PAPER NO.

PC 73-02

A SMALL FARM STUDY PROJECT A PROJECT IN IMPROVING CONDITIONS IN RURAL CALIFORNIA

by Wilson B. Goddard, Ph.D. Assistant Professor Division of Environmental Studies University of California Davis, California

For presentation at the 1973 Pacific Region Meeting AMERICAN SOCIETY OF AGRICULTURAL ENGINEERS Asilomar Conference Grounds Pacific Grove, California April 10, 1973

SUMMARY: A multi-disciplinary small farm study project at U.C. Davis is exploring alternative solutions to economic, environmental and social problems of rural California. Pressures caused by urbanization, rapid introduction of new technologies and accelerating growth of large corporate farms are leading to deterioration of rural communities, to rural under-employment and the demise of all too many smaller farms. This paper considers a historical perspective, lines of inquiry and some possible solutions.

ASAE American Society of Agricultural Engineers, St. Joseph, Michigan 49085.

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A SMALL FARM STUDY PROJECT A PROJECT IN IMPROVING CONDITIONS IN RURAL CALIFORNIA INTRODUCTION A multi-disciplinary small farm study project at U.C. Davis is exploring alternative solutions to economic, environmental and social problems of rural California. Initially the group is involved in evaluating existing problems, examining historical data, and formulating strategies for research and of possible solutions. The introduction into farming of such new technologies as large-scale machinery at the beginning of the twentieth century unfortunately coincided with a continuous and gradually accelerating disintegration and decay of rural community structure. Until recently the solution to destabilization of the rural community was simply an ever increasing movement from the land to the cities. However the decade of the 1960's saw a trend in movement from inner city to the suburbs. It may well be that the decade of the 1970's may see the initiation of a slow movement back to the rural communities. The purpose of this paper is to attempt to identify historical patterns in rural California and through interpretation of their significance to propose goals for rural development and measures by which solutions to rural problems may be approached. HISTORICAL PERSPECTIVE ON RURAL PROBLEMS It is ironic that the introduction of large scale mechanization to agriculture which has greatly reduced the human drudgery in farming has also resulted in the destabilization and accelerating disintegration of the rural community structure (Adams and Bedford, 1920; Goldschmidt, 1946). In the past the countryside was divided into small farms and towns, with a basic settlement pattern of 20 to 160 acre farms interlaced with small towns at regular intervals. In California where land holdings historically have been larger, most rural regions were self-sufficient and depended upon local farm operators and 1ocal labor for the entire crop production process. With the introduction of advanced mechanization there were several changes in farming and in rural life. A single farmer (or farm corporation) now had the technology to increase exponentially the number of acres he could develop. The productivity of the individual laborer was also greatly increased. An ever smaller number of farmers with a smaller and more transitory labor force was able to meet the food and fiber needs of an ever increasing population despite the continuing loss of rural land to urban uses (Starr, 1971). Many farmers could not afford the advanced mechanization or could not afford to increase their land

