The growth of U.S. agribusiness has corresponded with a decrease in the number of small, family farms in the country. Moreover, American multinational corporations have helped drive an international trend toward the replacement of subsistence farming with commercial farming.
First coined in 1955, the term “agribusiness” denoted an increasing consolidation of American agricultural resources that was driven by considerations of efficiency. This process began during the Industrial Revolution, when large farms with access to technological resources developed a competitive advantage over smaller, poorer farms. Wealthy farmers could purchase tractors and other machinery that made agriculture more efficient. They could cultivate more land and harvest crops more easily, benefiting from economies of scale unavailable to those working on smaller farms. Also as a result of the Industrial Revolution, people no longer had to produce their own food to survive. Instead, they could work in factories and earn enough money to purchase food. These factories provided poor farmers with a strong incentive to leave the land.
During the late 1960’s, the third agricultural revolution, also known as the Green Revolution, made farming an even more expensive activity. Scientists succeeded in altering the genetics of seeds so they could produce more food. To maximize the benefits of these genetically altered seeds, however, one needed to use irrigation and pesticides, increasing the cost of the capital outlay needed for competitive agricultural production. As had been the case during the Industrial Revolution, those most likely to benefit from these new techniques were the wealthier producers. Smaller, poorer producers were forced out of business. Thus, advances in agricultural technology inadvertently contributed to reducing the number of producers in this sector of the economy.
Agribusiness has been controversial in a variety of contexts. Opponents of agribusiness point to the sharp reduction in the number of producers of agricultural products. They fear that this situation could lead to an increase in the price of food as competition dwindles. Moreover, some environmentally conscious consumers have become concerned over the large carbon footprint of national and international agribusiness. They advocate eating food produced locally, rather than centrally produced food that is shipped long distances.
Furthermore, in developing nations, there are not enough urban jobs to accommodate all of the people leaving farms and moving to cities. In addition, the wages earned by industrial workers in developing nations are relatively low. Thus, opponents of agribusiness argue that the concentration of food production in the hands of a small number of large, multinational corporations exacerbates poverty and world hunger.
Advocates of agribusiness argue that global food production has increased as corporate farming has become more common, reducing rather than increasing world hunger. Corporations such as Cargill and Monsanto are able to use the most advanced agricultural technology, as well as management and organizational techniques, to produce food as efficiently as possible, thus bringing down the cost of food over time.
Elliot, Jack. Agribusiness: Decisions and Dollars. Clifton Park, N.Y.: Delmar, 1999. Jansen, Kees, and Sietze Vellema. Agribusiness and Society: Corporate Responses to Environmentalism, Market Opportunities, and Public Regulation. London: Zed Books, 2004. Ricketts, Cliff. Introduction to Agribusiness. Clifton Park, N.Y.: Thomson Delmar Learning, 1999.
U.S. Department of Agriculture
United Farm Workers of America