1) Big producers displace more jobs than they create!
A University of Missouri study (a) found that independent producers create three times as many jobs as corporate contract production. For each 12,000 slaughter hogs produced under corporate contract, the study estimated that 9.44 jobs would be created (4.25 on the farm and 5.19 in the community) but that 27.97 would be displaced (12.6 on the farm and 15.37 off the farm).
2) Big corporate livestock operations are less likely to do business locally than are small and medium sized family farmers!
A University of Minnesota study (b) found that livestock operations grossing under $400,000 a year spent 79% of their business expenditures within 20 miles of the farm. Larger operations spent only 49.5%.
3) Corporate farm profits usually go to outside investors! The real test is whether an increase in livestock production from corporate operations does more or less for a local area than an equivalent increase from independent producers.
A Virginia study (c) examined this issue, comparing the impact of adding 5,000 sows to a local area through corporate farming versus independent producers. It found the independent producer system provided:
(b) John W. Chism. "Local Spending Patterns for Farm Business in
Southwest Minnesota."
(c) Suzanne Thornsbury, S. Murthy Kambhampaty, and David Kenyon. "Economic
Impact of a Swine Complex in Southside Virginia."
(a) John E. Ikerd. "The Economic Impacts of Increased Contract Swine
Production in Missouri: Another Viewpoint."
Vertical integration can produce unfair competition. A meat packer that can supply its plants with slaughter livestock from its own production facilities can reduce prices to independent livestock producers.
A University of Nebraska study (Azzam and Wellman) used a computer model to simulate the effects of vertical integration in the pork industry.
The study concluded:
Interestingly, it was reported in Hogs Today magazine that packers in North Carolina, where vertical integration has reached the 50 percent level, were paying $51.00 per hundredweight on hogs purchased directly from large producers on the same day they were paying only $39.00 per hundredweight on the open market - a 24 percent difference. That's remarkably close to the University of Nebraska computer estimate.
North Carolina has aggressively pursued corporate hog farming with the notion that more corporate production would bring packers to North Carolina, increasing prices for hogs and opening up new opportunities for family farmers.
In fact, North Carolina has experienced dramatic growth in pork production. And it has attracted a new packing plant. Smithfield Foods built a plant there able to slaughter 32,000 head of hogs a day.
But this has not helped family farmers. In fact, North Carolina lost 48 percent of its pork producers between 1988 and 1994 and 73 percent between 1982 and 1994 - more than any other major hog producing state. And that loss has been in every size category of producer except the largest. By contrast, Nebraska, which has the toughest corporate farming restrictions in the country, leads the nation in the rate of retention of pork producers.
The difference is "market access." Smithield Foods contracts for most of its hogs from corporate farms. It reported that 55 percent of all the hogs it slaughtered in 1993 came from 4 corporate farms - two of which it has ownership interest in.
This reduces demand for hogs and gives independent producers less market access - that is, less opportunity to sell hogs at competitive prices.
Smithfield later bought the former Morrell packing plant in North Carolina and closed it down, reducing competition and further foreclosing market opportunities for independent family farmers.
A University of Missouri study (a) concludes...Large-scale, specialized hog operations produce more hogs per person employed...As a result, they create fewer jobs per hog produced...At least two hog farmers are left without jobs for every new job created.
Hog factories develop direct links to hog packers, bypassing local markets.
Local markets then go out of business.
Large packers refuse to accept small lots of hogs from local producers, or do so only at discounted prices.
Small and medium size independent hog producers die when local markets die.
The number of hogs produced in North Carolina grew 83% in 1985-1992, but the number of independent pork producers declined by 50%.
Net result was a substantial loss of local jobs.
