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Corporate FarmingCorporate farming is a critical, negative term that describes the business of agriculture, specifically, the practices of would-be megacorporations involved in food production on a very large scale. This encompasses not only the farm itself, but also the entire chain of agriculture-related business, including seed supply, agrichemicals, food processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales. The term also includes the influence of these companies on education, research and public policy, through their educational funding and government lobbying efforts. Corporate farming is often used synonymously with agribusiness (although in context, agribusiness does not always refer to corporate farming), and as the destroyer of the family farm. The goal of corporate farming (perceived or real, as the case may be) is to vertically integrate all food production. Some corporations want to manage every step of this production, from DNA to consumption. One of the biggest is Archer Daniels Midland. Even larger is privately held Cargill, with 2004 revenues of $62.9 billion. Corporate farming is a fairly loose term that refers to the practices and effects of the literal handful of large, global corporations that dominate food production. It does not refer simply to any corporate agribusiness enterprise, although most agricultural businesses today are in some way economically connected to the dominant food industry players. Genetic engineering and corporate farming The debate about large corporations in agriculture is heighted at the intersection with the already controversial issue of genetically modified food. Critics of both are concerned that these large businesses will leverage their economic and political power to defeat attempts to regulate or restrain the spread of genetic engineering in agriculture, or leverage intellectual property rights in GMOs to unfair advantage over their competitors, against the interests of users and consumers of their products, and to the detriment of the environment. Patents, say supports of such intellectual property rights, are designed to subsidize and create economics incentives for invention by rewarding the inventor with monopoly profits. The inventor is given the right to prevent any competitors from selling or using the invention, so that it may be sold at higher prices and on terms more favorable to the inventor. This may create significant economic rewards, though consumers may choose to buy rival products (possibly based on different patents, or none at all), and the lifetime of the patent is limited. Simple possession of a naturally occurring seed (free from patent restrictions) gives one the ability and the legal right to grow crops from the seed, to modify the breed, and to sell, exchange, or share the seed as one sees fit. With patent rights, however, the inventor (often a large corporation) may choose to restrict how farmers may use a given organism, in order extract the economic value of each type of use, and to extract economic value from each user. Critics of GMOs and corporations say that these rights give already powerful corporations an even greater advantage, and in a way which disrupts millenia-old agricultural practices. Supporters of genetic engineering emphasize the potential benefits in nutrition, reduced environmental impact, and increased productivity that may be possible with the technology. They say that the additional economic rewards are necessary to encourage the large capital investments needed to make useful advancements in the field. Concentration of production Corporate farming is criticized for its tendency to concentrate production, while expanding, and thus steadily decrease both the number of farms and the percentage of independent farmers. Those farmers not bought out or put out of business, are removed from independent production decisions and forced to sign production contracts with corporations. This is essentially an anti-monopolist criticism. The trend towards concentration began in the chicken and vegetable industries and has since expanded to hog and grain production. In 1997, some 60% of hogs sold within the US were sold under some form of contract, whereas in 1980 only 5% of hogs were sold in this manner. As production continues to concentrate and is coupled with increasing reliance on technology, farmers complain about their increasing remoteness from centers of population or production. For example, farm machinery repair services, which were once as close as two miles away, are increasingly as far as 40 miles away. Robert A. Rohwer asks, "Are we starting a new serfdom with CEOs as the lords? Are we creating a vise whose jaws are corporate control? Corporations will soon collect all the windfalls of agriculture and corporate decisions will dominate all aspects of the field. My son and daughter are mere employees, tied to the land, swamped in debt, and diminished in their entrepreneurship. We are moving towards industrialized agriculture." Food quality It is important to consider whether the food that reaches the consumer is as good as it would be under alternative structures of the food industry. Very large organisations may be motivated primarily to maximise yield and profit rather than breadth of choice (to the consumer) and flavour; they may feel more inclined to use genetically modified crops, hormones, preservatives, color additives and insecticides to maximise yield and profit. In the United Kingdom there has been a growing reaction against factory farmed produce in recent years, with consumers feeling that they can obtain higher quality products (admittedly at a higher price) if they know the provenance (the local and often small scale source) of the food they buy. There is little or no comparative information about flavours compared internationally and over time (i.e. today compared with the past) but there is anecdotal evidence that US factory farming may have resulted in a deterioration (and not simply a change) of food flavours. Corporate farm vs family farm Farms are expensive to operate; input costs include farm machinery, crop insurance, fertilizers, irrigation, pesticides, fuel, and seeds. Some people question whether small family farms are still economically sustainable in the United States. One major difference between independent farming and corporate farming is that a corporate farmer is usually a contracted employee, rather than the owner of the farm. However, ownership itself does not mean independence in business. An owner-operated farm today faces many constraints that are completely out of the owner's control. Depending on the type and size of independently-owned operation, some limiting factors are: - cost of inputs: fertilizer and other agrichemicals can fluctuate dramatically from season to season, partially based the oil prices, a range of 25% to 200% is common over a few year period.
- oil prices: Directly (for farm machinery) and somewhat less directly (long distance transport; production cost of agrichemicals), the cost of oil significantly impacts the year-to-year viability of all mechanized conventional farms.
- commodity futures: the predicted price of commodity crops, hogs, grain, etc, can determine ahead of a season what seems economically viable to grow.
- technology user agreements: a less publicly-known factor, patented GE seed that is widely used for many crops, like cotton and soy, comes with restrictions on use, which can even include who the crop can be sold to.
- wholesale infrastructure: A farmer growing larger quantities of a crop than can be sold directly to consumers has to meet a range of criteria for sale into the wholesale market, which includes timing and graded quality, and may also include variety, therefore, the market channel really determines most aspects of the farm decisionmaking.
- availability of financing: Larger farms today often rely on lines of credit, typically from banks, to purchase the agrichemicals, and other supplies needed for each growing year. These lines are heavily affected by all most of the other constraining factors.
- government economic intervention: In some countries, notably the US, government subsidies to farmers, intended to mitigate the impact on domestic farmers of economic and political activities in other areas of the economy, can be a significant source of farm income. Bailouts, when crises such as drought or the "mad cow disease" problems hit agricultural sectors, are also relied on. To some large degree, this situation is a result of the large-scale global markets farms have to alternative but to participate in.
- government and industry regulation: A wide range of quotas, marketing boards and legislation governing agriculture impose complicated limits, and often require significant resources to navigate. For example, on the small farming end, in many jurisdictions, there are severe limits or prohibitions on the sale of livestock, dairy and eggs. These have arisen from pressures from all sides: food safety, environmental, industry marketing.
These are absolute realities of modern farming, however, it is controversial to claim these factors as the doing of a few food giants. In fact, over the last century, societies have collectively taken most of the steps down this path. Individual farmers opted for successive waves of new technology, increasing their debt and their production capacity. This in turn required larger, more distant markets, and heavier and more complex financing. The public willingly purchased increasingly commodified, processed, shipped and relatively inexpensive food. And so forth. In the current situation, corporate farming is now in a position to perfect this vertical integration and streamlining. While it might be difficult to prove that coporate farming was the premeditated architect, the corporate farming argument holds that regardless, it is the giants who now are firmly in control, to the detriment of society at large. For the independent farmer to regain true independence, the entire food industry infrastructure would have to be restructured. See also External links
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