The Costs and Benefits of Industrial Agriculture 
Sustainable Agriculture--A New Vision

Industrial agriculture is sometimes considered one of America's greatest successes. But is it? It has had large, complex effects on our environment, our economy, and our urban and rural social fabric. A new awareness of the costs is beginning to suggest that the benefits are not as great as they formerly appeared.

Many of the costs of modern agriculture are coming as something of a surprise. It is not hard to see why. Industrial animal and crop agriculture has been developed with a narrow focus on increased production. The research establishment that underpins modern industrial agriculture has until recently paid little heed to the long-term and remote consequences of these systems.


The Benefits of Industrial Agriculture

Among the benefits of industrial agriculture have been cheap food; a release of labor from agricultural activities for employment in other sectors; large, profitable chemical and agricultural industries; and increased export markets.

Cheap Food

American agriculture has seen remarkable increases in agricultural productivity throughout the twentieth century. Between 1920 and 1980, for example, US corn yields soared 333 percent from 21 to 91 bushels an acre and are still improving. Current yields are about 110 bushels an acre. Half the increase can be attributed to improved plant varieties and half to fertilizers, pesticides, and mechanization. 

The stunning increases in the productivity of staple crops helps keep food prices relatively low. One measure of the cost of food is the portion of income spent on food. In 1992, people in the United States spent an average of about 11 percent of their income on food.


Greater Availability of Labor

In 1862, when Congress set up the Land Grant College system of agricultural colleges, 50 percent of Americans lived on farms and 60 percent of all jobs were directly connected to agriculture. A growing industrial economy could not afford to devote that high a percentage of a population to producing food and fiber. Labor and capital needed to move off the farm into other sectors of the economy. Over last 130 years, the US has increased agricultural productivity dramatically, enabling a much smaller workforce to meet basic food and fiber needs. Having accomplished that goal, the question now is whether further reductions in the number of farmers are still desirable.


A Profitable Chemical Input Industry

Agricultural chemicals like pesticides and fertilizers are big business. The Environmental Protection Agency estimates that in 1993 US farmers and gardeners spent 8 billion dollars on herbicides, insecticides and fungicides. Worldwide, the total amount spent on pesticides that year is an estimated 25 billion dollars. One company, Monsanto, reports sales of over a billion dollars for one popular herbicide, Roundup.

Americans are major customers of the pesticide industry. Purchases by US pesticide users account for a third of the world market in terms of dollars and a quarter in terms of active ingredient.


Profitable Large Agricultural Operations

Under today's agricultural system, large commercial farms account for most farm sales. Corporate giants like Tyson, ConAgra, and Cargill run the largest operations, many of which concentrate on beef and poultry. In 1993, 6 percent of US farms accounted for 56 percent of farm sales.

The United States is moving toward a dual agricultural system where a few large farms account for most produce and small farms account for most farmers. Relatively few farmers live on commercial farms. Most farmers live on small farms, where they usually must supplement their farm income with income from other sources. Medium-sized farms that would produce a middle class income for a single family without resort to off-farm jobs are currently being squeezed.

Export Markets

US agriculture has long since passed the point of being able to meet the demand for food in the US population. Much of US agricultural production is now exported to other countries. For example, the United States exports 60 percent of its wheat crop and 30 percent of its soybeans. Agricultural products make up 10 percent of all exported US merchandise. At the same time, the increase in the global food trade accelerated by international trade agreements has seen skyrocketing and imports of food from outside the United States have increased dramatically.


The Costs of Industrial Agriculture

Although the production gains attributed to industrial agriculture are impressive, they have not come without costs to the environment, the economy and our social fabric. 

Environmental Costs

Agriculture impacts the environment in many ways. It uses huge amounts of water, energy, and chemicals, often with little regard to long-term adverse effects. But the environmental costs of agriculture are mounting. Irrigation systems are pumping water from reservoirs faster than they are being recharged. Herbicides and insecticides are accumulating in ground and surface waters. Chemical fertilizers are running off the fields into water systems where they encourage damaging blooms of microorganisms. Mountains of waste and noxious odor are the hallmarks of poultry and livestock operations.

Many of the negative effects of industrial agriculture are remote from fields and farms. Nitrogen compounds from the Midwest, for example, travel down the Mississippi to degrade coastal fisheries in the Gulf of Mexico. But other adverse effects are showing up within agricultural production systems--for example, the rapidly developing resistance among pests is rendering our arsenal of herbicides and insecticides increasingly ineffective.


