Impacts on Agricultural Sustainability from Structural Change in Peanut, Poultry, Swine and Tobacco Production Systems

Final Report for LS97-085

Project Type: Research and Education
Funds awarded in 1997: $174,858.00
Projected End Date: 12/31/2001
Region: Southern
State: North Carolina
Principal Investigator:
Hal Hamilton
Center for Sustainable Systems
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Project Information

Abstract:

This study by seven nonprofit and academic institutions reveals important trends in four of the major southern commodities, implications for farmers and rural communities, and best practice interventions to support the sustainability of farm families and their communities. Case studies in three states included secondary data analysis, Rapid Rural Appraisal, focus groups, informant interviews, surveys and community meetings.

Agriculture’s structure, not only of farms but also of the input and output sectors, determines the sustainability of agricultural production systems. Central to agriculture’s impact on sustainability is the production/price treadmill, where farmers respond to low prices by chasing additional production, either through increased land or technology adoption. As additional farmers follow similar strategies, supplies increase and prices fall, driving the demand for additional land and technology. One effect of the transition to contract production is that it takes the innovation decision out of the hands of the farmer, and farmers are often required to adopt new technologies in order to receive a contract.

The commodity structures analyzed in these pages are on a continuum of “traditional” independent farmers to vertically integrated operations. Peanut farmers make independent production decisions within a relatively protected market. Tobacco remains under a federal program, but tobacco companies have begun the transition to contract production, and it is estimated that the federal programs for peanuts and tobacco have protected these growers from many of the forces of concentration and price diminishment that affect other commodity farmers, but these programs are both at risk. Poultry and hog contractors make few independent production decisions although their exposure to risk is mitigated by terms of their contracts.

Many southern commodity farmers face what can only be described as a systems-level collapse, with negative impacts on family income, rural communities, and the landscape. Some of these farmers will diversify into entrepreneurial enterprises and some depend increasingly on off-farm income. Some will engage in contract poultry or hog production, with results likely to follow directions indicated in this study. Much farmland will be converted through development or, in areas further from metropolitan regions, revert to brush and forest. Either way, the landscape loses its regionally unique qualities of stewardship and becomes a succession of subdivisions, strip development, factory farms and abandoned farmland.

These results are not inevitable. Our analysis, however, leads us to conclude that current programmatic efforts along these lines are completely inadequate to the task of revitalizing an agricultural rural economy. Only a collaborative, large-scale effort has any chance of creating a robust sustainable agriculture.

These results are not inevitable. The south does not need to lose its family farm texture. Some regions of the U.S. and Europe demonstrate the potential for entrepreneurship, value-adding, agriculture-related business development, and landscape enhancement programs.

Several studies have shown that the assumption that economies of scale make the transition to larger farms both inevitable and desirable ignore many other factors, and that small farms are as efficient as large ones.* This analysis leads us to conclude that current programmatic efforts are completely inadequate to the task of revitalizing an agricultural rural economy. Only a collaborative, large-scale effort has any chance of creating a robustly sustainable agriculture.

Peanuts

The technology adoption decision is a crucial point in determining the impact of agricultural production on the environment and community. Farmer responses to the 1996 changes in the Federal Peanut Program illustrate the impact of deregulation on this decision process, and indicate possible strategies that farmers will take should the program be eliminated.

Farmers cited increased perceptions of risk, and the need for risk aversion associated with reduced returns and the pressure to farm greater areas of land. Farmers were often driven to less sustainable production strategies when this was seen as their only option in the face of increased risk. They also cited negative community impacts of survival strategies.

A multi-year project with peanut farmers in North Carolina has demonstrated successful support of farmers in adopting systems-based pest management strategies, and reducing the cost and risks associated with more sustainable options. The important elements of this program are farm-based innovation that involves the farmer in all aspects of research and the development of solutions and peer-based discussion and information dissemination.

