Duration: 10/01/2004 to 09/30/2006

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

During the past several decades, the American food system has increasingly followed two
new structural paths. On one hand, small-scale farm and food enterprises in many
regions have thrived by adapting to successful direct markets which enabled them to sell
their production directly to consumers. This is an encouraging trend with real benefits to
their communities. On the other hand, giant consolidated food and fiber firms have
established supply chains that move bulk commodities around the globe largely to serve
their own business interests.

This new pattern of food systems has had a disastrous effect on independent family
farmers-it has led to a disappearing ?agriculture of the middle.? These farms and
enterprises of the middle have traditionally constituted the heart of American agriculture.
They operate in the space between the vertically integrated commodity markets and the
direct markets. While the bulk of these farms have gross annual sales between $100,000
and $250,000,3 it would be a mistake to characterize them simply as ?midsized? or
?small? farms. Many of these endangered ?agriculture of the middle? farms are what the
U.S. Department of Agriculture?s Economic Research Service calls ?farming-occupation
farms? and ?large family farms.?

What we are calling the ?agriculture of the middle? is, in other words, a market-structure
phenomenon. It is not, strictly speaking, a scale phenomenon. Yet, while it is not scale
determined, it is scale related. That is, farms of any size may be part of the market that
falls between the vertically integrated, commodity markets and the direct markets. But
the midsized farms are the most vulnerable in today?s polarized markets, since they are
too small to compete in the highly consolidated commodity markets and too large and
commoditized to sell in the direct markets.

Ironically it is also the mid-sized farms that have a comparative advantage in producing
unique, highly differentiated products. Their smaller size enables them to remain flexible
and innovative enough to respond to highly differentiated markets. And currently the
demand for such products is increasing dramatically, especially in the food service
industry. These products are suitable for the market of the middle. The commodity
markets are ill equipped to produce such unique, highly differentiated products, owing to
the uniformity and specialization demanded of commodity markets. And the direct
markets are unlikely to produce the quantity of unique products that this emerging market
demands. Furthermore, direct marketing will only affect the management of a very small
percentage of our agricultural lands. As Patrick Martins, director of Slow Food USA, put
it, community supported agriculture programs, wonderful as they are, can?t by
themselves save American agriculture.?

This situation presents us with a unique market opportunity. There is a burgeoning
market demand for foods that are produced in accordance with sustainable agriculture
standards and it is precisely the farmers ?of the middle? who are in the best position to
produce those products. What is missing is a functional value chain to connect these
farmers to the markets. Our main thrust will be to help these farms develop competitive
alternatives to commodity agriculture?alternatives which can potentially be much more
sustainable economically, socially and environmentally.

Nationally midsized farms still make up the largest share of ?working farms?-farms
where the chief source of income and primary occupation is farming. These farms also
constitute the largest use of farm land and currently remain as a critical variable in rural
community success. But the polarizing forces in the current market climate are rapidly
driving these farms out of business.

These polarizing forces threaten to ?hollow out? many regions of rural America by
transferring most of the agricultural economic activities that have sustained rural
communities, impacting agribusiness viability, job creation, and the maintenance of local
tax bases. And because these are mainly farms that have been in the family for several
generations (and good land stewardship is a high priority since they regard their land as
part of the family?s heritage and local ecological knowledge has been handed down from
one generation to the next), these farms make very important social and environmental
contributions.

While the majority of farmland in the United States is still managed by farmers whose
operations fall between the two marketing extremes, if present trends continue, these
farms, together with the social and environmental benefits they provide, will likely
disappear in the next decade. The ?public good? that these farms have provided in the
form of land stewardship and community social capital will disappear with them.

The phenomenon of the disappearing middle, of course, did not emerge in a vacuum.
Changes in the structure of agriculture that helped to bring about the disappearance of the
middle have been occurring for some time.

How Do Declining Farm Numbers Change American Agriculture?

Farm populations in the United States have been declining for more than half a century.
In fact, by the early 1990s Calvin Beale at the USDA had begun to refer to the steady
decline in farm populations between 1950 and 1980 as a ?free fall? situation leading us
toward ?trauma.? Of course, Americans continue to enjoy a surplus of food and fiber
despite these steady declines in farm populations. And many agricultural experts continue
to see the attrition of farmers as a necessary ?market correction? insisting that depressed
farm economies are due to inefficiencies. In their minds we still have ?too many
farmers.?

So are declining farm populations leading to trauma or to maximum efficiency? If fewer
farmers are able to produce more than enough food and fiber to meet our domestic and
export needs, why should we worry about declining farm numbers at all? Many policy
makers, and perhaps the general public, are, in fact, not concerned. At a meeting which
took place at the National Academy of Sciences Board on Agriculture almost 20 years
ago, an official of the Office of Management and Budget remarked that ?If two or three
farmers can produce all of the food and fiber we need, who cares? In fact, if robots can do
it, who cares??

But farm numbers are not the only issue at stake. If we are only asking our farmers to
produce bulk commodities to be manufactured into food, fiber, energy and other products
as cheaply as possible, without regard for the social and ecological costs associated with
such production, then we might indeed want to stay the present course and reduce farm
populations to the lowest possible number. But we have traditionally expected more from
our farmers. We expect them to take care of the land for future generations. We expect
them to care for their animals properly. We expect them to protect the environment. We
expect them to be good citizens of their communities. We want them to provide us with
food products that have unique attributes. We rely on them to provide us with food
security. All of these public aspects contribute to a healthy landscape, healthy
communities, pleasurable eating---and to a sustainable future.

The USDA?s A Time to Choose: A Summary Report on the Structure of Agriculture,
published in 1981, pointed to some of the critical issues facing agriculture that touch on
these expectations. The report warned that the structure of agriculture that we choose .will ?shape the options available for generations to come and affect the quality of life
of all citizens.? The report went on to suggest that it was time to ?make choices?
concerning ?our immediate needs? and ?the needs of future generations,? between ?the
maximization of current production and exports and long-run resource utilization and conservation.? ?The most critical? choice of all, the report went on to say, was deciding
?what structure of agriculture? could meet those goals.

The report also suggested that ?there can be little doubt that one of the most important
tasks before us is maintaining the productive capability of our resource base over the long
term? and that ?the market may fail to adequately reflect the full costs of resource use
over the long run.? Nothing has happened in the last 20 years to alter that assessment.
Everything that has happened makes that call to action more urgent than ever.

The central question still facing us is whether we can reasonably expect farmers to
provide these public services within the framework of the current structure of the food
and agriculture system we have developed.

We have now reached a critical crossroads. This is not just about farm numbers or
?saving the family farm.? The decline in farm populations, as the USDA report pointed
out, is closely linked to the structural changes that drive that decline, and the disappearing
middle plays an important role in that decline. Consequently, as we enter the 21st century,
a whole segment of the food and farming industry - the agriculture of the middle - is
about to become extinct. And the reason we are calling attention to this development is
that it will dramatically change the very landscape of rural America, jeopardize the future
productive capacity of the land, and severely limit our food choices.

Objectives

Procedures and Activities

Expected Outcomes and Impacts

Projected Participation

View Appendix E: Participation

Educational Plan

Organization/Governance

Literature Cited

Attachments

Land Grant Participating States/Institutions

IA, ME, MI, MN, MO, NC, NY, OR, PA, WA, WI

Non Land Grant Participating States/Institutions

Independent Food Systems Consultant