Extension’s Role, and Retreat, in Improving Farmers’ Bottom Lines
By Tim Schwab
Alabama’s Farm Analysis Program represents the best of what our nation’s “extension” program can be — utilizing the technical expertise of land-grant universities to improve farmer livelihoods. Extension, which this summer celebrates its centennial and is the subject of a series of blogs from Food & Water Watch, uses programs like this to connect farmers with university experts, in this case trained economists who conduct careful financial analyses of farm income.
Importantly, universities benefit as much from the program as farmers. From PhD students working on a graduate research to economics professors publishing peer-reviewed articles, academics have used the valuable data produced from the Farm Analysis Program to further their research and propose economic policy changes to help farmers.
This is especially the case for data about poultry production, where little meaningful, independent, financial data related to on-farm income is available. As Auburn University Professor Robert Taylor has noted, Alabama’s Farm Analysis Program “maintains the only set of consistent records on the actual economics of contract poultry production.”
Using this data, Taylor in 2002 highlighted the gross inequalities that exist in the poultry industry, concluding: “Farm business records show that contract producers who once had acceptable income from their poultry operations now put a few hundred thousand dollars of equity, and borrow several hundred thousand more to hire themselves at minimum wage with no benefits and no real rate of return on their equity. Yet integrators [large chicken processing companies] continue to earn 10-25% rates of return on equity.”
Ten years on, the problem is much worse. Most money generated from poultry production—including that from the 100 million chickens produced each year in Alabama—ends up in the coffers of one of a handful of corporate chicken companies while farmers exist on razor-thin margins, one or two bad flocks away from losing the farm.
Business journalist Chris Leonard’s new book “The Meat Racket” brilliantly describes the abuse and economic exploitation that poultry growers suffer under the thumb of companies like Tyson. Even the U.S. Department of Agriculture and the Department of Justice’s antitrust enforcement office offered a cursory acknowledgement of anti-competitive practices in the poultry industry with a public workshop at Alabama A&M in 2010, which has spurred talk of possible action from Congress and the USDA.
With the public spotlight finally shining on the rampant abuses in the poultry industry, it’s an awfully odd time for Alabama to jettison the Farm Analysis Program, as it did last May. An extension officer there told me that the state decided to shift resources to broader educational efforts. Farmers can still take classes on how to use QuickBooks and learn the basics of agricultural accounting, he told me, but extension now has greater time and flexibility to perform a range of functions that serve the public interest. But consider the public value that’s been lost with the demise of the “only set of consistent records on the actual economics of contract poultry production.”
The kind of economic concentration that exists in the chicken industry also exists elsewhere in the food system, with a handful of companies selling most of the seeds and agrochemicals, slaughtering most of the pigs and cattle, processing most food products, and selling food to consumers at grocery stores. This system greatly enriches the handful of companies at the top, but hurts farmers, workers, communities and consumers.
So, where is extension on this issue? Largely absent. This, again, raises questions about how relevant this institution is today, and to what extent extension is fulfilling the mission Congress laid out for it in 1914. All too often, extension avoids the most pressing economic and social issues facing farmers.
Stay tuned for Food & Water Watch’s continuing analysis of the hundred-year anniversary of cooperative extension.