The Changing Face of Agriculture

Interviewed by Randy Weckman

A worldwide economy. Deregulation of farming. Shifting consumer preferences. Social innovations in farm ownership and risk management. Just how will these factors influence Kentucky agriculture?

We asked four UK College of Agriculture faculty members, all seasoned observers of agricultural change, to give us their opinions. And while no crystal clear picture emerges, they all agree that agriculture will change substantively early in the next century.  

	Scott Shearer , Associate Professor of Biosystems and Agricultural Engineering specializing in site-specific agriculture.
Lori Garkovich , Professor of Rural Sociology specializing in social demography.
	Jerry Skees , H. Bruce Price, Jr. Professor of Agricultural Economics specializing in agricultural policy.
Austin Cantor , Associate Professor of Animal Sciences specializing in poultry nutrition.

What are the trends that will affect agriculture in the next decade? How will these trends change the complexion of agriculture?

Jerry Skees (agricultural economist): Clearly, the issue of the government's role and its influence on farm structure should be on the table, as well as the role of sustainable agriculture and environmental concerns. Finally, the question of risk in an international economy is important. All three will structure and shape what happens in agriculture, it seems to me.

Austin Cantor (animal scientist): Another important factor that's going to drive what we do in agriculture is the issue of food safety. Right now, it most affects the animal agriculture sector, but it has implications for all of agriculture.

Scott Shearer (agricultural engineer): We're also raising the level in terms of the people who are qualified to participate in agriculture on the production side. Because of technology, farmers need to have more and more skills and to be better managers to continue in farming.

Lori Garkovich (rural sociologist): At the same time, we're creating market conditions that make it even more difficult for farmers to generate the income from farming that compensates them for the investment they've made in training and personal skills development. Increasingly, people need to have a college education to farm successfully. But we have certain expectations for the kinds of rewards that we receive for an investment in a college education.

My sense is that over the last 10 to 20 years, the return from that investment for people who go back to the farm is shrinking. If you think back to the friends you went to college with, and compare your economic condition to theirs, you may not have gotten the same kind of benefits from your education that your friends did.

Skees: There are two components of benefits here. One is the cash flow – the income stream – and the other is wealth. We have two million farmers in the U.S. and 15 percent of them produce 80 percent of our food. In Kentucky it's not any different. You have to ask, for the people who are part-time farmers, where's the rest of their income coming from? And that's where rural development becomes really critical, because you've got to have those off-farm jobs.

Garkovich: And those people are farming in part because there's some income flow from it, but more critically because of the personal values associated with it.

Shearer: We also have the issue of large farms, where people are acquiring a lot of land. I don't see that with some of the people I've been involved with. They continue to increase the size of their operation, but they aren't the landholders necessarily.

Skees: The national numbers are at nearly 50 percent. In other words, nearly half of the land that farmers farm is not owned by them.

Garkovich: There are cultural reasons why. We know that many families have been farming for several generations and then they reach a point where there is no one to farm the land. They don't want to sell, so they find someone to rent the land and keep it in production use that way.

Skees: Renting allows farmers to share risk with the landowners, and one of the biggest risks in agriculture is land ownership.

Shearer: The way I see agriculture going, at least in the U.S. , is that the landholders essentially will purchase management or technology from the people who hold those resources. If you look at animal genetics, plant genetics – in terms of what the land is capable of producing – a lot of what will come off these farms in the future will be somewhat governed by people who don't own the land and come from someplace else. Some of the new technology is allowing farmers to manage increasingly larger acreage.

Skees: Should I own the GPS (global positioning satellite) technology?

Garkovich: Is the additional income generated by applying these technologies sufficient to offset their costs?

Shearer: I think we can draw some parallels with what we've already seen in the development of agriculture. The internal combustion engine replaced the steam engine. I think we're going through a lot of the same things today. If you look at the development of hybrid seed corn, how long did it take to adopt that? We had hybrid seed corn at the turn of the century, but it did not become popular on farms until the '40s and '50s.

Skees: It took institutional development to get the financing in place for these new technologies, and there's another world out there evolving very quickly in terms of capital markets, too. As a result, you'll have more vertical integration in a variety of commodities.

Garkovich: Under a vertical contracting arrangement, all the management decisions rest in the hands of the contractor. In terms of poultry production, the farm operator becomes a farm laborer— a highly skilled one—but a laborer nonetheless. And you're making that exchange for a certain economic security.