Recommendations

1. Reduce the risk associated with transitions to more sustainable production practices by continuing to develop information-based integrated pest management systems that focus on whole system solutions, and expanding government programs which support such changes;

2. Involve farmers in developing solutions, including production research;

3. Develop direct marketing or value-added opportunities to increase farm income.

Tobacco

A relatively rather large number of small family farms in tobacco growing regions have so far been able to escape the “industrialization” trends of U.S. agriculture. However, many tobacco farmers are questioning whether this enterprise will be able to survive political changes and remain profitable in an increasingly competitive world market.

This report describes a project of tobacco farm diversification in North Carolina and a series of case studies of diversification efforts in Kentucky, highlighting very high demand for assistance programs. The North Carolina case study shows a high degree of success where a comprehensive approach is used and key barriers including lack of capital, marketing outlets and processing are addressed. The program targets support to those enterprises which add value to agricultural products at the farm and community level and provide technical support in business development, marketing, production and processing. A direct delivery process is used to distribute funds and the program is designed to have as few bureaucratic layers as possible.

The Kentucky case studies reveal a list of difficulties faced by farmers, including poor experiences with cooperatives, power imbalance with corporate buyers, minimal coordination or accountability of outside “experts” seeking to assist farmers, poor leadership and management among farmers, and the difficulty of breaking into established markets.

The tobacco regions have an opportunity over the next several years, however, to move from piecemeal to comprehensive approaches. The national tobacco settlement provides potential for farm diversification if it includes the following components:

1. A cost-share granting program to support agricultural enterprise development;

2. Agricultural enterprise incubators for farmers and community groups developing value-added marketing and processing businesses for agricultural products;

3. On-farm research to develop sustainable production methods that can reduce costs;

4. Contract reform to increase income and make the contract arrangements fairer.

Poultry

The study of trends in poultry production is an important portion of this project because of poultry’s long history as the vanguard of commodities shifting to industrialized production systems.

This report by Dr. Heffernan of the University of Missouri includes the third phase of a longitudinal study of Union Parish, Louisiana’s number one poultry parish. Following studies in the same parish in 1969 and 1981, this 1999-2000 study examines the long-term social and economic consequences of changes in the structure of agriculture. Because of the recent appearance of production contracts in hog, tobacco, genetically modified crops, and other crop production, it becomes important to better understand the consequences of such organizational arrangements over a period of time.

Project collaborators at RAFI-USA carried out a survey of tobacco farmers who diversified into contract poultry. These farmers’ experience provides a blueprint for changes that are needed in this industry. In addition, case studies of three alternative poultry production companies are included. These case studies reveal the challenges for farmers who want to retain their independence by producing outside of the industry. These case studies include an unsuccessful range poultry company, a cooperative of turkey producers who were able to remain in business by buying out a closing processing facility, and a company using air-chill processing to produce a higher quality product.

These case studies indicate that successful alternatives to the industrial poultry model presently in place must have the following attributes:

1. State and local governments and private investors make it a priority to see that family farmers stay on their land and are included in the decision making process for the local processing companies. Enough capital must be raised to cover all costs and emergencies for the first 3-to-5 years. Farmers must receive a rate of return on their investments that is similar to that of the other investors in the industry and is regular in payments.

2. Local markets should be developed first with consumer satisfaction with the total process and quality of the product as the primary goal. Stakeholders in the decision making process should include not only the plant managers and the farmers, but also consumers, and other community interest groups.

3. Federal, state, and local laws must provide for fair contracts, fair business practices, effective dispute resolution methods, clear and practical environmental standards, penalties for failure to comply and strict enforcement of such laws.

Swine

The transformation of the structure of agriculture in eastern North Carolina related to the industrialization of the hog industry has become a complex political issue involving debates central to the concerns of sustainable agriculture. Problems related to odor, water quality, waste management, corporate control, and environmental racism have grown beyond the local arena to become statewide and national issues.