holdings and were forced to move out. Many of the farm workers were no longer needed, or needed only for part of the year. Other occupations related to these through the economic and social structure of the rural community, for example the teachers and shopkeepers, were lost. Indeed for the majority of the rural population mechanization has been detrimental, resulting in loss of livelihood and frequently migration to the already overpopulated cities. The net result has been that with the change from small farms to large corporate farms there has been a breakdown of the economic, social and environmental stability of the rural community. Facts about California Agriculture (1970) shows that the average number of acres per farm in the U.S. has increased 31% since 1959 while in California the increase was 77%. In the 1930's Californias farms averaged about 200 acres per farm with an investment of $16,000 per farm in land and buildings; in 1969 the comparable figures are 617 acres and $327,000. The total number of farms in California declined 19% in the short time from 1959 to 1964. The extent of rural poverty with its associated problems was determined by the Presidents National Advisory Commission on Rural Poverty. The rural poor are distributed throughout America but are concentrated in the South, the upper Great Lakes region, Appalachia, the Southwest and in areas of California's Central Valley. Most rural poor live not on farms but in the open country, in rural villages and in small towns. Poverty means poor diet, poor medical-care, poor housing, poor education. The rural community no longer functions as an effective institution. Large towns have taken over many of the economic and social functions of villages and smal1 towns. In many cases the tax base has been eroded as the more able-bodied wage earners seek jobs elsewhere. Public services in a typical rural community are inadequate in number, magnitude and quality (Anderson, 1972). The deplorable state of rural housing is well documented (Anderson, 1972). One in every thirteen houses in rural America is officially classified as unfit to live in. In 1960, while only 24% of the nations housing was in rural nonfarm communities and open country and 6% on farms, these same rural areas contained 56% of the substandard units in the U.S. Cochran (1971) reports that two-thirds of the substandard units are in areas outside Standard Metropolitan Areas; 34,000 communities are without modern water facilities and 44,000 communities are without modern sanitation facilities. With particular reference to California, it was found by the Governors Advisory Commission (1963) that 26% of the States substandard units were in rural nonfarm areas although rural nonfarm dwellings make up only 12% of the States total units. It was estimated that there were 200,000 substandard units in rural agricultural areas. Highway 99 running the length of the State and lined with farm workers shanties has been termed the longest slum in the world. Tulare and Yolo counties may be examined as particular illustrations. The Tulare County General Plan (1971) Housing Report shows the extent of rural poverty housing in one of the rich agricultural areas of the Central Valley. In the past ten years the percentage of sound housing units has decreased 20% while deteriorating units increased 195% and dilapidated units increased

213%. Only 54% of the existing 62,000 units were sound. The distribution of unsound housing units again emphasized the problem of the rural areas. The highest incidence of sound units was found in the cities; the unincorporated fringe areas of cities and the urban areas of small unincorporated communities had the second highest number of sound units, while the rural areas had the smallest quantity of sound units. Only 45% of the existing rural areas were considered to be sound. In Yolo county where there were 11,000 housing units in unincorporated communities according to the March 1969 Special Census Report, there were 1,343 substandard units in these same communities, 75% of these substandard units being located in only three of the unincorporated communities. Another important factor in the rural housing problem is that California agriculture still depends to an important degree on migrant farm labor for seasonal work. Between November 1968 and December 1969 the California Department of Human Resources Development (Annual Report, 1970) provided housing for 2,618 families (13,802 people) in the Migrant Fami1y Housing Centers. They turned away another 4,337 families. In addition to these there were uncounted families and individuals living in growers camps, in cars, under bridges, in local seasonal rentals and in abandoned shacks. There are many factors which contribute to the problems of rural residents: 1. Incomes are low. In 1966, 70% of the families in poverty areas of rural America subsisted on less than $2,000 per year and 25% on less than $1,000 per year. These 1ow income levels may be attributed to low wages, unemployment, underemployment and low productivity farms. Data for 1964-65 show that average hourly farm wages were less than half average hourly wages in manufacturing (Jones, 1967). During 1972 the U.S. Senate voted on a bill to increase the farm worker minimum wage from $1.30 to $1.60 an hour which is still extremely low. Farm workers, especia1ly seasonal workers, often work less than 150 days per year. Mechanization has increased unemployment and changed skill-level requirements (Bird, 1964; Fuller, 1968; Voland, 1968). In 1968 the unemployment rate for farm workers was 6.3%, for all workers it was 3.6% (Strut, 1969). The Presidents Commission on Rural Poverty reported that the unemployment rate in rural areas averaged 18% in 1967. On 1ow productivity farms, the U.S. Census of Agriculture (1964) reports that 60% of the commercial farms gross less than $10,000 per year and 37% gross less than $5,000. After expenses, these have a very 1ow income. Further there are many non-commercial part-time and retirement low-income farms. 2. The agricultural vocational programs for rural America are out of date. They are not designed to handle the great changes and resultant problems brought about by advanced agricultural technology. Instead of assisting the low-income rural poor these programs helped create wealthy landowners.

