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Fourth International, May 1942


C. Charles

The Crisis in American Agriculture


From Fourth International, vol.3 No.5, May 1942, pp.142-144.
Transcribed, Edited & Formatted by Ted Crawford & David Walters in 2008 for the ETOL.


I. The Concentration of Capital on the Land

An article of faith of American social thought, ever since the Revolutionary War and persisting until today is that farming in America is not an industry as other industries, but a calling, a sanctified and exalted “way of life.” In the words of Thomas Jefferson, leader of the agrarian wing of the American revolution:

“Those who labor in the earth are the chosen people of God, if ever he had a chosen people ... Corruption is the mark set on those, who, not looking up to Heaven, to their own soil and industry, as does the husbandman, for their subsistence, depend for it on the casualties and caprice of the customer. Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition ...”

In the paragraph that follows is represented an ideal that even when written was well along the path of distintegration as farming was being drawn into the “vortex” of industrialism and commercialism. But in the words we can get a sense of the period when all foods except certain luxury items, all the power, light, fuel, shelter and most of the clothing were produced on the farm. The quotation is from the Union Agriculturist and Western Prairie Farmer of August 1841:

“The farmer is the most noble and independent man in society … He is not placed in the station which requires him ever to be scheming or courting popular favor, bowing and bowing to this or that man to gain their favor; but he looks upon the earth and the indulgent smile of Heaven to crown his efforts, resting with the full assurance that ‘seed time and harvest’ shall ever continue through all coming time.”

The advice given in the Cultivator in May 1838 is rather poignant in the light of the facts of a century later. It counseled:

“A farmer should shun the doors of a bank as he would the approach of the plague or cholera; bankers are for traders and men of speculation and theirs is a business with which farmers should have little to do.”

One of the avowed causes for the Civil War was the opposition between slave labor-plantation, highly commercialized farming and the family-sized farm as a “way of life.” This was expressed by Congressman Holman in 1862 in these words:

“Instead of baronial possessions, let us facilitate the increase of independent homesteads. Let us keep the plow in the hand of the owner. Every new home that is established, the independent possessor of which cultivates his own freehold, adds a new and strong pillar to the edifice of the state.”

What has happened to farming as a “way of life”? Are “independent homesteads” the mark of modern American agriculture? Does the plow and land belong to the toiler? Under what conditions does the sower and harvester now work and live?

It is to answer these questions that Carey McWilliams of California has written his book, Ill Fares the Land. [1]

It is quite natural that the most important studies on modern American agriculture should he written by Californians. The development of agriculture has reached its highest point there. But California merely leads the parade. The rest of the country is in line.

The figures of the 1940 census, the hearings of the LaFollette and Tolan Committees and this latest book by Mr. McWilliams all notify the country that the Grapes of Wrath are growing in all sections, climates and soils of the United States.

Agriculture is becoming more and more marked by huge concentrations of the fundamental form of agricultural capital: the land.

The size of the average farm increased from 148 acres in 1920 to 156 acres in 1930 and to 174 acres in 1940.

The number of farms under 20 acres increased 41 per cent between 1930 and 1940. This increase is found mainly in those industrial and mining sections where, thanks to modern transportation, farm and non-farm employment can be combined.

The middle-sized farm, the farm supplying the only occupation to its owner or the tenant upon it, the farm from 20 to 175 acres, decreased in number by 8.8 per cent in this last decade.

In the meantime the large-scale farm increased in number and value of products. The percentage increase in farms of 1,000 acres or more was 24.7. Those farmers who produced goods to the value of $10,000 or more per year amounted to approximately 1.3 per cent of all farms. In the year 1939 such farms accounted for a total of $2,136,093,905 in farm products. Farms whose total output is below $750 a year were 63.3 per cent of the total number of farmers. Yet this group of farmers produced a total of $1,988,213,283, far less than produced by the 1.3 per cent of farms which form the large-farm group.

In the wheat-producing states the number of wheat factories between 1,000 and 4,999 acres increased in the decade ending 1939 from 20,322 to 24,585; the number of wheat enterprises above 5,000 acres in area jumped from 1,015 to 1,708. To accomplish this more than 25,000 farmers had to leave the land in Kansas.

In the cotton states of Texas and Oklahoma the number of farms above 5,000 acres increased from 2,980 to 3,590 in this ten-year period, while the farms between one and five thousand acres, which numbered 10,729 in 1930 grew to 14,402 in 1940. In Texas 60,000 sharecroppers were driven off the land in this process. In the five years ending 1940 Oklahoma lost 33,270 farms, which were merged to form large holdings.

Although not as far advanced in other sections of the country, this process toward centralization is found operative everywhere. In the corn belt (comprising Iowa, Missouri, Illinois, Indiana and Ohio) in the five-year period ending 1940, a total of 70,000 farm units were forced out of existence and the land consolidated into fewer but larger units.

Thus we see a great and growing number of large farms and the decrease of the independent farmer, the representative of farming as a “way of life.”

