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Larry D. Sanders

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Title: Larry D. Sanders


1

13. Ethical Issues in Saving the Family
Farm
  • Larry D. Sanders
  • AGEC 4990 Spring 2002

Dept. of Ag Economics Oklahoma State
University
2
Farming The more it changes, the more it remains
the same?
  • At the end of World War I most farm families
    lived on unimproved dirt roads farmed and went
    to town with horses and horse-drawn equipment
    obtained their news from weekly newspapers, and
    used kerosene lights when the sun went down. Few
    farm dwellings had central heating or flush
    toilets. Few farm boys were attending high
    schools. Farm incomes and farm land values had
    been rising almost steadily since 1900. Many
    people thought we were approaching a farm land
    shortage similar to that experienced in western
    European countries, which would make farm
    ownership more and more difficult for succeeding
    generations.
  • . . . Though substantial progress has been
    recorded in farm families standard of living and
    in the legislation designed to improve and
    stabilize their incomes, the basic problems
    remain unresolved. . . .
  • --Wilcox, W., 1947 (p. 388, p. 398)

3
Farming Trends Seem to Turn Free Market on
its Ear
  • This nation has long pursued the ideal of a farm
    sector populated with privately operated family
    farms, as opposed to corporate farms or large
    public units. Have todays farms become so large
    that they can no longer be considered family
    farms? Have they evolved into corporate-line
    business organizations which threaten to weaken
    productive efficiency as well as contribute to an
    unacceptable distribution of income?
  • . . . The use of formal coordination devices
    such as these contractual agreements vertical
    integration arose out of a felt need by the
    private sector to minimize risk to both producer
    and processor. The proliferation of these
    devices, however, is accompanied by new concerns
    about the adequacy of fairness of contract terms,
    concerns about the adjudication of contract
    disputes, and consequences of the resulting
    thinness of any still remaining open markets.
  • --Milton C. Hallberg Dennis Henderson, 1994
    (p. 55, p. 66).

4
Farm Trends Certain?
  • Farms in the United States are becoming fewer in
    number and larger in size as farm operators take
    advantage of new technologies to achieve
    additional size economies and become more
    specialized. This trend will likely continue
    into the foreseeable future as technological
    developments continue and as management levels
    improve.
  • --Hallberg Henderson, 1994 (p. 71).

5
Status of Ag Economy 2002
  • Many farms continue to be in poor economic health
  • Farms are more dependent on government aid
  • There are increases in small farms large farms

6
Status of Ag Economy (continued)
  • Agriculture is becoming more concentrated
  • With more flexibility in govt. programs, there is
    less flexibility from contract agriculture
    biotech
  • Farmers are aging

7
Status of Ag Economy (continued)
  • Average Farm Household Nonfarm Household Income
    now comparable (farm income accounts for 12)
  • Most farms are marginally profitable or
    unprofitable, but most income comes from off the
    farm

8
Status of Ag Economy (continued)
  • 10-15 farms produce 80-85 farm sales are
    profitable on average (8 farms account for
    72 of production)
  • Top 10 farms received 63 of govt. payments in
    2000

9
Net Farm Income Government Payments
NAFTA
WTO
1996 Farm Act
Billion
10
Net Farm Income Government Payments (cont)
  • Average ( bil/year)
  • 1991-95 1996-01 6-yr trnd
  • Net farm income 43.4 47.7 steady
  • Govt. payments 9.2 15.3 up
  • NFI - G 34.2 32.5 down
  • Govt. portion of NFI 21 32 up
  • Note updated 1 Mar 02

11
INDUSTRIALIZATION OF AGRICULTURE
  • Transformation from Way of Life to a Business
  • Production Scale Economies
  • Marketing Scale Economies
  • Venture Capital
  • Market Needs Drive Industrialization thru Search
    for Efficiency Gains Along Marketing Chain
  • Integration is the Organizational Mechanism

12
Farming A way of life or A way to make a
living?
  • America is of two minds about agriculture. One
    submits to the creed of farm fundamentalism,
    emphasizing belief in the primacy of agriculture
    and the family farm. The other submits to the
    creed of democratic capitalism, emphasizing
    belief in the primacy of free enterprise and
    authority of the people at large expressed
    through the political system. . . .
  • . . . Although the two creeds sharply conflict,
    both are widely held, often by the same person.
    This results in a kind of individual and national
    schizophrenia regarding how farmers shoulod be
    treated by government. . . .
  • --Luther Tweeten, 1989 (p. 73 p. 82).

13
Farm Fundamentalism(adapted from Tweeten)
  • Agriculture is the most basic
  • occupation.
  • Agriculture must prosper for nation to prosper.
  • Farmers are better citizens, have higher morals,
    are more committed to traditional American
    values.
  • The family farm must be preserved because its a
    vital part of our heritage.
  • Farming is a way of life.
  • The land should be owned by the person tilling
    it.
  • Anyone who wants to farm should be free to do so.
  • A farmer should be his own boss.
  • The family farm is the ideal nuclear family unit.

14
Family Farms as the Ideal
  • Maintains healthy rural economy
  • Maintains strong moral rural base for nation
  • Avoids rural economic malaise and pressure on
    urban areas
  • Food production in caring hands
  • Land stewardship in caring hands

15
Democratic Capitalism(adapted from Tweeten)
  • Farming is a business.
  • Free market is the most efficient way to allocate
    resources, decide the size/role of farm sector.
  • Family farm survival is dependent upon the
    market, may be replaced.
  • Government should not interfere except to
    maintain fair play in market.
  • Reward comes from level of proficiency.
  • All persons are of equal intrinsic value.
  • Concentration of power destroys individual
    freedom.
  • Property rights are inviolable.

