Corporate farming is a critical, negative term that describes the business of agriculture, specifically, what is seen by some as the practices of would-be megacorporations involved in food production on a very large scale. It is a modern food industry issue, and encompasses not only the farm itself, but also the entire chain of agriculture-related business, including seed supply, agrichemicals , food processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales. The term also includes the influence of these companies on education, research and public policy, through their educational funding and government lobbying efforts. Corporate farming is often used synonymously with agribusiness (although agribusiness quite often is not used in the corporate farming sense), and it is seen as the destroyer of the family farm.
The goal of corporate farming (perceived or real, as the case may be) is to vertically integrate all food production. Some corporations want to manage every step of this production, from DNA to consumption. One of the biggest is Archer Daniels Midland. Even larger is privately held Cargill, with 2004 revenues of $62.9 billion.
Corporate farming is a fairly broad term that deals with the general practices and effects of a small number of large, global corporations that dominate the food industry. It does not refer simply to any incorporated agribusiness enterprise, although most agricultural businesses today are in some way economically connected to the dominant food industry players. As such, it may be thought of as a movement, which is at times also referred to as anti-corporate farming.
Effects ascribed to corporate farming
In a pattern common to all industry, companies tend to grow, and as they grow, their economic power and capacity to continue growing increases. Competition usually becomes easier and easier to overcome, through outpricing, outmarketing, buying out, and the use of economic influence to create favorable conditions. Eventually, this pattern tends towards monopolistic conditions, where one or a very few entities "control it all", something that is seen by society as a potentially harmful situation (as in, for example, antitrust laws).
In agriculture, extreme corporate growth naturally has its specific effects, ones that subscribers to the corporate farming outlook find fundamentally harmful to society at large.
Concentration of production
Corporate farming is criticized for its tendency to concentrate production, while expanding, and thus steadily decrease both the number of farms and the percentage of independent farmers. Those farmers not bought out or put out of business, are removed from independent production decisions and forced to sign production contracts with corporations. This is essentially an anti-monopolist criticism.
The trend towards concentration began in the chicken and vegetable industries and has since expanded to hog and grain production. In 1997, some 60% of hogs sold within the US were sold under some form of contract, whereas in 1980 only 5% of hogs were sold in this manner.
As production continues to concentrate and is coupled with increasing reliance on technology, farmers complain about their increasing remoteness from centers of population or production. For example, farm machinery repair services, which were once as close as two miles away, are increasingly as far as 40 miles away.
Robert A. Rohwer asks, "Are we starting a new serfdom with CEOs as the lords? Are we creating a vise whose jaws are corporate control? Corporations will soon collect all the windfalls of agriculture and corporate decisions will dominate all aspects of the field. My son and daughter are mere employees, tied to the land, swamped in debt, and diminished in their entrepreneurship. We are moving towards industrialized agriculture."
Food quality and cheap food
A critical consideration is whether the food that reaches the consumer is as good as it would be under alternative structures of the food industry. Very large organisations may be motivated primarily to maximise yield and profit rather than breadth of choice (to the consumer), flavour and nutritional value; they may feel more inclined to use genetically modified crops, hormones, preservatives, color additives and insecticides to maximise yield and profit. In the United Kingdom there has been a growing reaction against factory farmed produce in recent years, with consumers feeling that they can obtain higher quality products (admittedly at a higher price) if they know the provenance (the local and often small scale source) of the food they buy. There is little or no comparative information about flavor and nutritional value compared internationally and over time (i.e. today compared with the past) but there is anecdotal and some scientific evidence that US factory farming may have resulted in a deterioration (and not simply a change) of food quality.
Genetic engineering
The debate about large corporations in agriculture is heighted at the intersection with the already controversial issue of genetically modified food. Critics of both are concerned that these large businesses will leverage their economic and political power to defeat attempts to regulate or restrain the spread of genetic engineering in agriculture, or leverage intellectual property rights in GMOs to unfair advantage over their competitors, against the interests of users and consumers of their products, and to the detriment of the environment.
Patents, say supports of such intellectual property rights, are designed to subsidize and create economics incentives for invention by rewarding the inventor with monopoly profits. The inventor is given the right to prevent any competitors from selling or using the invention, so that it may be sold at higher prices and on terms more favorable to the inventor. This may create significant economic rewards, though consumers may choose to buy rival products (possibly based on different patents, or none at all), and the lifetime of the patent is limited.
Simple possession of a naturally occurring seed (free from patent restrictions) gives one the ability and the legal right to grow crops from the seed, to modify the breed, and to sell, exchange, or share the seed as one sees fit. With patent rights, however, the inventor (often a large corporation) may choose to restrict how farmers may use a given organism, in order extract the economic value of each type of use, and to extract economic value from each user.
Critics of GMOs and corporations say that these rights give already powerful corporations an even greater advantage, and in a way which disrupts millenia-old agricultural practices. Supporters of genetic engineering emphasize the potential benefits in nutrition, reduced environmental impact, and increased productivity that may be possible with the technology. They say that the additional economic rewards are necessary to encourage the large capital investments needed to make useful advancements in the field.
Corporate farm vs family farm
Main article: family farm
Farms are expensive to operate; input costs include farm machinery, crop insurance, fertilizers, irrigation, pesticides, fuel, and seeds. Some people question whether small family farms are still economically sustainable in the United States.
One major difference between independent farming and corporate farming is that a corporate farmer is usually a contracted employee, rather than the owner of the farm. However, ownership itself does not mean independence. An owner-operated farm today faces many constraints that are completely out of the owner's control. Most of these can be seen in light of increasing concentration of ownership, not only of farms, but of the equipment and inputs necessary to farm, and the available sales channels.
Production contracts are a primary means of control and vertical integration of family farms. These are of two general types. Production management contracts specify the methods farmers must use. Resource-providing contracts require the contractor to also provide materials (e.g) and equipment. Under the latter, increasingly prevelant arrangement, the family farm owns its land and "sells" its output, but retains no real decisionmaking control over the essential farming activities, like crop selection, equipment purchase, production methods, sales channels, and buyers.
A prime example is the drive to constantly improve production efficiency, as measured by farm output. By using successive waves of new technology (in agrichemicals, mechanization, crop varieties, drugs, etc), output has steadily risen over the past decades. This in turn has contributed to steadily driving down the price farmers can get for their output, and driving up the cost (to the farmer) of production. As the cost of remaining in production rises, and income falls, only the larger business entities, with the ability to profit from outside of the immediate farming activities (such as through financial services, agrichemical production, food distribution, and so forth) can afford to remain in the game.
Benefits of Big Agriculture
The core argument for the methods criticized as corporate farming is essentially: "This is the way to keep up with population growth, and to make inroads into feeding billions of people to developed nation standards—this is the only way to feed the world." Indeed, rapid technological development and large-scale global production management are responsible for an unprecedented abundance of inexpensive, widely available, attractive, "safe" food. By lowering the cost of raw food inputs, creating sophisticated long-distance distribution networks, producing processed convenience foods, and making food available year-round in vastly stocked supermarkets, corporate farming has presented consumers in the wealthiest regions of the world with an immense variety of food, at relatively low cost. Today, in North America, only about 15% of average income is spent on food. By this measure, providing these methods are sustainable, corporate farming would appear to be a tremendous success.
See also
External links
Last updated: 05-07-2005 10:15:51
Last updated: 05-13-2005 07:56:04