In these figures we find the judgment that history has given on a great controversy.

In 1928, Werner Sombart, the famous German economist, in his attempted refutation of Marxian economics declared: “Karl Marx prophesied general ‘concentration,’ with the disappearance of the class of artisans and peasants ... Nothing of the kind has come to pass.” Richard T. Ely, in his Outline of Economics (1923), the intellectual sawdust on which class after class of college and high school students have been nurtured in economic “science,” asserts: “There is little tendency for farming to become large scale industry.” As the same processes which operate in industry become apparent in agriculture we can see who understood more and saw further into the future: Marx in 1867 or Sombart and Ely in the 1920s.

Factories in the Field: Examples

Let us give a few examples, quoted from Mr. McWilliams’ book, of the modern field factory:

“The Earl Fruit Company of California operates under a centralized management and as one unit, 27 farm propperties in California and leases 11 additional properties. It purchases, moreover, a considerable amount of fresh fruits grown by small orchardists. It owns 11 packing houses in California and packs and markets, for other growers, about a thousand cars of fruit each year ... it has reached out to control related lines of business. It owns a 95 per cent stock interest in the Klamath Lumber & Box Company so that it does not have to pay a profit on the boxes and crates used in packing fruit. It controls two wineries in California, one of which is the largest in the United States. The parent company, moreover, owns a 37 per cent stock interest in the huge Italian-Swiss Colony (one of the largest combination vineyards and wineries in California) ... The Earl Fruit Company also owns the Baltimore Fruit Exchange and has important holdings in fruit auction houses in Chicago, New York, Cincinnati and Pittsburg ... The company has employed an average of 2,887 agricultural workers, it has an annual payroll of $2,400,000 ... A company town of 350 dwellings has been established with bunkhouse accommodations for 2,500 additional employees. Through still another subsidiary the company owns 13,833 acres of orchard lands in other states. In 1938 the book value of the land and improvements was $10,855,418.84; and it made annual sales of about seven million dollars.”

The large scale farm is not found only in California. In Arizona, for example, according to Arizona; A State Guide:

“In the newer irrigation districts where the bulk of Arizona cotton is grown, large-scale, highly mechanized operations prevail. Two growers operate approximately half of the cotton acreage in Pima County. One of these growers is operating what was once a whole development district of small farms which went bankrupt during the depression. A single corporation controls 19,000 irrigated acres in Maricopa County. In the Roosevelt and Beardeley projects, 20 miles west of Phoenix, a handful of growers operate an entire district of 55,000 acres. According to local estimates, close to half of the 1937 Arizona cotton acreage was operated by a few growers, each controlling upward of 1,000 acres.”

In Kansas and Montana there are huge wheat factories. The Wheat Farming Company of Kansas, incorporated in 1927, by 1933 was operating 64,000 acres scattered through 10 Kansas counties. Its capitalization in 1933 was $2,000,000. It owned equipment worth a quarter of a million dollars, maintaining a complete equipment and repair division.

In Montana, one operator, Campbell, by 1930 was producing a half million bushels of wheat a year on 95,000 highly mechanized areas.

In Florida, the United States Sugar Corporation employs 2,500 workers throughout the year and double that number at the height of the harvest on its 25,000-acre plantation. Scattered through its holding are 11 company towns. The chain of retail stores owned by this company to do business with its workers takes in $750,000 a year.

Two thousand employees live on the premises, punch time-clocks and work in the fields of the 6,000-acre Seabrook Farms near Bridgeton, New Jersey. This farm contains 30 miles of improved roads on its property, has its own railroad loading facilities, a packing plant, a cannery that serves 32,000 acres of surrounding truck and fruit farms, two airplanes to spray the fields, a large overhead irrigation system, a chain of hothouses and a fleet of custom built trucks.

Mr. Fred Vahlsing is a grower-shipper who owns a 10,000-acre vegetable garden in southern Texas. During the winter season 3,000 agricultural employees work on his land. The farm he owns is almost as completely mechanized as the Seabrook Farms.

In the State of Connecticut, 73 large-scale farms each average $67,000 on their crops. Two typical concerns are the American Sumatra Tobacco and the Consolidated Cigar Corporation, both of which not only grow the plants but also process, sell and manufacture cigars. The Sumatra produces a fifth of the tobacco crop of Connecticut besides possessing farms in Massachusetts, Florida and Georgia. The Consolidated operates 11 farms in New England. Most of the tobacco grown by the “independents” is under contract to be sold to these two companies.

As the various forms of processing agricultural products, such as canning and freezing, grow in importance, there is a constantly increasing tendency for the processing industrial plant to become the owner of the land which produces the raw material. In this development of “verticalization” California also leads the way.

