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Corporate 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, food processing, machinery, storage, transportation, distribution and retail sales. The term also includes the influence of these companies on education, research and public policy, through their funding and 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.
History of corporate farming
The trend towards corporate farming 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.
Also in recent years, legal control by way of patent of genetically modified seed has opened up a new approach to vertical integration. GE seed leader Monsanto has successfully marketed seed (e.g. canola, soy) that is resistant to a specific herbicide (one that it also sells). Sold on the dramatic apparent advantages in labor-saving and improved yield, farmers who wish to purchase Monsanto seed must sign a user's agreement that controls how they use it, and even who they can sell the crops to, and new seed must be purchased every year. Thus, a company like Monsanto can effectively control farming, from seed through wholesale, through ownership of technology, without directly participating in growing or crop sales. Through funding of schools and other research, an lobbying governments, agricultural science and policy can be significantly shaped to this business model and its priorities.
Criticism of corporate farming
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.
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."
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.
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