Southern Farms: A Vanishing Breed

Black and white photo of two pigs behind a chicken wire fence

Jeff Jacobson

This article originally appeared in Southern Exposure Vol. 2 No. 2/3, "Our Promised Land." Find more from that issue here.

High above the front portals of Union Station, Washington, D C, are engraved these words: "The farm. Best home of the family. Main source of national wealth. Foundation of civilized society. The natural providence." Those Jeffersonians among us might be quick to add: "The farm, foundation of American democracy." Pragmatists might add: "The farm, hard work and long hours.”

There are many opinions (some highly romanticized) about life on the farm and the importance of farming. Despite a decline in the numerical significance of farming as measured by the agricultural population and the number of farms, farming remains extremely important in the South. The "old" South was an agricultural society; jobs and culture were tied to the land. Even today, an important part of the "new” industrialized South is still rural, and agriculture continues to influence rural economies. However, southern farmers are vanishing from the countryside, and the character of southern agriculture is changing from a predominance of small farmers to an increasing domination of large farm agribusinesses. The following pages describe the impact of the "agricultural revolution" on southern farming and the implications of this change for the South.


Southern Farms: A Vanishing Breed

This country lost one-fourth of its farms, a total of three million, in the past decade.1 The declines were particularly acute in the South: 29 percent or 454,000 fewer farms. Only small farms were decreasing, however. While there were 36 percent fewer farms with sales under ten thousand dollars, farms with sales of $40,000 increased by more than one hundred percent.2

Economics have forced many farmers out of business. Since 1952, farm prices have increased by only six percent, while overhead rose by 122 percent.3 The declining profit margins have caused farm operators to increase the size of their operations.

Minorities and tenant farmers have been especially hard hit. Southern black farm operators decreased by 68 per cent between 1959 and 1969. Of the 84,000 black farms remaining, nearly 95 per cent are small operators, with sales under $10,000, whose chances of success, given present conditions, are slim. Tenant farmers have been driven off the land to make way for bigger farmers. In 1969, there were half as many tenants and eighty percent fewer black tenants than in 1964.4

At the same time, however, mechanization and consolidation of farms have increased the importance of large scale farms. In 1960, less than nine per cent of all farms had sales of $20,000 or more, and they accounted for just over half of the total sales; in 1972, nearly one-fourth of all farms were in this category, and they accounted for better than eighty per cent of all sales.5

While the USDA officials note that technological changes have increased agricultural output, the changes have also created many problems for those displaced from agriculture. Many of these ex-farmers are ill-prepared in terms of education and training for nonfarm jobs. "Agriculture," as Ray Marshall observes, "has been a particularly important cause of rural poverty and low incomes."6 Moreover, the increased concentration of agricultural production, as noted below, has some frightening prospects for the future.

Scratchin' Out A Living

What's it like down on the southern farm? Jim Grady, a small Kentucky farmer, can tell you. In Jim's part of the country the average farm has 120 acres of land, a small tobacco allotment, a few pigs, some cattle, and a garden. Grady has been farming for 28 years, working his way up from sharecropping with a mule to owning a tractor and a few acres of land. Farming four acres of tobacco (mostly with leased allotments), fourteen acres of corn, twenty-five acres of hay, and an acre of tomatoes, he earns about $6,000 a year.

Grady would like to expand his vegetable production. Until recently there was no market for fresh vegetables. Five years ago, a good-natured county agent helped farmers organize a vegetable marketing co-op to aid low-income farmers. The co-op has been a great success and enabled farmers like Jim Grady to earn much-needed income and improve their farms. The co-op, however, has reached the limits of its capacity. Some of the local farmers would like to build a cannery for the produce that cannot be sold in the fresh market. Self-help co-ops for low income farmers can be of great benefit, not only for the farmers but for the entire county. If such co-ops are allowed and encouraged to survive, they can save many small farmers and provide opportunities in farming for many who prefer the farm to the city. Unfortunately, low-income co-ops face serious obstacles and many such co-ops constantly struggle for survival.7

