Vertical Coordination, Producer Response, and the Locus of Control over Agricultural Production Decisions¹

Abstract

Structural change in U.S. agriculture in part has been characterized by shifts in control over agricultural production decisions from the farm‐level to off‐farm firms. In the past decade, this process has accelerated as increasing concentration in production and processing has led to increased vertical integration and contract production. To retain control, some farmers have formed bargaining units, have created production and marketing networks, and have petitioned subnational state governments for regulation of production contracts. Concurrently, there has been an impressive increase in alternative marketing outlets linked with smaller‐scale production based on farm‐level control over production decisions. Structural change and producer collective response has a long history in U.S. agriculture. Using Mooney's and Hunt's (1996) recent contribution on recurrent ideologies of agrarian social movements, this paper outlines recent structural changes and collective responses to those changes with reference to the shifting locus of control over agricultural production decisions.

Farm and market structure, industrial regulation and rural community welfare: conceptual and methodological issues

“…These changes have been uneven across time and place, but in general have characterized the development of U.S. agriculture in the 20th and early 21st centuries, and have caused some observers to argue that agriculture is ''industrializing'' (Lobao and Meyer 2001;Welsh 1997). The potential for industrial farming to displace the traditional family-labor farm has caused public concern within and outside rural America.…”

“…Market structure is now more differentiated than in previous decades. Vertical and horizontal integration, contract production, organic and other specialty markets, and direct marketing are examples of new marketing forms that have emerged over the past few decades (Oberholtzer et al 2005;Martinez 2002;Welsh 1997). All of these bring with them farm structure implications and therefore effect potentially the relationship between farm scale and rural community welfare.…”

Constrained Choice and Climate Change Mitigation in US Agriculture: Structural Barriers to a Climate Change Ethic

“…Contract farming allows companies to limit their liability and to externalize risks (Ashwood et al 2014). Contract farming has emerged in an array of agricultural sectors and regions with negative consequences regarding labor and environmental outcomes (Ashwood et al 2014;Borlu 2015;Burch 1994;Dixon 1999;Goss et al 2001;Mabbett and Carter 1999;Vandergeest et al 1999;Welsh 1997). As seen in in the poultry and leafy green sectors, contracts constrain production choices because companies can stop contracting with farmers who do not comply with the terms of their contracts (Constance and Heffernan 1994;Heffernan and Lind 2000;Stuart 2009).…”

Bread in the Economy of Qualities: The Creative Reconstitution of the Canada‐UK Commodity Chain for Wheat

“…This can be particularly onerous for farmers in the Global South, where small‐scale producers struggle to meet quality requirements and follow elaborate auditing procedures (Campbell 2005; Cavalcanti 2004). Increasingly, quality requirements are defined, monitored, and enforced through producer contracting, a form of vertical coordination that was already becoming dominant in several North American agrifood sectors (especially milk, broiler chickens, and processed fruits and vegetables) by the 1980s (Welsh 1997; Winson 1992). Indeed, one key impetus for the growth of these types of contract arrangements is that they allowed downstream firms to exert greater control over product specifications, including quality (Winson 1992:146–48; Wolf, Hueth, and Ligon 2001).…”