At 02:26 PM 12/31/98 -0500, Frederick R. Magdoff wrote:
>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
>
>
>***************************************************************************
****
> Fred Magdoff
> Northeast Region SARE Program
> Hills Building
> University of Vermont
> Burlington, VT 05405
> tel:802-656-0472
> fax:802-656-4656
>***************************************************************************
***
>
>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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