FOOD

Rebuilding Local Food Systems

Fact Sheet • February 2011

N ot long ago, towns all over rural America had vibrant economies based on
farming and agriculture. There were independent grain mills and local dealers
for seeds, fertilizers and other inputs, as well as a slaughter facility to process farmers’
livestock. The income from agriculture sources then circulated throughout the
community, providing steady jobs and stable income for a large portion of the town’s
population. But things have changed. Now many rural downtowns lay silent, with
empty buildings where locally owned business once were.

The rise of industrial agriculture has lead to the death of

local agriculture and food production systems and the rural
economies that revolved around them. The changes in rural
communities are getting harder to ignore. The average age
of American farmer operators, now at 57 years old, has
been steadily increasing over the last 30 years, as fewer
younger people are getting into farming.1 Farmers cannot
make a living anymore selling their farm products, and
more than half of all farms in the United States depend on
non-farm income to cover farm expenses.2

Regional food systems used to be the norm, with networks

of producers, processors and distributors set up to sup-
ply consumers with food produced in their region of the
country. But in the last three decades, our food systems
have changed. Instead of regional networks, the systems
for bringing food to markets became national. This change
wasn’t simply the result of better logistical systems or the
growth of interstate highways. The rise of agribusiness con-
solidation and corporate mergers led to the loss of vital lo-
cal infrastructure that was used to turn livestock and crops
into the foods we buy at the grocery store. When networks
of small-scale, independent livestock auctions, grain mills,
slaughterhouses and food processing plants disappeared,
they often took the economic fortunes of rural communities
with them.
Some foods like fruits and vegetables can be locally grown
and distributed directly to consumers through farmers mar-
kets and community-supported agriculture plans. But many
other crops, like grain, milk and livestock, need to be pro-
cessed in some way before they are ready for consumers to
buy as bread, milk, butter, cheese or meat. Even fruits and
vegetables need processing to be turned into “value-added”
products like frozen vegetables, sauces or jam. The infra-
structure that used to exist to allow smaller independent
producers to bring these products to nearby markets disap-
peared when rapidly consolidating agribusiness companies
bought up processing facilities, closing those that were
duplicative or not “efficient” enough.
Meat and dairy may offer the starkest examples of how the
consolidation of agriculture has left producers with fewer
options for getting their products to market. The number of
cattle and hog slaughter plants declined by about a third be-
tween 1996 and 2006.3 Between 1972 and 1992, the num-
ber of fluid milk processing plants fell by 70 percent4 This
consolidation is not just a matter of how many facilities there
are to process food; the entire supply chain has changed. In-
stead of having multiple options for selling their agricultural
products, farmers are increasingly locked into a system with
a few buyers — or only one that buys in their area.

The rise in corporate consolidation in the food industry

has also led to the decline of independent, locally owned
infrastructure. No longer are there independent suppliers
of farm inputs like seed, feed or machinery. In their place
is most likely one corporation that supplies inputs through
contracts with large farms, and a single mill or slaughter-
house to process the grain and livestock for all of the farm-
ers in surrounding towns.

The loss of these local meatpackers, poultry producers,

milk processing plants and grain elevators can wipe out
rural economies. Independent slaughterhouses, milk and
meat processing firms, locally owned grain elevators, and
local feed and equipment dealers provide employment, in-
vestment and stability to rural communities. Economically
viable farms are the lifeblood of rural communities.5 The
earnings from locally owned and locally controlled farms
generate an economic “multiplier effect” when farmers buy
their supplies locally and the money stays within the com- The next farm bill needs to focus on leveling the playing
munity.6 When these businesses disappear and are replaced field for independent farmers, ranchers and food processors
by just a few larger facilities, rural economies suffer. The and to redirect rural development programs to rebuild miss-
earnings and profits from meatpacker-owned cattle feed- ing infrastructure that can serve regional food systems, not
lots and hog production facilities are shipped to corporate corporate supply chains.
headquarters instead of invested locally.
For more, go to www.foodandwaterwatch.org/fairfarmbill
It’s not just the loss of small agricultural businesses that hurt
rural economies; when small farms fail and those remaining
get bigger, rural economies continue to suffer. Several stud- Endnotes
ies have reported that large-scale livestock operations were
more likely than smaller livestock farms to bypass local 1 USDA Census of Agriculture 2007. Demographics Overview Fact
Sheet.
suppliers for inputs like feed and equipment. An Iowa study 2 Ibid.
7

found that more than two-thirds of smaller livestock opera-
tions bought feed locally, but only two out of five large-
scale livestock operations bought local feed.8 The economic
multiplier effect is much lower with large corporate-owned 5 Democratic Senate Agriculture Committee Staff Report (2004) at 2.
factory farms than with smaller independent farms. 9
This change in the food system didn’t happen by accident.
Decades of bad farm policy and misdirected economic de-
velopment policy drove these changes in rural economies.
It’s time to rebuild the links in the food chain that connect
farms and ranches with consumers, and to make sure that
independent, locally owned businesses are part of that
rebuilding.
Every five years, Congress passes a farm bill that creates
hundreds of millions of dollars of spending by the U.S. De-
partment of Agriculture on rural development, ranging from
grants to local governments and community organizations
to government-backed loans to businesses. Unfortunately,
many past farm bills have focused funding only on larger
projects like broadband access or businesses that don’t
help rebuild food systems, like hotels or convenience stores
selling processed food. Funding needs to be dedicated to
reinvigorating the local economy by investing in small and
medium-sized agricultural enterprises. These investments
would maximize returns to the local economy and allow
smaller regional food producers to process their products
and bring them to market.
3 USDA Grain Inspection, Packers and Stockyards Administration.
“Assessment of the Livestock and Poultry Industries: Fiscal Year 2007
Report.” May 2008 at 9 and 11.
4 Ollinger et al. (2005) at 16.
[Comment: See my questions above at clxxvii.)
6 Pew Commission (2008) at 41.
7 Abeles-Allison, M and L. Conner. Department of Agricultural
Economics. Michigan State University, East Lansing. “An Analysis
of Local Benefits and Costs of Michigan Hog Operation Experienc-
ing Environmental Conflicts.” 1990. Goméz, M.I. and L. Zhang.
“Impacts of Concentration in Hog Production on Economic Growth
in Rural Illinois: An Economic Analysis.” Presentation. American
Agricultural Economics Association Annual Meeting. Tampa, Florida.
July 31-August 2, 2000. Folz, J.D., D. Jackson-Smith and L. Chen.
“Do Purchasing Patterns Differ Between Large and Small Dairy
Farms? Economic Evidence from Three Wisconsin Communities.”
Agricultural Resource Economic Review. Vol. 31, Iss. 1 at 28-38.
8 Lawrence, J., D. Otto, and S. Meyer. (1997, Spring). “Purchasing Pat-
terns of Hog Producers: Implications for Rural Agribusiness.” Journal
of Agribusiness 15(1), 1S18.
9 Pew Commission (2008) at 41.
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Copyright © February 2011 Food & Water Watch