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The Industrialization of Agriculture: Implications for Public Concern and Environmental Consequences of CAFOs When/where did industrialized agriculture and CAFOs come into being? What are the driving forces behind agricultural industrialization?

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slide1

The Industrialization of Agriculture: Implications for Public Concern and Environmental Consequences of CAFOs

When/where did industrialized agriculture and CAFOs come into being?

What are the driving forces behind agricultural industrialization?

What consequences of industrialization and CAFO have caused controversy?

How are these consequences being dealt with by public policies and institutions?

outline
Outline

1.Review of Industrialization in the Poultry and Swine Sector

2.Viewing Industrialization in a Broader Context for Conflict (or Policy) Analysis

3.Consequences of Industrialization that Cause Conflict Over CAFOs

4. Concluding Thoughts about Public Policy and Institutional Responses

1 review of industrialization in the poultry and swine sectors
1. Review of Industrialization in the Poultry and Swine Sectors
  • Marriage of Scientific Knowledge and Industrial Economy Forces
  • Ag industrialization is not a new thing! (It’s been ongoing for many decades)
  • Selected Researchers’ Observations
    • 1960s & 70s - Poultry (broiler) Industry
    • 1980s & 90s - Swine Industry
ag industrialization observations of researchers in the 1960s 1970s
Ag Industrialization - Observations of Researchers in the 1960s & 1970s
  • Scientific/Technological Knowledge & Industrial Economy Forces
    • Specialization in services & products
    • Substitution of off-farm activities for farm work
    • Decreased importance of land vs. capital
  • Separation of crop and animal production
    • Shift from land-based to capital-based activity
    • Could be located almost anywhere
slide5

Feed mill

Crops

Animals

Soil

Separation of Crops & Livestock Had Implications for Location of Enterprises

Global

Manure ? ? ?

slide6

Ag Industrialization - Observations of Researchers in the 1960s & 1970s

  • Scientific Knowledge and Industrial Forces
    • Specialization in services & products
    • Substitution of off-farm activities for farm work
    • Decreased importance of land vs. capital
  • Separation of crop and animal production
    • Shift from land-based to capital-based activity
    • Could be located almost anywhere
  • Integration of Production-Marketing & Geographical Concentration - Broilers
integration of production and marketing geographical concentration
Integration of Production and Marketing & Geographical Concentration
  • First Application in Broiler Industry in 1960s
  • Industry Reorganization
    • Growth from Economies of Scale in Processing
    • Vertical Integration
    • Agglomeration Economies – Clustering of production
  • Contracting
    • Processors/Integrators own birds
    • Contract fee reduced grower price risk
    • Growers clustered near large processors
integration of production and marketing geographical concentration8
Integration of Production and Marketing & Geographical Concentration
  • Geographic Shifts in Broilers (toward South)
    • Pre – WW II
      • Delmarva, South (AK,TX), New England, Midwest (IN,IL)
    • Post – WW II
      • Arkansas, Southeast (GA, AL, NC) and South (TX, MS), Delmarva
  • Consolidation has led to a highly industrialized and vertically integrated sector
    • Production 90 % contracted, Dominant four firms

