Corporate Farming

Corporate farming is the practice of large-scale agriculture on farms owned or greatly influenced by large companies. This includes corporate ownership of farms and selling of agricultural products, as well as the roles of these companies in influencing agricultural education, research, and public policy through funding initiatives and lobbying efforts.

The definition and effects of corporate farming on agriculture are widely debated, though sources that describe large businesses in agriculture as “Corporate farms” may portray them negatively.

Legal definitions

Most legal definitions of corporate farming in the United States pertain to tax laws, anti–corporate farming laws, and census data collection. These definitions mostly reference farm income, indicating farms over a certain threshold as corporate farms, as well as ownership of the farm, specifically targeting farms that do not pass ownership through family lines.

Common definitions

In public discourse, the term “corporate farming” lacks a firmly established definition and is variously applied. However, several features of the term’s usage frequently arise:

• It is largely used as a pejorative with strong negative connotations.
• It most commonly refers to corporations that are large-scale farms, market agricultural technologies (in particular pesticides, fertilizers, and GMO’s), have significant economic and political influence, or some combination of the three.
• It is usually used in opposition to family farms and new agricultural movements, such as sustainable agriculture and the local food movement.

Farming contracts are agreements between a farmer and a buyer that stipulates what the farmer will grow and how much they will grow usually in return for guaranteed purchase of the product or financial support in purchase of inputs (e.g. feed for livestock growers). In most instances of contract farming, the farm is family owned while the buyer is a larger corporation. This makes it difficult to distinguish the contract farmers from “corporate farms,” because they are family farms but with significant corporate influence. This subtle distinction left a loop-hole in many state laws that prohibited corporate farming, effectively allowing corporations to farm in these states as long as they contracted with local farm owners.

Arguments against corporate farming

Family farms maintain traditions including environmental stewardship and taking longer views than companies seeking profits. Family farmers may have greater knowledge about soil and crop types, terrains, weather and other features specific to particular local areas of land can be passed from parent to child over generations, which would be harder for corporate managers to grasp.

Advantages:

1. Farmers are facing problem of credit and income; and this is a way out for them.
2. They become economically stable and also get agricultural credit.
3. They get seeds, fertilizers, modern equipment, etc. through the company for farming which is difficult to get when pursuing farming on their own, owing to their poor economic condition.
4. There is skill development among the farmers which can be useful when they pursue farming on their own later on (if they choose to).
5. There is infrastructure development due to contract and corporate farming as the company takes care of transporting and storing of the produce.
6. The farmer no longer is dependent on the volatility of the market. Also the exploitation of farmers by the intermediaries is removed by direct contract with the company.
7. Contract farming can open up new markets which would otherwise be unavailable to small farmers.
8. In India, land holdings are getting smaller and smaller. The companies can convince many farmers and bring many of them together under contract to have a continuous stretch of land for farming. This will help in mechanization of agriculture and help increase the per head income of the farmers themselves.
9. Many sell land or keep it uncultivated as agriculture is seen as a non-profitable profession nowadays. Such innovations can turn people towards agriculture again and give it a business oriented and profitable outlook.
10. This is also profitable for the sponsors as they get a consistent quality and production.

Disadvantages:

1. This is similar to indigo cultivation done by British where the farmers produced under an obligation. There physical force was used; here they use economic force and enticement trying to encash on the poverty and need of the farmers.
2. Traditional varieties are going extinct due to negligence towards them. Companies force the farmers to use seeds given by the company itself.
3. Economically the farmer becomes dependent on the companies. It becomes sort of a laborer who is working for a master and the farmers no longer have a feeling of ownership of land. Some corporations actually buy agricultural land and employ the previous owner-farmers as workers in the land. (This is similar to estate farming.)
4. There is feeling of alienation among the farmers as they hold no right over the produced crop. The product of their efforts is not theirs; just like Karl Marx said about the industrial workers where they get wages and have no right over the product of their labor.
5. They have to work as per strict rules laid down by the company which may contradict their social customs and culture. A feeling of subservience might creep up in the farmers.
6. Sponsoring companies may be unreliable or exploit the farmers. If they are the only buyers it creates a monopolistic situation which can be exploited by them. Who will be responsible in such scenarios?
7. If a company denies purchasing the produce owing to low standards reason, the loss falls on the head of the farmer itself. Who will be responsible in such cases of dishonoring the contracts?
8. The companies are a stronger group; a fight with whom, the farmers cannot afford. Currently the government has no role in this type of farming. This is between the company and the farmer as per the contract. So there is no use going to the government on dishonoring of the contract by any parties. There is no grievance redressal forum for such cases.
9. Indebtedness and over reliance on advances are other problems. Farmers may start to rely heavily on the advances given by the company and may not be able to get out of the contract even if they want to.
10. Sometimes land which traditionally is under food crops might be selected by the company for their crops.
11. Due to high mechanization in corporate farming lot of work is done by machines alone and that can increase unemployment. In India agriculture employs a considerable amount of people.
12. Due to use of chemical pesticides and fertilizers there is soil degradation. The farmer cannot stop the use of chemical inputs as they are necessary for high yield. Thus there is land degradation.