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

Project Overview

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

Annual Reports

Commodities

  • Agronomic: peanuts
  • Additional Plants: tobacco
  • Animals: poultry, swine

Practices

  • Animal Production: feed/forage, housing, parasite control, animal protection and health, grazing - continuous, feed additives, feed formulation, free-range, feed rations, manure management, mineral supplements, pasture fertility, preventive practices, vaccines, watering systems
  • Crop Production: continuous cropping, cover crops, double cropping, fallow, fertigation, foliar feeding, multiple cropping, no-till, nutrient cycling, organic fertilizers, application rate management, strip tillage, stubble mulching, tissue analysis, contour farming
  • Education and Training: extension, farmer to farmer, focus group, networking, on-farm/ranch research, participatory research, study circle, technical assistance
  • Farm Business Management: new enterprise development, budgets/cost and returns, cooperatives, marketing management, feasibility study, market study, value added
  • Natural Resources/Environment: soil stabilization
  • Pest Management: allelopathy, biological control, chemical control, cultural control, disease vectors, economic threshold, field monitoring/scouting, genetic resistance, integrated pest management, physical control, precision herbicide use, prevention
  • Production Systems: agroecosystems
  • Soil Management: earthworms, green manures, organic matter, soil analysis, composting, nutrient mineralization, soil quality/health
  • Sustainable Communities: infrastructure analysis, new business opportunities, partnerships, public participation, urban/rural integration, analysis of personal/family life, social capital, social networks

    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.

    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.