International Catholic Rural Association
General Assembly
8-11 November 2000
Rome, Italy

Report on the
Rural Situation in North America

Prepared by
National Catholic Rural Life Conference
Telephone: 515-270-2634 / E-mail: NCRLC@MCHSI.COM


I. Situation of the Economy
Rural America is home to one-fifth of its people. While some parts of rural America have fully participated in the nation’s long-running expansion, many localities have simply been left behind. Only four out of ten rural counties in the United States have captured the benefits of economic growth. These rural growth havens generally have one of three attributes: near a major city; possess scenic and tourist amenities; or situated as a growing hub of rural commerce (such as retail, financial or health services).
By all indications, a large swath of the American heartland has struggled with modest economic gains at best. These rural counties remain heavily tied to the traditional economic base of agriculture. Without question, most of rural America has been left out of the economic boom of metropolitan areas. Poverty in rural America is often unseen, unacknowledged and unattended. The 51 million Americans who live in rural areas tend to be older, poorer, less healthy and less educated than their urban counterparts.
Areas of persistent poverty in rural America are Appalachia, the Mississippi Delta, the lower Rio Grande and Indian Reservations in the West. On average, these areas have large numbers of people without a high school education and living in female-headed households. These rural areas also have higher proportions of Blacks and Hispanics who historically have had trouble gaining access to economic opportunities.
Overall, poverty rates in rural areas have been and continue to be consistently higher than those found in urban areas, which includes inner cities. Compared to their urban counterparts, those living in poverty in rural areas are the "working poor." They often do not receive government welfare assistance; participation rates in social service programs in rural areas are lower than urban areas.
Along with the higher poverty levels in rural America, there is a lack of basic necessities such as health care, good nutrition, education, and essential public services. The varying geography and cultures of the countryside, including areas of isolation and low population density, each provide their own challenges. The creative powers of the marketplace and the welfare safety net of the federal government are failing to attend to rural America adequately.
The Canadian National Farmers Union (NFU) reported earlier this year that farm incomes in Canada have returned to Great Depression-era levels of the 1930s. Seventy years ago, it took a worldwide economic collapse, a stock market crash, widespread unemployment, and a prairie-wide drought to drive net farm incomes to negative values. Today, stock markets are booming, employment levels are fair, weather is generally good, and crops are average or better. The current farm income crisis is unprecedented in times of economic prosperity and stability. The NFU report explicitly states:
"The market is failing farmers, it is failing all around the world, and it has been since at least the late 1970s. The market is failing to return a fair and adequate share of the consumer dollar to farmers. And it is failing to allocate to farmers a reasonable return on labor, management and equity from our agri-food system’s huge revenue stream. Moreover, this market failure is entirely predictable. It is a direct result of dramatic market power imbalances between global agri-food corporations and the family farms that must do business with these firms."

II. Situation of Agriculture
North American agriculture began to face serious price slumps after 1997; the global marketplace started to generate large losses for both crop and livestock producers.
Crop and livestock producers suffered the effects of a decline in agricultural exports, particularly to East Asia during their financial troubles. Most North American producers harvested large crops due to a combination of increased plantings and higher yields. Livestock producers suffered a severe price setback in 1998, with cattle and hog producers getting hit with huge losses. Moderate feed costs were not enough to offset plunging product prices. The most visible economic challenge in the last few years was the sharp slump in farm income. Prices for major commodities have fallen sharply; prices for corn, wheat and soybeans were down about a third in 1999 from the average of the three preceding years (1996-98). Livestock prices have remained weak, especially for hogs.
Farm prices are low for three reasons: (1) global crop supplies are plentiful (good weather in North America and large plantings worldwide); (2) global demand is weak (after-effects of the Asian crisis); and (3) the U.S. dollar has been strong against many currencies. North American farm exports tended to be more expensive than shipments from South American competitors.
Direct government payments to U.S. farmers have partially alleviated the problem of low farm prices. Government payments compensate for farm income taken away by the market. The U.S. Congress approved the third big bailout of the farm economy during the summer of 2000: a $15 billion package of cash payments to growers. Substantial government emergency payments were also made in 1998 and 1999, and most observers see another large payment in 2001 as well.
Although farmers continue to look for some improvement in the marketplace, profits next year may once again depend on government payments. If the government grants farmers another round of subsidies, then public pressure will force a change in current farm policy that cannot politically sustain large emergency farm payments.
On the other hand, if government subsidies retreat from current high levels without improvements in the marketplace, farm income will fall sharply and cause further problems for rural economies.
Farmers have been forced to accept most of the risks in the food production chain – weather, commodity prices, insects and market collapse – and at the same time have been largely excluded from sharing in the profits. Because global corporations capture the profits before they can make their way back to farms and rural communities, those farms and communities are becoming poorer and less numerous.
In the mid-1960s, there were 430,522 Canadian farms; today, only 276,548 remain. In the United States, a steady decline has continued throughout the 20th Century so that less than two percent of the population are commercial farmers. Farms tend to be either small, part-time operations or very large, supply-chain ones.
This two-tiered farm system has been called an unintended consequence of industrialized commercial agriculture. Some academics believe that low farm incomes and rural depopulation are integral parts of the agricultural market structure that corporate and elected leaders in North America and around the world have created. Rather than an agricultural quilt of independent proprietors across the countryside, farmland is contracted into a corporate-controlled food system comprised of factory farm units and empty main streets.
There is a sense of betrayal and surrender in the countryside that is publicly recognized by only a handful of political leaders. Farmers and citizens once relied on their government representatives to regulate the marketplace for the common good. For North Americans today, the rapid increase in size and power of agribusiness corporations has been accompanied by a marked decrease in a government’s willingness to oversee or regulate agri-food and allied markets.
Government leaders sign trade agreements, such as the North American Free Trade Agreement, which bind their hands while global trade fosters greater corporate growth, wealth and power. In the countryside, farmers have watched their incomes and prospects decline sharply over the last two decades as market competition gives way to corporate concentration. Without elected representatives using their political power for the good of the people, the global trend of market consolidation will continue for the benefit of a few.
The sense of betrayal in the countryside is felt by those who remain connected to the land and to a rural way of life. Canadian and American citizens alike are encouraged by popular media to castigate their own farmers for over-production problems and emergency bailouts. Farmers are told to blame themselves as well, or a host of "scapegoats" such as other farmers around the world and various foreign governments.
The real problem is the serious imbalance of market power and the equitable sharing of agri-food profits. For two decades now, political and corporate leaders have successfully sabotaged farmers’ attempts to understand and solve that economic bias in the market system.