To understand the impact of industrialized hog production, a series of focus groups was conducted in industrial hog-production counties with hog producers, citizens, anti-hog activists, and local business leaders. Interviews with local grassroots environmental activists were also conducted.

A core theme that emerged was that rural life was based on being a “good neighbor” and on maintaining the sustainability of natural and agricultural resources. However, the social definitions and meanings of “good neighbor” and “sustainability” differed markedly among the focus groups. Hog producers, while admitting that there were problems related to waste and odor, saw themselves as maintaining the sustainability of agriculture through their adaptation of scientific agricultural technologies that preserved the agricultural basis of their counties. Business leaders emphasized the sustainability of community through new economic opportunities related to the hog industry.
For participants in the citizen and anti-hog activist focus groups, sustainability meant returning to a family-farm and non-vertically integrated structure of agriculture, but the possibility of actually accomplishing this change was seen as remote in current circumstances. All groups looked toward government to come up with specific solutions to the problems of waste and odor, and general solutions to redress allegations of unfairness and unequal protection.

Perhaps the single most important lesson of the industrialization of hogs in North Carolina for SARE is that once an agricultural structure industrializes and becomes vertically integrated and dominated by large-scale integrators and processors, sustainability is no longer an issue solely related to agricultural production. It becomes an issue bound to people’s basic social definitions of rural life and community.

Project Objectives:
  • Document changes in the structure of the peanut commodity system and the responses of peanut farmers to these changes, with a focus on a peanut growing region and associated rural communities;

    Document the effects of vertically integrated contract poultry production on the lives and livelihoods of contract poultry farmers and their communities, including documenting the failure of a “free-range” poultry business in North Carolina and conducting a follow-up study of Louisiana poultry communities;

    Document changes in the structure of the tobacco commodity system, the responses of Kentucky and North Carolina tobacco farmers, and how structural shifts are affecting the quality of life in tobacco communities;

    Identify changes in the structure of agriculture correlated with the development of intensive hog confinement agriculture in Eastern North Carolina and the associated changes in community quality of life, paying special attention to changes in social capital and community conflict.

Introduction:

Collaborators on this project use a commodity systems approach to analyze the context within which farming systems operate, and we assume that sustainability requires understanding not only farm-level but also natural and human ecosystem impacts. Commodity systems impact rural localities, and both farmers and their communities face enormous challenges in adjusting to structural change.

The farming systems approach has grown rapidly in recent years. Initially, work centered on agriculture in developing nations. Unlike modernization approaches that emphasized the diffusion of Western technological innovations, the farming systems approach is based on the assumption that traditional patterns represent reasonable and rational organizations of human, physical, and ecological resources of farm households. However, while there was concern about family farm decision-making, the farming systems approach tended to neglect the structure of agriculture and the constraints that farmers faced. Critics argued that while micro-level processes of family farm decision making are important, it is also necessary to understand the structures and processes that constrain the types of decisions that can be made by farmers and farm households (Garrett, 1986).

Current scholarship on the sociology of U.S. agriculture adopts a commodity system approach toward analyzing the constraints that flow from the power relations among producers and non-producers (Friedland, Barton and Thomas; 1981). A commodity system is a series of steps or stages that together link the production and distribution of a product. It includes the network of labor and production processes that link households, firms and localities to each other. The segments within a commodity system involved the provision of inputs, labor power, technology, manufacturing, transportation, distribution, and consumption (Hopkins and Wallerstein, 1986). In other words, a commodity systems approach to the structure of agriculture does not limit its analysis to only farmers or growers; it also considers the links with agricultural scientists and universities, agricultural input firms, processors, manufacturers of food and fiber, and government organizations and agencies. The commodity systems approach provides the framework for studying the complex set of relationships that characterize the production of tobacco, peanuts, poultry and hogs in contemporary Southern agriculture. This project’s research includes a focus on the distribution of power and other resources between producers and non-producers and the social consequences of this distribution for the geographical localities and regions where farm families live and work.