A Kansas State University study (a) concluded that among 91 farrow-to-finish farms studied:
In Nebraska, data from the swine enterprise records and analysis program indicates that bigger is not necessarily better. The most profitable one-third of operations in 1993-1994 had an annual rate of return on capital of 19.2 percent. The least profitable third had a loss - a rate of return on capital of negative 15.3 percent. The most profitable third:
According to Iowa State University swine specialist Emmett Stevermer, the most profitable large sow herds between 1989 and 1993 were generating profit of $12.32 cwt., While the most profitable small herds earned $12.93 cwt.
If large, investor-owned farms are really more efficient than smaller family farms, then why do they need the protective cover and tax advantages of a corporation?
Lower Paying Jobs
Reduced Economic Diversity in the Community
Diminished Property Values
Eroded Tax Bases
Corporate farmers say they produce rural development by increasing investment in pork production and creating jobs...But what they really do is concentrate the pork industry in a few communities that are hard hit by the environmental consequences of large hog operations...At the same time, they displace independent pork producers, draining other rural areas of farm jobs and income.
Consider North Carolina, which has boomed with corporate hogs in recent years...Between 1987 and 1992, North Carolina doubled the number of hogs in the state, from 2.5 To 5.4 million.
BUT
Half the 100 counties in the state either saw no change or actually lost pork production in that period.
71% of the total growth was concentrated in four counties in eastern North Carolina.
Those four counties have over half the hogs in the state, and just two counties (Sampson and Duplin) have 44% of the state's hog population - 2.2 million hogs.
In North Carolina, an emergency inspection of the state's 3,643 lagoons found 124 lagoons full or overflowing, 526 with effluent at higher than desirable levels, and 109 facilities that were discharging waste into rivers, creeks and streams. As a result of several lagoon spills in the summer of 1995, 35 million gallons of manure were spilled into rivers and other waterways. (b)
Duke University odor expert Susan Schiffmann (c) states intense hog odors cause "more tension, more depression, more anger, less vigor, more fatigue, and more confusion" than in people not exposed to such odor.
As a result of odor and other environmental concerns associated with large hog facilities, researchers at North Carolina State University (d) indicate the location of a hog facility nearby has a negative impact on property values of residences nearby. The impact is greater the larger the facility is and the closer it is to a residence.
(b) "The Power of Pork." The News & Observer [Raleigh, North Carolina].
(c) Susan Schiffman, et al. "The Effect of Environmental Odors Emanating From Commercial Swine Operations on the Mood of Nearby Residents."
(d) Raymond B. Palmquist, et al. "The Effect of Environmental Impacts from Swine Operations on Surrounding Residential Property Values."
10,000 hogs generate waste equal to 17,000 or more people.
100,000 hog factory is in reality a big city...Sewage equivalent of 170,000 to 200,000 people.
Hog waste contains more concentrated organic matter than human waste...Nitrates, copper, antibiotics, and other chemicals harmful to humans in large doses.
Yet, none of the safeguards and regulations applicable to the smallest city waste disposal system apply to hog factory lagoons.
Hog factories flush manure into holding tanks, dump it into open lagoons up to 30 feet deep, and spray it on open fields.
Bob Bergland, Secretary of Agriculture under President Jimmy Carter, said recently, "the super-concentrated pig industry in North Carolina is in danger of collapse because in some counties the ground is saturated with hog manure."
The hog factory solution to the problem is to become "environmental carpetbaggers" and push their factories and hogs on neighboring states.
One study by Walter Goldschmidt found that communities with smaller sized farms surrounding them had:
A 1990 study by sociologist Linda Labao found that an agricultural structure that was increasingly corporate and non-family-owned tended to lead to:
In a similar vein, sociologists at Iowa State University summarized a dozen studies covering all parts of the United States over four decades and concluded from them that "a change towards corporate agriculture produces social consequences that reduce the quality of life for rural communities."
Corporate farms are spending huge sums to influence state legislatures and the public.
Goals include the prevention or elimination of environmental, corporate farming, and zoning laws.
The result is called "environmental classism" - the exploitation of sparsely populated, lower income areas.
This new system threatens rural resident quality of life and health.