multiple discourses on crisis: farm, agricultural, and rural policy implications

Multiple Discourses on Crisis: Farm, Agricultural,and Rural Policy Implications

Kenneth C. Bessant

Associate Professor, Department of Rural Development, Brandon University,Brandon, Manitoba R7A 6A9, Canada (phone: (204) 571-8516;

fax: (204) 725-0364; e-mail: [email protected]).

The terms farm crisis, agricultural crisis, and rural crisis have been invoked in political and policydiscourse to characterize significant disruptions in or threats to rural–farm livelihoods. Although theseexpressions reflect a general sense of concern over the state of agriculture and rural existence, theylack clear and concise meaning. Academic research and policy development are obfuscated by thelack of definitional consensus or, at minimum, some shared understanding of the core aspects offarm-related crisis. Much of the debate revolves around four main themes: farm financial difficul-ties (low or unstable incomes, indebtedness, and increasing reliance on nonfarm revenue), structuralchanges in agriculture (increasing scale, concentration, and consolidation), rural livelihoods (dwin-dling communities, institutions, and services), and international dimensions (market fluctuations,trade regulations, and disputes). The examination of these interrelated levels of analysis offers a valu-able framework for interpreting the multifold contexts, meanings, and responses to crisis. This paperexplores varied representations of farm–agricultural crisis, with particular emphasis on the presumedcauses (or precipitating factors), conditions, and related policies and programs.

Les expressions �crise agricole� et �crise rurale� sont evoquees dans le discours politique pourcaracteriser des perturbations ou des menaces importantes aux moyens de subsistance en milieurural et agricole. Bien que ces expressions traduisent certaines inquietudes concernant la situationdes secteurs agricole et rural, leur signification manque de clarte et de concision. Les chercheursuniversitaires et les elaborateurs de politiques sont deconcertes par le manque de consensus definitionnelou, du moins, par le manque de vision commune des aspects fondamentaux de la crise agricole. Unegrande partie du debat tourne autour de quatre themes principaux: les difficultes financieres del’exploitation agricole (revenu faible ou instable, endettement et dependance accrue aux revenusnon agricoles); les changements structurels dans le secteur agricole (augmentation de l’echelle deproduction, concentration et regroupement); les moyens de subsistance en milieu rural (diminutiondu nombre de collectivites, d’institutions et de services); les dimensions internationales (fluctuationsdu marche, reglements concernant les echanges commerciaux, differends). L’examen de ces niveauxd’analyse interrelies offre un outil precieux pour interpreter les multiples contextes, significationset reactions aux crises. Le present article analyse les diverses representations de la crise dans lesecteur agricole et se penche particulierement sur les causes presumees (ou facteurs declenchants), lesconditions ainsi que les politiques et programmes connexes.

INTRODUCTION

Over the last half century or so, researchers have made repeated references to the erosionof farm livelihoods and the impending demise of rural society (e.g., Friedland 1982). Andat different times, social scientists, policy analysts, and journalists have suggested thatfarm financial difficulties have reached crisis levels. Media reportage on problems in the

Canadian Journal of Agricultural Economics 55 (2007) 443–457

443

444 CANADIAN JOURNAL OF AGRICULTURAL ECONOMICS

agricultural sector has been sporadic, often highlighting price shocks, farm protests, ormarket volatility. Social and historical inquiry into aspects of farm, agricultural, and ruralcrisis has been similarly episodic and fragmentary. The term crisis is used relatively indis-criminately within various communities of discourse, making it difficult to establish howor when circumstances warrant its application. So, depending on the source, one can en-counter varied interpretations of farm-related crises, for example, the types of conditionsexperienced, the groups of people affected, and the implications for policy development.The expression farm crisis typically refers to financial issues (i.e., low incomes or increaseddebt loads), but it has become a euphemism for a wide range of concerns pertaining tostructural changes in agriculture and declining rural communities. Conceptual ambigui-ties have been exacerbated by the naıve view that the difficulties experienced in agricultureand rural life are matters of “common knowledge” (Hansen and Muszynski 1990, p. 2).Therefore, it is important to consider various uses of the terms farm and agricultural crisis,including related assumptions, interpretive frameworks, and policy responses. This paperexplores (i) the varied representations of crisis within different communities of academicand policy discourse, (ii) the complex intersection of precipitating multilevel factors (e.g.,domestic or international economic conditions), and (iii) the types of farm policies andprograms that have evolved in conjunction with assertions of farm-related crisis.

CONCEPTUALIZING “CRISIS”

Billings et al (1980) indicate that, although not much is known about the process(es)whereby a situation is classified as a “crisis,” analysis often proceeds in the absenceof a clear conceptual foundation. Broadly speaking, a crisis constitutes a “‘critical’ or‘urgent’ problem” (Hermann 1972, p. 4), the significance of which is subject to differencesof opinion, information, and analytical perspective. Hermann (1972) contends that asituation may be deemed a crisis when (i) it poses a threat to important goals, (ii) there isa limited amount of time in which to respond, and (iii) policymakers are taken by surprise(p. 13). Brass (1986) likewise suggests that the term crisis has been used widely, in thesocial sciences, to refer to an anomalous event that threatens the status quo and, if leftunresolved, can precipitate a “systemic breakdown” (p. 262). He notes four characteristicsof a crisis situation, that is, it

� is perceived “to have reality” by someone or some group,� is defined in a way that convinces those not directly involved of its authenticity,� involves a prospective or real threat of significant loss or undesirable change, and� conveys a need for some type of response (Brass 1986, p. 246).

