The Decline of the Family Farm

Consolidation within the corporate agriculture industry has consequences in rural America, a new report states.

October 14, 2024

Small family farms are disappearing, and they’re taking rural communities with them.

Facing a national agriculture system ruled by powerful monopolies in nearly every sector, independent farmers struggle to compete, and many are forced to sell out to massive corporations, sometimes relinquishing lands that have been in their families for generations.

“You can see small towns struggling to survive. It’s destroying rural America,” said Jonathan Kanter, assistant attorney general for the U.S. Department of Justice’s Antitrust Division under President Joe Biden. Kanter gave the comments during a September 26 webinar presented by the nonprofit organization Farm Action, which works to stop corporate monopolies and build fair competition in rural America. “The communities are suffering because of the decline of the family farm. … (It) does not have to happen and certainly (is) not inevitable. It was a product of choices and deals make in boardrooms and back rooms from New York and Washington to Brazil and even Beijing.”

The conversation took place around the release of Farm Action’s new, 206-page report, Kings Over the Necessities of Life: Monopolization and the Elimination of Competition in America’s Agriculture System, written by Basel Musharbash, principal attorney at Antimonopoly Counsel, an antitrust law and policy firm. After a year-long investigation, Musharbash said what he discovered was “shocking.”

“Roughly three dozen corporations now get to decide who gets to farm and how they farm, what food gets produced and sold in this country, and how much we all have to pay for it. And I don’t mean that colloquially. I don’t mean that loosely,” Musharbash said during the webinar.

The first part of the report offers a history of antitrust law and policy in the United States from the Civil War through the 2010s. Like a pendulum, the nation’s industrialists and policy makers have swung back and forth from the sort of laissez-faire capitalism that breeds monopolies to times of government intervention, like the passage of the Sherman Antitrust Act of 1890, which led to the breakup of Standard Oil Company in 1911 and later AT&T in 1982. According to Musharbash, the United States is currently in a period of pro-monopoly government.

Farm Action co-founder Joe Maxwell said he has observed this trend of consolidation in agriculture during forty years as an independent hog farmer. Maxwell is also a lawyer, served in the Army National Guard, and held elected office in Missouri for fourteen years, first as a member of the state House and Senate and then as lieutenant governor from 2000 – 2004.

Maxwell told the webinar viewers that the number of hog farmers working in the United States has dropped from 512,000 to 61,000 in the past four decades. “I have lived the negative impact of wrongheaded government policies and unbridled corporate power,” he said. “The U.S. has been in this position before, and in all instances, the people had to call on their government to stand up against the power of corporations.”

The report paints a vivid picture of concentration across America’s agriculture system and industry, Kanter said. “It shows how consolidation has impacted every step of the farmer’s business, from seeds and machinery to financing and crop insurance to meat packers and other buyers,” he said. “From day one of my time in the antitrust division, agriculture has been and continues to be among our top priorities because we know that farming as a way of life is absolutely essential to every American.”

Farm Bill drives agriculture policy

The Farm Bill, the massive, omnibus federal legislation passed every five years (or so), has been part of the problem, wrote Musharbash. During the New Deal era, the farm bill was used to control supply. Farmers were incentivized through land “set-aside” programs not to over produce. This led to higher prices for crops and livestock, ergo more farmer security. That all changed under President Richard Nixon, who appointed Earl Butz to be his Secretary of Agriculture. Butz hated the New Deal’s supply-management programs that allowed small farmers to remain on their family lands, adopting the infamous slogan, “get big or get out.”

After Butz struck a deal in 1972, the top-five U.S. grain exporters sold 16.45 million metric tons of American wheat, corn, barley, and soybeans to the Soviet Union, then considered the “largest commodity deal in history,” Musharbash wrote. Within months, U.S. grain inventories were depleted, and Butz released all forty million acres of American land that had been set aside from planting, urging farmers to “plant fence row to fence row” to ease the food crisis.

Large grain corporations like Cargill were delighted with this new agriculture policy, and it continued with the 1973 Farm Bill, which established a program of making “deficiency payments,” to farmers, which made up the difference “between the average market price and a ‘target price’ for each covered crop,” Musharbash wrote. The 1985 Farm Bill, signed by President Ronald Raegan, and the 1996 Farm Bill, signed by President Bill Clinton, shifted federal policy almost exclusively toward incentivizing the production of a handful of commodity crops, particularly corn, soybeans, and other grains and oilseeds. Today’s Farm Bill (which is currently being negotiated in Congress), subsidizes the “overproduction of commodity crops by the largest agribusiness operations while hanging beginner, small, and midsize farmers out to dry,” Musharbash wrote.

Corporations rule livestock production

According to data collected by Farm Action, many of the nation’s agricultural markets are dominated by the top corporations, to the detriment of free and fair competition. The concentration ratio of the top four (CR4) beef companies is between 80 and 85 percent, led by Tyson Foods, JBS USA, Cargill, and National Beef. According to economists, a CR4 greater than 60 percent indicates consolidation in an industry bordering on oligopoly or monopoly. The U.S. pork industry’s CR4 is 67 percent, including WH Group, JBS, Tyson, and Hormel. The poultry industry’s CR4 is 60 percent, including Tyson Foods, Pilgrim’s Pride, Sanderson Farms, and Perdue Farms.

“What this means is that a farmer looking to build a farming business today doesn’t have a whole lot of options about what they can grow, doesn’t have a whole lot of options about how they can market that product and what it goes into,” Musharbash said during the webinar. “And then, across the supply chain, consumers have fewer and fewer options of what food they’re going to consume and they have less power to push back on prices increases for those products that they need.”

Increased federal enforcement of antitrust laws like the Packers and Stockyards Act of 1921 has begun to dilute the power of the largest corporate agriculture firms, Kanter said.

Consolidation also affects Oklahoma

After the Oklahoma Legislature exempted swine and poultry operations from the state’s anti-corporate farming law in 1991, a swell of industrial farming operations set up shop, with corporate-contracted poultry houses popping up in northeastern Oklahoma, and factory hog farms opening in the northwest and panhandle. “Between 1990 and 2000, the number of Oklahoma hired-farm workers fell 72 percent, from 49,681 to 13,721,” states The Way Forward: A Report on the Extreme Confinement of Pregnant Pigs in Oklahoma, published by the Kirkpatrick Foundation earlier this year.

To feed the millions of hogs now being raised in Oklahoma, many farmers have switched from growing wheat to sorghum, corn, and other water-intensive crops, whose prices are artificially propped up by recent Farm Bills. By 2019, according to The Way Forward, Oklahoma led the nation in the rise of farmer bankruptcies, and by 2022, 1.8 million acres of Oklahoma farmland were owned by foreign entities. All this while animal-agriculture corporations made record profits.

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