How industrial farming destroyed local economy; the rise of the CAFO

Michael Shuman in “Local Dollars, Local Sense,” explains the power of local economy, which is an antidote to the collapse of the U.S. system of which we are in the middle.

By Franklin Sanders

Please take time to read Part I of this essay here at, our local economy and Noogacentric free market website.

Family farming and industrial farming

Nowhere have the dangers of abstraction vs. reality been realized more lethally than in the evolution from family to industrial farming. In the rush to abstract and industrialize everything, one thing was forgotten: biology is not a factory. Life is so subtle, so mysterious, so intertwined that its processes cannot be reduced to abstracts like N-P-K fertilizers only, or “one weed-one weed killer.” Of all spheres where all possible outcomes have to be taken into account carefully, where possible unexpected bad outcomes must be watched for, it’s biology.

On paper, industrial farming appears more productive, but is not in fact when all costs counted, especially environmental pollution and social costs. But even without those imputed costs, low input, closely managed family farms can produce rings around factory farming. The former U.S.S.R. offers the most extreme ex ample, the land of gigantic collective farms that had to import wheat and depended on tiny private garden plots for 80% of its food.

Another example comes from Haiti in its black Creole pigs. Introduced by the Spanish before 1500, these tough native pigs, well adapted to Haiti’s climate and conditions, served 85% of the peasants as garbage collector, soil fertilizer, and savings account. In 1982 international bureaucracies announced that because they were carriers of Asian Swine Flu, all the Creole pigs must be killed so the disease would not spread.

The U.S. promised to develop replacements, and two years later sent the new, better pigs from Iowa – so much better that they required clean drinking water (available to only 20% of Haiti), roofed pens, and imported feed (at $90 a year where per capita income was about $130). The Haitians dubbed them prince a quatre pieds, four-footed princes. Worse still, the meat did not taste as good as the Creole pig’s. Rural school enrollments dropped 30%, rural Haitians ate much less protein, the peasant economy was decapitalized, and soil fertility and productivity was wounded. The peasants were tapped to the tune of $600 million.

Abstractly, the introduced pigs might have appeared superior on paper: faster growers, more efficient meat producers, heavier maturity weights, and more efficient feed converters. In reality, they weren’t appropriate the Haiti’s conditions.

Industrial farming is simply not inherently more efficient than family farming. In fact, there’ nothing more efficient than family farm. Simple size affects that if nothing else. A family with only 200 acres will watch those 200 acres more closely, more intimately, than a corporation with 20,000 acres – every time. If there are economies of scale, there are also “wastes of scale,” and factory farming has discovered all of them.

Don’t forget the human and social costs of factory farming. Driving family farmers off land has reduced the farmer to a rarity, and endangered species. Yet in no way can urban life produce the flexible, forward, and responsible character of a farmer. Quite literally, farmers have been throughout Western history the backbone of a nation, and they remain that today. Yet today’s farmers are not much more than assembly line workers driving a tractor or combine —  an air-conditioned one at that.

Tennessee: From 10,000 dairies to 500

Drive this country from east to west, and look at how much farming is done. Answer: not much. Industrial farming has left vast swathes of formerly productive land uncultivated and barren. (I know personally from Tennessee’s Cumberland Plateau and southwest Virginia.) Yet it can’t possibly be more efficient or even cheaper to drive milk 1200 miles from Florida or 2000 miles from California to Tennessee. Twenty years ago Tennessee had 10,000 dairies. Today she has less than 500.

Don’t overlook the environmental costs of factory farming with its chemical dependency on herbicides and pesticides. These affect cell genetics in exactly the same way as ionizing radiation. In other words, the long term genetic effects resemble being exposed to an atomic bomb.

And in factory farming’s efficiency claims lies hidden another cost: declining quality, the nutritional costs. Animals – dairy cattle, hogs, poultry – are raised in filthy, unnatural Concentrated Animal Feeding Operations (CAFOs) and fed unnatural food. Most grain production has gone to Genetically Modified Organisms, which I refuse for my family and my pigs to eat. Its safety has never been shown. American food is no longer nutritious, no matter how tasty it seems. The taste is achieved with high fructose corn syrup and monosodium glutamate, which both make you want more.

These nutritional costs are now bringing in their train a whole host of social problems, including epidemic diabetes and obesity, auto-immune and degenerative diseases, and sharply falling fertility. How much do agricultural chemicals contribute to rising cancer rates?

I’m sorry, I don’t buy it. Factory farming is not more efficient than family farming.

Local economy to national economy

As late as 50 years ago, the “national” economy existed mostly in the output and exchange from local economies. A panic in New York affected New York, but didn’t seize up every other economy in the country, because local communities didn’t depend on any theoretical “national” economy. Local economies produced most of food they consumed and much of everything else they used.

About the time of World War I national economy began to develop at expense of local economies. The cheap Fordson tractor (1917) converted self-sufficient farmers into consumers for industry. Where once farmers raised their own machinery (horses, oxen, mules) and their own fuel (corn, oats, wheat, hay), now they had to send money off to Detroit for tractors and New York for gasoline. At the same time new roads made it easier to get into town, and radio and advertising began raising the wants of Mama and daughters. No longer satisfied with home-made, they wanted to drive to town and buy clothes.

In the local economy money circulated through all the participants. It was not an abstract of government compiled statistics, but a reality of local people supplying local needs. Farmers sold milk, meat, and produce to consumers, who then used that money to buy supplies & services from local merchants and craftsmen, who then sent that money back to the farmer to buy food, and round and round. The simple act of living supplied the local economy’s motive power and circulation.