Economic Costs

Estimating the economic costs of industrial agriculture is an immense and difficult task. A full accounting would include not only the benefits of relatively cheap prices consumers pay for food, the dividends paid to the share holders of fertilizer and pesticide manufacturers, and the dollars earned by exporting American goods abroad, but also the offsetting costs of environmental pollution and degradation.

Such costs are difficult to assess for a number of reasons. In some instances, such as water pollution and global warming, agriculture is only one of several contributors. Another difficulty is our rudimentary understanding of potential harms. A good example is the potential for endocrine disruption that many pesticides appear to have. Endocrine disrupters are molecules that appear able to mimic the actions of human and animal hormones and disturb important hormone-dependent activities like reproduction. More research is needed to determine the extent of the health and environmental damage done by such compounds and the relative contribution of agriculture and other sectors and activities. 

Among the many environmental costs that need to be considered in a full cost accounting of industrial agriculture are the damage to fisheries from oxygen-depleting microorganisms fed by fertilizer runoff the cleanup of surface and groundwater polluted with animal waste the increased health risks borne by agricultural workers and farmers exposed to pesticides

In addition there are enormous indirect costs implicit in the high energy requirements of modern agriculture. Agriculture requires energy at many points: fuel to run huge combines and harvesters, energy to produce and transport pesticides and fertilizers, and fuel to refrigerate and transport perishable produce cross country and around the world. The use of fossil fuels contributes to ozone pollution and global warming, which could exact a high price through increased violent weather events and rising oceans.  The full costs of industrial agriculture call into question the notion of cheap food.


Social Costs

Industrial agriculture also has complex social ramifications in terms of where and how people live. One effect of decreasing the number of farmers is to deprive rural America of its population and base of economic activity. As farmers leave the farm, rural towns and cities lose ancillary services like cafes, equipment manufacturers, gasoline stations and car dealerships. Currently, the Great Plains states are facing rapidly declining populations as a result of changes in agriculture.

Another effect of industrial agriculture has been to create a new class of farmers highly dependent on large corporations. One of the best examples is poultry farming. No longer are most chickens grown by independent farmers who choose which kinds of chickens to grow and sell them wherever they can. Now chicken farmers contract with corporations who supply the eggs and specify the conditions under which they are grown. As corporations grow in size and market power, individual farmers are in ever weaker positions when it comes time to negotiate the price to be paid for growing chickens or to decide who will bear the cost of disposing of the mountains of chicken waste.

Overall, the share of the food profits going to farmers rather than to the agricultural input and food-processing and marketing sectors has been steadily declining. For many farmers with small and medium-sized farms it means that they will be unable to stay in business if they only produce food. To participate in the more profitable part of the food system, many farmers are expanding into processing and retailing food, either singly or in cooperatives. 

The fact that food processors and fertilizer and pesticide suppliers are increasing their share of food profits, of course, has an economic upside for those who hold shares or jobs in chemical or retailing companies. But the loss of farmers means more than simply shifting jobs to other sectors. Farming has in the past been representative of the American ethos. Farmers and their families were seen as testaments to the virtues of independence, hard work, and community that Americans have considered vital to civic democracy. In addition, farmers have been the basis of rural economy and communities. Finally, millions of independent farmers meant a decentralized food supply beyond the control of narrow interests. The social and economic ramifications of the drastic decline in farm populations is just beginning to be felt.

Perhaps the reduction of the number of farmers has gone too far. There seems little advantage in further reductions. The goals of the last century have been met. It might be time to set a reverse course and adopt policies that would stabilize the farming population at 1 or 2 percent of the total population.

Agriculture at a Crossroads

It is time to transform agriculture into a sustainable enterprise, one based on systems that can be employed for centuries--not decades--without undermining the resources on which agricultural productivity depends. The question is how to do it. The choices are to stick with the current system and adjust around the edges or to fundamentally rethink it. UCS is aiming for the long-range transformation of US agriculture to a system that is both productive and environmentally sound.


Sources

R. Drury and L. Tweeten, Trends in Farm Structure into the 21st Century, American Farm Bureau Federation, citing USDA data, 1997.

Environmental Protection Agency, Pesticides Industry Sales and Usage: 1992 and 1993 Market Estimates, 8-9, 1994.

A.V. Krebs, The Corporate Reapers, Appendix C, "The Nation's 100 Largest Farms," Essential Books, 1992.

P. Raeburn, The Last Harvest, Simon and Schuster, 37, 1995.

S. Smith, "Farming -- It's Declining in the US," Choices, 8-11, (1992).


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