Cantor: And we're seeing the concept of contracting really expanding now. In corn production there's a lot of interest in new varieties of corn, particularly the high oil varieties.

Shearer: Look at No. 2 yellow corn. Traditionally, we've put it all in the same bin and sold it that way. I think in the future we're going to see much more attention being paid to who's producing the crop, where the crop's coming from, and where it's going to.

Skees: There's a major company out of Wichita . They will contract with you, the corn grower, and they will give you the formula: here's how you grow the plant, we'll see you the inputs to make sure you grow it the way we say, and by the way we're going to put the GPS on your tractor. This company came to the federal crop insurance advisory board I'm on and they wanted access to the subsidy on crop insurance. They want to contract the corn with the end user and they want to guarantee that farmer a revenue. So we're very close to an integrated market now, with risk being shared all the way through the chain.

Shearer: What I hear you saying is that instead of the government assuming some of the risk in farming, it is being transferred to the private sector.

Skees: Through all kinds of innovative capital market instruments, people all over the world are interested in that risk.

Garkovich: What are the implications for rural communities? The arrangement you're talking about means that those inputs for farming are not being purchased locally.

Cantor: Some people may be thinking of the family farm, but when we talk about agriculture we need to be clear: are we talking about the people on the land or about food production? That's not just a national issue; that's a global issue.

Skees: Keep in mind we are not in a world food crisis. The technology and the innovation we've talked about has in fact been a substitute for land.

Garkovich: And at what environmental cost? Not just in terms of water quality and soil quality, but also in terms of high energy use. At some time in the late 1970s Iowa corn land passed the threshold in which it was taking more total energy to produce a bushel of corn than they were getting out in terms of the food energy from that bushel of corn.

Shearer: From the perspective of an engineer, an energy balance tells us how long we can sustain that production level. If it's sunlight, it's free. If we continue to extract those energies from the ground, how long can those sources be available?

Skees: The legitimate question is: what other substitutes will come along as we have more energy shortages, the fossil fuel shortages?

Shearer: I agree the market's going to determine what we do in agriculture. And maybe biotechnology has a lot to offer in terms of this energy cycle. We do a very poor job of capturing solar energy using crop production in fields to begin with.

Garkovich: Well, I'm a little uneasy about this presumption that somehow we're always going to have a technological fix that will resolve the problem. We have a highly efficient farm factory system, you're absolutely correct, but now we're discovering that the way in which it is organized has a lot of externalities, one of which is that we've tremendously increased the problem of food safety.

Skees: Food safety certainly is more visible as an issue, but risk has two components to it: one is frequency and the other is severity. I would argue that with the system we have, we probably decreased the frequency of events.

Garkovich: I think there's one other factor in risk, and that's the perception of risk.

Cantor: There's not only a lot more awareness because of the media, but we're better able to detect the cause of food safety problems.

Shearer: And trace it back. The illnesses we used to say were “just the flu” we can now prove are not the flu, but cases of food poisoning.

Cantor: I agree. And instead of a hundred large plants, you had five thousand small processing plants, with higher risks of increasing the frequency of contamination. Now we have large processing plants that use the newest technologies in food safety.

Garkovich: To the point that I'm not sure if small companies will be able to continue to survive, in terms of meeting the requirements.

Cantor: There's been so much emphasis on trying to eliminate risks on the farm level, which is totally impossible, and from my point of view there hasn't been enough emphasis on trying to eliminate risks in the kitchen. And let's face it, the people in the kitchens – whether it be in the home, or fast-food restaurants, or institutions – have far less training in food safety, at least on the formal level. Most of our outbreaks with food safety issues have come about usually through some kind of institutional setting.

Shearer: Wouldn't you agree, though, that with time we tend to understand more about some of the liabilities associated with food production and food safety? And we also develop new technologies to address those issues? And so we probably have a safer food production system than we did 50 years ago. u

This roundtable discussion ended after two hours. The experts seemed to agree on a variety of trends that will shape agriculture into the next century.

Trends in Agriculture Farmers will farm more land but much of it will be leased. Innovations in risk management will help smooth the peaks and valleys in farm income due to globalization of the economy and the removal of the U.S. government from production decisions. Technologies such as biotechnology and precision agriculture will increase on-farm efficiency. Farmers will be associated with large national or international corporations who supply much of the technology for production. The farmer will supply land and labor. Food safety will continue to be a public issue. Improved technologies to detect pathogens at large processing plants, coupled with better training at food preparation sites, will decrease the incidence of foodborne illnesses.

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