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PROSPERITY: Economic Policy | April 9, 1985


A Published Letter to Los Angeles Times

Although there is a certain amount of truth in your editorial assertion that the current farm crisis, as in California, will weed out unprofitable, inefficient operations, there is something else to consider in this "survival-of-the-fittest" theory.

Unlike most corporate farms, each often with a large, non-agricultural parent company to fall back on, most small family farms have little savings to tide them over for such extended periods of unprofitability as we have been experiencing in the United States for some years now. Added to the toll in human suffering (as brought to public attention in many news reports and in popular, highly acclaimed dramatic productions), there is a basic economic problem with driving many families off farms, which, then, are usually taken over by corporate landholders, such as banks.

Many highly respected studies have shown over the years that although larger farms have higher total production, smaller farms are generally more efficient, in terms of the yields returned per energy and other capital invested. This higher productivity results in lower food prices in the long run, regardless of short-term price-undercutting on selected items in selected regions by large food producers.

The reasons given for this phenomenon include such things as more intensive, personal attention devoted to the land and crops by an owner-operator, who lives on the farm and whose time and skills he or she does not need to purchase elsewhere. This situation is analogous to the higher productivity on small, personal plots of land tended in the Soviet Union by the same people who farm the much less productive collective farms, for the state.

In short, our current agricultural economic crisis will indeed weed out many unproductive farmers; but unfortunately, it will also take a relatively higher toll on small family farmers than on large corporate farmers, simply because of the size of the capital reserves each has on hand. Not only does this increase human suffering rurally; but also, agricultural efficiency, vital to all of us who buy food, decreases.

In our modern economy, there should be a balance between both small and large businesses, in agriculture and other sectors; so the disproportionate bankrupting of small, often creative and efficient operations is not only unfair to them but also unwise for us consumers. As Ben Franklin admonished, "We must indeed all hang together, or assuredly we shall all hang separately!"

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