The End of Family Farms?

Big Farmers Are Getting Fat
on Uncle Sam's Dough
as Old Family Farms Die Out


Sixty-seven-year-old Helen Waller, a wheat farmer, says she's seen more heartache and pain than she ever wants to see. In the past few years Waller has watched dozens of her neighbors shut down their farms and move out of her eastern Montana county to search for jobs in the city.

"It isn't because they want to move, it's because we can't get enough from the marketplace for our products to pay for the cost of production," says Waller.

Making a living on the farm has never been easy, but it's becoming even harder for small family farms -- the mom-and-pop operations that symbolize "farming" to most Americans. And as farmers give up the struggle and move to the cities, rural America is crumbling. In the town of Circle, near Waller's farm, stores have gone out of business, churches are struggling, and several teachers had to be let go from the shrinking school. All that is left of the local hospital is an emergency center.

"I want community. I need my neighbors. I need schools to stay open so that our grandkids don't have to bus 50 miles to go to school," says Waller.

Waller was born on a farm just nine miles from where she now lives. Her grandfather was a farmer, and her son now runs a part of her farm used for livestock. But the bleak economic future of family farming means her son may be the last of the Wallers to work the land.

Freedom to Fail

For years, politicians have publicly lamented the plight of family farmers. As a presidential candidate Bill Clinton promised to save family farms. "If I gave up on the farmers I could never go home again," he said, speaking of Arkansas, a major rice and poultry producer. But as president, in 1996, Clinton signed the Freedom to Farm bill, which by all accounts has been a disastrous failure. Under the bill, farmers were to be weaned away from subsidies. The theory was that they would prosper in a market economy from increased exports. But that's not the way things happened.

Two years later Clinton begged Congress to send money to farmers. Congress pushed through $20 billion to $30 billion in emergency aid each year to keep family farms afloat, but agriculture experts say most of the money went to industrialized factory farms. The aid has accelerated the concentration of agriculture into large agribusiness corporations. These megafarms are able to take advantage of economies of scale while the generations-old family farms die out.

Each year tens of thousands of farms collapse. In 1950, there were six million farms across the United States. Today, only 1.9 million remain. Eight percent of those farms control 72% of production, according to a study by the Virginia-based Sparks Companies, an agricultural research firm. And the bulk of government aid -- 70 to 75% -- goes to the largest farms.

The problem is that government payments are largely calculated by acreage and production rather than need. Family farm advocates say aid should be designed to assist those in greatest distress, not just those able to produce the most.

Most farmers get no aid. Only the farmers who grow specific crops -- one-third of farmers -- are eligible for government subsidies. But even with government payments, family farmers are just barely surviving. The average farm payment is $7,200, according to 1999 figures from the Environmental Working Group, a Washington D.C.-based nonprofit. But the biggest farmers are able to get as much as $460,000 under the various federal aid programs, and others are able to double this through loopholes.

Agribusiness groups brush aid inequality aside. "Why do people always want to highlight this issue?" asks Tim Cansler, director of governmental relations for the pro-business American Farm Bureau. The federation says farmers and ranchers need subsidies to provide a safety net.

"Commodity prices are still at a low level ... for the foreseeable future we don't see it rebounding," Cansler says.

Farmers have been hurt recently by record low prices for their products, high fuel costs, and bad weather. A financial crisis in Asia also reduced demand for US agriculture products.

A minimum wage

Many family farm advocates say the government's solution is making matters worse. "It's easier to push money into the system rather than change the underlying bad policies," says Katherine Ozer, executive director of the National Family Farm Coalition, a network of grassroots organizations that Helen Waller helped found.

Lawmakers from farm states seeking to attract rural and farmer votes are fighting to get even more money allocated for agriculture. But emergency bailouts are not a long-term solution. Family farm advocates are calling for an overhaul of the Freedom to Farm bill, which is set to expire next year.

"The premise of the Freedom to Farm bill is that increased exports and increased volume is supposed to translate to increased farm prices. But it leads to increased profits for exporters, not farmers," Ozer says.

The prices farmers receive for products do not cover the cost of production. To make up for the loss, farmers are forced to grow more. The surplus dumped on the market drives prices down even further.

Family farm advocates are calling for a price floor, which would amount to a "minimum wage" for farmers. With fair farm prices, they say, there would be no need for emergency bailouts and wasting taxpayer billions.

Processing companies and exporters want to keep farm prices down. A low grain price helps them keep their products cheap and makes them more competitive on the global market. They would prefer a farm bill that keeps the current system in place.

And why wouldn't they? Despite the negative impact of higher energy costs and weak global demand, ConAgra, one of the largest food service manufacturers and retail suppliers, posted record gains last year -- $25.4 billion in sales and $1.9 billion in profit. In 2000, net earnings for Archer-Daniels-Midland (ADM) were $300 million, up from $266 million in 1999. Cargill's profits were down to $480 million last year, from $597 million in 1999. But the company's net worth rose from $7.2 billion to $7.5 billion.

