The slow and steady decline of the family farm in the USA has been documented for years now by many sources.

There are many reasons for but one of the chief reasons is a paradoxic, at least if you don’t know anything about the economics of government subsidies.

At least since the 1930’s there have US Federal programs to “help” family farmers survive by basically giving them subsidies for all sorts of things. And yet…

One of the continuing themes of American agriculture in the 20th century is a decline in the number of farms, farmers and rural residents coupled with an increase in the farm size, specialization and capitalization. The two decades between 1950 and 1970 were bellwether years for these trends.

Actually all that has happened was that the larger a farm was the more money it could get from the government. So they became ever larger and began swallowing their smaller brethren.

Just 8.9 percent of American farms comprise approximately 75 percent of all farm sales revenue in the United States, illustrating how few farms provide the majority of production.

To be fair to the US government it should be said that while these programs did not help the family farm, they’re not the driving factor in destroying it. Simple economics is the culprit:

One of the main causes of this consolidation of farms is specialization. Large farms are not simply replicas of smaller ones on a bigger scale. The economic realities that allow a farmer to grow also force him or her to change the operation. Large farms almost have to specialize in a few cash crops. Or, to put it another way, specialization allows farms to grow larger. It is both a push and a pull of economic factors that fosters specialization.

And specialisation, the division of labour, has been one of the fundamental drivers of our capitalist economic system since the start of the Industrial Revolution. That is not going to change. That article mentions the size and cost of machinery resulting in dedication to single crops just to get the ROI, and I’ve seen that in my own lifetime. My Dad was pleased to own all the haymaking equipment we needed for what was a moderate-sized farm. But in the days of huge, $200,000 balers, requiring even bigger $300,000 tractors to pull them, that would be out of the question now. And it is a justifiable sacrifice, for the modern equipment gets the job in 1/3 or even 1/4 of the time, and this is combined with the fact that modern machinery means the hay doesn’t have to bake in the sun for two days – “haylage” is the word now, with no farmer I know of doing either pure hay or pure silage. With such changes and efficiencies no farmer can complain of being forced by the contractor to do the job when rain threatens (my Dad’s reason for buying his own equipment); they can do it between the rains. I’ve not heard of a hay crop being lost for decades.

Still, all this does produce concerns:

Today in the United States, fewer than 1 percent claim farming as an occupation and only 2 percent of Americans live on a farm. In my opinion this translates to a human systemic risk for the 98 percent of people who literally depend on them (and others) for their food.

That risk was also shown in this 2021 Spectator article, as it discussed the problems of the resulting monoculture when the C-19 Pandemic responses screwed with the food supply chains:

Now we have a new abiding symbol of modern industrial just-in-time agriculture: row upon row of euthanized pigs dumped into hastily-dug, wood-chip-lined shallow graves, beasts rotting in the sun, destined never even to “turn into pork,” at best serving as a very expensive compost additive. Surely this is the reductio ad absurdum of an entire way of life — our own — and yet more support for Leopold Kohr’s incontrovertible dictum that “whenever something is wrong, something is too big.”

And before anybody gets too nostalgic, understand that this is merely another step in a process of mechanisation started over a century ago. From a 1992 book Nature’s Metropolis: Chicago and the Great West (1992) by one William Cronon:

Nothing in Chicago at the end of the nineteenth century better symbolized the city’s profoundly transformed relationship to the natural world than its gigantic meat-packing corporations. Although they joined the Board of Trade and the lumberyards in guidebooks that sought to impress visitors with the ways in which Chicago stood first among cities, the packers in fact represented the city’s greatest break with nature and the past. . . .“An industry that had formerly done its work in thousands of small butcher shops around the country must be rationalized to bring it under the control of a few expert managers using the most modern and scientific techniques. The world must become Chicago’s hinterland.” This was an epochal rupture with the past,

So I’m sad to say that this is an inevitable process that’s been going on for a long time now and which shows no sign of stopping. Still, the government is (still) not helping:

Biden is trying to get rid of fossil fuels, and it’s killing us,” Stanton said. “Our packaging costs almost doubled, fuel costs are through the roof, and we paid $1,000 a ton this year for fertilizer that was $500 a ton in 2021.” Natural gas is a key ingredient in nitrogen fertilizers. “So we get hit twice,” he said. “It’s putting a lot of pressure on all of us.”

And not just fuel costs but other government-induced discrepancies:

Store chains, he said, bring in sweet potatoes from Georgia — where, under federal law, seasonal farm workers make just $11.99 per hour, compared to the $15.54 hourly wage mandated in New Jersey.

“For New Jersey farmers, that pay rate went up $1.50 last year, and it went up $1 the year before that,” Cassaday said. “What with labor, fuel and fertilizer, my input costs have probably gone up 50%.”

Meanwhile, buyers — equally squeezed by inflation — are offering farmers less and less.

“One area chain store paid me $17 a box for my sweet potatoes three years ago,” he recalled. “Last year they paid me $15, and this year they told me they’re paying $13. Next year I can’t plant them,” he said. “I cannot compete with that farmer in Georgia.”

I was interested to see that one of the farmers quoted – one Natasha Stein-Sutherland – had been a dairy worker in NZ after she finished her degree at Cornell university, and the she milks a 1000 cows in New York state, which I never think of for dairy farming, or farming in general. My assumption may become truth over time:

“I used to be the largest grower of processing peaches in New York, for fruit cocktail and diced peaches,” said Bittner, 64, whose orchards — apples, cherries, peaches, plums, and more — thrive in the rich soil of the Lake Ontario shoreline.

“I have a young peach orchard coming into production right now that was planted for processing and we’re going to have to cut it down. It’s heartbreaking. But we lost that peach processing market to China,” he added. “We had to remove all that acreage. There was no home for it.” American fruit canneries across the US have closed in recent years after China’s low labor costs sent prices for imported canned fruit plummeting, according to industry experts.
…
Yet supermarkets keep touting their “local produce.” “Bulls–t,” said Cassaday, 55. “It’s going to come to the point where there will be no local growers left and all our produce will be imported.”

Well yes, and while you can’t argue with all this in terms of how it’s made food cheaper than ever…

… you do have to wonder whether the marketplace is actually pricing in the cost of disrupted food chains when something goes wrong. What cost then? For those socialists out there who view all this as just another example of why capitalism fails, allow me to introduce you to economist Ronald Coase‘s famous 1937 paper, The Nature of the Firm, which explains the shifting dynamics of when and why firms (including partnerships) are created rather than contracting out to the marketplace. It’s a question of internalised vs externalised costs and they change over time.

I’m not familiar enough with economic theory to know if Coase’s theorem has been played up against the larger idea of free trade in marketplaces between nations, but it seems to me that one can substitute a nation for a firm and ask the same question: internal production vs external contracting in the marketplace, when it comes to things like silicon chips for weapon systems – and food.

Within the next few months, the United States is projected to import more agricultural products than it exports for the first time in history.