13.
Ethical Issues in
Saving the Family Farm
Larry D. Sanders
AGEC 4990: Spring 2002
Dept. of Ag Economics Oklahoma State University
1
Farming: The more it changes, the
more it remains the same?
“At the end of World War I most farm families lived on unimproved
dirt roads; farmed and went to town with horses and horse-drawn
equipment obtained their news from weekly newspapers, and used
kerosene lights when the sun went down. Few farm dwellings had
central heating or flush toilets. Few farm boys were attending high
schools. Farm incomes and farm land values had been rising
almost steadily since 1900. Many people thought we were
approaching a farm land shortage similar to that experienced in
western European countries, which would make farm ownership
more and more difficult for succeeding generations.
“. . . Though substantial progress has been recorded in farm families’
standard of living and in the legislation designed to improve and
stabilize their incomes, the basic problems remain unresolved. . . .”
--Wilcox, W., 1947 (p. 388, p. 398)
2
Farming Trends Seem to Turn
“Free Market” on its Ear
“This nation has long pursued the ideal of a farm sector populated with
privately operated ‘family farms,’ as opposed to corporate farms or
large public units. Have today’s farms become so large that they can
no longer be considered ‘family farms’? Have they evolved into
corporate-line business organizations which threaten to weaken
productive efficiency as well as contribute to an unacceptable
distribution of income?”
“. . . The use of formal coordination devices such as these [contractual
agreements & vertical integration] arose out of a felt need by the
private sector to minimize risk to both producer and processor. The
proliferation of these devices, however, is accompanied by new
concerns about the adequacy of fairness of contract terms, concerns
about the adjudication of contract disputes, and consequences of the
resulting ‘thinness’ of any still remaining open markets.”
--Milton C. Hallberg & Dennis Henderson, 1994 (p. 55, p. 66).
3
Farm Trends Certain?
“Farms in the United States are becoming fewer in
number and larger in size as farm operators take
advantage of new technologies to achieve
additional size economies and become more
specialized. This trend will likely continue into
the foreseeable future as technological
developments continue and as management levels
improve.”
--Hallberg & Henderson, 1994 (p. 71).
4
Status of Ag Economy: 2002
Many
farms continue to be in poor
economic health
Farms are more dependent on government
aid
There are increases in small farms & large
farms
5
Status of Ag Economy (continued)
Agriculture
is becoming more concentrated
With more flexibility in govt. programs,
there is less flexibility from contract
agriculture & biotech
Farmers are “aging”
6
Status of Ag Economy (continued)
Average
Farm Household & Nonfarm
Household Income now comparable (farm
income accounts for 12%)
Most farms are marginally profitable or
unprofitable, but most income comes from
off the farm
7
Status of Ag Economy (continued)
10-15%
farms produce 80-85% farm sales &
are “profitable” on average (8% farms
account for 72% of production)
Top 10% farms received 63% of govt.
payments in 2000
8
Net Farm Income &
Government Payments
$ Billion
60
50
N
A
F
T
A
W
T
O
1996 Farm Act
40
30
20
net farm income
govt payments
NFI-G
10
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
0
9
Net Farm Income &
Government Payments (cont)
Average ($ bil/year)
1991-95
1996-01
Net farm income
Govt. payments
NFI - G
Govt. portion of NFI
43.4
9.2
34.2
21%
47.7
15.3
32.5
32%
6-yr trnd
steady
up
down
up
Note: updated 1 Mar 02
10
INDUSTRIALIZATION OF
AGRICULTURE
 Transformation
from “Way of Life” to a Business
– Production Scale Economies
– Marketing Scale Economies
– Venture Capital
 Market Needs Drive Industrialization thru Search for
Efficiency Gains Along Marketing Chain
 Integration is the Organizational Mechanism
11
Farming: “A way of life” or
“A way to make a living”?
“America is of two minds about agriculture. One submits
to the creed of farm fundamentalism, emphasizing belief
in the primacy of agriculture and the family farm. The
other submits to the creed of democratic capitalism,
emphasizing belief in the primacy of free enterprise and
authority of the people at large expressed through the
political system. . . .”
“. . . Although the two creeds sharply conflict, both are
widely held, often by the same person. This results in a
kind of individual and national schizophrenia regarding
how farmers shoulod be treated by government. . . .”
--Luther Tweeten, 1989 (p. 73; p. 82).
12
Farm Fundamentalism
(adapted from Tweeten)
1.
1.
2.
3.
4.
5.
6.
7.
8.
Agriculture is the most basic
occupation.
Agriculture must prosper for nation to prosper.
Farmers are better citizens, have higher morals, & are
more committed to traditional American values.
The family farm must be preserved because it’s a vital part
of our heritage.
Farming is a way of life.
The land should be owned by the person tilling it.
Anyone who wants to farm should be free to do so.
A farmer should be his own boss.
13
The family farm is the ideal nuclear family unit.
Family Farms as the Ideal
 Maintains
healthy rural economy
 Maintains strong moral rural base for
nation
 Avoids rural economic malaise and pressure
on urban areas
 Food production in caring hands
 Land stewardship in caring hands
14
Democratic Capitalism
(adapted from Tweeten)
1.
2.
3.
4.
5.
6.
7.
8.
Farming is a business.
Free market is the most efficient way to allocate
resources, & decide the size/role of farm sector.
