Economics Volume II: Modern Economic Problems

by Frank A. Fetter

§ 1. #Size of farms, and total farming area#. The average area of farms has varied from a maximum of 203 acres, in 1850 (the first figures), to a minimum of 134 acres in 1880, being 138 acres in 1910. A better index, perhaps, is the average improved area per farm, which has been more nearly stationary, varying from a maximum of 80 acres in 1860 to a minimum of 71 acres in 1870 and 1880, being 75 acres in 1910. Here again the statistics require interpretation, for in the spread of the frontier the addition of large farms in the arid and semi-arid regions may raise the average, or the breaking up of large plantations in the South may decrease the average, without this indicating any essential change in the technical conditions of farming in the country generally. Since about 1900 the total area in farms has increased very slowly. Between 1900 and 1910 the increase was only 4.8 per cent; whereas a larger increase occurred in the area of improved land, 15.4 per cent, and the unimproved area in farms decreased 5.6. Future changes of farm areas may be expected to be of this same nature, mainly in the improvement of rough pastures, swamps, partly cleared woodlands, and desert lands awaiting irrigation. An increasing population will have to be provided with food and other products of agriculture on a farming area that henceforth will be increasing less rapidly than it has in the past and than the population increases.

§ 2. #Influences acting upon the size of farms#. In these averages for the whole country many conflicting influences unite and neutralize each other. Making for smaller farms is the breaking up of large grazing areas in the West into smaller general purpose farms or irrigated fruit districts, and of larger general farms in the North and East into small poultry, flower, and fruit farms. Opposed to this is a movement toward the merging of farms of 50 to 100 acres into larger farms of 300 acres, more or less. The economic cause of this movement is interesting and important. The typical and economic size of farms when the Atlantic states were settled, was determined by the use of hand tools, which permitted a man and his family to operate a farm of about 75 acres of which about half was tilled and the rest was in permanent pasture and woodland. The fields were small and were laid out irregularly, which was no disadvantage for hand cultivation. But for the most economic use of land in field crops and under more modern conditions it is necessary to have pretty level fields, of regular rectangular shape. The farm unit should be of such extent as to permit of the proper use of the soil by rotation of crops, and to employ fully the best modern labor-saving machinery for each purpose. Numerous recent agricultural surveys point to the conclusion that for general farming this unit is a comparatively large area of about 300 acres.

These conditions offer a reward to those agricultural enterprisers who can purchase lands at a price based upon the high costs and lower yields of the older methods and cultivate them at the lower costs and with the larger yields of the newer methods. This movement, therefore, toward the consolidation of smaller into larger farms is likely to continue in many communities for several decades. This is likewise an advantage to the community in increasing the production with less labor. But the net effect upon the social life of the countryside is more doubtful, and calls for careful consideration.

§ 3. #Self-sufficing versus commercial farming. The typical American farming family once produced nearly everything it used, and used nearly everything it produced. It was very nearly a self-sufficing economic unit, "a closed economy," as it sometimes called. Food, clothing, fuel, lumber, houses, furniture, tools, were on the farm carried through the various processes from the first gathering of the raw materials to the finished product. They were then consumed by the farm household. It is true that even in the first settlements there were some craftsmen, cobblers, millers, weavers, blacksmiths—whose services and wares were got by trading some of the surplus products from the farms—butter, cheese, eggs, wool, hides, furs, live stock, grain lumber. A few rare commodities of foreign make found their way to the farm through peddlers and merchants; but altogether the goods produced outside the farm were a small fraction of the family's consumption, and were exchanged for but little of the farm's production. Most farmers tried to produce for themselves, as far as possible, everything their families needed, when the soil and situation were poorly suited to the purposes. True, there were early some exceptions to the general rule, where only one kind of crop was taken from the land. Such was the forest product of masts, shingles, lumber, and turpentine, and the great southern staple, tobacco, and later, cotton. The exceptions have been tending to become the rule in more and more communities. Farmers have been specializing more and more in the kinds of products to which their farms are adapted in respect to soil, relation to market, and otherwise. These products are taken to market and sold for money with which are bought the things needed for use on the farm.

