Corporate farming

Most legal definitions of corporate farming in the United States pertain to tax laws,[2] anti–corporate farming laws,[3] and census data collection.[4] These definitions mostly reference farm income, indicating farms over a certain threshold as corporate farms, as well as ownership of the farm, specifically targeting farms that do not pass ownership through family lines.

In public discourse, the term "corporate farming" lacks a firmly established definition and is variously applied. However, several features of the term's usage frequently arise:

1. It is largely used as a pejorative with strong negative connotations.[1]
2. It most commonly refers to corporations that are large-scale farms, market agricultural technologies (in particular pesticides, fertilizers, and GMO's), have significant economic and political influence, or some combination of the three.[5][6]
3. It is usually used in opposition to family farms[7] and new agricultural movements, such as sustainable agriculture and the local food movement.[8]

The Nunley Brothers Ranch in Sabinal, Texas has been family owned and operated for over 70 years.[9] The ranch is also among the largest private landowners in the US.[10]

"Family farm" and "corporate farm" are often defined as mutually exclusive terms, with the two having different interests.[11] This mostly stems from the widespread assumption that family farms are small farms while corporate farms are large-scale operations. While it is true that the majority of small farms are family owned, many large farms are also family businesses, including some of the largest farms in the US.[12]

According to Food and Agricultural Organization of the United Nations (FAO), a family farm "...is a means of organizing agricultural, forestry, fisheries, pastoral and aquaculture production which is managed and operated by a family and predominantly reliant on family labour, both women’s and men’s. The family and the farm are linked, coevolve and combine economic, environmental, reproductive, social and cultural functions.”[13]

Additionally, there are large economic and legal incentives for family farmers to incorporate their businesses.[14]

Farming contracts are agreements between a farmer and a buyer that stipulates what the farmer will grow and how much they will grow usually in return for guaranteed purchase of the product or financial support in purchase of inputs (e.g. feed for livestock growers).[15] In most instances of contract farming, the farm is family owned while the buyer is a larger corporation.[16] This makes it difficult to distinguish the contract farmers from "corporate farms," because they are family farms but with significant corporate influence. This subtle distinction left a loop-hole in many state laws that prohibited corporate farming, effectively allowing corporations to farm in these states as long as they contracted with local farm owners.[17]

Cargill beef processing plant in Australia.

Many people also choose to include non-farming entities in their definitions of corporate farming. Beyond just the farm contractors mentioned above, these types of companies commonly considered part of the term include Cargill, Monsanto, and DuPont Pioneer among others. These corporations do not have production farms, meaning they do not produce a significant amount of farm products. However, their role in producing and selling agricultural supplies and their purchase and processing of farm products often leads to them being grouped with corporate farms. While this is technically incorrect, it is widely considered substantively accurate because including these companies in the term "corporate farming" is necessary to describe their real influence over agriculture.[18]

Family farms maintain traditions including environmental stewardship and taking longer views than companies seeking profits. Family farmers may have greater knowledge about soil and crop types, terrains, weather and other features specific to particular local areas of land can be passed from parent to child over generations, which would be harder for corporate managers to grasp.[19]

To date, nine US states have enacted laws that restrict or prohibit corporate farming. The first of these laws were enacted in the 1930s by Kansas and North Dakota respectively. In the 1970s, similar laws were passed in Iowa, Minnesota, Missouri, South Dakota and Wisconsin.[29] In 1982, after failure to pass an anti–corporate farming law, the citizens of Nebraska enacted by initiative a similar amendment into their state constitution.[30] The citizens of South Dakota similarly amended their state constitution in 1998.[29]

All nine laws have similar content. They all restrict corporate ability to own and operate on farmland. They all outline exceptions for specific types of corporations. Generally, family farm corporations are exempted, although certain conditions may have to be fulfilled for such exemption (e.g. one or more of: shareholders within a specified degree of kinship owning a majority of voting stock, no shareholders other than natural persons, limited number of shareholders, at least one family member residing on the farm).[31] However, the laws vary significantly in how they define a corporate farm, and in the specific restrictions. Definitions of a farm can include any and all farm operations, or be dependent on the source of income, as in Iowa, where 60 percent of income must come from farm products.[29] Additionally, these laws can target a corporation's use of the land, meaning that companies can own but not farm the land, or they may outright prohibit corporations from buying and owning farmland.[31] The precise wording of these laws has significant impact on how corporations can participate in agriculture in these states with the ultimate goal of protecting and empowering the family farm.[32]