Corporate farming has always played a significant role in Great Plains agriculture. This is explained in part by the scale of the production of agriculture that exists in the Plains region of the United States and Canada. Agricultural production units in the Plains are typically much larger in acres and in dollar volume of production than their counterparts in other parts of North America. In order to be economically viable, both cropland and livestock production units often extend over thousands of acres and generate annual sales values of a million dollars or more. Because of sheer size, these units are frequently multifamily that are efficiently transferred from one generation to the next. Therefore, there are economic as well as tax reasons to operate within a corporate form of organization rather than as a single proprietorship. In short, corporate agriculture often makes sense in the Plains.
Family-farm corporations are a frequent and socially accepted component of Plains agriculture in both the United States and Canada. However, the two countries part company in their historical attitudes toward nonfamily corporate agriculture. While Canada has essentially taken a laissez-faire attitude toward nonfamily corporate agriculture, in large areas of the United States there remains a pervasive opposition to this form. Moreover, the opposition essentially exists in the Plains states.
Of the nine states in the United States that restrict corporate farming either by state statute or constitutional mandate, eight lie within the Plains region. In fact, the very roots of anticorporate farm sentiment were historically centered in North Dakota and eventually spread as far south as Oklahoma. When insurance companies began foreclosing on small farmers in the depression years of the 1930s and taking title to thousands of acres of land, it was seen as a threat to the deep-seated values and livelihood of working-class farm people. Similarly, when the first signs of a more industrialized agriculture began appearing in the 1960s, public reaction was strong. Many of the states that did not have corporate farming restrictions on the books instituted state statutes at that time. In Nebraska, citizens even voted corporate farming restrictions into the state constitution when the legislature failed to enact statutory restrictions.
Today, as the more advanced stages of an industrialized type of production agriculture are manifest in the form of mega-sized and vertically integrated livestock production units, Plains people are again reacting with a populist response. Nonfamily corporate agriculture is seen as a threat to the values and beliefs of a Plains culture that remains tied to the land. These are people whose ancestors migrated here a century ago and tenaciously settled the region, making it the productive agricultural area it is today. It was built in the context of family-farm agriculture and close-knit rural communities, which wove a social fabric of mutual support and care. There was a sense of place and connectedness that could be comprehended and lived within. Now, partly as a result of large-scale industrialized production agriculture, with its lower labor requirements, Plains people see their social fabric unraveling: young people migrate to urban centers, main street businesses close for want of customers, and schools and hospitals struggle to keep their doors open.
Yet, for a variety of economic reasons, corporate farming lends itself well to Plains agriculture. Large capital investment and intricate vertical integration with input suppliers as well as with processors and end consumers seem to be the emerging agricultural structure of the twenty-first century. Finding market niches with new or value-added products is part of this new world of production agriculture. In this context, a corporate form of organization may facilitate the infusion of outside capital, the improvement of resource management, and the merging of nonfamily partnerships into new and profitable business ventures–in short, it may be more an antidote than a poison for a rapidly changing Plains agricultural economy. Nonfamily corporate agriculture may actually enhance rather than harm the sustainability of rural economies.
In sum, the fate of the Great Plains in the twenty-first century may well rest on what happens to the structure of its production agriculture. The key question is: Can corporate farming strengthen the rural economy without depopulating and compromising the viability of the communities?
See also INDUSTRY: Agribusiness.
Bruce Johnson University of Nebraska-Lincoln
Johnson, Bruce B. "Corporate Restrictions in U.S. Production Agriculture: Economic Implications." Journal of American Society of Farm Managers and Rural Appraisers (1995): 21–26.