Brass’s (1986) first point indicates that a crisis exists by virtue of processes of socialconstruction that emanate from the shared, first-hand experiences of an identifiablegroup of people. This can take the form of personal testimonials that consolidate localunderstandings and shape public perceptions. Second, individuals, not directly affected,should appreciate or accept the reality of the situation. This typically involves broadeningthe impact field to generate a more public or political profile of the crisis. Brass’s (1986)third and fourth conceptual elements are concerned with the presence of an implicit orexplicit threat to the “established order” and, by implication, the need for a response(p. 246). This approach assumes that systems seek equilibrium and that crisis situations

MULTIPLE DISCOURSES ON CRISIS 445

can transform elements, disrupt core operations, and precipitate large-scale changes. Inthis sense, a crisis represents a sudden or abrupt change in the variables defining “stable”patterns of interaction within a given system (Hermann 1972, pp. 10–11).

It is also important to consider both the objective (factual or empirical) and thesubjective (interpretive or constructive) aspects of crisis definition. Billings et al (1980)propose a “model of crisis perception” that first entails sensing a discrepancy or problem(e.g., triggering event), followed by a judgment of its seriousness that rests on the estimatedvalue of the potential loss, the probability of occurrence, and the degree of “time pressure”(pp. 301–4). The authors further suggest that the perceptual aspects of a crisis involveinterrelated assessments of the implied threat, the importance of the problem, and thelevel of (un)certainty over the supposed effectiveness of a response. Researchers’ attemptsto define the terms crisis and crisis situation represent some effort, however imprecise,to establish a useful interpretive framework. Furthermore, these conceptual issues arepertinent to the analysis of farm-related crises that can vary anywhere from psychologicalstress to pervasive structural changes in agriculture and rural community life.

VARIED THEMES AND LEVELS OF DISCOURSE ON CRISIS

Farming in North America has been in a recurrent state of crisis since the 1930s, asevidenced by volatile commodity prices, bankruptcies, and the continual need for govern-ment programs to address a succession of natural and economic disasters (Gardner 1992).Discourse on farm-related crises spans the better part of a century and encompasses abroad range of themes and viewpoints. One of the main tasks of crisis analysis involvesidentifying the multiplicity of overlapping and sometimes competing “master frames”(Mooney and Hunt 1996, pp. 178–79). Insofar as there are many ways to define a crisis,it is important to take note of how such claims are made, that is, the particular way(s) inwhich a problem is framed (Hilgartner and Bosk 1988). Hence, researchers have examinedfarm crises from multiple perspectives such as the effects on household livelihoods, theconcentration of production, the deterioration of rural communities, and the implicationsof (and for) agricultural policies.

The perceived threat to family farms and the associated rationale for governmentsupport have been (and remain) central aspects of crisis definition. There has also been atendency to treat successive farm crises as short-term financial difficulties rather than assymptomatic of deeper (i.e., chronic) underlying issues. Even a strictly economic appraisalof farm crisis should take into account micro-level processes, along with national and in-ternational factors (Adelman 1990). And, while the causes and consequences of farmcrises are commonly represented in economic terms, their effects are readily apparent in“the social, environmental and political costs” experienced by farm households and ruralcommunities (Pugh 1987, p. 9). Table 1 below presents four general themes of discourseon crisis, each with a corresponding level or frame of analysis: (i) financial difficulties(family or household level), (ii) structural changes in agriculture (organizational or sec-toral aspects), (iii) rural livelihoods (community or regional issues), and (iv) internationaldimensions (global influences or repercussions). The contents of the table illustrate theinherently complex and interrelated nature of any crisis, regardless of whether it deals withthe challenges facing family farming, the changing nature of agriculture, or the broaderissues of rural sustainability and international trade. Several historical instances of farm


Table 1. Core levels of analysis and themes of discourse on crisis

Financial crisis Agricultural crisis Rural crisis International(family or (structural or (community or crisis (transnationalhousehold) sectoral) regional) or global)

� perceived threat tothe family farm

� low or unstable(market) income

� cost-price squeeze� farm indebtedness

and bankruptcy� vulnerability to

global markets� increased reliance on

income supports andsubsidies

� high levels ofoff-farm employ-ment/revenue

� limited on-farmdiversification

� increased farm stress

� perceived threat tofamily-basedagriculture

� intensification andextensification ofproduction

� increased size/scale of farms(efficiency/competitiveness)

� productionconcentration

� consolidation (e.g.,land and propertyownership)

� farm depopulation� increased

industrialism (i.e.,loss of small andmedium-sizedoperations)

� increasedcapitalization

� vertical integration

� perceived threat torural livelihoodsand lifestyles

� rural-urbanmigration

� service and businessloss

� erosion of local taxbase

� diminishing role ofthe agriculturalsector

� rural/communitydecline

� poor or inadequateinfrastructure

� weak economicperformance

� limited economicdiversification

� need for social andeconomicenhancement

� international farmcrisis

� long-wave cycles� overproduction vs.

shortfalls� expansion and

contraction of worldmarkets/prices

� export marketvolatility

� internationalizedfood systems(globalization)

� organizationalconflict

� trade disputes/imbalances

� food security issues(e.g., BSE)

� trade distortingprograms/payments

crisis are discussed below in order to demonstrate the utility of this fourfold frameworkfor analyzing core defining elements, precipitating factors, multilevel effects, and policyresponses.

Farm Problems in the Early 1900sThere are scattered references to farm crises dating back to the early 1900s, both in Canadaand the United States. Adelman (1990) examined the Canadian prairie “farm debt” crisisof 1914, which he attributed to the poor crop yields and slumping world financial marketsthat followed a period of agricultural expansion fueled by “liberal credit” (p. 500). Westernfarmers were heavily reliant on long-term financing to secure fixed assets (e.g., land,machinery, and livestock) and short-term operating funds. Although the 1914 crisis wassignificant enough in both human and financial terms to prompt political interest inlegislating debt moratoria, ultimately, farmers bore the brunt of the adjustment becauseof “the local, national, and international distribution of political and economic power”(Adelman 1990, p. 519). This research illustrates how diverse factors, operating at multiplelevels of analysis, can converge and thereby contribute to a recurring cycle of expansionand crisis in agriculture.


