|You are in: Special Report: 1999: 09/99: Farming in crisis|
Tuesday, 14 September, 1999, 16:11 GMT 17:11 UK
Midwest farmers going bust
By BBC North America Correspondent Brian Barron and News Online's Kevin Anderson.
The US states of North and South Dakota have laws that restrict the spread of what are called corporate farms, but small farmers are still going bust.
All across the Grain Belt stand abandoned homesteads, symbols of untold stories of failure, flight from the land, and even suicide.
For those farmers who do not survive economically, auctioneers perform last rites, selling combine harvesters and other specialised machinery at knockdown prices.
Law on their side
In an attempt to curb farm failures, voters in the US state of South Dakota passed a law by referendum that bans new corporate farms in the state.
The measure is called Amendment E, and Don Hoogestraat, who raises pigs and grows wheat, says it is long overdue.
Many independent farmers like Mr Hoogestraat denounce corporate farm entrepreneurs as predators who prey on the misfortunes of others, treating once independent farmers like serfs in feudal Europe.
"It is very threatening" he says, "in fact they are trying at this particular time, and for the last two years to take over the entire industry. We feel they are also controlling the prices with over-production. It has caused quite a deal of unrest between neighbours. Neighbours are not as friendly any more as they used to be due to that particular fact."
Agricultural economist John Ikerd says that massive agricultural corporations are using their market and political power to pass along the environmental, economic and social costs of large-scale agriculture to farmers and rural communities.
When agricultural corporations have an unanticipated oversupply, they reduce the volume of hogs or chickens supplied to the their farmers, said Mr Ikerd who works with the sustainable agriculture programme at the University of Missouri at Columbia.
"That means that (chicken) houses are sitting idle for four to six weeks a year, and the farmers are only paid on the basis of the number of birds that go through the house," he said, adding that corporations "shift the burden of unfavourable market conditions onto the producer," or rather the farmer.
Corporations also pass along the environmental effects of intensive agricultural to farmers and local communities, he said.
Some massive hog operations in northern Missouri produce as much waste as Kansas City, but the contracts are written so that the farmers are responsible for the large amount of waste produced by raising a large amount of livestock in a small space, he said.
Consolidation in agriculture has also hurt rural communities. With fewer farmers required to work the land corporate agriculture "virtually continues to shut them down," he said.
Death of independent markets
Mr Ikerd said consolidation and corporate contracts had led to the decline of independent markets, apart from direct contractual relationships between agricultural corporations and individual farmers.
Hog, cattle and, soon even grain production were simply following the model of the poultry industry, where only a handful of corporations control almost 100% of the production of chickens in the US, said Mr Ikerd.
He estimates that the largest 50 hog operations in the US already have over half of the country's total hog production, and more than 60% of the hogs produced in the US are raised under contract.
Arlo Biere, also an agricultural economist, says the trend in consolidation is nothing new. It began in the 1930s.
The changes are part of economic development and technical change, said Mr Biere, who is a professor at the Kansas State University.
Part of the impetus for contract agriculture is quality control, and in modern agriculture, increasingly genetic engineering is used to select desirable traits. GM foods will also drive the increase in contract agriculture.
But these market and technological changes driving consolidation will mean fewer farmers will be able to make a living from production agriculture.
Professor Biere says that the US will not be impacted as greatly as other countries because a smaller percentage of the population is involved in agriculture.
Also, he says that the farming population is growing older, which means that many farmers will soon be retiring, helping to reduce the number of active farmers.
But he does not believe that contract agriculture is necessarily negative for the remaining farmers. It is in the agricultural companies' best interest to treat the farmers, their suppliers, well.
"As the car industry and retailers have realised, it doesn't pay for them to drive their suppliers bankrupt," he said.
Adapt or fail
Back in South Dakota, 100 miles to the north of the Hoogestraat farm, Lester Moeller is a convert to corporate factory farming.
Mr Moeller says: "For me it is a steady form of income, it is a steady job. I only do this for a few hours a day and then I'm done - I can still go out and farm and plant what I want. There is no such thing as a free person in a world market anymore."
Where there were 84,000 individual farmers, today there are just 23,000 left. Legislation may delay the spread of corporate farming, but in America, market forces usually triumph in the end.
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