21st Century Agriculture: The end of the American farm or the new American farm?

by John Ikerd, professor emeritus, agricultural economics, University of Missouri

Note: The following article is excerpted from a presentation by John Ikerd at the March 2001 Partnerships for Sustaining California Agriculture: Profit, Environment and Community conference, co-sponsored by UC SAREP in Woodland, Calif. In this inspirational address, Ikerd offers an alternative perspective to the corporate and industrial models of agriculture that currently pervade the American agricultural scene. The full text of this address is included in the conference proceedings, which will be available in December 2001. The audio file of Ikerd’s speech is available on the SAREP Web site at http://media.ucdavis.edu:8080/ramgen/ag/ikerdaudio.rm

John Ikerd identifies a growing consensus that a sustainable agriculture is one that meets the needs of the present while leaving equal or better opportunities for the future. (photo by Mike Hembree, Woodland Daily Democrat)

The conventional economic wisdom in America today seems to be that only the markets are capable of ensuring that the right things are done, and are done efficiently. Supply and demand are seen as the only true arbiters of value. If something is profitable, it should be done, if it is unprofitable, it shouldn’t. Anything that interferes with the markets - the government, public attitudes, or cultural values, for example - by definition creates economic inefficiency and is bad for society. Few people are aware of the origin of these beliefs, and even fewer seem willing to challenge them. In fact, the few who dare to question the sanctity of the markets are quickly attacked by people in powerful places with obvious self-interest in perpetuating the myth of the markets - including an army of economists.

From Adam Smith’s observations of more than 200 years ago, neo-classical economists developed the fundamental assumptions that underlie “free market” economic thinking even today. Although contemporary economists try desperately to rationalize arguments to the contrary, these conditions must hold before the invisible hand of competitive capitalism can transform the pursuit of individual short-run self-interest into the greater long-run good of society in general.

First, markets must be economically competitive - meaning numbers of buyers and sellers so large that no single buyer or seller can have any noticeable effect on the overall market. In such markets, no one has the power to retain profits by exploiting anyone else. It must be easy for new sellers to enter enterprises that are profitable and easy for sellers to get out of unprofitable enterprises, so that producers are able to respond to market signals of consumers’ wants and needs. Consumers must have clear and accurate information concerning whether the things they buy will actually meet their wants and needs. And finally, consumers must be sovereigns - their tastes and preferences must reflect their basic values - their tastes and preferences untainted by persuasive influences.

None of these assumptions holds in today’s society. Today, agricultural markets are dominated by the large agribusiness corporations, certainly at every level other than farming, and increasingly even at the farm level. In addition, it is not easy to get into or out of any aspect of agriculture, and it is becoming increasingly harder to get into or out of farming. Consumers don’t get accurate, unbiased information concerning the products they buy, but instead get disinformation by design, disguised as advertising. Finally, consumers are no longer sovereigns. The food industry spends billions of dollars on advertising designed specifically to bend and shape consumers tastes and preferences to accommodate mass production and mass distribution, which enable corporate control of agriculture. There is no logical reason to believe that the corporate agriculture of today is evolving to meet the changing needs or wants of consumers.

Instead, corporate agriculture today is designed specifically to generate profits and growth for corporate investors. In fact, we no longer have a competitive, capitalistic agricultural economy. Capitalism requires that individuals make individual decisions in a competitive market environment. As corporations extend their control horizontally “within” the same functional levels, such as marketing, storage, transportation, processing, or retailing, they increase their ability to protect profits from competitors. As corporations extend their control vertically, “across” functional levels, including additional different stages of production and marketing, they gain control over decisions concerning how much of what is produced, when it is produced, how it is produced and for whom. Those decisions are made to maximize their short-run profits and growth, not to meet the long-run needs of society.

Toward a More Enlightened Future

Thankfully, as society becomes more enlightened, we are beginning to understand the true costs of cheap food. We are beginning to realize that the industrialization of agriculture, while enhancing economic efficiency and reducing food costs, has brought with it unanticipated ecological and social costs. The industrialization of agriculture, characterized by specialization, standardization, and centralization of control, has put farmers in direct conflict with their ecological, social, and economic environment.

The outdated economics that supports agricultural industrialization for the sake of economic efficiency is fundamentally incapable of dealing effectively with either the environmental or the social challenges confronting agriculture today. In economics, the environment and society are external or outside of the decision making process - something that may impact or be impacted by decisions but not part of the process. In reality, the economy, environment, and society all are parts of the same inseparable whole. Society needs a more enlightened system of decision-making - one capable of integrating economic, ecological, and social decisions.