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Social welfare and labor legislation largely exclude farmers and farm workers; many are denied unemployment insurance, the right of collective bargaining and the protection of workmens compensation laws. Antipoverty money and programs, including job training and work programs, have been concentrated in urban areas. 90% of all Federal housing funds go to cities. Subsidies in the form of price supports and land diversion payments which were intended to increase farm income and boost the economy of small surrounding communities have in reality helped on1y the already large, better-off producers. In 1963 direct government payments for acreage diversion showed the following unequal distributions: 54.5% went to farms with gross sales above $20,000 and only 9.3% of the money went to farms with gross sales below $5,000. The distribution of all payments made under Agricultural Stabilization and Conservation Programs emphasizes the same inequalities: 67% of the producers received less than $1,000 but nine producers each received more than $1,000,000.

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The rural poor are not well organized and have few effective spokesmen. Community leadership is likely to be scarcest in the very areas that have the greatest need for economic development and welfare programs. One of the fundamental deficiencies of rural America is its shortage of information and sophisticated know-how.

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Studies by Gouig (1972), Adams and Bedford (1920) and Goldschmidt (1964) among others all illustrate the detrimental effect of increased farm size while at the same time showing positive tangible evidence for the benefits of a small farm size. The results of only one of these studies will now be presented. In the now classic study of rural-community structure, Goldschmidt (1946) found that for two communities of approximately the same population, sharing common geographical and soil features and receiving the same gross income for crops, the quality of life in the two communities was dominated by the size of the surrounding farms. In his introduction to the study James E. Murray, Chairman of the Senate Small Business Committee wrote: "In the community surrounded by big farms the social, cultural and economic attributes of life are developed to a lesser degree than in the other community which is in the midst of an area made up of smaller farms independently operated where the community welfare is of a higher order and more wholesome in every particular. Some of the points which emphasize the contrast between the two communities are: 1. The smal1 farm community supported 62 separate businesses, the large farm community 35, a ratio in favor of the small farm of nearly two to one.

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The volume of retail trade over one year was $4,383,000 in the small farm community compared with $2,535,000 in the large farm community. The expenditure for household supplies and building equipment was three times greater in the small farm community. The small farm supported 20% more people in the local community than the larger farm, per dollar volume of agricultural production. More than half of the workers in the small farm community were independently employed businessmen, white collar workers or farmers; in the large farm community they were less than one-fifth. Agricultural wage earners (who characteristically have low and insecure incomes) constituted less than one-third of the wage earners in the small farm community but almost two-thirds in the large farm community. There were many more facilities in the small farm community, such as paved streets, sidewalks, garbage and sewerage services. Educational facilities were greater in the small farm community which had four elementary schools and one high school as compared with one elementary school in the large farm community. The small farm community had three public recreation parks, the large farm community had one playground, loaned by a corporation.

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The conclusion that Goldschmidt (1946, p.5) draws from these studies is that there is "strong support for the belief that the small farm provides the basis for a richer community life and a greater sum of those values for which America stands than do industrialized farms of the usual type. EFFICIENCIES IN FARMING AND ECONOMIES OF SCALE The national goal for our agricultural industry has been and should remain to be to provide an adequate supply of nutritious foods at reasonable cost. The ability of American farmers to produce more food on less acreage for more people with fewer farms and farmers is well documented (Starr, 1972). The question to raise here is how efficient in an economic, a social and an environmental sense is this present farming. The concentration of effort in the past has been on insuring economic efficiency in farming, i.e. an efficient farm was one which yielded an acceptable return on investment. This concentration of effort has clearly neglected other considerations both social and environmental. In assessing the total impact of farming a new concentration of effort is clearly needed where farming efficiency is rated in terms of effective use of human and natural resources. An efficient farm