Earlier and, to some extent, more recent instances of crisis have been framed in termsof the so-called ‘farm problem,’ that is, unfairly low or unstable incomes that are insuffi-cient to support family-based operations (see Gardner 1992; Bonnen and Schweikhardt1998). Based on an examination of farm income trends between 1926 and 1948, Shefrin(1949) states that “uneven distribution,” over time, is one of the most significant is-sues confronting agriculture (p. 7). Similarly, a report prepared by Canada’s FederalTask Force on Agriculture (1970) identifies a host of difficulties: “low incomes, over-production, prevalence of small, non-viable farms, increasing regional disparities, low andunstable prices, cost-price squeeze, slow market growth, diminishing export markets, . . .ineffectiveness of government policies and programs” (p. 7). Many of the issues enter-tained in this document are mirrored in current policy discourse on increased economiesof scale, reduced government support, and improved efficiency and competitiveness. Theprimary message was that the future direction of agriculture had already been establishedand that policies would have to be developed to facilitate the transformation. The coreproblem of low incomes and its close corollary, the relatively large number of “redundantfarmers,” formed the context for contemplating “the need for a widespread exodus” outof agriculture (Canada–Federal Task Force on Agriculture 1970, pp. 17, 32). Greaterpolicy attention could then be focused on the remaining viable operations that providea more acceptable standard of living. Furthermore, the circumstances of the 1914 farmdebt crisis and the concerns raised in the 1970 Federal Task Force report highlight thecomplex array of internal and external factors impinging on farm livelihoods and thebroader agricultural sector.

The 1980s Farm CrisisThe expression farm crisis did not become part of general academic parlance until the1980s, even though many of the issues with which it has come to be associated have hada long history in Canadian and U.S. agriculture. Brooks et al (1986) suggest that the1980s crisis reflected “the age-old ‘farm problem’ of low prices and incomes combinedwith the new debt-intensive capital structure in agriculture” (p. 391). The farm crisis wasslow to evolve and should perhaps be understood within the broader context of ruralrestructuring and structural adjustment (see Harl 1990). Goodman and Redclift (1989)note that the events of the 1980s had all of the characteristics of “a structural economiccrisis,” including depressed incomes, low returns on resources, and the deterioration ofagriculturally dependent communities (p. 13). However, Buttel (1989) makes a distinctionbetween the 1980s debt crisis and overcapacity as compared to the 1930s problem ofdeclining prices and foreclosures associated with “a deep world-economic depression”(p. 71). He further suggests that the turbulence of the 1980s was precipitated by theconvergence of farm-, national-, and international-level factors.

Commodity prices and land values rose during the 1970s in response to a strongmarket for wheat and field grains, which stimulated farm production and agribusiness.Increased agricultural output was absorbed by export markets, while credit was extendedon the strength of the anticipated (i.e., “inflationary”) value of land and the positiveoutlook on future growth (Fulton et al 1989). The promise of increased profits fueledheavy investments in capital assets, such as land and equipment, with a related growthin farm debt. Hence, structural changes in agriculture were intertwined with nationaland international economic trends. Pugh (1987) states that “[e]ncouraging the large,


capital-intensive farm unit model [in Canada] was a primary policy of . . . financial agen-cies, as well as agribusiness corporations and governments at all levels” (p. 4). Efforts tocurb inflation (e.g., increased interest rates), along with the reduced demand for agricul-tural commodity exports, had a significant effect on the farm sector in Canada and theUnited States. Land values began to plummet but input costs continued to rise, furthereroding farmers’ equity. In essence, a period of expansion was followed by the contractionof international markets.

Cloutier and MacMillan (1986) remark that the most critically affected Canadianproducers were those with equity positions (relative to assets) of less than 50% (i.e., about10% of farmers) and, most notably, those with equity levels of under 25%. This lattergroup of approximately 7,000 farmers (or slightly over 3%) was experiencing “very seri-ous financial problems,” many of whom were “above average producers” (Cloutier andMacMillan 1986, Abstract, pp. 12–13). Auer (1989) notes that the proportion of “non-viable” or insolvent (prairie) farm operations increased sharply from 4 to 10% between1985 and 1987 (p. 26). However, one of the cruel realities of the 1980s crisis was theunevenness of its impact, especially among farmers producing crops primarily for export.Individuals who had recently entered farming (e.g., younger producers) and those whohad expanded their operations were confronted by declining “real” net farm incomesand heavy debt loads incurred at a time of high inflation (Fulton et al 1989). Althoughthe most severe financial problems were concentrated within particular groups of farm-ers, it was the threat posed to more productive enterprises that was at the heart of thecrisis. Glenna (2003) contends that policy makers in the 1980s only became concernedwhen these difficulties began to affect “the most prosperous and efficient farmers” and,by extension, the agribusiness and banking sectors (p. 16). In this sense, analysts re-sponded to the prospects of an agricultural system crisis more so than a farm livelihoodscrisis.

Much of the discourse on the 1980s farm crisis revolved around financial difficulties,declining farm numbers, and the implicit threat to family-based operations. Brinkman(1981) examined farm income levels (i.e., adequacy), rates of return, and instability, allof which remain relevant to the current debate over government intervention in theagricultural sector. Forbes et al (1982) indicate that government involvement in the foodsystem has been “pervasive,” including efforts to protect agriculture and support farmincomes (p. xiii). Farm policy can be viewed as addressing economic and social issues.Forbes et al (1982) argue that income transfer initiatives are closely aligned with thebroader rural issues of poverty, population loss, and regional disparity. Income supportand stabilization programs represent efforts to deal with problems stemming from farm-and market-level forces, such as inelastic demand regarding prices and income, unstablerates of return on resources, competing production, and market fluctuations. Indeed, thepersistent conditions of “volatility” and “uncertainty” within agriculture are commonlycited as rationale for supportive policies and programs (Fulton et al 1989, p. 30).