This approach also necessitates a definition of sustainability that reaches beyond the individual farm. Sustainable agriculture is usually defined as a process, not a specific set of practices. Movement towards sustainability involves awareness of the holistic nature of the farm enterprise and its interactions with the other components of the commodity systems in which it is embedded. These components, including aspects of the social, economic, regulatory, and ecological environment, may constrain or enable sustainable agriculture process. Since agricultural commodity systems are highly dependent on place, research on specific commodity systems and localities is needed to address the problem of understanding constraints on sustainability. Since movement toward a more sustainable agriculture has been linked to the financial viability of farm operations, sustainability also involves the ability of a group of growers or farmers to maintain the well-being of their operations and households, including access to adequate food, shelter, medical care, and education.

Because the viability of farms implies that people will reside and work in the countryside, questions of sustainability also involve investigating commodity system impacts upon rural localities. Literature in the Goldschmidt tradition illustrates a link between large-scale industrialized agriculture and diminished community well-being (Lobao, 1990). However, the social impacts of industrial agriculture depend much on the local context (Lasley, Hoiberg, and Bultena, 1993). The number of jobs that flow from the local provision of inputs, markets, and processing and the quality of these jobs–working conditions, social benefits, wage rates, and opportunities for mobility–impact the stability of employment which is an important determinant for maintaining community quality of life and building social capital. Flora (1995) argues that the pattern of mutual trust and reciprocity encouraged by the sustainable agriculture movement contributes to well being by building social capital within rural localities. Social capital is the network of reciprocity and trust that exists among community resident that facilitates financial, human, and natural capital.

Our research illustrates that agriculture is a system that links farmers and growers to larger economic, social, and political conditions. The structure of the commodity systems creates a particular set of macro-level conditions that impact the micro-level decisions made by individual farmers and growers that in turn have further impacts on local rural communities.

The core problem is that farmers and communities find it difficult to respond effectively to fundamental structural changes. Even as farmers meet their daily demands, they must also try to respond to an array of new regulations and changes in long-standing government commodity programs. The “rules of the game” regarding the environment are changing, and farmers must keep abreast of new constraints and opportunities. Consumers are increasing their demands for safe food. World trade agreements are re-shaping the criteria for successful agricultural production and marketing.

Peanuts, tobacco, hogs and poultry are among the region’s major commodities, and their growers face difficult decisions. Peanut growers are facing as much as a fifty percent cut in income due to recent commodity program changes; peanut growers are also in serious competition with foreign contract growers (Argentina for example) who send their peanuts to Canada for processing into candies that end up on U.S. shelves. The region’s tobacco farmers face the problem of finding viable alternatives for a commodity that has provided economic stability and a way of life for generations. Poultry growers-who contribute half of the industry’s total capital investment–have few alternatives due to the constraints of contract agriculture as it exists. North Carolina has become the second largest hog producer in the United States, with hog production expanding in Eastern North Carolina in many areas formerly dominated by tobacco production. This has drastically changed the structure of agriculture in the affected regions and affected community quality of life; many people are concerned that small-scale hog producers will not have access to markets and that large-scale, factory-type hog farms will not benefit the local community.

Growers of all four commodities must respond to increasing environmental demands, including the need to reduce use of pesticides or agricultural chemicals. As contract agriculture continues its rise–with corporate hog farming following the model set by poultry–it generates increased concern about disposal of animal wastes and carcasses.

These four commodity systems represent different points on a continuum that ranges from the traditional, if threatened, independent family farm system to a fully “corporatized” vertically integrated commodity system. They also range on a continuum of federal program support. The fate of farmers who produce these commodities will have a powerful impact on the development of sustainable agriculture in the region.