Like Jim Grady, Charles Pascal is a small farmer struggling to remain on the land. But there is a major difference between the two: Jim is white and Charles is black. Inflation, the cost-price squeeze, technological change, and the racism of the rural white establishment have combined to drive many black farmers like Charles from farming. In Mississippi, Charles Wade, once a black county agent in the formerly segregated Extension Service, courageously challenged this vicious racism. Wade, an Associate County Agent in Holmes County (Negro County Agents were made Associate Agents when the Extension Service was integrated in 1965), was next in line for the county agent's job. When a less-qualified white was appointed to fill the vacancy created when the county agent resigned, Wade sued the Mississippi Cooperative Extension Service, claiming racial discrimination in hiring, promotion, and salary and in the quantity and quality of services provided to black farmers in his county. Wade won his suit and is currently one of a very few black county agents in the country. Frank Parker, the Jackson, Mississippi, civil rights attorney who handled the Wade case, believes such racial discrimination prevails in the Extension Service of every southern state. Parker fears that countless law suits may be necessary to change the racist policies of the Extension Services in the South.8

Small farmers like Jim Grady and Charles Pascal have many common problems, such as credit, land, and marketing. Rural banks are conservative lenders; small farmers like Grady and Pascal often don't have the high collateral necessary to qualify for commercial loans. The Farmers Home Administration (FHA), which was established to provide credit for farmers who could not qualify for other credit, has been guilty of "creaming.” As FHA's mandate required it to help farmers who could benefit from its loans, it has helped whites more than blacks and the affluent more than the poorer farmers. After many investigations by Congress, the Department of Agriculture, and the Department of Justice, FHA's poor record of loans to minorities seems to be improving. However, small farmers will have to continue their struggle with FHA. A source at FHA's Washington office reported high-level discussions concerning the possibility of phasing-out farm credit for "marginal” farmers.9 Thus far the Federal Land Banks, Production Credit Associations, and the Bank for Cooperatives have not made concerted efforts to extend credit to small farmers.

In rural areas far from industry's path, large farmers have first priority for available land. In Charles Pascal's area of Louisiana, large white farmers, by social custom and because of their economic and political power, are given first preference for land to buy or rent. Pascal said, "You can't rent land if you're black.” In some areas of the South, small farmers can still find land to rent but they have little security. One small operator observed, "Land is plentiful when prospects are poor; but when they are good, all the land is grabbed by the big operators." Land prices, even in remote areas, have been soaring, putting land purchases beyond the reach of most small farmers.

The agricultural marketplace which buys and sells the small farmer's crops is a closed system. Federal agricultural programs determine the quantity and prices of many crops, and these programs have often discriminated against small farmers. "King Cotton," still an important southern crop, is a notorious example. In 1971, the top twenty per cent of recipients in the cotton program received nearly three-fourths of all the benefits.10 While the Queen of England recently received a $68,000 subsidy payment for her Mississippi cotton plantation, small farmers have had their allotments cut. When John Bales, a black cotton farmer in the Mississippi delta, complained after his allotment was decreased, the local federal office told him "Get out of here, you black s.o.b. or we'll turn the sheriff on you.” Pressing his case to the state officials, Bales learned that USDA had increased the total allotments in his county but that only large farmers had received increases.11

Because small farmers like Bales, Pascal, and Grady are usually poor, relatively uneducated, and disorganized, they are fair game for the large shippers and processors that control many agricultural markets. In Charles Pascal's county, for example, a few large sweet potato shippers completely controlled the local market, keeping prices low. Pascal recalled, "The prices for number one potatoes were so low those days that it just wasn't worth it to the farmer to grade his potatoes.” Pascal and a number of other small farmers resisted by organizing their own self-help sweet potato marketing cooperative, which was met with much suspicion and hostility by the local establishment.

Although co-ops exist in all societies (some of our largest agribusinesses are co-ops and are ideologically neutral), co-ops and co-op organizers in the South were red-baited. Pascal's co-op eventually succeeded and forced local sweet potato shippers to raise the prices paid to local farmers.


There's No Business Like Agribusiness

Self-help farmer co-operatives and other farmer organizations may be the only salvation for small farmers. Salvation is never too late, but it may be hard to come by in these days of southern agribusiness. While prosperous small farms are a rarity, agribusiness is increasingly common in the South.