An important structural issue that emerged during the 1980s farm crisis concernsthe bifurcation of agricultural production into small, part-time farms and very large,commercial enterprises (Brooks et al 1986). Although there have been suggestions thatthe financial stress of the 1980s accelerated the shift toward dualism (e.g., Murdock andLeistritz 1988), Albrecht (1997) contends that the “two-part structure” of the 1970s re-verted to the familiar trend toward large-scale farms and the concentration of production


(p. 474). Lyson (2004) makes a similar distinction between commodity agriculture, whichrests on the twin pillars of efficiency and production, and a more locally based system ofcivic agriculture. He further suggests that “[t]he entire system of commodity productionis being propped up by large government subsidies . . . [that] favor some producers overothers (usually large ones over small ones) and certain production practices over others(usually capital-intensive over organic)” (Lyson 2004, p. 100). Definitional ambiguities(e.g., small vs. large operations) continue to obfuscate research on this topic, but there islittle doubt that the scale of agriculture is increasing.

Finally, the 1980s farm crisis drew attention to the growing integration and interde-pendence of world (food) production and consumption. Goodman and Redclift (1989)contend that the “international farm crisis” of the 1980s was “a logical consequence of therestructuring of the global food economy” (p. 3). The authors trace the roots of the farmcrisis to the movement toward capital- and energy-intensive agriculture, which encour-aged increased productivity, farm consolidation, and depopulation. Furthermore, thediffusion of the agro-industrial model to other countries contributed to global overpro-duction, volatile world markets, as well as growing tensions over trade policies. Tubania(1989) juxtaposes “the technical and economic pre-eminence” of North American agri-culture, during the 1960s and 1970s, with the subsequent “crisis of organisation” in worldtrade, that is, price fluctuations, market fragmentation, state intervention (e.g., incomesupports and supply management), and trade disputes (pp. 24, 31). Unfortunately, there isa dearth of research on “the tendency toward long cycles of expansion and contraction inthe world economy, and inherent contradictions in industrial-country agriculture—thatcan be seen to make ‘farm crises’ a normal ingredient in the process of accumulation inadvanced capitalism” (Buttel 1989, p. 61). From this standpoint, the 1980s farm crisis, andothers that have occurred since, form part of a recurring pattern of financial problems.

Farm Financial Difficulties in the 1990sThe agricultural sector has undergone significant challenges since the 1980s crisis of heavydebt loads, volatile export markets, and declining net farm incomes. Although householdfinancial issues and structural adjustment remain important policy themes, they are oftendiscussed in light of new-age global food regimes, international trade, and regulatorybodies. In 1998, the Canada-House of Commons Standing Committee on Agricultureand Agri-Food (1998) prepared a document entitled The Farm Income Crisis in Canada.This report notes that total net farm income followed an upward trend between 1991 and1996 but declined sharply in 1997 in part because of unfavorable worldwide economicconditions and the resulting collapse of commodity prices. Mention is made of the price-distorting effects of U.S. and European Union (EU) export subsidies and the need toaddress the then current crisis through the implementation of a Farm Income DisasterProgram (FIDP) and the development of an income support policy. The FIDP or disasterrelief program was intended to complement other elements of the farm income safetynet that were not designed to address abrupt changes in commodity prices. Concernwas also expressed over the possibility that unresolved income problems could lead tostructural adjustments (e.g., declining numbers of producers) that would in turn threatenthe sustainability and productivity of the family farm and the broader agri-food sector.

Brinkman (2002) indicates that (prairie) agriculture has long experienced price andincome fluctuations and that heavy dependence on grain production has exposed it to


the vagaries of global markets, government policies, and weather conditions. In spiteof continued efforts to adjust agricultural policy in line with rapidly changing domesticand international conditions, farming continues to face persistent conditions of financialdistress, most notably income instability. Dakers (1996) remarks that the 1990s broughtwith it a “new liberalized global trading environment” and an emerging vision of a“market-oriented” agri-food sector that was more internationally competitive and lessreliant on government assistance (pp. 1, 14). This statement underscores the recent policyfocus on making agriculture more efficient and responsive to market signals throughgovernment-funded research, product development, and risk management (AgricultureCanada 1989; Fulton et al 1989). Hence, policy responses to farm-related crises shouldbe understood within the context of globalized systems of trade.

There has been considerable debate concerning the trade-distorting effects of somefarm support programs. Yet, Qualman (2001) rejects the suggestion that low net farm in-comes are the result of EU subsidies, the latter of which are commonly blamed for prob-lems of oversupply, production distortions, and reduced commodity prices. He arguesinstead that the real explanation behind the income crisis is “market failure” stemmingfrom “power imbalances” within the agri-food sector, most notably between transna-tional corporations and family farms (Qualman 2001, p. 14). Farm financial difficulties,interpreted in this manner, reflect an uneven distribution of profits and market power,whereby producers are caught between “down-stream” (e.g., retailers and processors)and “up-stream” components (e.g., input suppliers) of the modern food chain (Qualman,2001, p. 15). By implication, medium-sized operations are in danger of being edged outbecause the income derived from farming is often considered inadequate to provide areasonable standard of living.

Lobao and Meyer (2001) note that approximately 94% of U.S. farms receive annualgross sales of less than $250,000 and, according to a USDA (1998) National Commissionreport, A Time to Act, these operations are at significant risk. Indeed, the growing propor-tion of total farm family income derived from nonfarm sources, across various sizes andtypes of operations, serves as a barometer of persistent financial difficulties (see Bessant2006). The trend toward increased reliance on nonfarm income indicates that operatorsrequire external capital streams in order to maintain viable production units and familyhouseholds, regardless of crisis conditions. Off- or non-farm income is needed to avertthe breakdown of farm families or family farms in times of shock or stress. However,the conditions or effects of crisis are not limited to livelihoods alone; they can traversea number of dimensions including household financial difficulties, farm depopulation,declining rural communities, and global trade barriers (recall Table 1). For this reason,efforts undertaken to define farm-related crises, to specify precipitating conditions, and toresolve or avert their (re)occurrence should incorporate varied levels of analysis.