Those who are committed to promoting sustainable agriculture in the South face this key task: understanding the structural conditions that constrain or enable farmers to develop sustainable agricultural practices as a useful resource for coping with the changes described above. That is, farmers will adopt sustainable agricultural practices to the extent to which the commodity systems networks in which they are embedded enable them to see sustainable agriculture as a practical way to respond to market changes, government regulatory changes and trade agreement impacts. Furthermore, since agriculture production is based in local geographic and ecological places, the communities where growers work and live are also impacted by the changes in the structure of agriculture. Farming practices, diversification options, and community economic options are all at stake. Farmers’ neighbors who are concerned with community development are ultimately stakeholders in sustainable agriculture.

The project’s case studies and analysis illustrate that agriculture is a system that links farmers to larger economic, social, and political systems. The structure of the commodity system creates a particular set of macro-level conditions that impact the micro-level decisions made by individual farmers, which in turn impact rural communities.

Cooperators

Click linked name(s) to expand
  • Karen Armstrong-Cummings
  • Betty Bailey
  • Mary Clouse
  • Gerry Cohn
  • Bill Heffernan
  • Scott Marlow
  • Judi Morrison
  • Michael Schulman
  • Michael Sligh
  • Will Snell
  • Tim Woods

Research

Materials and methods:

Farmer and other Stakeholder Involvement

Peanut, tobacco, and poultry farmers were major participants in the development of this project, and local communities in each case study community included not only farmers but also other stakeholders from the communities, including bankers, farm supply dealers, extension, and civic leaders. These local committees have been actively involved in both research implementation and dissemination of findings.

Case Studies

Peanuts:
Northampton, Bertie, Halifax, and Martin Counties, North Carolina

Tobacco:
Jackson, Clay, Owsley, Lee, and Breathitt Counties, Kentucky;
Wayne County, North Carolina
Selected Kentucky farmers with diversification experience
Commodity Growers Cooperative and Department of Agriculture,Kentucky

Poultry:
Union Parish, Louisiana
300 North and South Carolina poultry growers
Poultry farmers of Ashe, Watauga, and Alleghany Counties in North Carolina who tried the “alternative” Wilson-Fields system
Iowa turkey growers faced with plant shutdown
MBA Poultry in Nebraska

Hogs:
Sampson and Duplin Counties, North Carolina

Key Research Questions

1) What is the current structure of the commodity system in the South? What is the historical development of this structure? What are the major trends affecting farmers in this commodity in the region?

These questions involve an examination of the historical development of the commodity system and the current state of its social, economic, and technological development. Existing studies and analysis, including books, government documents, census material, and university publications provided necessary data. In addition, the research teams interviewed commodity system experts at various universities, in government agencies and in other organizational components of the commodity system. Individuals whose work or position in the system allows them to have an overview of the structure of the commodity system and how it has changed over time have been the prime sources of interview data.

2) What are the constraints on sustainability which come from the major trends in the commodity system? What impacts do the trends have on farmers, their families, the local community, consumers, and the environment? Specifically, what are the power relations within the commodity system and what limits the ability of farmers and growers to make decisions that would enhance the sustainability of their enterprises?

In order to address these questions, a set of comparative case studies of specific communities where the commodity systems are dominant were conducted. Case studies are advantageous research strategies for explanatory questions, or questions that deal with issues needing to be traced over time. One of the unique strengths of a case study is the ability to deal with a variety of evidence, including documents, interviews, and observations (Yin 1994). A common concern about case studies is that they are not necessarily generalizable to populations or universes. However, case studies are generalizable to underlying research questions (i.e., how rural communities are responding to the changing structure of agriculture).

The secondary databases were used to select specific communities for the comparative case studies. The databases were analyzed to identify specific counties or multi-county areas where the commodity system has been dominant and is undergoing a major change in its organization and power relations. Data on the growth or decline of the commodity system in the community, employment rates, average wage and racial/gender composition of the labor force delineate trends in the locality’s economy. Team members also assessed the extent to which access to the various local actors and groups was available. Based on current organizational capacity in the locality and the desire of members of the locality to work with the research teams, localities were selected for each case study. The secondary database described above was used to create a basic profile of the agricultural, social, and economic conditions in the localities selected as the sites for the case studies.