should be one which realizes the greatest social and environmental good with the least expenditure of scarce resources (Perelmen and Shea, 1972). A survey of research on economies and diseconomies of farm size reveals that most economies of scale can be reached by a one- or two-man farm. In summarizing studies of crop-producing farms which covered seven types of farms in 14 locations and five states Madden (1967, p. 54) concluded that "in most of these studies all of the economies of size could be obtained by modern or fu1ly mechanized one-man or two-man farms." This conclusion was for lowest cost of production which may not be the size for maximum profits. Minimum costs were attained by farm sizes of 90 to 110 acres of California Cling peaches, 440 acres of irrigated Texas cotton, 1600 acres of summer-fall Oregon wheat, 1 or 2 man crop-livestock Iowa farms, less than 640 acres for Imperial Valley, California vegetable farms, and 600 to 800 acres of Yolo County California cash crops (Madden, 1967). In a study of energy and resource use in California farming the most efficient farm sizes were found to coincide closely with the minimum production cost size (Williams, 1973). It may therefore be concluded that large farms have no advantage over small farms in the matter of production costs. Economy of scale calculations must also consider other factors than resource use and profit. There may be artificial economic advantages resulting from administration policy biases, for example the income tax policy. Raup (1970, p. 7) points out that: "one of the most important forces that has stimulated the growth of large and corporate farms is the way in which our graduated, progressive income tax has been devised and administered . . . . almost every type of lenient or preferred treatment under the income tax laws has helped the big farms, or the corporate farms, and hurt family type farms. In addition, economy of scale calculations fail to consider the cost of social problems created by large scale agricultural business. Raup (1970) summarizes the prime reasons for concern about large farms: 1. A fear that many of the incentives leading to large corporate farms do not result from greater efficiency or superior management but from institutional defects in the tax system, market system and the agricultural extension programs; A fear that the trend toward corporate farming is symptomatic of the trend towards centralization of economic power and decision-making in a few hands and places, with a resultant loss of flexibility and diversify in our national economic and political life; A fear that a rural social structure dominated by a smal1 number of "company farms will yield a deadening conformity and a restricted environment in which It will be impossible to develop the full potential of the quality of rural life.

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A further problem of rural land use is that speculation on increases in land value in the U.S. over the past 35 years has encouraged many individuals and corporations to use farming as a hedge on future inflation. As Raup (1970) indicates, this attracts capital from individuals less interested in current income than in capital preservation or appreciation. He also shows that over

the long term this can change a yearly 2-3% return on investment to 8-10% by way of capital-gains taxation. For the family farmer who must make a profit each and every year this type of competition is decidedly unfair. Another bias against the small farmer is that there is little effort to inform the sma1l farmer of the results of the national investment in research and development in agricultural technology. User education has been supplied to the large buyers, but according to Raup (1970, p. 9) "smaller farms have been written off as productive units by agricultural specialists and technicians. Their operators have been classed as a welfare problem, not an agricultural potential. It is evident from a review of farming efficiencies, economy of scale and economics that smaller farm sizes can compete with large farms. It is also evident that the smaller farm sizes have many social advantages. The next section examines the environmental implications of farm size from an ecological perspective. ENVIRONMENTAL CONSIDERATIONS IN FARMING - AGRICULTURAL ECOSYSTEM ANALYSIS Ecological studies of energy flow and nutrient cycling through and within natural and managed ecosystems yield insight into sound operation and management of agricultural ecosystems. Early successional levels in an ecosystems development have been shown to be highly productive with net productivity declining as higher successional levels are reached (Kormondy, 1969). As an ecosystem nears climax, where productivity is just equaled by decay, most usually a high degree of diversity in numbers of plants and animals occurs. A close association between an ecosystems diversity and its stability has been found for most studied ecosystems (Margalef, 1968). Applying these concepts to most agricultural systems reveals that in striving for ever greater productivity agricultural crop and livestock systems are early successional, inherently low in diversity and hence unstable. The implications of these ecological concepts are that many of our present agricultural pest and disease control problems are a direct outgrowth of mass specialization. The notion that extreme crop husbandry specialization can control all variables of production is in direct conflict with the ecological relationships which indicate the very unstable nature of monocultures. The very nature of large specialized single crop farms produces such inherent ecological instability that methods of pest and disease control fail. In a recent agricultural extension newsletter published by Stanislaus County, it was noted "Each year farmers buy more herbicides and each year the problem seems to be getting worse. I saw quite a few fields where the weeds were so bad in spite of high control costs that yields and quality were definitely affected" (Gouig, 1972, p. 13). In 1971, the control costs for pests in the Central Valley of California were estimated as one-tenth of the gross crop value (Caltagirene, 1971). Ironically the trend is strongly to higher specialization in both crop and animal production systems, even though pest and disease control costs are taking away most economic gains. From these ecological perspectives the small highly diversified crop-livestock farm is

