1. The Changing Structure of Agricultureby
Michael Duffy
Leopold Center for Sustainable Agriculture
Iowa State Extension Economist

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

3. 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

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

34. 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

45. 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

46. 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

47. 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