Small Farms: The Optimum Sustainable Agriculture Model
The agriculture sector is an exception to the principle of economies of scale: numerous studies actually find diseconomies of scale as farm size increases.
by Marika Alena McCauley
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| More and more small-scale, family-owned farms are in danger of being swallowed up by large agribusiness operations. By: Nancy Delaney/Oxfam |
Vast, industrial farms are rapidly replacing small farms across the United States. Many Americans are asking themselves what this trend signifies, and how it will impact the nation. At the heart of the issue is the following question: which agriculture system is better for our society – many small farms, or fewer large, industrial farms?
In the United States, conventional wisdom on agricultural production is that "bigger is better," and that increasing farm size leads to increases in productivity through economies of scale, thus benefiting society at large. Many people see large farms as representative of economic progress and growth, and see small farms as inefficient, albeit scenic, representations of an earlier era.
Yet, as agriculture economists research the costs and benefits of these starkly different models for food production they have generated a sizeable body of evidence that contradicts many widely held beliefs. The agriculture sector has, in fact, been identified as an exception to the principle of economies of scale. Numerous studies actually find diseconomies of scale as farm size increases. (2) These findings can be understood by taking a look at the basic design of large and small farms.
The average small farm is a polyculture, so the farmer may be simultaneously growing a few acres of corn, raising some cows, and also tending an acre of vegetables. Large farms, on the other hand, are usually monocultures – an environment in which only one crop is grown. (3) If economists are measuring the total output of one crop per acre, the large farm will seem more productive. But, if an economist is measuring the total output of all farm products per acre, the small farm will seem more productive. Thus, while large farms are more productive and efficient by some measurements, when total output of grains, fruits, vegetables, and livestock produced on a farm are measured, the small farms are more productive overall. (4)
There are many additional factors that make small farms the optimal sustainable agriculture model. Small farms are multi-functional, which means that they not only produce quality food, but that they also contribute to a community’s overall economic and social development. (5) As locally-based businesses, they generate wealth in rural areas that leads to better housing, health services, education, thriving local businesses, and the overall infrastructure and economic development of rural areas. This support of the rural economy dissolves when a small farm is replaced with a large farm. Research shows that large farms cause economic problems for small communities, including decreasing the number of quality jobs in a community, diverting farm income from the community, and limiting the potential for diversified local economic growth. One recent study on the impact of small versus large farms on local economies found that small producers create 10 percent more permanent jobs, a 20 percent larger increase in retail sales, and a 37 percent larger increase in local per capita income. (6)
There are also significant differences in these models when considering their impact on the environment. As members of their community, small farmers tend to treat local natural resources with a long-term outlook, to ensure the land’s sustainability and productive capability for future generations. The bottom line in large farm operations, however, does not value conservation. In pursuit of ultra-efficiency and high profits, corporate farms often consider the land, air, and water in rural areas as resources to be exploited. They have little incentive to invest in sustainable agricultural practices, or to consider the long-term implications of intensive farming methods.
The United States Department of Agriculture acknowledges these stark differences between small and large farms. A 1998 report by the National Commission on Small Farms made it clear that small farms were the invaluable foundation of any vibrant rural community, and that the future of agriculture in the United States was dependent on the their re-growth across the country. Based on these findings, the Commission recommended new regulations including the enforcement of fair and competitive markets in agriculture, and the allocation of increased federal funds to support the small farm model in American agriculture.
Oxfam America agrees that small farms are essential to the continued growth and development of rural communities, both in the United States and in developing countries. We support community-based organizations working to promote small farm models for sustainable agriculture at the grassroots level. Our partner groups also engage in national and international advocacy on these issues to help create policies that shift power away from corporate agribusiness, and toward communities in which small farms are the primary drivers of rural development.
For more information:
Food First: Institute for Food and Development Policyhttp://www.foodfirst.org/pubs/policybs/pb4.html
Journey to Foreverhttp://journeytoforever.org/farm.html
Endnotes:
1. The term ‘small farm’, according to the USDA, refers to any farm with an annual income of less than $250,000. For these articles, we will consider the term small farm to be inclusive of all small ranches, small family farms, and independent farms
2. Peterson, Wills L., “Are Large Farms More Efficient?” Staff Paper P97-2. University of Minnesota, Department of Applied Economics. January 1
3. Monoculture is the cultivation of a single crop on a farm, and polyculture is the cultivation of multiple crops or animals on a farm.
4. Halweil, Brian, “Where Have All the Farmers Gone?” Worldwatch Institute, September/October 2000.
5. Rosset’s classic essay
6. “Hog Wars: The Corporate Grab for Control of the Hog Industry.” Missouri Rural Crisis Center. Colombia, Missouri. 1996. Statistics taken from a Virginia study that compared the addition of 5,000 sows to the local economy by independent producers versus corporate producers.