16
Farming as a Business Ideal
  • Resources allocated to most efficient uses
  • Inefficient resources reallocated to improve
    economy
  • Improves likelihood to achieve/maintain
    competitive advantage in global economy
  • Could reduce need for government support
  • More efficient farm economy should lead to more
    food at cheaper prices

17
The Real Question Not whether to save the family
farm, but how do farm families adjust to change?
  • . . . farmers are facing a situation common in
    the American past adjustment, in circumstances
    beyond their control, of a rural population to
    the realities of a changing economy. The
    migration of country people to other occupations
    and localities and the surrender to a new way of
    life that substitutes for the rhythms of nature
    the timetables of shop and factory are major
    themes of social history. The situation of the
    modern farm family, forced to sacrifice the farm
    which is home, livelihood and legacy to their
    children, is symptomatic of a continuous
    adjustmenht of farming since the time the land
    was first settled.
  • --Mark Friedberger, p. 1, 1988.

18
Ethical Dimensions of Family Farms (TMR)
  • It is harder to see why anyone should take the
    family farm issue seriously, that is, why it
    should be part of a rational argument intended to
    sway disinterested parties toward sympathy with
    the integrated producers point of view. . .
    .family farm arguments are irrational, founded on
    nostalgia and emotion. . . . But there is no good
    reason for policies to save the family farm. . .
    . Little more than a cloak for interest group
    politics. . . . There is no ethical content to
    the notion of the family farm. . . .
  • This conclusion is hasty, however, for it
    ignores the arguments that have been given to
    support a policy goal of preserving the family
    farm. . . .
  • --TMR, pp. 241-2.

19
Ethical Dimensions of Family Farms (TMR)
  • No intrinsic connection between farm size
    family ownership
  • Bonnen Browne family farm is agrarian myth
    muddles public policy discussion
  • Libertarians government cant intervene w/o
    violating noninterference rights
  • Utilitarians stress farm size (structure) as
    key in public policy
  • Govt. involvement judged on consequences (BC?)
  • Some add nonmarket values such as aesthetic,
    historic, symbolic value
  • Agrarian views (populists traditionalists)
    stress family farm as key in public policy

20
Ethical Dimensions of Family Farms (TMR)
  • Agrarian Populism
  • Jeffersonian agrarianism
  • Breimyer Hightower Egalitarian view of
    opportunity rights as essential
  • Breimyer stresses the interests of the poor and
    weak over the interests of property efficiency
  • Hightower ag family farm ensure legitimacy of
    American political system a moral political
    imperative to maintain this component of economy
    to counter corporate middlemen suppliers
  • Right to farm essential to liberty

21
Ethical Dimensions of Family Farms (TMR)
  • Agrarian Traditionalism
  • Emerson Berry
  • Loyalty character as aspects of personal
    morality
  • Personal loyalties embedded in a web of concrete
    social relations that establish that social
    structure individual role are codetermined
  • Social morality becomes fixed by the web of
    relationships in the form of community small,
    low-tech farms preserve work habits that build
    strong moral character bind farm families into
    a close-knit community

22
Ethical Dimensions of Family Farms (TMR)
  • Agrarian Traditionalism (continued)
  • Family farming places a way of life within the
    socio-cultural setting and social
    interdependence, rather than economic gain as the
    end that justifies the means
  • Meaning is derived from work, nature community,
    rather than achieving economic success
  • Does not accept enlightened self-interest the
    social contract as acceptable basis for
    agricultural ethics

23
Issues
  • Definitional
  • Structural
  • Economic
  • Political
  • Ethical

24
A Curious Twist (2001)?
  • Farmers farm groups who previously called for
    less government regulation, less supply control,
    less government support, more free market have
    shifted to calls for more government support to
    assure free market survival of family farm
  • Farmers who continue to call for more government
    intervention (financial support supply control)
    to save family farm are out of political favor

25
Competition,creative destruction the
protective response
  • Destructive gales of competition (Schumpeter)
    lead to the protective response from public
    private sectors (Polanyi)
  • Private sector protective response
  • concentration/consolidation/contracting
  • externalizing costs
  • unionization/cooperation
  • Rent seeking
  • Public sector protective response
  • redefining public good
  • regulation/taxation/tax breaks/ protection/
    subsidies
  • education

26
Public Alternatives Consequences
  • Simple choice
  • Regulate the market or, it will regulate us
  • Difficult process
  • Who decides?
  • How fast to let change occur?
  • Whether how to compensate losers?
  • Self-regulating market cannot sustain itself
    remain free
  • Ethics is inherent in this process, whether
    conscious or unconscious, planned or unplanned

27
References
  • Friedberger, M. Farm Families Change in 20th
    Century America, The University of Kentucky
    Press, 1988.
  • Hallberg, M. D. Henderson, Structure of Food
    and Agricultural Sector, Food, Agriculture, and
    Rural Policy into the Twenty-First Century
    Issues and Trade-offs, M.C. Hallberg, R. G.
    Spitze, D. Ray, editors, Westview Press, 1994.
  • Sandersvarious professional presentations
    writings
  • TMR
  • Tweeten, L. Farm Policy Analysis, Westview Press,
    Inc. Boulder, 1989.
  • Wilcox, W. The Farmer in the Second World War,
    The Iowa State College Press, Ames, 1947.
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