April 26, 1973
I have been asked to report on the impact of corporate involvement in agriculture in the Midwest. The assignment is rather broad because the Midwest is difficult to define, even for us who live there.
Since the request was not specific, I have arbitrarily selected a 10-state area that was settled by family farmers and ranchers, that has similar land ownership patterns, and that has an agricultural economy built on production of grain, milk and livestock.
The states involved are Kansas, Nebraska, South Dakota, North Dakota, Minnesota, Iowa, Missouri, Illinois, Wisconsin, and Indiana.
The trends toward bigness are documented in these states as elsewhere. A recent report shows, for example, that nearly all the growth in cattle feeding is in lots with capacity of 8,000 head or more and that the smaller lots operated by independent farmers are losing ground.
Most of the poultry and much of the eggs formerly produced on Midwest farms have passed to feed suppliers and poultry product processors. An attempt is being made to produce pork in factory-like setups.
Although there is a growing awareness of these trends, there still is not the sense of urgency about corporate intrusions in agriculture that there should be. One reason is that we have not yet had a reliable survey of corporate activity in the Midwest.
The only survey covering the area is a Department of Agriculture survey that Secretary Earl Butz and others use consistently to try to prove that no corporate threat exists. The study has been repeatedly discredited because it is based on incomplete, misleading and poorly analyzed data.
The real work of evaluating this research was done in the Midwest by Prof. Richard D Rodefeld of Michigan State, who made a systematic survey of corporations involved in agriculture in his home state of Wisconsin. His research exposed glaring errors in the basic USDA data.
In an analysis of corporation tax returns filed in Wisconsin (a state where these are public records) he found, among other things, that IBDA had missed 252 farm corporations altogether. He also found that IBDA had underestimated the total number of acres owned by corporations by 37%, acres rented by 269%, number of cattle fed by 80%, number of milk cows by 54%, number of sows by 216%, and acres of vegetables by 37%.
Since exactly the same procedures were used by USDA in surveying corporate farming in 46 other states, we can conclude that USDA understated the problem all across the country. My own conclusion is that there is at least twice as much corporate involvement in agriculture as the USDA survey would indicate.
Another solid piece of research in the Midwest is being done by the Kansas Farm Project, a group of young people making a county-by-county survey of land ownership, Kansas, as you may know, has a law banning corporate involvement in most farm production areas and putting a 5,000-acre limit on their land holdings.
However a preliminary report issued by the Project listed 28 corporations owning in excess of 5,000 acres and located in 55 different counties in Kansas. This has been called to the attention of Atty. Gen, Vern Miller, who had earlier promised to look into any alleged violations.
The pattern emerging from the Kansas study is that the corporations are grabbing off land in those areas that have enough underground water for irrigation. They especially like the combination of water, oil, minerals, and cattle.
Another interesting study was issued last August by a group of Midwestern extension economists from one of the real power centers of American agriculture. I am referring to the North Central Public Policy Education Committee, composed of farm economists from Midwest land grant universities.
The report issued by these conservative economists (it is entitled “Who Will Control U.S. Agriculture?”) raises serious questions about the consequences of present trends toward concentration in agriculture. They suggest that these trends, if not reversed, could wipe out family farms and units classified as commercial full time farms in the next 25 years.
There is nothing startling or particularly new in this material. But the fact that it was Issued by extension economists from land grant universities in the Midwest, and is being pushed for discussion at meetings sponsored by the Extension Service, gives the corporation farm issue credibility it has needed for so long. This is highly significant.
You can’t get action on a problem that everybody says doesn’t exist. It will be interesting now to see how the Extension Service material is handled by the Farm Bureau and all those farm editors who have convinced people that corporate involvement in farming was a phony issue. The list includes an editorial page editor from the largest paper in my home state who has insisted that the corporate farming issue is a myth. No discussion of the Midwest would be complete without mentioning a form of corporate involvement that is not land based. That is vertical integration, where a corporation takes over most production phases as was done with broilers.
Large feed companies began signing a lot of contracts with hog producers In 1971, after prices dropped far under cost of production, and a later price recovery is all that kept the integrators from making substantial inroads in hog production.
There is no question but what confined feeding of livestock is seen as a most promising possibility by large conglomerates seeking opportunities in agriculture. Cattle feeding is now so concentrated, and underwritten to such an extent by Chase Manhattan and other big money, that a half dozen conglomerates could buy up sufficient feedlot capacity in a few days time to control the industry.
There is considerable variation among states in the Midwest in the level of understanding of this issue. They range from North Dakota, which recently reaffirmed its ban on corporate farming by an overwhelming vote, to Iowa where the prevailing opinion is that this is not a serious problem.
The most innovative legislation adopted in the region in the land reform area was enacted in Minnesota. It requires all corporations owning or leasing any farmland to file a report on these holdings by March 15th of each year. The reports go to the Secretary of State and are available to the public.
The Minnesota approach has been considered this year in several legislatures in the Midwest and should be pushed all across the nation as a basic step in determining who owns the land.
Several different versions of the Family Farm Act, an antitrust approach to preventing further movement of corporations into food production, also have been proposed in most state legislatures in the region. It is obvious, however, that legislators are not going to pass these bills until we can establish that a problem exists and document it. These bills also expose the social interests taking advantage of the lack of restrictions on corporate agriculture, The most powerful opponents of disclosure of land ownership in the Kansas Legislature turned out to be the railroad lobbyists, which should tell us something about who owns the land.
These proposals are not lost causes, however, because of the growing interest of labor, consumer, environmental and other groups in the corporate farm issue. It is highly significant, for example, that AFL-CIO leaders from Kansas held meetings across the state last September to argue the case that corporate farming is bad for Kansas.
The churches also are becoming more active on this issue in the Midwest. Archbishop Streicker of Kansas City hosted a four-state workshop in January for other bishops, Catholic rural life directors, and others to provide them with facts and. arguments needed in fighting corporate farming in Kansas, Nebraska, Iowa and Missouri.
Unfortunately, with a few notable exceptions coming mostly from Midwest states, the members of Congress are sleeping through this issue.
In summary, the corporations are making headway in the Midwest, this activity is not well documented, it includes some of the vertical integration activity that was involved in the broiler industry takeover, the land grant colleges are beginning to recognize that corporate farming is an issue, there is activity in nearly every Midwest state house on bills to restrict corporate activity in agriculture, and the issue is getting serious attention from labor, environmentalists, and others outside agriculture.
Remarks by Roger Blobaum at the Land Reform Conference
San Francisco, California
April 26, 1973
Summary: Organic consultant, Roger Blobaum reports on the impact of corporate involvement in agriculture in the Midwest.