DISCUSSION OF POLICY RESPONSES

The recurrent conditions of crisis in agriculture have precipitated a wide range of gov-ernment policies. Table 2 presents a number of illustrative themes drawn out of thediscourse on farm crisis that are pertinent to policy development, several of which arediscussed below. Before proceeding, it is important to note that policies directed at oneparticular aspect of a farm crisis, for example, addressing financial difficulties through


Table 2. Policy issues emerging out of recurring farm crisis conditions

General policy issues Specific points of concern

Volatility in agriculture Fluctuations in export markets, prices, assetvalues, and farm incomes

Government transfers, support payments,subsidies, etc.

Coordination and integration, marketdistortion, (over)production, and otherrelated impacts

Diverse types of farm enterprises (e.g.,family-based, commercial,“low-resource” or “part-time”)

Devising policies and programs for different(or only particular) types of productionunits

World agri-food/commodity production Global expansion of the agro-industrialmodel

Cyclic expansion and contraction (e.g., longwave patterns)

Shorter periods of high prices and longerepisodes of depressed prices

Reduced/variable levels of net farm income Research and development, riskmanagement, on- and off-farmdiversification

Off- and non-farm income sources Livelihood diversification to sustain thefarm operation and the farm householdeconomy

(Over)capitalization Capital-intensive agriculture, land values,technology, cost of external inputs, etc.

Farm debt levels Increased vulnerability in times of low orfluctuating incomes

commodity-specific programs, can have reverberative effects on structural (e.g., increasedeconomies of scale or capitalization) and global conditions (e.g., trade distortions). Thefollowing discussion is intended to demonstrate that, as with crisis analysis, agriculturalpolicy responses should be examined at multiple points of impact: familial, sectoral,regional, and international.

Commodity Price Supports, Subsidies, and Farm Income ProgramsThere is a long history of government intervention in the agricultural sector throughan array of price, income, and farm assistance programs. The Crow freight rate benefit(1897), which was removed with the elimination of the Western Grain TransportationAct, is perhaps one of the most noteworthy and earliest input subsidies in Canadianagriculture. Federally sponsored price supports became a permanent aspect of agricul-tural production beginning with the Agricultural Stabilization Act (1958). Fulton et al(1989) suggest that federal and provincial involvement in (prairie) agriculture during the1960s and 1970s focused primarily on stabilizing production and income, for example,crop insurance (1961), the two-price wheat program (1967), and the Western Grain Sta-bilization Act (1976). Since then, a comprehensive range of policies and programs hasbeen devised to provide financial assistance to producers. Between 1985 and 2001, netgovernment transfers and rebates accounted for approximately 77% of prairie net farmincome (Brinkman 2002, p. 400).


Researchers and policy analysts regularly question programs that distribute paymentson the basis of the level of production or the scale of enterprise. The need for fiscal restrainthas raised additional concerns about the rationale for and transfer efficiency of varioussupport programs. Quantity-related subsidies have been criticized on the grounds thatthey increase output and depress international food prices, which in turn deterioraterural livelihoods (Pinstrup-Andersen 2002). Furthermore, Messerlin (2002) suggests thata relatively modest proportion of government support (i.e., about 25–30%) finds its waydirectly to farm income, while the remaining funds are absorbed by increased pricesfor land and other agricultural inputs (p. 31). These types of programs raise domesticfarm income levels but, in doing so, can reduce risk and expand production in waysthat affect international prices and trade. Dewbre and Short (2002) note the importanceof identifying policies that improve farm household income while minimizing marketdistortions and the costs to taxpayers and consumers. According to Turvey et al (1997),Canadian agricultural policy is moving away from commodity price and income supportsin favor of “whole farm income stabilization” (p. 1). Canada and the United States haveinitiated countercyclical programs to assist farmers in times of declining prices, whileattempting to decouple income supports from production decisions (Zahniser et al 2005).Still, agricultural subsidies remain one of the most significant issues confronting tradeliberalization negotiations at the World Trade Organization.

Changing Structure of AgricultureStructural issues are at the heart of farm policies, as they tend to support expanded pro-duction capabilities. The increasing scale of agricultural operations (i.e., intensification orextensification) is commonly rationalized in terms of enhancing competitiveness and effi-ciency. Although there is broad recognition of the importance of maintaining a viable anddiverse farm sector, some analysts suggest that government policy and assistance shouldbe directed toward supporting commercial, business-focused operations (see CanadianAgri-Food Policy Institute 2006). Such a viewpoint is consistent with the emphasis placedon achieving economies of scale in times of low prices or marginal returns. A counter-point to this position is offered in a Prairie Farm Rehabilitation Administration (1992)report, which suggests that the “‘large farm’ scenario” is inconsistent with both the goalof building vibrant rural communities and the pursuit of environmental sustainability (p.63). Freshwater (2002) likewise questions the benefits of subsidies that promote “largefarm efficiencies” in light of the potential for environmental degradation, harmful ef-fects on rural development, and conflicts with “social values” (p. 466). Policy analystshave taken note of the varied nature of agricultural enterprises and the importance ofmaintaining a diverse farm sector. Offutt (2000) suggests that the differentiation of agri-culture into diverse commodity and market structures has necessitated more specializedpolicy responses. However, Bonnen and Schweikhardt (1998) remark that “[p]olitically,we see a continuing fragmentation of agricultural policy as it becomes viewed primarily asa heterogeneous set of regulatory policies adapted to specific industrialized subsectors ofagriculture” (p. 30). A move toward more focused programs may provide greater benefitsto those most in need of support, but it is equally important to pursue an integratedframework.

