Agricultural Restructuring and Concentration in the United States: Who wins, who loses?
August 2003, Policy Brief No. 6
The U.S. government has been in the forefront of bilateral and multilateral trade agreements worldwide. The government claims that its negotiating strategy has been to open markets in those sectors in which it has been competitive. The agricultural sector was, at the time these agreements were on the table, touted as one of the U.S.’s strongest industries. Yet the story of U.S. agricultural liberalization hasn’t been a happy one. This report, which uses U.S. Department of Agriculture data wherever possible, finds that the U.S. has experienced:
- a reduced trade surplus in agriculture
- reduced numbers of family farms
- racial discrimination against farmers of color
- increased levels of subsidy to large agricultural concerns
- increased levels of pesticide use
- decreased crop and biological diversity in the U.S. countryside
- falling levels of rural social welfare
- increased indicators of poverty and malnutrition across the United States
Domestic policy has advanced in lock step with these agreements; the same administrations that have advanced trade liberalization have invariably authored domestic policy changes to comply with these new agreements, at least nominally. The new policies and international market structures have not been neutral in their effects. The U.S. government has created incentive structures that favor large scale monocultural farming operations; in these structures, small family farmers have been marginalized.
The U.S. government has created incentive structures that favor large scale monocultural farming operations; in these structures, small family farmers have been marginalized.
Despite strong international rhetoric against agricultural subsidies, and equally vocal domestic rhetoric for a “level playing field”, the U.S.’s direct payments to agriculture are at record levels. The findings of this report suggest that these payments are not being directed to those farming operations most in need of support, but have instead gone to already affluent agricultural concerns and banks.
Farm subsidies have been and continue to be inequitably and inefficiently distributed. The report examines a range of subsidy mechanisms. The top 1 percent of beneficiaries from one program collect an average $83,000 per year and those in the top ten percent average $32,000; the typical program participant, however, receive just $1,200 annually. Recipients include fifteen Fortune 500 Companies.
At the same time, small family farmers, facing falling returns from farming together with rising costs, are relying on off-farm income as a survival strategy. Fifty-five percent of U.S. farm operators work off-farm, with 80 percent working full-time jobs. This is a 24 percent increase from 1979. During the same period, the percentage of farm operator spouses working off-farm increased by 65 percent, from 27.7 percent to 45.8 percent. This is indicative of self-exploitation on the part of farm operator households, as they must manage both farm responsibilities and off-farm employment.
While there is no doubt that all small family farmers are facing increasing pressure as a result of consolidation in the sector, the disappearance of American farmers has proven to be quite discriminatory. Minority farmers are at greater risk of being pushed out of the sector than their white counterparts. While 925,000 farmers (14 percent of all farm operators) were African-American in 1925, there remained fewer than 18,000 African American farmers (less than 1 percent of all farm operators) at the turn of the twenty-first century. With black farmers exiting the sector at a rate almost five times greater than whites, a 1990 House Committee report declared that black farmers were on the verge of extinction.