§ 4. #Farming viewed as a capitalistic enterprise#. Thus the farm comes to be looked upon more and more, not just as a home, but much as if it were a commercial enterprise or a factory, by which products are made for sale. This change, to be sure, is far from complete, as the figures for the average farmer's income show that a large share of the family living still comes from the farm. It has gone on much further in some districts than in others, as is indicated in the types of farming discussed below. But just to the extent that the farmer grows crops to sell, his outlook on his work undergoes a change. He is less exclusively a farmer, concerned with the technical processes of farming; he must be more largely a business man. Like a manufacturing enterpriser, he buys the factors of production, combines them into new products, and sells them again. He becomes interested in market conditions and prices. He grows more commercially-minded. He views the farm no longer as a fixed area, but one that may be enlarged by purchase or by rental, and that may be reduced by selling or letting the less needed parts. One-fifth of farm owners now rent additional land. In commercial farming the land is not contrasted with capital as something apart, consisting of the value of the equipment and stock; but the whole complex of land and other goods is thought of as a capital-investment. The greater ease of transferring landed-property in America and the greater mobility of our population have always made it more natural here than in Europe to look upon land as a capital investment. This view is now becoming more general as a result of the commercializing of farming enterprise.

This change has been favored by other influences. Particularly has the use of machinery and of other equipment, calling for a larger investment per man and per acre, been making agriculture, in its form of enterprise, more and more like manufacturing and commercial undertakings.

§ 5. #Diversified versus specialized farming#. To be self-sufficing a farming family must carry on general farming, that is, must produce a diversity of products. As farming becomes more commercialized it necessarily becomes somewhat more specialized, and produces a smaller variety of products. In some parts of the country and on particular farms this specialization is extreme: in California, citrus fruits, or prunes, or beans, may be the only crop raised; wheat in Kansas and the Dakotas, and dairy products in thousands of farms surrounding the great cities, are the main, tho not the exclusive products. Many farmers in these districts have no gardens or orchards, keep no cow, and buy much or all of the grain for their horses, as well as milk, butter, vegetables and fruits for their own use. Poultry and eggs are shipped in trainloads two thousand miles from the Middle West to California to be consumed by orange growers. Many farmers in the East no longer keep sheep, pigs, or beef cattle, and they buy out of the butcher's wagon all the meat except fowls used by their families. This partly explains the decrease of live stock in the whole country in recent years and the increase in the price of meat.

§ 6. #Conditions favoring diversified farming#. There are, however, limits to the net advantage of specialization in crops, and competent authorities on agriculture question whether in many cases that limit has not been readied and passed. Most farms have a variety of soils and of conditions—hilltops, slopes, bottom lands—which are suitable for different purposes. A rotation of crops is necessary to get good yields. Live stock must be kept to maintain the fertility of the land, which deteriorates fast if hay and grain are continually sold. Some live stock can be kept on every farm very cheaply with the food that would go to waste otherwise. The specialization in stock raising in the prairie states ceased to be profitable when lands became more valuable. Specialization in wheat production in the states just west of the Mississippi is possible only so long as wheat will grow on the virgin soil without costly fertilizers. The cotton farmers of the South, especially the negro farmers, have been forced by debt and thriftlessness into a one-crop policy that is now seen to be wasteful in the long run. A variety of production is necessary to employ labor somewhat regularly on a farm throughout the year. These and other conditions will make most farming always an industry of comparatively diversified products. Only 1 per cent of the farms get as much as 40 per cent of their receipts from fruit; 2 per cent get that much from tobacco; 3 per cent from vegetables; 6 per cent from dairy products; and 19 per cent from cotton. The remaining 60 per cent of receipts were in most cases from various sources, and these figures did not include the value of produce consumed by the farmer's family.

§ 7. #Intensive farming in Europe and America#. No other farm problem interests the city man so much as that of increasing the production of the land. To most city men farming hardly seems to be an occupation giving livelihood and life to the farmer; it seems rather to exist for the sole purpose of feeding men living in cities. The city man, therefore, measures the success of farming not by the farmer's income, by the level of countryside prosperity, but by the number of bushels per acre raised to ship to town. Every city newspaper and magazine contains articles pointing to the fact that larger crops per acre are raised in Europe than in America, and broadly suggesting that the American farmer could do as well, if only he would. Foreign travelers comment in like vein on the wasteful use of land in America as compared with farming methods in Europe.

Land is used most extensively, with respect to labor, when it is in forests; somewhat less so when in pasture as care must be given to the live stock; and still less when used for hay, grain, and other crops. But the use of machinery in large fields is far more extensive than the patient work of peasants with their hand tools. The more labor or the more equipment (or both together) that is put upon an acre, the larger the product, but the larger the cost per unit. It is a familiar economic principle.[1] It would bankrupt any farmer, excepting the millionaire amateur, to farm in America by European methods. American farmers, at least many of them, could raise as many bushels per acre and keep their farms as thoroly cultivated as do the European peasants, if wages were as low here as are the peasants' incomes.