Internal economies falter

But once farmers began to send money for tractors and fuel outside the local economy, that circulation was drained off. Where before farmers had little need of money, now, from somewhere outside the community, they had to bring in new money every year.

Meanwhile, the Armistice brought to an end the huge agricultural demand that farmers had been feeding on. In 1921 a depression hit agriculture, and it has never recovered since. After Roosevelt buried holocausts of shoats and boatloads of oranges, the government warned farmers to “get big or get out.” University extension services promoted a style of farming which required ever greater cash inputs for equipment and chemicals.

The more the government “helped” the farmer, the poorer he became. Thousands of family farms disappeared in the 1960s. Bewildered farmers thought they were making money, but in fact were only slowly decapitalizing themselves, as industrial farming and imports brought down the prices they received for their products. The more family farmers were driven off farms, the faster rural populations declined, and the faster local economies dried up.

Corporate chains arrive

About that time, Wal-Mart showed up. And Kroger, and Lowe’s, and Home Depot, and fast food chains. They hammered the final nails into the local economy’s coffin. Now virtually 100% of the circulation in the local economy had to be brought in from outside, earned somewhere else. Local money spent educating youngsters simply fed the brain & population drain as graduates fled to cities for higher paying jobs.

Shifting from local to national economy sprang not only from family farming being replaced by industrial, but also from confounding money and wealth. Across the land local chambers of commerce operated (and still do) on the notion that prosperity can only be created by drawing money from outside the county. Like starving South African farmers in the 1880s, they don’t realize they are standing on acres of diamonds. Lasting prosperity can only be built upon local wealth. The simple act of living can supply circulation to rebuild the local economy – and when labor becomes cheaper in China, the jobs won’t leave the county.

A county north of ours has a population of 11,000, and has always been relatively poor. Yet based on USDA average consumption of milk, meat, and produce, this little county spends $20 million yearly. Think of that: that is a $100,000 cash flow for two hundred farms. Even if locals don’t capture every bit of that (and they won’t), it is still a huge market for local agriculture.

And healthy local agriculture means a healthy local economy, with bakers and butchers and tradesmen and craftsmen of every sort to help farmers spend their money.

What about the rest of the economy? Well, that 11,000 spends another $100 million a year. Surely local merchants can capture more of that.

What are we to think?

Now I know some people will call me a Luddite or anti-capitalist, but don’t start throwing your wooden shoes at my head just yet. I have a point to make.

The world we live in results from the choices somebody makes. We didn’t have a hand in making these Great Mistakes above, so do we have to keep on making them? Or can we make other choices?
Directing the Industrial Revolution into the path it followed, especially the monetary path, was never inevitable. Without fractional reserve banking, government issued currency, and central banking, it might have followed a very different route.

But we don’t have to remain on the wrong path. We can change. The present economic crisis is the most favourable opportunity we will ever see to make those changes. The economic and social system created by the Great Mistakes is failing. It may take a few more years to fall to the ground and expire, but fall it will. In the meantime, on its ruins, we can begin building a more just and stable economy.
Whoa! Stop right there. I am not talking about organizing people and lobbying Congress and passing laws and all the rest of those quixotic and feckless activities that make us think we are accomplishing something while really running in place.

Where do you start? Your local economy. Everything meets in the local economy, so buy local. It sounds like a small thing, but start by patronizing local farmers who grow clean, chemical-free food. The cash flow begins with farmers because they alone, by the grace of God, create something out of almost nothing. More precisely, they harvest the grace of God with seven, eight, or tenfold increases, thanks to seed, chlorophyll, and sunlight.

Boosting the local economy is the clean food or local food movement. This is the greatest movement for freedom to appear in the last 100 years. Mothers who have seen their children’s asthma disappear after a month on raw milk will get that raw milk, whatever black market they have to visit. People who want to avoid poisoning themselves on adulterated, processed foods will find a place to buy clean food, or grow it themselves.

A great blessing: Getting to know your neighbor

In the process of eating and buying locally, you will get to know your neighbors. Learn them. Eventually you may want to invest in their businesses. Rebuilding an economy needs capital, so look forward to a time when you are going to dig out that gold and silver and invest it with your neighbor.

I don’t yet know exactly what that new economy will look like, I only know it has to be built around one principle: love your neighbor as yourself. And I know that when I say we must build an economy on love, folks will roll their eyes and point to their temples. But what is the Golden Rule but the rule of love? What is love but justice, tempered with mercy?

Maybe you can find a better basis for an economy and life with other men, but I doubt it. – F. Sanders

1 Money and Man: A survey of Monetary Experience by Elgin Groseclose. Norman: University of Oklahoma Press, Fourth Edition, 1976. P. 17.

We first published this essay in February 2013. From the May 2009 Moneychanger newsletter. Used by permission. Franklin Sanders is publisher of The Moneychanger, a privately circulated monthly newsletter that focuses on gold and silver and the application of Christianity to economics, culture and family life. We have subscribed to this newsletter for more than 20 years, and consider it a must read. F$99 a year. Franklin is an active trader in gold and silver (he’ll swap your green Federal Reserve rectangles and give you real money in return). He trades with savers and investors outside Tennessee. Subscribe to his daily price report and market commentary on the website. F. Sanders, The Moneychanger, P.O. Box 178, Westpoint, Tenn. 38486 Tel. 888-218-9226.


  1. Joshua

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