Ben Lilliston of the Institute for Agriculture and Trade Policy says subsidies have enabled farm prices to remain unrealistically low. "The subsidies really are directly benefiting processors like Cargill and ADM. It's allowing farmers to stay on the land and produce their crops at below cost prices."

Money to Get Bigger

"Are we actually bettering small and medium family farms by supporting a subsidy system where the bulk of the money goes to the largest recipients?" asks Clark Williams-Derry, of the Environmental Working Group.

The subsidies enable big farms to buy up more land -- outbidding smaller farmers or buying them out in difficult years -- to expand their operations. This in turn makes them eligible for even greater subsidies.

"Right now the bigger you are, the more money you get. You get money to get bigger," says Dave Serfling, a small livestock farmer in southern Minnesota.

The vast majority of subsidy programs are for crop growers and many farmers switch from raising livestock to growing crops to get the aid.

"People quit raising hogs and raise crops. It leads to surplus and low prices," says Serfling, who has watched two of his neighbors, dairy farmers within a mile and a half of his farm, shut down this past year. One took a job in highway construction, and the other now works as a laborer on a hog farm.

Serfling, who runs the 350-acre farm where he was born, raises livestock and grows corn, oats, alfalfa and pasture to feed his animals. As a livestock farmer Serfling would not be eligible for subsidies were it not for his crops. Last year, he got $20,000 from the government.

Many in the agricultural sector say federal subsidies have helped avoid a national farm crisis, but most agree the payments are not always reaching the right people.

"For the small to medium farmers it's the difference between making bank payments and filing for bankruptcy," Ozer says.

Fertilizing Politics

Congress is now rushing to complete a new farm bill before mid-July. With the balance of power in Congress so narrowly split between Democrats and Republicans, some observers say next year's battle for legislative control may come down to the farm states, and the final scope of the farm bill could help determine which incumbents retire and which return to Washington.

Other forces shaping the bill are the campaign contributions, lobbying, and public relations work funded by the agribusiness groups through their trade associations.

In the 1999-2000 election cycle, agribusiness contributed more than $58 million to political campaigns, according to the nonpartisan Center for Responsive Politics. Most of that money came from crop producers and processors like Archer-Daniels-Midland, which contributed more than $932,000 (43% to Democrats and 57% to Republicans) and ConAgra, which gave $467,000 (85% to Republicans and 15% to Democrats).

Though George W. Bush was the top recipient of campaign contributions from agribusiness groups, receiving $2.6 million (against Al Gore's $300,000), according to CRP, his budget plan proposes to decrease agriculture funding by 7% next year. This reduction is necessary to make room for his much ballyhooed tax cut.

No one knows yet what shape a new farm bill will take, but the battleground has been drawn around subsidies and fair farm prices. Family farm advocates fear more bad news -- huge payments for industrialized farms and continued low prices for farm products. But agriculture experts say with less money allocated for agriculture, lawmakers cannot easily justify continuing a failed and wasteful policy.

Farm Conservation

Family farm advocates say they hope Congress takes time to carefully re-examine farm policy. Ozer says the farm debate should focus on conservation, rural development, access to credit, fair income, and food access that better links farmers to low-income groups.

One congressional bill popular among family farm advocates is the Conservation Security Act, introduced in the Senate by Gordon Smith, R-Ore., this past February. The bill, if rolled into the overall farm policy, would tie government payments to conservation practices. Aid to a farm would increase depending on how many conservation activities the farm pursued, such as practices aimed at improving water and air quality, soil erosion, and invasive species management.

Agriculture is a key source of water pollution, and the current subsidy programs encourage harmful practices, according to environmentalists. Sugar producers -- major recipients of government aid -- have destroyed large parts of the Florida Everglades. They dump phosphorus and other pollutants into the waterways, according to Green Scissors 2001, a report by a coalition of environmental groups that is critical of price supports for sugar growers.

Environmentalists say there is good reason to save family farms: While industrial farms are driven by profit, family farmers want to insure the sustainability of the land they will pass on to their children and grandchildren.

"The only person that is going to do justice to that land and preserve the integrity of the land is the person who is out there making footprints in the dirt, not managers making decisions in a board room," Waller says.

Serfling, the Minnesota livestock farmer, supports the Conservation Security Act. He uses methods like crop rotation and conservation tillage to prevent soil erosion. Although his farm is not organic, he keeps the use of herbicides to a minimum -- spraying only two out of every six years.

Industrialized farms rely heavily on pesticides, herbicides, fungicides and other chemicals to mass-produce food on vast acres of land. Environmentalists and family farm advocates say in the long run the use of chemicals is more costly when taxpayers have to fund pollution clean up.

Added to the environmental damage and increased urban sprawl when family farmers are replaced by factory farms, advocates also say America is losing the agricultural knowledge base which used to be passed on from one generation of farmers to the next.

"We are a community of old people now," says Waller, who isn't sure her grandson will carry on the family farm tradition. "Unless we can bring back some kind of economic stability to production agriculture, it's unclear whether he will want to [farm]."

Jennifer Bauduy is the associate editor at, where this originally appeared. Editor's Note: The National Family Farm Coalition is a grantee of the Florence Fund, the parent organization of

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