It’s true, people will pursue their self-interest - it is an inherent aspect of being human, as conventional economics assumes. But, people, by nature, do not pursue only their narrow, individual self-interest. It is within the fundamental nature of people also to care about other people and to accept the responsibilities of humanity as the caretakers of the earth. People are perfectly capable of rising above the economics of greed to an economics of enlightenment. An invisible hand can still translate pursuit of self-interests into the greatest good for society, but only if each person pursues a more enlightened self-interest - a self-interest that values relationships and stewardship as important dimensions of our individual well being.

Our enlightened self-interests include our narrow self-interest, which focuses on individual possessions and pleasures. However, it also includes a broader self-interest, which recognizes the value of relationships with other people - even those relationships that return nothing in the way of possessions or individual pleasures. Our enlightened self-interests also include our higher self-interests, which recognizes the value of stewardship, and other ethical and moral behavior, in giving meaning and purpose to our lives. All three - personal, interpersonal, and spiritual interests - contribute to our well being. Each contributes to a more enlightened sense of quality of life, which explicitly recognizes that each individual is but a part of the whole of society, which in turn must conform to some higher order or code of natural laws.

Sustainable Agriculture — the New American Farm

The sustainable agriculture movement in America exemplifies the pursuit of a more enlightened self-interest. People may disagree on the specific words, but there is a growing consensus that a sustainable agriculture is an agriculture that is capable of meeting the needs of the present while leaving equal or better opportunities for the future. The concept of sustainability applies the Golden Rule across generations. We should do for those of future generations, as we would have them do for us, if we were of their generation and they were of ours. We must find ways to meet our needs, all of us who are here today, without diminishing the ability of those of future generations to meet their needs as well.

A sustainable agriculture must have three fundamental characteristics. It must be ecologically sound, economically viable, and socially responsible. Any system of farming that lacks any one of the three quite simply is not sustainable. This is not a matter for debate; it is just plain common sense. A sustainable agriculture must protect and maintain the productivity of its natural resource base. If the land loses its ability to produce, the farm is not sustainable. A sustainable agriculture must provide for the food and fiber needs of people, but it also must provide people with opportunities to lead successful lives. Agriculture must do its part to sustain society or society will not sustain that type of agriculture. Finally, a sustainable agriculture must make sufficient profits for farms to remain economically solvent. If the farmer goes broke, the farm is not sustainable.

No one of the three dimensions is any more or less important to sustainability than the others. The ecological, economic, and social dimensions of sustainability are like the three dimensions of a box. A box that is lacking in height, width, or length quite simply is not a box. A farm that lacks economic viability, ecological integrity, or social responsibility quite simply is not sustainable.

Farmers motivated by sustainability share a common pursuit of an enlightened self-interest, in spite of their diversity in many other respects. They are not trying to maximize profit, but instead are seeking sufficient profit for a desirable quality of life. They recognize the importance of relationships, of family and community, as well as income, in determining their overall well being. They accept the responsibilities of environmental stewardship, not as constraints to their selfishness, but instead, as opportunities to lead more meaningful, successful lives. To them, practicing friendship and stewardship are not sacrifices made solely for the benefit of others, but are means by which they pursue a higher quality of life.

Sustainable farmers seek to farm in harmony with the world around them. They match their unique abilities and talents with their land, their community, and their markets. This requires a higher level of understanding of themselves, their capabilities, their values, and their purpose in life. This requires a higher level of understanding of consumer tastes and preferences and of the uniqueness of relationship markets. This requires a higher level of understanding of the land and of nature’s productive processes. In general, sustainable farming requires more intensive resource management - more thinking and creativity per acre of land or dollar of investment.

Sustainable farming is thinking farming. It requires an ability to translate observation into information, information into knowledge, knowledge into understanding, and understanding into wisdom. Certainly, sustainable farming involves hard work, but farming sustainably is not the “first stage of development beyond hunting and gathering.” It is the next stage, beyond “industrialization.” Sustainable agriculture is very much in harmony with a post-industrial paradigm for future human progress - the next step forward in the ongoing process of human development. Sustainable farmers are thinking workers - or working thinkers. Contrary to suggestions by UC Davis agricultural economist Steven Blank in his book The End of Agriculture in the American Portfolio that we must abandon agriculture as it moves beyond industrialization, perhaps America simply needs to embrace this new kind of agriculture that brings with it a new vision for the American economy and society.

This new paradigm for agriculture is being developed by thousands of farmers all across the American continent and all around the world. These new American farmers are developing the replacement for the old industrial model of agriculture. They are developing a new pattern for farming in the future. Farming sustainably is no simple task, but thousands of farmers are finding ways to succeed. They may carry the label of organic, low-input, alternative, biodynamic, holistic, permaculture, or no label at all, but they are all pursuing common economic, ecological and social goals. By their actions, these farmers are defining the new American farm.