In 1920, more than half of the United States’ population were farmers. They lived a peasant life in rural communities and were skilled in a range of animal rearing and crop production skills. Farmers tended to embrace natural complementaries between the unique components of the farm to establish healthy food production systems. Most farm work was done with human or animal labor.
Since that time, the advent of industrialization has enabled technology to become a pervasive part of society that affects almost every aspect of our lives. Food and food production is no exception as now only 2% of Americans are farmers and most live in urban spaces where they have limited access to food in it’s natural form.
Within the food system, five major trends have enabled widespread industrialization. They include the discovery of inorganic chemical inputs, mechanization, specialization, consolidation, and market concentration.
Chemical inputs (fertilizer, herbicide, etc.)
Until approximately 1910, there were no chemical fertilizers and farmers were dependent on natural sources of fertilizers, e.g. manure, plant residue, etc. However, following the successful implementation of the Haber Bosch process, nitrogen could be extracted from the air.
This ‘new’ form of nitrogen enabled the widespread expansion of farming operations. It also prompted further research into the use of chemicals for a range of agricultural purposes. Following World War II, there was heavy investment in the agricultural sector. Many of the advancements were attempts to retrofit war technologies for use civilian use.
Much of this investment spurred the Green Revolution which heavily impacted the nation’s approach to food production. Production became more efficient and large-scale. Likewise, many believed that chemicals would be able to replace natural capital.
Despite such a belief, inorganic nitrogen has a somewhat different affect on the soil than organic nitrogen. For instance, because inorganic nitrogen is not a byproduct of natural processes, it can leech out of the soil, burn the plants’ roots, and lead to eutrophication. Likewise, there is emerging evidence showing that plants with access to slow-release, organic fertilizer are in fact healthier than conventionally grown produce.
Accordingly, despite chemicals being a mainstay in modern agriculture, many opponents are questioning this approach due to the harmful environmental and health impacts.
Farming can be tedious and repetitive, especially for common tasks like seeding, weeding, and harvesting. Accordingly, there was strong motivation to develop technologies that would reduce both the amount of labor needed and improve efficiency. This need drove innovation and the development of large-scale machinery that would come to dominate the production landscape.
However, the trade-off for the use of heavy machinery are the negative environmental impacts, e.g. because of the use of fossil fuels. Likewise, high startup and operation costs preclude many from entering the farming profession. Farming has also arguably become so efficient that many small-scale producers have been put out of business and many former farm workers have been left ‘landless’ and without alternative opportunities to secure their livelihood.
When a farmer engages in a select number of activities when farming, they are specialized. This differs from traditionally diverse production. The most common examples of specialization are monoculture, e.g. corn or soybeans, and factory farms.
By specializing, a farmer can become more efficient as they focus their time and resources into one aspect of production. However, a specialized farmer is more likely to be affected by crop failure or market volatility. Likewise, they may suffer the ill effects of a lack of diversity, e.g. soil erosion loss of soil quality, and they will likely need to purchase expensive inputs for the life cycle of their farm business.
As mechanization and specialization become commonplace, scaling the farms up become the norm. Government policy encouraged farmers to ‘get big or get out’. This policy approach facilitated massive farm consolidation as it was expected that farmers would be able to enjoy economies of scale, thus reducing costs to both producers and consumers.
However, treating living creatures and the environment like simple variables in an economic equation has led to controversy about animal welfare and the negative externalities of industrial production. Nonetheless, the fast majority of food is produced within consolidated systems. For example, a strong majority of all chickens come from facilities housing over 200,000 birds or 5,000 pigs per year. Such production systems are called concentrated animal feeding operations (CAFOs) or factory farms.
Within the food sector, an increasingly small number of companies own the vast majority of the market. For example, PepsiCo owns 62% of the salty snack market, while six main companies control the majority of the world’s seed and pesticide market (and further consolidation is taking place as ChinaChem has merged with Syngenta, DuPont has merged with Dow, and Bayer recently purchased Monsanto. Likewise, the four largest U.S. beef slaughtering and processing companies industry earn 82% of the sales and four companies the super market sector earn at least 42% of the sales.
Each of the above-mentioned factors are path dependent. For example, without chemical inputs, farmers would not be able to specialize on the scale that they can. Similarly, without large-scale production, it is unlikely that only a small handful of companies would be able to ascertain such large percentages of the market share.
Still, it is important to note that industrialization in and of itself is not bad. It has lifted countless people out of poverty and enabled a wide range of quality of life improvements. Thus, focusing on the
Accordingly, creating solutions to address and alleviate the disadvantages of each advancement must be system-based and capable of offering viable solutions that maintain efficacy and economic advantage.
- Decarlos, S. (2018). And Then There Were Four?: M&A in the Agricultural Chemicals Industry. USITC Executive Briefings on Trade.
- Hendrickson, M., & Heffernan, W. (2007). Concentration of agricultural markets. Columbia, Missouri: Department of Rural Sociology, University of Missouri.
- James, H.S, Hendrickson, M.K., Howard P.H. (2013). Networks, Power, and Dependency in the Agrifood Industry. In: James, H.S, ed. The Ethics and Economics of Agrifood Competition. Dordrecht: Springer Science-Business Media Press, p. 99-126.
- O’Brien, T. (2001). Factory farming and human health-It is not small food production, but large-scale factory farming, that presents a threat to our health. Ecologist, 31(6), 30-34.