Earl Butz, Secretary of Agribusiness — oops, Agriculture — argues that corporate farming is not widespread. In 1972, Butz observed "Less than one percent of our total farms are corporate farms, and almost six out of seven of these are family corporation farms. They are really family farms."12 As Professor Rodefield has pointed out, however, the survey on which Butz's figures are based significantly undercounted farming corporations. Moreover, the definition of "corporate" farm used by USDA in its official figures excludes many, if not most, of the farms normally thought of as corporate in structure.13 Contrary to Secretary Butz's assertions, corporate farms dominate this nation's agriculture, and corporate farms are more dominant in the South than in any other region except for California, Arizona, and Nevada.14 Moreover, as we have seen, large farms in the South are growing at a fantastic rate.

Many economists are more concerned about agribusiness' control of farmers than about corporate farms per se. Contract farming is one way that agribusiness controls farmers. Although precise arrangements vary, a farmer will contract with a corporation to grow a certain crop at a specified price. The corporation supplies the farmer with seeds, fertilizer, and other inputs; the farmer in turn supplies his labor and land. Contracting can be beneficial to the farmer by guaranteeing him a market and a price for his product. However, the farmer pays for his security with lower prices and by sacrificing his independence. He becomes, in effect, an employee of the contractor.

Stokely van Camp is a major agribusiness. In 1970, this corporation contracted 9,000 acres of vegetables with a number of farmers.15 Paul Stephens, a small Kentucky farmer, has grown 35- 40 acres of green beans for Stokely van Camp for the past two years. Pete sharecrops or rents most of the four hundred acres he farms and is barely able to earn enough money to support his family. His mother is ill and receives some welfare. Pete said Stokely supplies him with seeds and arranges for crews of pickers to harvest the product; Pete does the rest. "I sell my beans to Stokely for 6 ½ cents a bushel. That is 1 ½ cents more than last year, barely enough of an increase to pay for the increased cost of fertilizer,” Pete explained. Fortunately for its stockholders, Stokely van Camp does not share Pete's financial problems. Last year, this corporation ranked 362th in Fortune's 500 in sales and 420th in net earnings.16

Tropicana Products, Inc., another large corporation, controls the production of thousands of acres of Florida citrus land by contracting with citrus growers.17 Tropicana and thirteen other agribusiness corporations, including Coca-Cola, account for some sixty per cent of the citrus products and a higher proportion of farm labor employment in Florida.18

The broiler industry provides another example of large corporations that have taken over the market. Most of the nation's chicken farmers are under contract with southern-based agribusinesses. These large, vertically-integrated corporations own hatcheries, feed mills, processing plants, retail outlets, and contract (actually hire) small farmers to raise the broilers.

The largest broiler corporation in the world is Holly Farms, Inc., of Wilkesboro, North Carolina. C.F. Lovette, a North Carolina businessman, formed Holly Farms in 1969 from sixteen poultry-oriented companies in the Wilkesboro area. When Lovette began to create his empire, sixty per cent of all broilers were grown by independent farmers.19 By 1974, corporations like Holly Farms produced 98 per cent of the nation's broiler chickens. The independent chicken grower disappeared.

Holly Farms grew by acquiring control of each link in the process: hatching, feeding and processing. Holly's investment paid off. Last year, the corporation processed 182 million broilers, 3 ½ million broilers each week.20 This single "farm” accounted for half of the pre-packaged broiler market and five percent of the total broiler market.

Vertically-integrated broiler corporations sign contracts with individual farmers to raise the broilers. Such contracts are notoriously low. In 1969, a good year for broilers, the net return to the average broiler farmer was only $2,000 per year.21 Often the contracts tie the farmer's payments to market prices and to the farmer's efficiency, computed by the corporation. The individual grower loses his independence because the corporation determines the number of broilers that each grower may sell. It's "poultry peonage" for the farmer, but a different story for the corporation. Last year, Holly Farms, Inc., earned $11,502,000 before taxes.22

A chicken is a chicken — or is it? Broiler corporation advertising, which raises product prices, will try to convince you that their chicken is really different. Perhaps the major difference is that the corporate chicken lives and dies in a very unnatural environment. Corporate broilers are crowded into large chicken factories and fed vitamins, antibiotics, coloring additives, and arsenic, as well as feed. (Arsenic increases the rate at which the chicken matures and gains weight).23 Corporate-owned fried chicken restaurants, another link in the vertical integration, use the best Madison Avenue techniques to convince you to have some good ole Suthen' fri' chicken.

