The Changing Structure of Agriculture by Michael Duffy Leopold Center for Sustainable Agriculture Iowa State Extension Economist

The Changing Structure of Agriculture Outline of Presentation Farming Agri-business Consumption

The Changing Structure of Agriculture Farming A farm is defined as any place that sold or would have sold $1000 in agricultural products; Same definition since 1974 Case of the disappearing middle Technology treadmill Increased reliance on government payments Aging population Increased reliance on outside income Changing rural environment Increased pessimism

The Changing Structure of Agriculture Agri-business  Disappearing middle  Increased concentration

Top Five Grocery Retailers in the United States* 1997 Kroger Co Safeway American Stores Albertson’s Ahold USA CR5=24% 2000 Kroger Co. Wal-Mart Albertson’s Safeway Ahold USA CR5=42% * Source: Heffernan, William

The Changing Structure of Agriculture Conclusions Agriculture has changed and will continue to change Increased awareness of environmental and other problems associated with current farming systems are leading to a rethinking of the current approach Changing consumer preferences and lifestyles offer new options and alternatives for farming Increased awareness of our dependence on imported oil is opening new opportunities for agriculture to lead the way in a biobased industrial society  We can not go backwards. We have to go forward recognizing that things will continually change but that we do have some control over the direction of the change

Strategies Individual, Local, State, National, World  Agriculture Policy Options Do nothing different; continue to follow the same basic course Decide that cheap, bulk, commodities are the primary goal for farming and move as quickly as possible toward production methods and units designed for such production; eliminate programs and expenditures for other goals and redirect the funds toward helping people exit agriculture as quickly as possible Increase the expectations for farming to include energy, medicines, industrial products and service; base support on other aspects besides commodity production

Potential Farm Strategies The basic approach should be to look for ways to decrease costs, increase the value of output, and increase the value retained on the farm.  Collective Bargaining Selling higher up the food chain  Cooperative pools Differentiated products New market relationships Creative thinking switching thinking from a family farm business to a farm family business