The rationale for supporting farm operations, including those deemed less efficient,stems from a series of issues, for example, price and income instability, volatile (export)


markets, and financial difficulties. However, a significant proportion of commercial pro-duction comes from the largest farms. In 2004, 18% of U.S. operations reporting $100,000or more in annual revenue accounted for approximately 88% of total farm sales and re-ceived over 80% of commodity payments (USDA 2006, p. 2). Similarly, in 2001, Canadianfarms of $250,000 or more in sales (i.e., 13%) were responsible for 64% of total produc-tion (Agriculture and Agri-Food Canada 2006, p. 28). In light of this situation, somemight question the logic of providing assistance to so-called marginal or low-resourceenterprises. However, policy interest in the organization of farming is linked to the preser-vation of rural livelihoods and communities. This issue is mentioned in the Fifth Reportof the Canada-House of Commons Standing Committee on Agriculture and Agri-Food(2002), which argues against allocating funds to the largest operations on the groundsthat it overlooks the importance of maintaining diversity within agriculture and the con-tributions of smaller farms to rural community viability. Furthermore, the persistence ofsmall- and medium-sized operations offers some protection against the threats posed tofood safety and food supplies in the event that large, commercial enterprises encountercatastrophic events (e.g., financial crisis or disease).

CapitalizationOne of the most common policy responses in times of farm income difficulty has beento increase financial assistance. However, the use of program benefits to acquire fixedassets (e.g., land, machinery, and buildings) intersects with the broader issue of capi-talization in agriculture. Some time ago, Schmid (1964) discussed the capitalization ofincome streams derived from farm support programs into land values at the expenseof labour and earnings. So, “[w]hen these increased incomes become capitalized intohigher land values, they become part of the cost structure and the overall rate of re-turn remains low, leading to a new round of demands for still greater support” (Dewbreand Short 2002, p. 456). Brinkman (2002) analyzes escalating levels of capitalization,on a more general level, as evidenced by the steady increase in capital values since 1988and the ratio of capital to income (“capital turnover rate”) (p. 401). Clearly, farmerswould face less risk associated with income fluctuations if they diversified their net worthinto assets other than “farm-specific capital, such as farmland” (Calomiris et al 1986,p. 449). There is ongoing concern over the capitalization of income in land prices, par-ticularly when they exceed agricultural use values, and a corresponding need to identifypolicy alternatives that would reduce the pressure to overcapitalize income streams of anysource.

CONCLUDING REMARKS

Rural social scientists of the mid–twentieth century drew attention to livelihood disparitiesthrough their analyses of the ‘farm problem,’ insufficient incomes, and poverty. Despiteseveral decades of attention, public policy has been relatively unsuccessful in resolvingpersistent financial difficulties along with the growing reliance on program paymentsand off-farm employment. Indeed, many of the problems of yesteryear persist, to someextent, among various groups of producers. Government support that is linked to pro-duction levels is less advantageous to small- or medium-sized farm enterprises; rather, ittends to benefit larger operations, input suppliers, and absentee owners. Furthermore, the


increasing complexity of the agricultural sector in the global era necessitates the develop-ment of analytical concepts and frameworks that are more applicable to these changed andever-changing conditions. The present analysis of the “crisis” concept, as it is used in farm,agricultural, and rural contexts, is a case in point. In the absence of a clear conceptual def-inition, the investigation of farm-related crises is best approached from varied frames ofreference: the family or household unit, the structural or sectoral level, the local or nationalsphere, and the international realm. It is also important to differentiate, and thereby moreappropriately respond to, the nature of short-term shocks such as the fluctuations in exportmarkets (e.g., the BSE crisis), currency values, and interest rates, as compared to morelong-term issues, most notably decreasing “real” commodity prices, the cost-price squeeze,and structural changes (Anonymous Reviewer). The foregoing discussion illustrates thevalue of considering multiple perspectives (vis-a-vis crisis analysis) when investigatingthe nature of precipitating factors, the varied effects within the agricultural sector, andthe implications of policy responses.

One avenue of research that shows promise of late involves the household-basedapproach to livelihoods analysis. The farm household represents one of the most fun-damental units of social organization within the agricultural sector; it is central to theunderstanding of livelihoods and policy development. Although agricultural economistscommonly study farm- or sector-level production, Hum et al (1995) argue that a house-hold model is more useful when analyzing “income stabilization, income maintenance,and farm welfare” (p. i). Such a framework recognizes the growing importance of pluriac-tivity, that is, adopting new livelihood strategies that integrate diverse forms of agriculturalenterprise with off-farm activities. Bessant (2006) states that “[e]arly linkages to ‘insuf-ficient’ or marginal operations have since given way to a much broader understandingof the ubiquity and the relative stability of pluriactive farm livelihoods and lifestyles”(pp. 67–68). It is increasingly common for academics and policy analysts to discuss thecontributions of off-farm employment to the persistence of family farms, most notably intimes of structural change and financial difficulty (see Gardner 2000). On a larger scale,off-farm activity plays an important role in stabilizing rural populations through the in-tegration of farm operators into local economies. Farm families may be able to weathershort-term financial distress by taking on off-farm employment activities. In the longerterm, however, this alternate source of income may become a baseline element of thefarm household economy such that continued difficulties would necessitate additionalrevenue. The main point here is that each successive livelihood adjustment establishesa new normative standard for survival, based on an ever-changing definition of farmfinancial problems. Ultimately, it is the farm household’s capacity to absorb shocks andstresses that determines its sustainability.

The inherent diversity of the farm sector suggests a need for policies that are tailoredto particular farm types, production conditions, or vulnerability contexts. If all farmhouseholds shared identical characteristics, then there would be no need to considerdifferential policy impacts (Offutt 2000, 2002). Micro-level analysis of farm householdscan be rationalized on the grounds that it provides greater insight into a range of policyissues, for example,

� the success of efforts aimed at improving the conditions of farm families,� the “distorting effects of subsidies on markets,”


� the role of nonfarm income or assets, and� the nature of decision-making processes or policy responses (Offutt 2002, p. 1192).

