[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.
By BRUCE GARDNER
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
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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