Once sites for the case studies were selected, the research teams identified key groups in the commodity system and in the local community. Individual informants who represent the entire range of stratification positions, not just community leaders, were interviewed. Growers, farmers, workers, local officials, and business people were all potential informants.

In the structured interviews, informants were asked to describe the power relations in the commodity system and in the locality. Informants were asked to define the major threats or advantages to sustainability that they encounter. Questions were asked about the major trends impacting the locality and about the level of trust and respect between groups as well as abut the potential channels available to voice concerns or resolve conflicts. Informants were also asked to assess the role of ethnicity, race and socioeconomic class in commodity system changes and specifically, whether or not certain groups have been more affected by changes than others. For farmers, growers, and farm employees, questions probes their satisfaction with working conditions (i.e., benefits, incentives, autonomy, responsibility). One focus was on the occupational satisfaction of previously independent farmers who now raise livestock or crops under contract.

Interview results were transcribed from notes (or from transcripts of tape-recorded sessions if tape-recording didn’t create artificial sets of responses) and analyzed for common patterns and themes. In some case study situations, mail and telephone surveys were conducted, and focus groups and community meetings supplemented one-on-one interviews.

3 ) What are the opportunities for change and the development of sustainable processes within the commodity system and within the locality? What resources do farmers need in order to adopt and maximize sustainable agriculture alternatives in response to trends and impacts and maintain viable farming operations in the region?

The before-mentioned informant interviews also attempted to identify specific issues that unite or could unite people in efforts to enhance commodity system and locality sustainability. Local social capital was assessed through questions about network ties among people who share similar social locations and between groups who occupy different positions in the local stratification structure.

Research results and discussion:

The structure of agriculture and sustainability

Sustainability has social, economic, and environmental dimensions. Agriculture’s structure, not only of farms but also of the input and output sectors, determines the sustainability of agricultural production systems. Negative indicators include pressure on the resource base (i.e., soil loss, pollution, biodiversity loss), pressure on rural communities (i.e., main street business loss, declining social capital) and financial pressure on producers.

If we are to address these indicators, we need to uncover the underlying dynamics of the system. According to computer modeling of commodity systems by the Sustainability Institute (Rice, Sawin, Meadows, 1999,) the most essential cycle is one of technology adoption, yield increase, price pressure, and consequent increased demand for land and technology inputs.

The crucial decision point in this cycle is the technology adoption moment. Individual farmers make rational decisions to increase their competitiveness, but at the expense of their collective well-being. The only mechanism they see for increasing their income is increasing production by increasing size or implementing new technology. However, this strategy is only effective if the rest of the system remains static. When all farmers are taking the same steps, the “yield-chasing/low price cycle” kicks in. The worst off is the farmer who stays the same, and receives less for his crop as the price drops.

The decision-point about technology adoption is a classic “tragedy of the commons” moment. The results of this yield chasing, low price cycle are pressures on the environment, producer incomes, and rural community well being. Our conventional approaches to these symptoms of an unsustainable system are to treat them symptomatically, with producer subsidies, environmental regulations, conservation incentives, and community development initiatives.

Lasting transitions toward sustainability require that the benefits to the producer and to the aggregate of producers must be aligned. In everyday language, it must be in the farmer’s financial interest to do what is best for everyone.

How do we address the underlying dynamics so that this alignment is achieved, so that we fix the system rather than just symptoms? Modeling helps us understand why the peanut and tobacco programs sustained farm prosperity through large regions of the south over the past half-century. These programs, particularly the program in the burley tobacco region, moderated farmers’ needs to adopt yield-enhancing technology. Producers of peanuts and tobacco have production quotas and price protection that locks the system into place. Technology adoption has been retarded by small production scale, and, in the burley region, by the “franchising” of production quotas to farms in marginal, hilly topography. Many economists, in fact, have criticized these New Deal programs for inhibiting innovation. The result, however, was to sustain a “system” in which producer income held steady with inflation until the late 1970s, with a firewall against the pressures of industrialization and concentration. Recent pressures of globalization and liberalization are destroying the structure of this system and replacing it with the familiar commodity cycle.

