Re: farm policy

Frederick R. Magdoff (fmagdoff@zoo.uvm.edu)
Thu, 31 Dec 1998 14:26:28 -0500 (EST)

Cass et al.,
Regarding profitability of large-scale (mega?) farms vs. smaller
ones---- I think that most of it has to do with what might be
called financial advantages (NOT economies) of scale (as opposed to more
output per unit of land or labor, which is usually no greater in very
large farms than found in reasonable scale family farms). Very large farms
pay less for inputs (volume discounts- and this includes the lower
interest rates on borrowed money, just ask your friendly banker), get more
for their products (volume premiums), and have more opportunities to make
money through use of hired labor.The total of these financial advantages
can be quite large.

FRED

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Fred Magdoff
Northeast Region SARE Program
Hills Building
University of Vermont
Burlington, VT 05405
tel:802-656-0472
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On Thu, 31 Dec 1998, Cass Peterson wrote:

> Bob MacGregor writes:
>
> >I am well aware of the impact of decreasing farm numbers on rural social and
> >economic structure. However, do you think that government policy --
> >purportedly to "support the family farm" has inhibited the consolidation of
> >farms and the attrition in farm (and farm family) numbers?
>
> Obviously it has not. But that word "purportedly" is fraught with meaning
> here. However the government's policy has been described, and whatever
> rhetoric Congress used in enacting farm legislation, the fact is that
> government policy does not, and was not designed, to support the family
> farm. It's a syllogistic fallacy to state otherwise.
>
> The government''s policy is ample agricultural output at globally
> competitive prices. Period.
>
> If support of the family farm were the point, the government would not have
> permitted federal irrigation rights in the West to expand to 960 acres
> instead of the 160 acres envisioned by the Reclamation Act, and it would
> not avert its gaze as legal machinations allowed farmers to expand that to
> thousands of acres.
>
> If support of the family farm were the point, the government would not have
> permitted corporate farms to reap millions of dollars in crop-support
> payments in violation of maximum benefit levels.
>
> >If the government really wanted to maintain farm numbers, they could ban the
> >technological advances -- notably mechanization -- that allow such big,
> >low-labour operations to be created.
>
> If the government really wanted to maintain farm numbers, it would be much
> more aggressive in examining agricultural marketing, packing, and shipping
> operations for antitrust violations.
>
> >Barring some such extreme action,
> >consolidation of farms will continue as long as the larger units are more
> >economically viable than the smaller ones.
>
> Then let us examine, very closely, what makes those larger units so much
> more economically viable. It couldn't be, could it, that they've gotten
> more than their share of the government largesse that was "purportedly" to
> support the family farm?
>
> Cass Peterson
> www.flickerville.com
>
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