and soya products enabled it to expand its livestock production, because these two field crops are the base for livestock food. Animal husbandry and livestock feed became the engines for the growth of the U.S. agro-business industry in the post-War period. European subsidies for domestic wheat and dairy, and U.S. subsidies for almost all sectors of farm production, enabled the buoyancy of the Atlantic world's agricultural dominance. Central to the farm sector in this region was the agro-business that slowly began to overrun the small family farm.

THE crisis in international agriculture in the 1970s, matched by the general economic crisis of the decade, allowed the large agro-businesses to consolidate their position. These agro-business concerns supported protectionism if it allowed them to thrive, but they argued against it where it hurt their interests. U.S.-based agro-business giants that enjoy subsidy within the U.S. fought to protect and expand this agro-corporate welfare, just as they fought to end the tariff and subsidy regime that protected the Third World economies from the wiles of profit motive. The agro-businesses integrated the world's agricultural economy by disrupting the logic of food security in the service of the logic of corporate profits: it was more important to make a profit than to feed every mouth.

In the 1996 Federal Agriculture Implementation and Reform Act (FAIR), the U.S. government eliminated the deficiency payment scheme and replaced it with the Production Flexibility Contracts. By the new contracts, the government expanded its subsidies to agriculture - now more to agro-business and less to small farmers. As the Institute for Agricultural Trade and Policy shows, the new farm policy provided an average of 15 per cent annual return on equity for agro-businesses and only 2 per cent for small farmers.

One result of this has been the decline of the family farm, where income is currently just above $23,000. Between 1994 and 1996, 25 per cent of hog farmers, 10 per cent of grain farmers and 10 per cent of dairy farmers went out of business. The Bureau of Labour Statistics projects that between 1998 and 2008 the number of family farms will decrease by just over 13 per cent.

Meanwhile, the agricultural industry continues to concentrate in the hands of a few monopoly firms. Four firms control more than half the poultry industry, four others control more than 80 per cent of the beef industry. Two firms, Cargill and Continental, control two-thirds of the world's grain. Ten firms control over 84 per cent of the world's agro-chemical market. Today, 8 per cent of the farms account for 72 per cent of agricultural sales. These firms, not the market, control prices.

In 2002, as President George W. Bush signed the poorly named Farm Security and Rural Investment Act, he said: "It will promote farmer independence, and preserve the farm way of life for generations. It helps America's farmers, and therefore, it helps Americans."

Anuradha Mittal, Director of the San Francisco-based Food First Institute, rebuked Bush's romantic spin on his pro-corporate legislation. "A comparison between the 1930s and today hardly supports President Bush's words. Then, 25 per cent of the population lived on the nation's six million farms; today, our two million farms are home to 2 per cent of the population. Small family farms have been overwhelmingly replaced by large commercial farms." Furthermore, the Bush administration's policy "can be best described as agro-business welfare". The federal crop subsidies will go not to farmers who resemble John Steinbeck's Joad family, but to rich recipients.

"The government's subsidies go to agro-business firms that control the market. In 2000, 63 per cent of the $27 billion subsidy went to just 10 per cent of the farm owners or agro-businesses. From the 2002 Farm Bill (size: $248.6 billion), the top 10 per cent of those who receive subsidies rake in two-thirds of the subsidies, while the bottom 80 per cent will have to rest content with a sixth of the subsidy pot.

Forty per cent of U.S. and European farm income comes from subsidies, while Japanese farm income benefits from a 60 per cent intake from the federal government. In Europe, Japan and the U.S., the subsidies go to agro-businesses whose growth comes at the expense of the small farmer and the consumer. The economics Nobel laureate Joseph Stiglitz said of the U.S. subsidy policy that it was "the perfect illustration of the Bush administration's hypocrisy on trade liberalisation".

In a strong editorial against the current farm situation in the U.S., The New York Times (in late December 2003) offered the following analysis and rebuke: "The farms that benefit most [from the subsidy-tariff regime] are industrialised. American small farmers are victims of federal agricultural policies, just like the African cotton growers, who cannot compete against the American product. American cotton - thanks to subsidies - often sells for less than it costs to grow. The real small farmer's opportunities are limited by high land costs. The stream of subsidy dollars flowing from the federal Treasury - about $20 billion [in 2002] - has a way of turning arable land into welfare tickets. That is why in 2001, despite low commodity prices and an ongoing exodus from rural America, farmland values in places like Iowa were hitting all-time highs. Subsidies inflate the price of land by an estimated 25 per cent."

The number of farms in the U.S. has declined from six million in the 1950s to two million today - an indication of the concentration of farmland wealth in a few hands. People like Dale Burr do not own the land any longer, their land is now with the banks, and they are the detritus that litters the post-industrial, post-family farm order. Agro-business is the "monster" Steinbeck identified seven decades ago, and even as it is not growing food for all, it is growing money for a few.

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