Furthermore, the livelihoods framework provides a comprehensive understanding ofhow family-based operations combine farm and nonfarm assets in an effort to safeguardboth short- and long-term survival. Policy analysis would benefit from a more detailedunderstanding of household decision making, management processes, coping strategies,and ongoing adjustments to shocks and strains. In keeping with livelihoods analysis, farm–agricultural policies should also be considered within the broader (i.e., macroeconomic)context of “monetary policy, interest rates and foreign exchange rates” (Tyrchniewicz andTyrchniewicz 2005, p. 11). The structure and operation of farm households are evolvingcontinually in response to a complex and highly interrelated set of internal and externalconditions (Morehart et al 2004). It is, therefore, vitally important for policy discourseto recognize the multidimensional or multilevel nature of farm-related crises, the complexnature of precipitating factors, and the varied implications for farm livelihoods, ruralcommunities, and the agricultural sector.

ACKNOWLEDGMENTS

This research was supported by financial assistance from the Brandon University Research Com-mittee, Brandon University, Brandon, Manitoba R7A 6A9.

REFERENCES

Adelman, J. 1990. Prairie farm debt and the financial crisis of 1914. Canadian Historical ReviewLXXI (4): 491–519.Agriculture and Agri-Food Canada. 2006. Long Term Challenges and Opportunities: FutureCompetitiveness and Prosperity of the Agriculture and Agri-Food Industry. FPT WorkingGroup on Economic Analysis Progress Report. http://www.agr.gc.ca/pol/index_e.php?s1=pub&s2=cp&page=cp (accessed May 25, 2007).Agriculture Canada. 1989. Growing Together: A Vision for Canada’s Agri-Food Industry. Ottawa:Minister of Supply and Services Canada.Albrecht, D. E. 1997. The changing structure of U.S. agriculture: Dualism out, industrialism in.Rural Sociology 62 (4): 474–90.Auer, L. 1989. Canadian Prairie Farming, 1960–2000: An Economic Analysis. Economic Council ofCanada. Ottawa: Minister of Supply and Services Canada.Bessant, K. C. 2006. A farm household conception of pluriactivity in Canadian agriculture: Mo-tivation, diversification and livelihood. Canadian Review of Sociology and Anthropology 43 (1):51–72.Billings, R. S., T. W. Milburn and M. L. Schaalman. 1980. A model of crisis perception: A theoreticaland empirical analysis. Administrative Science Quarterly 25 (2): 300–16.Bonnen, J. T. and D. B. Schweikhardt. 1998. The future of U.S. agricultural policy: Reflec-tions on the disappearance of the “farm problem.” Review of Agricultural Economics 20 (1): 2–36.Brass, P. R. 1986. The political uses of crisis: The Bihar Famine of 1966–1967. The Journal of AsianStudies 45 (2): 245–67.Brinkman, G. L. 1981. Farm Incomes in Canada. Economic Council of Canada and The Institutefor Research on Public Policy. Ottawa: Minister of Supply and Services Canada.Brinkman, G. L. 2002. Report card for prairie agriculture. Canadian Journal of Agricultural Eco-nomics 50 (4): 391–413.


Brooks, N. L., T. A. Stucker and J. A. Bailey. 1986. Income and well-being of farmers and the farmfinancial crisis. Rural Sociology 51 (4): 391–405.Buttel, F. H. 1989. The US farm crisis and the restructuring of American agriculture: Domesticand international dimensions. In The International Farm Crisis, edited by D. Goodman and M.Redclift, pp. 46–83. New York: St. Martin’s Press.Calomiris, C. W., R. G. Hubbard, J. H. Stock and B. M. Friedman. 1986. The farm debt crisis andpublic policy. Brookings Papers on Economic Activity 1986 (2): 441–85.Canada–Federal Task Force on Agriculture. 1970. Canadian Agriculture in the Seventies. Ottawa:Queen’s Printer.Canada–House of Commons Standing Committee on Agriculture and Agri-Food. 1998. The FarmIncome Crisis in Canada. Ottawa: Public Works and Government Services.Canada–House of Commons Standing Committee on Agriculture and Agri-Food. 2002. The FutureRole of the Government in Agriculture. Ottawa: Public Works and Government Services.Canadian Agri-Food Policy Institute. 2006. Working Towards a New Direction for the Agri-FoodSector. Discussion Document. Ottawa: Canadian Agri-Food Policy Institute. http://www.capi-icpa.ca/forum_2/documents/papid45_workingtowards.pdf (accessed September 27, 2006).Cloutier, P. and D. MacMillan. 1986. Current Financial Difficulties in Canadian Agriculture. Dis-cussion Paper No. 310. Ottawa: Economic Council of Canada.Dakers, S. 1996. Agriculture: The Policy Agenda. Research Branch of the Library of Parliament.Ottawa: Minister of Supply and Services Canada.Dewbre, J. and C. Short. 2002. Alternative policy instruments for agriculture support: Consequencesfor trade, farm income and competitiveness. Canadian Journal of Agricultural Economics 50 (4):443–64.Forbes, J. D., R. D. Hughes and T. K. Warley. 1982. Economic Intervention and Regulation in CanadianAgriculture. Economic Council of Canada and the Institute for Research on Public Policy. Ottawa:Minister of Supply and Services Canada.Freshwater, D. 2002. Economics of farm support and Canada’s safety net: Discussion. CanadianJournal of Agricultural Economics 50 (4): 465–71.Friedland, W. H. 1982. The end of rural society and the future of rural sociology. Rural Sociology47 (4): 589–608.Fulton, M., K. Rosaasen and A. Schmitz. 1989. Canadian Agricultural Policy and Prairie Agriculture.Economic Council of Canada. Ottawa: Minister of Supply and Services Canada.Gardner, B. L. 1992. Changing economic perspectives on the farm problem. Journal of EconomicLiterature 30 (1): 62–101.Gardner, B. L. 2000. Economic growth and low incomes in agriculture. American Journal of Agri-cultural Economics 82 (5): 1059–74.Glenna, L. 2003. Farm crisis or agricultural system crisis? Defining national problems in a globaleconomy. International Journal of Sociology of Agriculture and Food 11: 15–30.Goodman, D. and M. Redclift. 1989. Introduction: The international farm crisis. In The InternationalFarm Crisis, edited by D. Goodman and M. Redclift, pp. 1–22. New York: St. Martin’s Press.Hansen, P. and A. Muszynski. 1990. Crisis in rural life and crisis in thinking: Directions for criticalresearch. Canadian Review of Sociology and Anthropology 27 (1): 1–22.Harl, N. E. 1990. The Farm Debt Crisis of the 1980s. Ames: Iowa State University Press.Hermann, C. F. 1972. Some issues in the study of international crisis. In International Crises: Insightsfrom Behavioral Research, edited by C. F. Hermann, pp. 3–17. New York: The Free Press.Hilgartner, S. and C. L. Bosk. 1988. The rise and fall of social problems: A public arenas model.The American Journal of Sociology 94 (1): 53–78.Hum, D., D. Kraft and W. Simpson. 1995. A Framework to Analyze Income Support and In-come Stabilization Policies in Canadian Agriculture. Technical Paper 3/95. Industry and Policy