perhaps optimal. Crop residues become an asset for grazing livestock while manure becomes a useful fertilizer. Contrast this to the present manure handling problems of large feed lots or the fertilizer needs for large specialized field crop farms. If each was small and they were close together each would benefit but being large and frequently far apart the asset becomes a liability and so the environment suffers. Pest control, animal disease, air pollution from burning or spraying, water pollution from runoff manure, fertilizers and pesticides are mainly environmental problems of large scale farming and are seldom problems of the smaller diversified farm (Raup, 1970). SUMMARY AND CONCLUSIONS The economic, social and environmental problems of rural areas have been described with an attempt to illustrate that many of the problems are directly related to farm size and intensity of production. Progressive work on improving rural conditions does appear to favor assisting the sma1l farm size to maintain both its efficient use of human and scarce resources and its economic viability. Peter Barnes writing in the New Republic on land reform describes past abuses of public land disposition and the plight of the small farmer and develops a strong case for land redistribution (Barnes, 1971). He states: "Many citizens and public officials are coming to realize that rural America ought to be revived, cities salvaged, welfare rolls reduced, and they see that present policies aimed at achieving these objectives are not working." Environmentalists who for years have pointed to the dangers of intensive agriculture and the need for prudent rural land use, are finally getting an audience. The list of organizations that have recently urged vigorous enforcement of the 160-acre limitation includes the AFL-CIO, the Sierra C1ub, Common Cause, The National Education Association, the Grange and the National Farmers Union. Barnes concludes by stating: "The ultimate political appeal of land reform is that it places both the burden and opportunity of self-improvement upon the people themselves. It can give hundreds of thousands of Americans a place to plant roots, and a chance to work with dignity. Can we deny them that chance (Barnes, 1971, pp. 16-17). The Nader Report describes land conglomeration in California and supports the position that land reform policies are needed to protect agriculture from abusive land speculation (Nader, 1971). The U.C. Davis Sma1l Farm Study Project certainly will not be able to deal with the totality of social, economic and environmental problems in rural regions of California. Rather the goals of the project are to attempt to locate those critical factors which are most responsible for the actual inequality between efficient economic farm size and efficient farm size based upon the best use of human and scarce resources. As has been previously noted there has been an increasing movement especially in California toward larger farm sizes (U.S. Bureau of the Census, 1964). The census also indicates that over 70% of the gross farm sales comes from less than 10% of the farms which are grossing

in excess of $100,000 per year. These large farms, while profitable do not meet the efficiency criteria dictated by social and environmental factors. Agricultural researchers have a responsibility to be cognizant of these factors and should participate where economic, social and environmental efficiency dictates whether it be to concentrate on developing competitive and efficient smal1 farm machinery systems, developing and improving efficiency in management of water and soil under small diversified farming or developing advanced management techniques in buying and marketing. Most economies of scale can be overcome by smaller farm sizes if research is concentrated in these areas (Raup , 1971). By helping smaller farm sizes to be economically competitive many social and environmental problems of rural communities can be overcome.