What has happened to broilers, vegetables, and citrus is now happening to hog production. Vertically-integrated corporations are poised to take over the Southern hog market. The New York Times, reported that a wealthy New York investor, Malcom McLean, recently purchased 380,000 acres in Dare and Tyrrell counties in North Carolina. According to the Times24

The domain, called First Colony Farms, total nearly 600 square miles. On this vast expanse, Mr. McLean plans to raise thousands of cattle and develop the nation's largest hog-growing operation, planned ultimately to produce a million head of hogs a year. It is the largest holding of its kind under individual ownership in the country. The claim is difficult to prove because of the nature of the land records, which often shield owners behind dummy corporations and names, but it is probably true.

Two other agribusiness giants, Ralston Purina and Swift & Company are reportedly building a large hog factory in Missouri. According to plans, this operation will breed, wean, feed and slaughter 2.5 million hogs a year.25 Small farmers, many who raise a few hogs for income, will no doubt feel the impact of these giant hog factories on the market and perhaps more small farmers will be driven out of business as a result.


Who's Farming Whom?

As agribusiness giants like Holly Farms, Stokely van Camp, and Ralston Purina continue to grow, small farmers like Jim Grady, Charles Pascal, and Pete Stevens are rapidly becoming an extinct species. However, it may surprise the average American, accustomed to believing that "bigger is better," that, according to the USDA, most of the economies associated with size in farming are achieved by the "modern and fully mechanized one-man or two-man operation."26 Corporate farming is known to be inefficient. Eric Thor, agricultural economist and former administrator of USDA's Farmer Cooperative Service was reported as saying:27

There is plenty of data to show that large corporations have higher production costs and get lower yields than do farms where the operator is a part owner.

The real risk in a hired manager is that he can't make decisions very well. ... He knows that if he makes a bad decision he might get fired, so he waits for someone higher up to approve it. Sometimes it's too late to save a crop.

The New York Times also reported several corporations had recently divested their holdings in corporate farms because of such inefficiencies.28

Like any other business, farming has its own economies of scale, and they happen to favor the family farm. But, because of the economic power and political influence of corporate America, public policies favor agribusiness.29 This policy tilt reached its zenith in the 1972 wheat sale to Russia — "The Great American Grain Robbery.”30 Large grain exporting companies, with prior knowledge, were able to reap large windfall profits; wheat farmers, uninformed, sold cheaply. The rest of America also lost out. The huge export subsidies were paid by American tax dollars; the consequent rise in grain prices contributed to the rise in meat prices.

Most, if not all, public agricultural policy is geared to increasing the profitability of large-scale farming. Federal tax policies have enabled wealthy investors to benefit from "hobby farming" and have encouraged the growth of corporate agriculture. The result of these tax shelters has been clearly stated:31

While the rich get richer, the family farmer is competitively disadvantaged. Agricultural markets are distorted, the public treasury is avoided, land values are artificially inflated and consumers are faced with a threat to food prices and supplies.

Public funds have been spent on agricultural research, such as for the development of mechanized harvesters, that have contributed to the profits of agribusiness and large-scale farm operations while doing little to aid the small farmer. Hard Tomatoes and Hard Times documents how the multimillion dollar research effort of the land grant college system has primarily benefited the giants of American agriculture.32 The black 1890 land grant colleges, such as Alcorn A&M in Mississippi and North Carolina A&T, have not been given their fair share of research funds. The white land grant colleges, which have received most of the federal funds, have done little research on ways to improve the technical efficiency of limited-resource farmers.

Public agencies, such as the Cooperative Extension Service, Farmers Home Administration (FHA) and the Agricultural Stabilization and Conservation Service (ASCS) have been guilty of widespread discrimination against minorities and the poor. Part of the problem is the scarcity of minorities on ASCS and FHA committees and in state and county offices. In 1970, there were only two black county ASCS Committeemen, and only 385 blacks on the seven thousand FHA county committees which determine loan eligibility. Only 232 out of the 2,007 ASCS county employees were minorities in 1970, and only seven of these were above GS-5. A March, 1971 survey found only five percent of the FHA managers/supervisors in the South were black.33

The Extension Service, established to provide technical and managerial assistance to farmers in order to increase productivity, was racially segregated in the South until 1964, has lacked an effective outreach program, and generally failed to aid small farmers to any extent.34 While some county agents cite understaffing as a prime cause, some freely admit they see little future for "marginal” farmers and can more profitably spend their time working with large successful farmers.