Source: Martin and Zering, 1997

how industrialization happens
How Industrialization Happens
  • Comparative analysis of broiler, fed cattle and processing vegetable sectors
  • Identified three catalytic forces that trigger structural change:
    • New mechanical, biological or organizational technology
    • Shifting market forces and demand
    • New government policies and programs
  • Source: Reimund, Martin and Moore, USDA Economic Research Service, 1981
a model of structural change four stage process
A Model of Structural ChangeFour – Stage Process
  • Technological change - innovators adopt new technology
  • Locational shifts - production of the commodity moves to areas more amenable to changed methods than traditional ones
  • Growth and development - output rises as a result of newly gained efficiencies
  • Adjustment to risks - new institutions for coordination emerge and relationships within the sector evolve in order to manage new risks.
  • Source: Reimund, Martin and Moore, 1981
observations in 1980s 1990s focus swine industry
Observations in 1980s & 1990sFocus: Swine Industry
  • Industrialization Trend Existed for Decades
    • Accelerated in late 1980s & early 1990s
  • Significant Farm Exits, Consolidation, etc.
  • Major Geographic Shifts in the 1990s
    • Traditional Large Production Area was in Midwest states (IA, IL, IN, MN, NE, OH, SD)
    • Rapid expansion in the N. Carolina in early 1990s
    • Shifts to Great Plains (KS, OK) in late 1990s
  • Some Factors Driving Evolution of Sector
factors driving rapid evolution of the swine sector
Factors Driving Rapid Evolution of the Swine Sector
  • New technology
    • Biological – Genetics and feeding
    • Mechanical - Improved housing, disease control
    • Organizational - Contracting, Vertical Integration
  • Shifting market forces and demand
    • Consumer meat preferences, Diet/Health
  • New government policies and programs?
    • State/Local Econ Dev Environmental Policies
  • Business Climate?
  • Market Control?
2 viewing industrialization in a broader context for conflict policy analysis
2. Viewing Industrialization in a Broader Context for Conflict/Policy Analysis
  • Externalities and Public Policy
    • Existence of “third party” effects (externalities)
      • People’s actions and welfare are linked
    • Existing Public Policy Determines Rules for “who can do what to whom?”
  • Industrialization as a Dynamic Process
    • New Linkages Between People
    • New Patterns of External Effects
      • Positive Opportunities (profits, jobs, income)
      • Negative Burdens or Costs (water degradation,odors)
viewing industrialization in a broader context for conflict policy analysis
Viewing Industrialization in a Broader Context for Conflict/Policy Analysis
  • Existence of new opportunities (benefits) and burdens creates incentives for individuals and groups to change the policy “rules”
    • Those helped – protect benefits and gains through industrialization
    • Those harmed – protect themselves from the negative effects (damages or costs) of industrialization
  • People selectively view the consequences of industrialization depending on how they relate (+ or -) to the process.
different stakeholders will selectively perceive or impacts of a proposed cafo
- CAFO owner

- Other producers

- Integrator

- Local Ag Suppliers

- Farmer Interest Groups

- Consumers

- Local Officials

Neighbors

Residents of rural area or watershed

Environmentalists

Water suppliers

State officials 

Federal officials

Different Stakeholders will Selectively Perceive + or - Impacts of a Proposed CAFO
viewing industrialization in a broader context for conflict policy analysis16
Viewing Industrialization in a Broader Context for Conflict/Policy Analysis
  • Some Implications & Questions
    • Are the current public policies obsolete?
    • How well do markets work to deal with the new pattern of externalities?
    • Do institutions exist for people to discuss and deal with negative and positive consequences of industrialization?
    • How can these processes and policies be improved?
3 consequences of industrialization that cause conflict over cafos
3.Consequences of Industrialization that Cause Conflict Over CAFOs

Three Dimensions of Conflict

  • People - History of relationships and personalities
  • Process - Patterns of interaction and possibly conflict escalation
  • Problem - (or content ) the issues and interests that are the “reason” for the dispute

Source: Beer and Steif, 1997.

3 consequences of industrialization that cause conflict over cafos18
3. Consequences of Industrialization that Cause Conflict Over CAFOs
  • Content Examples
    • National and Regional Scale
      • Nutrient Overabundance
slide19

Feed mill

Crops

Animals

Soil

Nutrient Cycle Doesn’t Cycle!

Global

Manure ? ? ?

slide20

3. Consequences of Industrialization that Cause Conflict Over CAFOs

Selected Problem (or Content) Examples

  • National and Regional Level
    • Generally - Nutrient Overabundance
    • Surface Water Quality
      • Spills from manure lagoons
      • Nitrogen and Phosphorus in the valued water resources; Ecosystem and economic effects
      • Public Health Concerns in late 1990s – Pfiesteria in water bodies in MD and NC and possible links to high levels of phosphorus from farms and other sources
slide21

Inorganic P Sources

Crops

Phosphorus Cycle Has Become Fragmented

Soil

Manure

? ? ?