REFERENCES Adams, R. L. and W. W. Bedford, "The Marvel of Irrigation: A Record of a Quarter Century, Turlock and Modesto Irrigation Districts, California, 1920. Anderson, V., Rural Housing; Farmers Home Administration, Unpublished, U.C.D. Field Paper, 1972. Barnes, Peter, "Land Reform I: The Great American Land Grab, The New Republic, June 5, 1971, pp. 19-23. Barnes, Peter, "Land Reform II: The Vanishing Small Farmer," The New Republic, June 12, 1971, pp. 21-24. Barnes, Peter, "Land Reform III: The Case for Redistribution," The New Republic, June 19, 1971, pp. 13-17. Bird, A. R., Poverty in Rural Areas of the United States," Agr. Econ. Report #63, Econ. Res. Ser., U.S.D.A., 1964. "California Department of Housing and Community Development: Annual Report," 1971. California Department of Human Resources Development: Annual Report," 1970. Caltagirene, L. E., Control of Insects on Deciduous Fruit Trees," Ecology Action Central-Valley Conference Paper, 1971. Cochran, C. L., The Scandal of Rural Housing, Architectural Forum, 1971. "Facts About California Agriculture, U.S. Department of Commerce, Bureau of the Census, 1970.

Fuller, V., "Hired Farm Labor in the West," Presidents National Advisory Commission on Rural Poverty, Rural Poverty in the U.S. Washington, D.C. 1968. Goldschmidt, W. R., "Small Business and the Community, U.S. Government Printing Office, 1946. Gouig, C., "The Small-Farmer," Unpublished, U.C. Davis ABS Senior Project, 1972. "Governor's Advisory Commission on Housing Problem," Report on Housing 1n California, 1963. Jones, L. B., "Farm Labor: Shortage or Surplus?," Southwestern Social Quarterly, 47, 1967. Kormondy, Edward J., Concepts of Ecology, Prentice-Hall, N.J., 1969. Madden, J. P., "Economics of Size in Farming," Ag. Econ. Report #107, Econ. Res. Service, U.S.D.A. , 1967. Margalef, Ramon, Perspectives in Ecologica1 Theory, U. Chicago Press, 1968. Nader Task Force, Report on Land Use in the State of California, Power and Land in California, 1971. Perelman, M. and K. P. Shea, The Big Farm," Environment 14(10), pp. 10-l5, 1972. Presidents National Advisory Commission on Rural Poverty, Rural Poverty in the U.S.," Washington, D.C., 1968. Raup, P. M., "What Policies Should We Have Toward Corporations in Farming? Department of Agricultural Economics, University of Michigan, 1970. Starr, Chauncey, Energy and Power, Scientific American 225(3), 41, Sept. 1971. Strut, D. W., "The Rural Manpower Scene," Fruit and Vegetable Harvest Mechanization, Manpower Implications, Michigan State University, Rural Manpower Center Report #17, 1969. "Tulare County General Plan," Housing Report, Tulare County Planning Commission, D. A. Woolfe, Director, 1971. "U. C. Davis Smal1 Farm Study Project: An Experiment 1n Improving Conditions in Rural California, Initial Proposal, 1972. U.S. Bureau of the Census, U.S. Census of Agriculture, Vol. II, Chapters 1, 3, 6, U.S. Department of Commerce, Washington D. C., 1964.

Voland, M. E., "Human Relations on Michigan Fruit and Vegetable Farms, Michigan State University Rural Manpower Center Special Report #7, 1968. Williams, D., Systems Analysis of the Flow of Energy, Nutrients and Water Through the California Agricultural Ecosystem," Unpublished Doctorate of Engineering Thesis, U.C. Davis, 1973. Yolo County Planning Department, "Housing: Yolo County, California, Report on Special Census, March, 1969, 1969.