Ultimately, consumers will pay for the concentration of southern agriculture. As large giants increase their control over agricultural markets, prices will go up, not down. A 1972 report by the Federal Trade Commission found consumers are overcharged by two billion dollars a year because of monopolies in only thirteen food lines.35 Jim Hightower of the Agribusiness Accountability Project warned:36

The food industry model might well be ready-to-eat breakfast cereals, where four corporations — Kellogg, General Mills, General Foods, and Quaker Oats — control 91 percent of the market. There is no competition in price or quality. The cereals are essentially the same, differentiated only by color and shape. 

Public policies which have aided the increased concentration in agriculture have also contributed heavily to rural poverty in the South. On the average, those displaced from southern agriculture have little education and few skills, and have had difficulty in moving into non-farm jobs. While low-wage industrialization has helped some farmers combine non-farm jobs with part-time farming, more than a third of all small farmers do not work off the farm and almost half work less than fifty days.37 For most of these, farming is a vital source of family income. Efforts to increase their farm earnings can be an important way to help the small farmers help themselves.

One such effort, sponsored by the Extension Service, utilizes paraprofessional aides to seek out and help small farmers.38 The program appears to have been relatively successful in improving technical efficiency and raising incomes. The program of the Missouri Extension Service succeeded in increasing incomes by fifty per cent.39 Unfortunately, the programs were begun after many small farmers had disappeared and continue to receive only a small portion of the total resources of the extension service. More such programs on a more widespread basis will be needed to have any significant impact on the total problem.


The Future for Southern Farming

The more than three-quarters of a million small southern farmers can make a significant contribution to our food supply and to the quality of life in the South. However, unless significant changes in agricultural policies are made, many of these farms will cease to exist.

They must, and by all rights should, begin to receive a fair share of the agricultural services of FHA, ASCS, and the Cooperative Extension Service. Where needed, special programs to seek out and aid small farmers, such as the aides program discussed above, should be given adequate financial aid and technical support. If states and counties refuse to provide for family farmers, consideration should be given to the federal government's assuming responsibility for including limited-resource farmers in all U.S. agricultural programs. Research on the crops, production techniques, and machinery which will enable small-acreage, labor-intensive farmers to maximize their limited resources should be greatly expanded. Current expenditures in this area are miniscule compared to the millions spent to increase the profitability of large-scale corporate farming. The Federal government must take the lead in pushing for anti-discrimination and affirmative action plans to increase minority employment in southern offices of ASCS, FHA, and the Extension Service, and to insure minority participation on ASCS and FHA state and county committees.

Secondly, increased public support is needed for cooperatives and other organizations which aid and represent the interests of low-income farmers. Consideration should be given to public subsidies for small farmers such as that given for years to larger farmers. Federal tax loopholes which encourage tax-loss farming should be closed. In addition, anti-trust action should be taken to break up monopolistic concentration in agricultural markets. Federal policies should prohibit or limit corporate mergers which increase concentration in the food industry. Legislation could be enacted by Congress and by southern legislatures to prohibit farming by large non-farm corporations. The farmworkers who till the fields of the agribusiness corporations, for low pay and without many of the legal protections afforded to other laborers, must be covered by federal labor legislation that gives complete legal protections, including the right to organize a union and to bargain collectively with management.

Finally, increasing opportunities for alternative sources of income through rural industrialization, manpower training, and public employment will help keep family farmers on the farm. Enactment of a comprehensive income maintenance system, such as those proposed in several welfare reform measures, will likely stimulate additional persons to supplement family incomes by small-scale farming.

The small farmer problem is not strictly a southern problem. The disappearance of small farmers from the South and other regions means a disproportionate rise in the economic and political power of a few corporate giants. The likely results will be higher prices for lower quality food and repeated scandals like the Russian wheat deal. The interests of all of us demand that we recognize the need for a vigorous, competitive southern agricultural system in which the family farmer plays the major role.



1. U.S. Department of Agriculture, Fact Book of U.S. Agriculture (March, 1972), p. 14.

2. Bureau of the Census, U.S. Department of Commerce, U.S. Census of Agriculture: 1969 and U.S. Census of Agriculture: 1959, State Reports.