Family farm survival is dependent upon the market, &
may be replaced.
Government should not interfere except to maintain fair
play in market.
Reward comes from level of proficiency.
All persons are of equal intrinsic value.
Concentration of power destroys individual freedom.
Property rights are inviolable.
15
Farming as a Business Ideal
 Resources
allocated to most efficient uses
 Inefficient resources reallocated to improve
economy
 Improves likelihood to achieve/maintain
competitive advantage in global economy
 Could reduce need for government support
 More efficient farm economy should lead to
more food at cheaper prices
16
The Real Question: Not whether to save the family
farm, but how do farm families adjust to change?
“. . . farmers are facing a situation common in the
American past: adjustment, in circumstances beyond
their control, of a rural population to the realities of a
changing economy. The migration of country people to
other occupations and localities and the surrender to a
new way of life that substitutes for the rhythms of
nature the timetables of shop and factory are major
themes of social history. The situation of the modern
farm family, forced to sacrifice the farm which is home,
livelihood and legacy to their children, is symptomatic
of a continuous adjustmenht of farming since the time
the land was first settled.
--Mark Friedberger, p. 1, 1988.
17
Ethical Dimensions of “Family Farms”
(TMR)
“It is harder to see why anyone should take the family farm
issue seriously, that is, why it should be part of a rational
argument intended to sway disinterested parties toward
sympathy with the integrated producers’ point of view. . .
.family farm arguments are irrational, founded on
nostalgia and emotion. . . . But there is no good reason
for policies to save the family farm. . . . Little more than a
cloak for interest group politics. . . . There is no ethical
content to the notion of the family farm. . . .
“This conclusion is hasty, however, for it ignores the
arguments that have been given to support a policy goal
of preserving the family farm. . . .”
--TMR, pp. 241-2.
18
Ethical Dimensions of “Family Farms”
(TMR)
 No
intrinsic connection between farm size & family
ownership
 Bonnen & Browne: family farm is agrarian myth &
muddles public policy discussion
 Libertarians: government can’t intervene w/o violating
noninterference rights
 Utilitarians stress “farm size” (structure) as key in public
policy
– Govt. involvement judged on consequences (B>C?)
– Some add nonmarket values such as aesthetic, historic,
symbolic value
 Agrarian
views (populists & traditionalists) stress
“family farm” as key in public policy
19
Ethical Dimensions of “Family Farms”
(TMR)
 Agrarian
Populism
– Jeffersonian agrarianism
– Breimyer & Hightower: Egalitarian view of
opportunity rights as essential
» Breimyer stresses the interests of the poor and
weak over the interests of property & efficiency
» Hightower: ag & family farm ensure legitimacy of
American political system; a moral & political
imperative to maintain this component of economy
to counter corporate middlemen & suppliers
» “Right to farm” essential to liberty
20
Ethical Dimensions of “Family Farms”
(TMR)
 Agrarian
Traditionalism
– Emerson & Berry
– Loyalty & character as aspects of personal morality
– Personal loyalties embedded in a web of concrete
social relations that establish that social structure &
individual role are codetermined
– Social morality becomes fixed by the web of
relationships in the form of “community” & small,
low-tech farms preserve work habits that build strong
moral character & bind farm families into a closeknit community
21
Ethical Dimensions of “Family Farms”
(TMR)
 Agrarian
Traditionalism (continued)
– Family farming places a way of life within the sociocultural setting and social interdependence, rather
than economic gain as the end that justifies the means
– Meaning is derived from work, nature & community,
rather than achieving economic success
– Does not accept enlightened self-interest & the social
contract as acceptable basis for agricultural ethics
22
Issues
 Definitional
 Structural
 Economic
 Political
 Ethical
23
A Curious Twist (2001+)?
 Farmers
& farm groups who previously called for
less government regulation, less supply control,
less government support, & more free market
have shifted to calls for more government support
to assure free market & survival of family farm
 Farmers who continue to call for more
government intervention (financial support &
supply control) to save family farm are out of
political favor
24
Competition,“creative destruction” & the
protective response
 “Destructive
gales” of competition (Schumpeter) lead to the
protective response from public & private sectors (Polanyi)
 Private sector protective response:
– concentration/consolidation/contracting
– externalizing costs
– unionization/cooperation
– Rent seeking
 Public sector protective response:
– redefining “public good”
– regulation/taxation/tax breaks/ protection/ subsidies
– education
25
Public Alternatives & Consequences
 Simple
choice:
– Regulate the market or, it will regulate us
 Difficult process:
– Who decides?
– How fast to let change occur?
– Whether & how to compensate “losers”?
 Self-regulating market cannot sustain itself & remain
“free”
 Ethics is inherent in this process, whether conscious or
unconscious, planned or unplanned
26
References
Friedberger, M. Farm Families & Change in 20th Century America,
The University of Kentucky Press, 1988.
Hallberg, M. & D. Henderson, “Structure of Food and Agricultural
Sector”, Food, Agriculture, and Rural Policy into the TwentyFirst Century: Issues and Trade-offs, M.C. Hallberg, R. G. Spitze,
& D. Ray, editors, Westview Press, 1994.
Sanders—various professional presentations & writings
TMR
Tweeten, L. Farm Policy Analysis, Westview Press, Inc. Boulder,
1989.
Wilcox, W. The Farmer in the Second World War, The Iowa State
College Press, Ames, 1947.
27