Increasingly Agribusiness

American agriculture is increasingly "agribusiness," a term coined to reflect the large-scale nature of agricultural enterprise in the modern U.S. economy. Agribusiness refers to the entire complex of farm-related businesses, from an individual farmer to a multinational maker of farm chemicals. It includes farm cooperatives, rural banks, shippers of farm products, commodity dealers, firms that manufacture farm equipment, food-processing industries, grocery chains and many other businesses.

Agribusiness correctly describes changes in American farms in the late 20th century. A century ago one-half of the labor force worked on farms; in the 1990s that figure was down to less than 3 percent. In early America farms produced much of what they consumed. Now, commercial farmers have become increasingly specialized so that almost everything consumed on most farms is now bought from outside sources rather than home-grown. In general, machinery has replaced most hired labor.

In 1940 there were 6 million farms averaging 67 hectares each; in 1990 the situation had shifted to the point where there were only 2.1 million farms averaging 185 hectares each. During this same period farm employment decreased dramatically -- from 12.5 million in 1930 to 2.9 million in 1990 -- while the total U.S. population approximately doubled.

It has always been true that many farms changed hands by being passed on from father to son. The high cost of capital investment in land and equipment now makes entry into farming very difficult for most individuals. In fact, some observers assert that the small family farm is no longer viable in the United States. One-third or more of American farmers are really only part-time farmers; they also hold non-farm jobs to supplement their incomes. In the late 20th century, farms were increasingly being passed into the hands of corporations, ranging from small, one-family businesses to giant conglomerates. About one-seventh of all farmland is owned by corporations, about two-thirds of which are family corporations. Slightly less than 1 percent of U.S. farmland is owned by noncitizens.

Some commentators argue that the government has a stake in preserving family farms. They point to the role of the family farm in the American experience and argue that nonfamily-held corporations are only interested in profits. They assert that these corporations are more likely than family farms to use production techniques that might damage the environment. Defenders of corporations point out, however, that nonfamily-held corporations usually have more capital than family farms and can thus afford conservation measures that pay off only over a long period of time.