Industrial farming takes money away from rural areas, study says

Social Justice News
October 6, 2008

Industrial farming takes money away from rural areas, study says
By Mark Pattison, Catholic News Service

WASHINGTON (CNS) -- A new study said that industrial farming practices -- also known as confined animal feeding operations, or CAFOs -- take more money away from rural communities than they leave behind, and leave less money in rural areas than do smaller, family run farms.

"It is clear that industrialized animal production has adverse impacts on rural communities," the study said. "The consolidation of the nation's animal agriculture has led to a more concentrated, industrialized model, which has had dramatic and increasingly problematic impacts on rural communities and the traditional farm."

The study, "Impact of Industrial Farm Animal Production on Rural Communities," was conducted by Tim Kautza, a science and environmental education specialist for the National Catholic Rural Life Conference, and Holy Cross Brother David Andrews, a former executive director of the conference. The study was issued Sept. 24 by the Pew Commission in Industrial Farm Animal Production, on which Brother Andrews served as a member.

"What began with a pursuit of efficiency to improve production for all farms has unintentionally resulted in a decline in economic freedom for them and an imbalance of economic power favoring dominant firms within the industry, rather than individual producers," the study said.

"As technological advances were made in animal agriculture, farmers were eager to adopt them as they seemed likely to increase efficiency and maximize profits. However, the technology was usually capital intensive, meaning that those who adopted the technology had to utilize it at full capacity to achieve profits," the study added.

At the same time, according to the study, "animal agriculture" has become vertically integrated, which has resulted in farmers now becoming "growers"; they own the land and the buildings used to raise the animals, but the "integrators" -- large corporations -- own the animals and enter into contracts with the growers.

"The integrator makes all the decisions in this system," the study said, while the grower is "responsible for the waste produced by the animals and is paid a set price" for the animals when they are sent to slaughter.

A 2001 U.S. Department of Agriculture study cited by Kautza and Brother Andrews said that 77 percent of poultry producers, 58 percent of hog producers and 44 percent of cattle producers reported "no open-market alternative" to contract farming.

"The single-minded pursuit of economic efficiency within agriculture has resulted in a loss of economic freedom and created an imbalance of economic power favoring agribusiness over independent farmers," the Pew study said.

The study illustrated the kinds of economic disparities in today's farming. "Farms with a gross income of $100,000 made nearly 95 percent of their expenditures locally, while farms with gross incomes in excess of $900,000 spent less than 20 percent locally. That means that most dollars made by the industrial operation do not stay in the community and help it to thrive, but instead leave the community, draining it economically."

It added, "There is no multiplier effect of dollars being spent locally when large corporate-owned CAFOs are built in a community."

Farmers working in industrial farming earn about 58 percent as much as all wage and salaried workers, it said. About 45 percent of all hired farmworkers ages 25 and up earn less than the federal poverty threshold for a family of four, and one-third of them have annual family incomes under $15,000.

What growth in employment there is from CAFOs is not offset by the "out-migration" taking place by others in rural communities, according to the study.

"Today, we see increasing control of the food system by dominant corporations. Independent livestock producers, even with lower costs than those producing under contact, are finding it very difficult to compete, due in part to the reduction in market access and price manipulation by dominant livestock buyers shunning open markets in favor of private contracts to procure livestock," the study said.

"If farmers are denied market access, their feeding costs are increased, production flow is interrupted, and the sale of overweight animals later results in substantial price discounts," it said. "Where large-scale operations are present, there are few farmers and fewer ... farms."

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