Concentration

Concentration in Agrifood Sectors

Social scientists have pointed to farm losses and the resulting larger farms as an outcome of competition under capitalist political economy, with Willard Cochrane's “treadmill of production” featuring prominently in explanations. The treadmill of production refers to the pressure on farmers to adopt new technologies, as they increase efficiency relative to factors of production. Early adopters of new technologies—such as tractors, fertilizers, pesticides, and hybrid seeds—have a competitive edge over farmers who have not adopted. [Page 95]If nonadopters are to remain competitive, they need to adopt the new technology as well. When all farmers do so, production increases and, everything else being equal, farm gate prices drop. The main ways in which farmers can maintain their incomes with declining prices is to produce more, or to produce with greater efficiency. Thus, new technologies increase productivity but also lead to intense competitive pressures on farmers, many of whom will end up being outcompeted by other farmers.

In the United States, the treadmill of production has taken the form of substituting capital and management for labor and land. The number of farms has dropped by two-thirds from 1910 to 1997. The social changes set in motion by the green revolution in many areas, and the “farm crisis” in the United States in the 1980s, are important examples of concentration among farms. Concentration of production among an ever-smaller number of producers has resulted in the decline of population, community, and economic activity in rural areas where agriculture is a prominent activity. Walter Goldschmidt's work, and subsequent research along similar lines, has shown that rural communities surrounded by fewer, larger-scale farms have lower indices of community health than communities surrounded by a larger number of small-scale farms.

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