Economic and Marketing Information for Indiana Farmers (Mar. 31, 1969) |
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Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana March 31, 1969 Viewpoints on by /. H. Atkinson and R. N. Weigh * Agricultural Economics THE THREAT OF CORPORATE FARMING THE AGRICULTURAL AND business presses have indicated for a couple of years that there is growing concern in some quarters about the entry of corporations into agricultural production. Some legislators, political leaders, and farm policy leaders have expressed interest and, in some cases, alarm. Little is known of the extent of this concern among farmers themselves, but it appears that their concern has been intensified over the last year or so by news of large corporations which plan to purchase farm and ranch lands. The integrated poultry operation owned by a large corporation is of concern to the poultry farmer, but may not bother other farmers; however, when there is talk of large scale purchase of farm land by corporations, this is apt to cause farmers of all types to sit up and take notice. Some of those who have expressed concern about corporate farming have not been very explicit in defining the term, but we shall assume that they are not talking about a change in form of business organization by family farms —the change from a proprietorship to a family-owned corporation. Farm corporations in Indiana, although tending to be larger than average, could be defined as family farms, that is, farms where the management and a sizable proportion of the labor is supplied by a single farm family or a couple of related families. There are some interesting aspects to this type of farm incorporation, but they are not the concern of this article. What we are talking about is the entry into agricultural production of large or "giant" corporations, some of * Weigle is now an extension economist at the University of Wisconsin. which may have agricultural interests, but others of which have had no previous connection with agriculture in any way. Corporate Farming Examples The involvement of large corporations in agricultural production has been going on for at least two or three decades. This supports the contention that recent expressions of fear of corporate farming are, to a considerable degree, fears that farm and ranch land will pass into the hands of large corporations. Farmers and farm people view land ownership and control as something more than a property right created by society. For many years, we have had in this country a philosophy and, to some extent, a public policy revolving around the idea that those who work the land should own it or that ownership of the land should be an attainable goal. The prospect of land moving out of the hands of mortal beings and into the hands of a perpetual legal person (the corporation) poses a threat to our historical land settlement policy and our philosophy of land ownership. Examples of corporate farming which have been going on for some time are pulp and timber production in the southeastern United States, poultry production, canning and fresh vegetable production and some other specialty crops. In addition, we have seen agricultural production carried on as sidelines to coal or oil production. Corporations have operated experimental farms and those acquired by foreclosure. In recent years, cattle feeding and dairying have reached large scale proportions in some areas although "outside" corporations may or may not have been involved. Also, in the past year or so we have seen increasing interest in custom farming in the Midwest as well as in the Southeast. Finally, large corporations have indicated interest in entering what we might call general farming and ranching. Corporate Incentives Exploitation of new technology has been one of the incentives in the past in entry of corporations into agricultural production, especially exemplified by the poultry industry. In these situations there is a "package" of new technology, much of it inter-related so that the profit potential from integration and coordination appears high. Management skills not existing in the farming sector may be required. The corporation may have these skills or be able to supply them. Economies of size must be listed as a separate incentive although it is involved in several of the incentives mentioned here. In production of agricultural products, we know- that there are considerable economies in expanding from average or below average size farms to the level of our larger commercial family farms. However, several studies indicate that, under existing management, these economies tend to disappear before we reach the levels which could not still be considered a family farm. In much of the Midwest, wc are talking about farms with a total labor force of three or four men and an acreage under 1,000. A study of dairy farms in Indiana found the lowest cost production on herds of about 40-45 cows, regardless of management level. However, on farms which had superior management, expansion to 70 or more cows in milk would have been profitable under existing milk prices. On
Object Description
Title | Economic and Marketing Information for Indiana Farmers (Mar. 31, 1969) |
Purdue Identification Number | UA14-13-econ196903 |
Date of Original | 1969 |
Publisher | Purdue University. Agricultural Extension Service |
Subjects (LCSH) |
Farm produce--Indiana--Marketing Agriculture--Economic aspects--Indiana |
Genre | Periodical |
Collection Title | Extension Economic & Marketing Information (Purdue University. Agricultural Extension) |
Rights | Copyright Purdue University. All rights reserved. |