We are not arguing that the peanut and tobacco programs were ideal programs. They never dealt with issues of high land values and consequent barriers to entry for new farmers, for example. But we are hypothesizing that these programs hold some very important lessons about the scale and comprehensiveness of policies essential to sustainability.

One of the major structural trends in agriculture is the increase of vertical integration, and the rise of production contracts. This transition has an impact on the technology adoption decision point. Richard Levins of the University of Minnesota estimates that production contracts covered about $60 billion by 1997, almost one-third of farm-level crop and livestock sales, and have expanded greatly since. As farmers turn increasingly to contracting for risk aversion, or just to gain the ability to continue in agriculture, the technology adoption moment is no longer a free choice. Farmers frequently must adapt new methods and machines in order to receive each new round of contracts.

Referring to contracting with a large integrator, one Louisiana poultry grower commented, “In a lot of rural towns there is no other opportunity and it is better than none. That is a central point. You might not have extra money but it will probably help your standard of living.”

Short of such a comprehensive approach, the structure of agriculture has reached the point where many agricultural advisors and leaders consider the best options for commodity producers to be either: 1) contract production in an integrated supply chain, or 2) niche production of specialty products.

Specialized product development is recommended for entrepreneurial farmers. To facilitate diversification, the tens of millions of dollars pouring into tobacco communities from the Master Settlement with tobacco companies provides opportunities to create the processing and marketing infrastructure needed by farmers seeking diversification opportunities with new enterprises. These programs provide a huge case study of diversification and the search for niche markets. We might hypothesize, using data gleaned from this study, that these new enterprises will have the greatest chances of success if they can avoid the power imbalance of poultry and hog contracts, and if they can avoid the market oversupply and price pressures of traditional commodity production.

The commodities analyzed in this report are each indicative of a different point in the transition to vertical integration. Peanut producers still make relatively independent decisions within a relatively protected market. Within this context, this report looks at the impact of the technology adoption treadmill and the accompanying concentration of farmland on the innovation decision-making of individual farmers. In addition, in the absence of federal commodity programs, this section outlines a model program which has been successful in aligning the financial interest of the farmer and the interest of sustainability, and providing support for farmers in transitioning to more systems-level problem solving.

The tobacco industry is currently undergoing a rapid transition from independent production to contract production. In this section, we examine the impact of this transition on farmers. In this industry, programs which encourage diversification and value-added enterprises are important as they provide farmers with a survival strategy which allows them to step off of the yield-chasing treadmill. This report examines several examples of programs created to support this level of enterprise development.

The hog industry has nearly completed the transition to vertical integration. In this section, we examine the impact of confinement hog operations on the adjoining community.

The poultry industry provides important lessons on the impact of vertical integration on the farm community because it has been vertically integrated for the longest period of time. This section outlines the long-term impact of vertical integration on two communities, and examines three case studies of alternative markets.

As long as farmers remain exclusively commodity producers they will remain part of a structure that drives unsustainable behaviors. Only by shifting to product production can farmers hope to escape the yield-chasing/low price cycle. In the policy arena, one additional opportunity for farmers to sidestep the commodity treadmill is to capture the interest of the larger society in their production of public goods and services.

We do not imagine that dramatic progress will happen rapidly. Sustainability is only likely to be achieved when a public consciousness of ecological and social damage coincides with a tangible vision and first steps toward a new societal “contract” with agriculture.

EDITOR’S NOTE: A detailed 192-page final report is available from the Southern Region SARE office. It contains supporting documents that don’t translate into online viewing. For a free copy call (770) 412-4786 or email groland@griffin.peachnet.edu

Participation Summary
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.