Regional

Boundary

State Boundary

Feed Mill

Farm

Animals

Global

People

3 consequences of industrialization that cause conflict over cafos23
3. Consequences of Industrialization that Cause Conflict Over CAFOs

Selected Problem (or Content) Examples

  • State level
    • Existing Water Quality and/or Quantity
    • Future Quality of Water (or Air) Resources and their role in the State’s Development and residents quality of life
    • Future viability of an animal sector and associated income or jobs
    • Viability of other industries supported by agriculture
3 consequences of industrialization that cause conflict over cafos24
Drinking water quality

Surface and groundwater quality

Water availability

Dead animal disposal

Insects and public health or nuisance issues

Odors

Air quality

Property Values

Farm or farmer viability

Ag-related businesses

Open space preservation

3. Consequences of Industrialization that Cause Conflict Over CAFOs

Selected Problem (or Content) Examples

Local Community Level

4 concluding thoughts about public policy responses
4.Concluding Thoughts about Public Policy Responses
  • Industrialization as a Dynamic Process
    • New Patterns of Positive and Negative External Effects
  • Different stakeholders perceive different benefits or burdensdepending on how they relate (+ or -) to the process.
  • Question about policies and institutions that allow people to effectively express their concerns over the effects of industrialization
slide26

4.Concluding Thoughts about Public Policy Responses

  • How Are the Consequences of Industrialization Are Being Dealt With By Public Policies and Institutions?
  • Current Level of Conflict over CAFOs-- suggests not very well.
  • Addition Efforts Looking at Boundary Issues at Several Levels
slide27

4.Concluding Thoughts about Public Policy Responses

  • Explore Role of Boundary Issues
    • Firm level – What costs do firms consider?
    • Federal –State – Local Gov’ts - Who decides?
    • Between Agencies – Who Decides & Who Implements Policy?
slide28

3.Consequences of Industrialization that Cause Conflict Over CAFOs

Three Dimensions of Conflict

  • People - History of relationships and personalities
  • Process - Patterns of interaction and possibly conflict escalation
  • Problem - (or content ) the issues and interests that are the “reason” for the dispute
slide29

3.Consequences of Industrialization That Cause Conflict Over CAFOs

  • Acknowledge the “People” dimension
  • Process Issues -Previous interactions in policy-making
    • Environmentalists concerns about follow-through of a business or agency
    • Neighbor’s frustration that no state agency has jurisdiction over their concern (odors, insects, water quantity)
slide30

3.Consequences of Industrialization That Cause Conflict Over CAFOs

  • Acknowledge the “People” dimension
  • Process Issues – Some Examples
    • Previous interactions in policy-making
    • Environmentalists concerns about follow-through of a business or agency
    • Neighbor’s frustration that no state agency has jurisdiction over their concern (odors, insects, water quantity)
conflict can be over process
Conflict can be over Process
  • Results of “Conflicts over Intensive Livestock Operations & Potential for Public Participation & Conflict Management” project
    • Funded by PA Dept. of Ag. 1998 -2000
    • Universities:
      • Penn State University
      • Ag Law Center– Dickinson Law School/PSU
      • Juniata College
slide32

Key Stakeholder Concerns Intensive Livestock Operations Study

  • Environmental Use
  • Health and Safety
  • The Role of Gov’t Officials
  • Economic Impact
  • Community Conflicts about Farming/Food
  • Decision Making Processes
  • The Possibility of Successful Resolution
selected stakeholder concerns
Selected Stakeholder Concerns
  • Governments officials’ role (i.e. trust)
    • Lack of clarity of laws and gov’t responsibilities
    • Capabilities
    • Bias and/or Conflicts of interest
  • Decision making processes
    • Respect and civility; Desire to have their input heard and considered
    • Frustration with current opportunities for education and dialogue
    • Lack of control (e.g., local gov’t preemption)
need for improved conflict management methods
Need for Improved Conflict Management Methods
  • Avoid
    • High legal fees
    • Economic costs, delays
    • Losing control of decisions
    • Tearing of social fabric
    • Wasting community resources
recommended processes
Recommended Processes
  • Mediation
  • Consensus Seeking Processes
  • Formal Public Hearings
  • Formal Review and Comment
  • Public Information Meetings
focusing on different goals
Focusing on Different Goals
  • Education of citizens
    • Public information meetings
  • Enhanced dialogue with citizens
    • Formal review and comment; Formal hearings
  • Search for common ground to advise public decision making
    • Consensus seeking processes
  • Search for consensus and commitment by all stakeholders
    • Mediation