The California Packing Corporation is the largest packing and processing concern of its kind in the world. It operates 50 packing plants in California, the Middle West, Utah, Oregon, Washington, Florida, New York, Minnesota, Illinois and the Hawaiian and Philippine Islands. It is found not only in fruit and vegetables but also packs coffee and cans fish – one of its subsidiaries is the Alaska Packers Association. It is capitalized at $65,000,000 and annually grosses about 660 million dollars in sales. Besides purchasing the crops of 4,713 growers in California it directly owns 21,000 acres in that state. It also possesses rich farm land in the Middle West, Hawaii and the Philippines. It employs nearly 5,000 agricultural workers.

Fourteen canning, shipping and sugar companies in California own 106,900 acres of land and lease nearly 25,000 acres more. Among them are the Hunt Bros. Packing Co., with farm properties valued at over half a million dollars and the Anderson Orchard Company with farm properties worth $235,953.

A canning company (Stokely) owns 7,547 acres in Tennessee. It operates 27 plants in eight states. The Applecrest Orchards of Hampton Falls, New Hampshire, with its own packing plant, last year produced 70,000 bushels of apples.

Nourse, in Agriculture and the National Economy, cites as examples a canning company in New York that raises the vegetables it cans on 1,000 acres of its own land; a prominent rubber company that secures its tire cloth and belt fabrics from 1,100 acres of cotton land it owns in Arizona, and a marketing concern which owns 1,300 acres of Wisconsin potato land.

The Ford Motor Company has its own farms to raise the soya beans used in the manufacture of enamel, oil and plastics for its automobile. Procter & Gamble Co. (soaps, etc.) owns a large farm in Ohio.

Bank Ownership of Farms

Up to recently, finance capital loaned money to the working farmer. The latest tendency is for the financial institutions to directly own and operate farm land.

Between 1910 and 1930 farm mortages increased from $3,559,000,000 to $9,631,000,000. By 1940 this figure had dropped to $6,909,794,000. The drop in indebtedness is due above all to foreclosures and tax delinquencies. Many farmers are no longer in debt – they are no longer farmers, just as a sick patient who dies is no longer ill.

As a result, by the end of 1938 the 21 most important insurance companies owned $795,000,000 worth of farm real estate primarily as a result of foreclosures.

In California, the Bank of America through its subsidiary California Lands, Inc., by 1936, owned 600,000 acres of land valued at $25,000,000. The Bank of America owns mortgages on 7,398 farms totalling over a million acres, representing a total indebtedness of $40,450,000.

In the northern Great Plains States, one insurance company owns 800 farms involving a grand total of 200,000 acres of land.

Where the banks do not care to work the land they own, they, as well as the insurance companies and tax commissioners, prefer as tenants large-scale operators well equipped with machinery and hiring large numbers of workers, rather than the small tenants.

Ownership of farms by banks, industrial enterprises, shippers, absentee owners, and corporations creates a situation where the owner of the land not only does not live on the farm but is also completely innocent of any knowledge of farming.

Under such circumstances the actual management of the farm is severed from farm ownership. This evolution was described by Lenin in connection with industry in his Imperialism. Now it has extended its reign into agriculture. To supply the technical service for the farm owners the new profession of farm management has developed.

This modern calling came into its own with the depression of 1929, when lending agencies came into possession of thousands of foreclosed farms. The new owners turned to a farm management company or formed a department to handle farm operations.

An example of the latter is California Lands, Inc., which maintains a central office in charge of accounting sales, leases and operation. To carry out “operation” the state is divided into districts, each under the supervision of a district manager, who in turn has supervisors under him. Each supervisor manages 40 to 50 farms.

The first exclusively farm management company was the Farmers National Company of Omaha, which manages 700 farms, over a quarter of a million acres, in seven Middle Western states; 103 farms that it manages belong to one company. Other management companies soon made their appearance to remove from the stockholders and finance companies the burden of supervision. Among them are the Doane Agricultural Service of St. Louis which manages 200,000 acres of land; the Decatur Farm Management Company of Decatur, Illinois, which manages some 17,000 acres; and the Farm Management Company, Inc. of Ohio, which manages 22,000 acres on 80 farms.

The farm managers have a professional organization, the American Society of Farm Managers and Rural Appraisers, which publishes its own professional journal.

To add a touch of irony to the tragedy it must be mentioned that, in various Middle Western cities, business men who own farms have formed farmers’ luncheon clubs to sit around over their coffee and discuss their farming problems.

The distance from the independent farmer, the ideal of Jefferson and the theme of song and fable, to the farms given above as examples is nearly as great as between the crossroads blacksmith shop and United States Steel Corporation; between the neighborhood grocer and the A&P. There is no turning back. The small farmer has no more chance of escaping his fate under capitalism than the textile artisan and hand loom had in 1800. The hundreds of thousands who have departed from their own land are merely the advance guard of other millions of farmers still “independent” Large-scale farming is the future form of agriculture.

(A second article in this series on American agriculture will appear next month.)


1. Ill Fares the Land, by Carey McWilliams. Little, Brown, Boston, 1942. 419 pages. $3.00.

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