In this section:
 Supporters of industrial farming often claim that sustainable agriculture is not economically viable. They favor large-scale factory farming as the most efficient way to produce huge quantities of cheap food. Hidden costs and subsidies enable factory farms to produce food that is sold to consumers at prices that do not reflect the true costs of production. These costs are not paid for by the owners of factory farms; they are paid by everyone else. However, even if you ignore the hidden costs of production, the argument that industrial agriculture is the most efficient way to farm is simply untrue.1
Rural economies
Among the hidden costs of industrially-farmed food is its effects on small family farms and rural communities, which include the loss of nearly four million farms in the United States since the 1930s.2
Sustainable farms support local economies by providing jobs for members of the community and purchasing supplies from local businesses. A University of Minnesota study showed that small farms with gross incomes of $100,000 or less made almost 95 percent of farm-related expenditures within their local communities.3 Further, studies have shown that small, locally owned farms have a multiplier effect: for every dollar the farm spends, a percentage remains in the local economy, contributing to the economic health of the community.4
Factory farms hire as few workers as possible and purchase equipment, supplies, and animal feed from the same agricultural conglomerates they produce their products for, further stagnating struggling rural communities.5 The University of Minnesota study referred to above showed that large farms with gross incomes greater than $900,000 made less than 20 percent of farm related expenditures locally.6 Industrial farms often have absentee owners whose profits are sent out of town.7 As a result, rural areas with factory farms endure high rates of unemployment and limited opportunity for economic growth.
Economic Efficiency
Even when the hidden costs of factory farming are ignored, industrial agriculture is simply less efficient at producing food than smaller, sustainable farms. While large-scale, single crop (also called monocrop), industrial farms produce a large output per worker, diverse crop, sustainable farms produce more food per acre of land.8 In other words, sustainable farms require more workers and create more jobs, while also doing a better job at feeding people on smaller plots of land than industrial farms.
Despite decades of claims to the contrary, industrial farming has not relieved famine or hunger throughout the world. On the contrary, industrial agriculture has fed a culture of over-consumption, particularly in the United States, where nearly half of all food is tossed in the trash while,9 at the same time, the population is in the throes of an obesity epidemic.10
Meanwhile, a study by the University of Essex found that sustainable agriculture increased productivity by an average of 93 percent on nine million farms in places including the Sahel region of Africa, the hills of the Andes, the rainforests of Southeast Asia, and other areas where synthetic-chemical-dependent farming is neither affordable nor successful.11
Subsidies
Another hidden cost of industrial farms are the billions of dollar in public funds that go to subsidize them. While some industrially-produced food at the grocery store may seem inexpensive, the tax dollars spent on producing it must be taken into account when calculating the food's true cost.
Between 1995 and 2006, the U.S. government spent more than $177 billion in taxpayer dollars on agricultural subsidies.12 In 2007, $5 billion in taxpayer funds were given to growers of corn, soybeans and cotton alone, despite their record profits that year. More than half of that $5 billion was paid to just 10 percent of all recipients, including the largest and most prosperous industrial farm operations.13
These public subsidies support industrial agriculture while allowing big food producers to keep supermarket prices artificially low, making it impossible for the small farms that don't receive subsidies to compete.
Supply, Demand and Food Prices
As more consumers consider the environmental, health, and social consequences of industrial food production, demand for sustainably-raised foods is growing. According to the USDA, the sale of organic agricultural products increased by 20 percent each year throughout the 1990s and is predicted to grow 9 to 16 percent annually through 2010.14 It has also become more common to see foods labeled "raised without antibiotics," "pasture raised," or carrying other important information consumers increasingly want about what they eat. Farmers' markets, food cooperatives, and community supported agriculture (CSA) programs continue to grow in popularity, making local, sustainably produced food more available.
What You Can Do
Increasing sustainable food production results from concerned consumers making informed, responsible choices. By purchasing sustainable foods from your local farmer or grocery store, you support the farmers who are raising food responsibly and actively encourage the growth of a more sustainable food system.
- Wherever possible, instead of giving your money to industrial agriculture - give it to a sustainable farmer instead. Buy foods directly at farmers' markets, farm stands, or through a CSA group. Check out the Eat Well Guide to locate sources of sustainable food in your area.
Did You Know?
- In 2002, only one-third of the farms in the United States received government subsidies; two-thirds of all U.S. farmers received no subsidy payments at all.15
- In 2006, Texas received 10 percent of federal farm subsidy funds for that year, and just 10 states received 58 percent of the funds.16
- The rural workforce employed on U.S. farms dropped by about 50 percent in the 1980s and 1990s.17
For More Information
- The Leopold Center for Sustainable Agriculture - Food Facts: Results from Marketing and Food Systems Research. The Leopold Center is a research and education center in Iowa, with statewide programs to develop sustainable agricultural practices that are profitable and conserve natural resources. "Food Facts" compiles information from a number of studies conducted by the Center's Marketing and Food Systems Initiative.
- The E. F. Schumacher Society. This educational non-profit organization creates model programs that demonstrate how social and environmental sustainability can be achieved by applying the values of human-scale communities and respect for the natural environment to economic issues.
- The CAFO: Implications for Rural Economies in the US. Written by Economics Professor Dr. William Weida, this paper provides an overview of the economic effects of CAFOs on rural communities.
- The High Price of Cheap Food. What cheap food really costs (Emily Green, LA Times, January 2004).
- Reducing Food Poverty with Sustainable Agriculture: A Summary of New Evidence. (Jules Pretty; Rachel Hine, University of Essex, February 2001).
- D'Souza, G., and J. Ikerd. "Small farms and sustainable development: is small more sustainable?" Journal of Agricultural and Applied Economics. Vol. 28, Iss. 1. 1996. pp.73-83.
- Peterson, Wills L., "Are Large Farms More Efficient?" Staff Paper P97-2. University of Minnesota, Department of Applied Economics. January 1, 1997.
Page last updated August, 2009
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