A Multi-Million Dollar Industry: Activism

[Michele Payn-Knoper]

Many in food production take the hard knocks for becoming family corporations with million dollar assets. Some activists, such as the Environmental Working Group, have even gone so far to list farm subsidies so everyone can see the millions brought in by today's "rich farmers." There's no list of input costs, equipment prices, explanation of how those assets aren't liquid, or the distribution of dollars between the farm gate and food plate. Yet, we frequently read "the greedy corporate farmers making millions."

It's time to turn the plate and look at some of the folks fostering the talk of agriculture's greed. Humane Society of the United States (HSUS) is an easy one to top that list and not because of their supposed work with cute kittens and fuzzy little puppies. As reported by Consumer Freedom, HSUS contributed only 4.2% of its budget to organizations that operate dog and animal shelters in 2006 (the last year reported). They raised $34 million in the wake of Hurricane Katrina, yet public disclosure of the spending of those funds only accounts for $7 million.

Much of the million dollar activist industry can be chalked up to Wayne Pacelle, who became HSUS President in April 2004 and is now paid well over $200,000. In those four years, Pacelle has more than doubled the HSUS assets to $200 million and reportedly quadrupled their fundraising. By the way, HSUS files a form 990 - meaning they are exempt from paying income tax to the IRS. Take a look at their 990 here. As a small business owner who forks over a third of my income and then some, I find that unacceptable. Imagine the uproar if food producers were given a 990! After all, raising food to feed the world should be considered a cause, shouldn't it?

Farm Sanctuary and PETA (People for the Ethical Treatment of Animals), good friends of HSUS, aren't any better. PETA's 990 shows they brought in over $30 million and Farm Sanctuary over $5 million. Drovers presented a good piece outline the increase of charitable contributions to animal rights groups 11% in the last year.

If you're thinking environmentalists aren't in this million dollar game, think again. Greenpeace shows a cool $40 million on their 990 and Friends of the Earth brought in around $3.5 million. Much of their work focuses on the greenhouse emissions of agriculture and anti-biotechnology campaigns. Go to http://causematters.wordpress.com/ and scan through the "Anti-Agriculture Groups" if you'd like to learn more.

The industry of anti-agriculture activism has generated more cash than most of us will see in a lifetime. In today's global economy, it seems like we have the perfect opportunity to educate people about the millions wasted by activists. The aftermath of over-regulations, ballot initiatives and legal battles have and will continue to drive food prices up. Is that really what people want? Take a minute to have that conversation this week and let me know what you learn.

[Michele Payn-Knoper]

Thought this info from ERS would add additional insight on "million dollar" farms...

A new report from the Economic Research Service shows that small farms still represent the majority of farming in the US, but the number of million-dollar farms is increasing rapidly.

Small farms (those with annual sales less than $250,000) represent a large majority of US farms (92%), but account for a relatively small share of total farm production (23%). The report from the Economic Research Service (ERS) of the USDA examines the other end of the size spectrum, where a large percentage of farm production occurs, specifically on “million-dollar farms” whose annual sales total $1 million or more. The 35,100 million-dollar farms reported in 2006—2% of all US farms—accounted for 48% of the sales of US agricultural products.


Shift in farm sales distribution
More shifts occurred in the distribution of gross farm sales between the 1982 and 2002 Censuses of Agriculture, with sales measured in constant 2002 dollars. Farms with sales of $1 million or more doubled their share of total US farm sales from 23% in 1982 to 48% in 2002. Some of these million-dollar farms are relatively recent entrants to farming, while others existed as far back as 1978. The shift in production to million-dollar farms is likely to continue. Average operating profit margins increase with sales, reflecting economies of size in farming. As a result, million-dollar farms—and farms growing to that size—have a competitive advantage relative to smaller farms.The shift in production may eventually slow, however, once million-dollar farms’ shares of the commodities most amenable to large-scale production reach their upper limits.


No market power
Million-dollar farms do not have market power. The shift in farm production to million-dollar farms reflects a long-term concentration of farm production on fewer farms that has been underway since the beginning of the 20th century. However, there are still too many million-dollar farms—just over 35,000—for any single farm to dominate agriculture or the production of specific commodities.


Small share in subsidies
Million-dollar farms receive a small share of Government payments. Most Government payments are commodity-related or targeted at current or past production of specific commodities, largely feed and food grains, cotton, and oilseeds. Relatively few million-dollar farms—particularly those with sales of $5 million or more—specialize in crops covered by commodity programs. As a result, million-dollar farms received only 16% of US Government payments in 2006, a small share compared with their 48% share of gross sales, although disproportionately large compared with their 2% share of all farms.


Implications drawn
Three significant implications regarding million-dollar farms can be drawn from the information presented:
1. The shift in production to million-dollar farms is likely to continue. As long as the operating profit margin is roportional to sales class, million-dollar farms will have a competitive advantage. The shift in production may eventually slow, however, once million-dollar farms’ shares of the commodities most amenable to large-scale production reach their upper limits.
2. There are still a sufficient number of million-dollar farms to prevent individual farms’ domination agriculture or individual commodities. Concentration of production, however, may be a more significant concern when the owners of commodities—which include production contractors—are considered, rather than just the farms producing them.
3. Most million-dollar farms are family operations, although the operator and spouse supply only a small fraction of the labour. Direct ownership of million-dollar farms by non-farm corporations is infrequent, but such corporations are frequently involved with million-dollar farms through contracting.

[Michele Payn-Knoper]

Yes, it is, but I hope agriculturists like yourself will take some of that power into your own hands and do things such as talk to your neighbors or people you interact with regularly about what farming involves. People who can put a face on a farmer are much less likely to believe marketing misinformation about food production.

[jeremy gerow]

very scary the power and money these groups have by apealing to peoples emotions instead of common sense and their cause !!! to remove ag from the Us so ungreatfull

[Shane]

That is a refreshing statement!

[Michele Payn-Knoper]

My point is the hyprocisy of actvists pointing fingers when they're bankrolling millions.