3. Jim Hightower, “The Case for the Family Farm,” Washington Monthly (September, 1973), 28.

4. Bureau of the Census, Census of Agriculture: 1969 and 1959, State Reports.

5. Economic Research Service, U.S. Department of Agriculture, Farm Income Situation (July, 1973).

6. Ray Marshall, Rural Workers in Rural Labor Markets (Salt Lake City: Olympus Publishing Company, 1974).

7. A recent account of low-income cooperatives in the South can be found in Ray Marshall and Lamond Godwin, Cooperatives and Rural Poverty in the South (Baltimore: The Johns Hopkins Press, 1971).

8. Interviews with Frank Parker (Jackson, Mississippi) July 2, 1974 and Charles Wade (Lexington, Mississippi) June 28-30, 1974.

9. Interview with FHA official(Washington, D.C.) July, 1974.

10. Marshall, Rural Workers, Table II-4.

11. Interview with John Bales (Lexington, Mississippi), July, 1974.

12. Earl Butz, Wisconsin Agriculturalist, January 8, 1972.

13. Richard D. Rodefield, "A Reassessment of the Status and Trends in 'Family' and 'Corporate' Farms in U.S. Society,” paper prepared for First National Conference on Land Reform, San Francisco, April 25-28, 1973. Rodefield characterizes corporate farms as "large (acreage and/or sales-wise), have absentee owners, hired managers and hired workers and provide their own capital.”

14. Economic Research Service, U.S. Department of Agriculture, "Our 31,000 Largest Farms” (March, 1970),

15. From the files of the Agribusiness Accountability Project, Washington, D C.

16. Fortune's 500, 1973.

17. Files of the Agribusiness Accountability Project.

18. D. Marshall Barry and Sr. Ann Kinnisey, "The Acid in Florida's Citrus," Southern Exposure (Spring/Summer, 1974), 79.

19. Harrison Wellford, Sowing the Wind (New York: Grossman, 1970), 103.

20. Holly Farms, Inc., Holly Farms Growers Bulletin (Wilkesboro, N.C.: March/April, 1974).

21. Wellford, p. 109.

22. The Federal Company, Annual Report, 1973, Memphis, Tennessee. (The Federal Company is the holding company for Holly Farms, Inc.)

23. Wellford, p. 106.

24. ”380,000 Acre Plantation is Being Started in Wilderness,," New York Times (May 8, 1974).

25. Jim Pierce, "The Condition of Farm Workers and Small Farmers in 1973,” Report to the National Board of the National Sharecroppers Fund/Rural Advancement Fund.

26. F. Patrick Madden, Economics of Size in Farming, Agricultural Economics Report No. 107, Economics Research Service, U.S. Department of Agriculture, February, 1967. A more recent study saw no reason to change this earlier finding. See Warren R. Bailey, The One-Man Farm, Economics Research Service, U.S. Department of Agriculture, August, 1973.

27. "No Keeping Them Down on the Farms,” New York Times (January 20, 1974).

28. Ibid.

29. Business As Usual: Corporate Influence in Food Policy,” Agribusiness Accountability Project, December, 1973.

30. See Martha Hamilton, The Great American Grain Robbery and Other Stories (Agriculture Accountability Project: Washington, D.C., 1 973) for an excellent account.

31. Jeanne Dangerfield, "Sowing the Till: A Background Paper on Tax Loss Farming,” Congressional Record, Vol. CXIX, No. 74 (May 16, 1973).

32. Jim Hightower and Susan DeMarco, Hard Time and Hard Tomatoes: The Failure of the Land Grant College Complex (Cambridge, Mass.: Schenken Publishing Co., 1972).

33. Marshall, Rural Workers, Ch. 2.

34. Ibid.

35. Paul Scanlon, Anti-Trust Law and Economics Review, Vol V, No. 3, Spring, 1972.

36. Hightower, "The Case for the Family Farm," p. 32.

37. Census of Agriculture: 1969, State Reports.

38. For an account of the aides program in several Southern states see Proceedings of the Workshop on Methods of Working with Limited Resource Farmers, National Fertilizer Development Center, Tennessee Valley Authority (Muscle Shoals, Alabama, 1972).

39. Jerry West and Kenneth Schneeberger, "Marginal Farms — A Micro Development Opportunity," Southern Journal of Agricultural Economics (July, 1973), 97.