[Paleopsych] NYT Op-Ed: The Little Guys Are O.K.

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Sun Apr 17 15:56:30 UTC 2005

The Little Guys Are  O.K.


     College Park, Md. THE increasing size and industrialization of
     American farms have been decried as responsible for depopulating the
     countryside and causing economic and social ills. President Bush's
     proposed budget has encouraged the belief that help is on the way, in
     the form of more stringent limits on farm program payments. The plan,
     under which payments to some producers would drop by 5 percent and the
     current $360,000 annual ceiling on payments would drop to $250,000,
     has earned praise from rural populists, who see it as a step to reduce
     the subsidization of large as compared to small farms.

     However, two questions must be raised: Will the limits on payments
     really help small farms? And, more fundamentally, is it a good idea to
     subsidize large farms less than small ones?

     To answer these questions fairly, one must consider some surprising
     news: small farms are actually surviving and even flourishing to an
     extent no one guessed 20 or 30 years ago.

     The United States had 6 million farms in 1944, and by 1970 that number
     had declined to 3 million, a rate of loss of almost 3 percent each
     year. If the pattern had held, we would have just over a million farms
     today. Instead we have 2.1 million, and the rate of decline has slowed
     to a trickle, with today's total essentially the same as that of 1990.

     What made this moderation of the trend possible? In large part, the
     integration of the farm and nonfarm labor markets. Yes, all the
     improvements over the last 75 years in rural transportation,
     communications and education first led to an accelerated movement of
     people from farm to city. But a more recent trend has seen many people
     commuting to nonfarm jobs while they remain living on the farm.
     According to the Agriculture Department, nonfarm jobs now account for
     more than 90 percent of farm households' incomes.

     In many cases, one family member focuses on the farming enterprise
     while others - spouses, siblings, grown children - work off the farm.
     In other situations, no one works full-time at farming - the operation
     is a side job for the entire family, in some cases a refuge from urban
     stresses. While complete statistics are hard to come by, the data
     indicate that these arrangements are proving viable to an extent far
     greater than was thought possible 30 years ago.

     Government statistics show that the rise of these nontraditional farms
     has been accompanied by a marked improvement in the economic condition
     of the agricultural population. Until the 1960's, farm household
     incomes remained stubbornly below those of nonfarm households,
     averaging about 60 percent of the nonfarm average. But, beginning in
     the 1960's, relative farm incomes began to rise - and by 1990 they had
     achieved income parity with the rest of Americans. The Agriculture
     Department's latest estimate, for 2003, is that farm households had
     average incomes 15 percent higher than average nonfarm levels.

     Federal figures show that both large farms and small ones are
     increasing as a fraction of all farms, with the proportion of mid-size
     farms decreasing. This would lead one to expect a rise in income
     inequality among farm households, with the middle-sized farmers
     falling behind. So perhaps the biggest surprise is that incomes are
     actually becoming more equal.

     Consider the relative net income of farmers classified by the
     Agriculture Department as at the bottom fifth in terms of gross sales
     and government subsidies. In 1950 they made about a third less than
     did the average farm household. But by the mid-1990's, those farmers
     in the bottom fifth were within 10 percent of the national average.
     Similarly, in 1950 the top 5 percent of farmers had two and a half
     times the average farm household's income; this figure was reduced to
     one and a third times as much by the mid-1990's.

     So how should this good news change our thinking about the proposed
     changes in federal payments? First, the new limits are unlikely to
     give any significant boost to small farms. Large farms will likely go
     on producing just as much as they are producing now, because these
     payments are almost entirely fixed per farm, and do not vary with the
     amount the farm produces. So the market conditions facing small farms
     will not improve. On the other hand, if large farms produce less of
     the bulk program crops that are subject to the limits (cotton and rice
     are the main ones affected), they will produce something else on their
     land, and that something else may well be the high-value crops that
     are more prevalent on today's small farms than on large ones.

     As to the question of whether it is good policy to promote small
     farms, the main reasons advocates give are that small farming makes
     rural areas more vital by resulting in more people per square mile,
     and that small farms are closer to the bucolic ideal so many of us
     grew up with. While that traditional farming image has as much appeal
     in agriculture as in many other endeavors, and while I share the
     sentiment, I have to side with those who question the wisdom of using
     taxpayer dollars to subsidize it. Large farms simply produce
     commodities at lower cost, and shouldn't be thought the worse for it.
     After all, special subsidies for smaller stores in country towns would
     help them compete with Wal-Mart, too, but even the chain's greatest
     enemies haven't suggested such a policy.

     The promising trends in terms of farm numbers, increasing incomes and
     decreasing inequality don't mean there are no economic problems in
     American agriculture. But they do mean that the industrialization of
     agriculture has not crowded out small, specialized farm operations.
     Even in the age of Monsanto and Cargill, there is still a role for Mom
     and Pop.

     Bruce Gardner, dean of the College of Agriculture and Natural
     Resources at the University of Maryland, is the author of "American
     Agriculture in the 20th Century: How It Flourished and What It Cost."

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