"Get Big or Get Out," the government's agricultural economics mantra since the 1950s, has had a major impact on farms, farmers and rural communities.
Published: 10/11/18, Last updated: 2/28/24
Much of the way that agriculture has developed in the last fifty years seems inevitable — as if consolidation, ever-larger farms and ever-fewer farmers are just the natural evolution of the farm economy. This narrative also says that this is a small price to pay for “feeding the world.” But the truth is that all those changes and many more happened because of specific farm policy — and the consequences of these changes have very real financial, social and environmental costs.
Here we focus on some of the ways that policies have changed the farm economy to benefit a few players and corporations. These changes disadvantage smaller farmers, the economic health of rural communities and food security.
Farming is a unique business. The volatility of weather, pests, global markets and more make it unpredictable in ways often unrelated to the farmers’ skill or management techniques. Most farmers borrow a great deal of money every year just for operating costs, as well as for repairs or new equipment, with the anticipation that their harvest will earn enough to pay back their loans.
Agriculture is also uniquely important to the security of any nation — people must eat. Like other industries, the farm economy has good and bad years. As a result, there is a long history of the government providing a safety net to the sector, especially for bad years.
Following the Great Depression of the 1930s, the New Deal included big changes in farm policy intended to guarantee farmers a fair price for their goods. These policies skewed towards farmers who had more land, exacerbating existing inequality even then, but for the many farmers they helped, they were invaluable.
A key feature was a program that managed agricultural supply and kept farm prices from falling too low on commodity goods (e.g., grains, dairy, some other storable crops). Because harvest comes at roughly the same time for everyone, another unique feature of agriculture is that the price farmers get for their goods drops at the peak of harvest, because the market is suddenly flooded. Ironically, the better the harvest is, the lower the price is likely to go for the farmers who produce it.
The New Deal programs, called supply management, stabilized these swings by keeping the supply of commodity goods constant. Crop harvests vary from year to year, so keeping a steady amount on the market requires some structure. A floor price — essentially a minimum wage — ensured farmer prices would not drop too far below the cost of production; a grain reserve allowed the government to purchase surplus commodities to keep them off the market; and conservation incentives kept marginal land out of production. When the program was in full effect from 1941 to 1953, businesses who bought commodities paid those commodities’ full cost of production. The federal government, meanwhile, only had to buy the surplus, so the cost to the taxpayer was much lower than it has been since — in ways we will see below. 41519
The ever-growing companies that now dominate the market are a far cry from local businesses — they are virtually all multinational corporations. Smithfield, the top US pork producer, is owned by a Chinese company, while many US-based firms have been exporting practices like chemical-dependent agriculture and CAFOs around the globe for years. Foreign ownership is not inherently negative; as a nation of immigrants, the US has thrived on influences from abroad. But many global corporations, whether based in the US or elsewhere, are primarily concerned with their bottom line, setting up operations wherever they can get the best tax breaks, cheapest labor or most business-friendly regulations – conditions that are not good for the well-being of the local community, workforce or environment.
As farms have consolidated, they have also consolidated ownership of their supply chain in a process called vertical integration. This started in the 1940s, when companies like Tyson Foods began buying up the formerly independent parts of their supply chain — breeding facilities, feed mills, slaughterhouses — and integrating them under their umbrella. What would have formerly been a network of small businesses supporting and being supported by a local meat industry is now one self-contained corporate economy. 21
The farmer must take out loans, often starting at $1 million, and build barns to company specifications. Once the farmer is committed to the agreement, by way of significant debt, he or she often finds that the contracts are not as fair or profitable as the company salesmen promised. 24
In addition, there is evidence that larger farms spend less at local businesses than small farms. A Minnesota study, for example, shows that farms with a gross income of $100,000 made nearly 95 percent of their expenditures locally, while farms with gross incomes above $900,000 spent less than 20 percent locally. 26 A North Dakota metastudy found “detrimental effects of industrialized farming on many indicators of community quality of life, particularly those involving the social fabric of communities.” 30
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