Coverage | United States - Indiana |
Type | text |
Format | JP2 |
Language | eng |
Repository | Purdue University Libraries |
Date Digitized | 05/01/2015 |
Digitization Specifications | Original scanned at 400 ppi on a BookEye 3 scanner using Opus software. Display images generated in Contentdm as JP2000s; file format for archival copy is uncompressed TIF format. |
URI | UA14-13-econ196903.tif |
Description
Title | Economic and Marketing Information for Indiana Farmers (Mar. 31, 1969) |
Purdue Identification Number | UA14-13-econ196903 |
Transcript | Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana March 31, 1969 Viewpoints on by /. H. Atkinson and R. N. Weigh * Agricultural Economics THE THREAT OF CORPORATE FARMING THE AGRICULTURAL AND business presses have indicated for a couple of years that there is growing concern in some quarters about the entry of corporations into agricultural production. Some legislators, political leaders, and farm policy leaders have expressed interest and, in some cases, alarm. Little is known of the extent of this concern among farmers themselves, but it appears that their concern has been intensified over the last year or so by news of large corporations which plan to purchase farm and ranch lands. The integrated poultry operation owned by a large corporation is of concern to the poultry farmer, but may not bother other farmers; however, when there is talk of large scale purchase of farm land by corporations, this is apt to cause farmers of all types to sit up and take notice. Some of those who have expressed concern about corporate farming have not been very explicit in defining the term, but we shall assume that they are not talking about a change in form of business organization by family farms —the change from a proprietorship to a family-owned corporation. Farm corporations in Indiana, although tending to be larger than average, could be defined as family farms, that is, farms where the management and a sizable proportion of the labor is supplied by a single farm family or a couple of related families. There are some interesting aspects to this type of farm incorporation, but they are not the concern of this article. What we are talking about is the entry into agricultural production of large or "giant" corporations, some of * Weigle is now an extension economist at the University of Wisconsin. which may have agricultural interests, but others of which have had no previous connection with agriculture in any way. Corporate Farming Examples The involvement of large corporations in agricultural production has been going on for at least two or three decades. This supports the contention that recent expressions of fear of corporate farming are, to a considerable degree, fears that farm and ranch land will pass into the hands of large corporations. Farmers and farm people view land ownership and control as something more than a property right created by society. For many years, we have had in this country a philosophy and, to some extent, a public policy revolving around the idea that those who work the land should own it or that ownership of the land should be an attainable goal. The prospect of land moving out of the hands of mortal beings and into the hands of a perpetual legal person (the corporation) poses a threat to our historical land settlement policy and our philosophy of land ownership. Examples of corporate farming which have been going on for some time are pulp and timber production in the southeastern United States, poultry production, canning and fresh vegetable production and some other specialty crops. In addition, we have seen agricultural production carried on as sidelines to coal or oil production. Corporations have operated experimental farms and those acquired by foreclosure. In recent years, cattle feeding and dairying have reached large scale proportions in some areas although "outside" corporations may or may not have been involved. Also, in the past year or so we have seen increasing interest in custom farming in the Midwest as well as in the Southeast. Finally, large corporations have indicated interest in entering what we might call general farming and ranching. Corporate Incentives Exploitation of new technology has been one of the incentives in the past in entry of corporations into agricultural production, especially exemplified by the poultry industry. In these situations there is a "package" of new technology, much of it inter-related so that the profit potential from integration and coordination appears high. Management skills not existing in the farming sector may be required. The corporation may have these skills or be able to supply them. Economies of size must be listed as a separate incentive although it is involved in several of the incentives mentioned here. In production of agricultural products, we know- that there are considerable economies in expanding from average or below average size farms to the level of our larger commercial family farms. However, several studies indicate that, under existing management, these economies tend to disappear before we reach the levels which could not still be considered a family farm. In much of the Midwest, wc are talking about farms with a total labor force of three or four men and an acreage under 1,000. A study of dairy farms in Indiana found the lowest cost production on herds of about 40-45 cows, regardless of management level. However, on farms which had superior management, expansion to 70 or more cows in milk would have been profitable under existing milk prices. On |
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