Analysis Division. Policy Branch. Agriculture Canada. http://www.agr.gc.ca/pol/pub/frame-cadre/pdf/framecadre_e.pdf (accessed July 17, 2006).Lobao, L. and K. Meyer. 2001. The great agricultural transition: Crisis, change, and social conse-quences of twentieth century US farming. Annual Review of Sociology 27: 103–24.Lyson, T. A. 2004. Civic Agriculture: Reconnecting Farm, Food, and Community. Lebanon: TuftsUniversity Press.Messerlin, P. A. 2002. Plowing up subsidies. Foreign Policy 133: 30–1.Mooney, P. H. and S. A. Hunt. 1996. A repertoire of interpretations: Master frames and ideologicalcontinuity in U.S. agrarian mobilization. The Sociological Quarterly 37 (1): 177–97.Morehart, M., J. Hopkins and J. Johnson. 2004. Policy Analysis with Integrated Ru-ral/Farm Household Data for the U.S. Paper presented at the Third International Confer-ence on Agricultural Statistics. Cancun, Mexico. http://www.unece.org/stats/documents/ces/ac.61/2004/wp.6.e.pdf (accessed August 4, 2006).Murdock, S. H. and F. L. Leistritz. 1988. Introduction. In The Farm Financial Crisis: SocioeconomicDimensions and Implications for Producers and Rural Areas, edited by S. H. Murdock and F. L.Leistritz, pp. 1–28. Boulder: Westview Press.Offutt, S. 2000. Can the Farm Problem Be Solved? M. E. John Lecture. The Pennsylvania StateUniversity. http://www.aers.psu.edu/Announce/AESeminar/offutt.pdf (accessed May 10, 2007).Offutt, S. 2002. The future of farm policy analysis: A household perspective. American Journal ofAgricultural Economics 84 (5): 1189–1200.Pinstrup-Andersen, P. 2002. Food and agricultural policy for a globalizing world: Preparing for thefuture. American Journal of Agricultural Economics 84 (5): 1201–14.Prairie Farm Rehabilitation Administration. 1992. Rural Prairie Sustainability: A Background Paper.Regina: PFRA.Pugh, T. 1987. The invisible crisis. In Fighting the Farm Crisis, edited by T. Pugh, pp. 1–12.Saskatoon: Fifth House.Qualman, D. 2001. The Farm Crisis and Corporate Power. Ottawa: Canadian Centre for PolicyAlternatives.Schmid, A. A. 1964. Capitalization of farm program benefits: Further comment. Journal of FarmEconomics 46 (3): 687–88.Shefrin, F. 1949. Farm Income: Cash and Net–1926 to 1948. Ottawa: Department of Agriculture.Tubania, L. 1989. World trade in agricultural products: From global regulation to market fragmen-tation. In The International Farm Crisis, edited by D. Goodman and M. Redclift, pp. 23–45. NewYork: St. Martin’s Press.Turvey, C., K. Meilke, A. Weersink, K. Chen and R. Sarker. 1997. The Transfer Efficiency Assessmentof Individual Income-Based Whole Farm Support Programs. Farm Management Solutions Inc. andthe Dept. of Agricultural Economics and Business. Guelph: The University of Guelph.Tyrchniewicz, E. and A. Tyrchniewicz. 2005. Vision and Strategic Direction Options for theCanadian Agricultural Sector. Ottawa: Canadian Agri-Food Policy Institute. http://www.capi-icpa.ca/PapID25_Tyrncheweicz.pdf (accessed September 27, 2006).United States Department of Agriculture. 1998. A Time to Act: A Report of the USDA NationalCommission on Small Farms. Miscellaneous Publication 1545.United States Department of Agriculture. 2006. Farm Family Income. USDA Farm Bill Forum.http://www.usda.gov/documents/FARM_FAMILY_INCOME.pdf (accessed May 20, 2007).Zahniser, S., E. Young and J. Wainio. 2005. Recent Agricultural Policy Reforms in North America.Economic Research Service, United States Department of Agriculture, Electronic Outlook ReportNo. WRS-05-03. http://www.ers.usda.gov/Publications/WRS0503/ (accessed July 21, 2006).

multiple discourses on crisis: farm, agricultural, and rural policy implications

Documents