III. Perspectives and Programs for the Future
North America is undergoing a watershed of change in the structure of production agriculture as the 21st Century begins. The changing structure is defining who will remain in the farming industry of the new century.
According to the Center for the Study of Rural America (connected to the Federal Reserve Bank of Kansas City), the key component is an integrated business alliance known as a "supply chain". Farmers will no longer make independent production decisions and sell their crops at the local elevator. Rather, farmers are more often signing a contract with a dominant food company to deliver farm products on a set schedule.
These supply chain alliances declare themselves highly efficient, but they also determine who does business and who gets to farm. While it is true that the number of farms has been falling for decades as full-time farm operations have greatly expanded to drive costs down, the supply chain structure locks in control for global corporations. An agribusiness firm putting a supply chain together would prefer fewer farms in order to minimize the costs of managing a highly integrated food system for the world.
Clarifying this real problem for North American agriculture is a first step; the next step is to differentiate between two concurrent calls for a "new agriculture". Perhaps these two distinctive perspectives can co-exist simultaneously, but they are more likely to confront or contradict each other.
One perspective, already introduced above, sees a future world of global connections and a new way to do agribusiness. Farmers will need to form contract relationships with corporate-controlled "supply chains" which reach from genetics to grocery store shelves. Tight orchestration of production, processing and marketing will be the norm. The new rural landscape will have hubs or geographical concentrations determined by global agribusiness interests.
The other "new agriculture" is a dramatic break from 20th Century practices and sees itself as a renewal of natural resources and rural life. This new agriculture challenges the cult of efficiency and responds sensibly to the multiple functions of farm life. Concern for community, stewardship and proprietary farmers living on their own land are social goods recognized in equal standing with sufficient and sustainable production of food and fiber.
This is a renewed agriculture that retains control among farm families on the land rather than a handful of corporate executives in boardrooms. This inspired perspective is sometimes known as "sustainable" or "alternative" agriculture, and is best expressed through local food systems, community-supported agriculture and personalized farmer-consumer relationships.
The choice between the two perspectives is currently argued in various forums in North America and will become important in next year’s farm bill debate in the U.S. To complicate the matter, public action must address three immediate problems as the two competing perspectives struggle for acceptance:

(1) There is the immediate problem of excess supply (grains, dairy and livestock) with no means for dealing with the problem except to let low prices squeeze out producers at the periphery or margins. While low prices squeeze everyone, the reality is that supply is not noticeably reduced unless the squeezing also produces a land-use shift in the peripheral areas. If a new farmer or renter takes over production, no lessening in supply occurs.

(2) There is a growing social problem as concentration dramatically transforms the structure of agriculture. Farmers are faced with the multiple threats of vertical integration and concentration on both the input and output/processing sides.

(3) There is the genetically modified seeds/food controversy which continues to draw concern from consumers. This controversy is related to the structure question; many are concerned that large "life science" companies will eventually control the world's food supply. However, public debate is slowing the introduction of transgenic seeds in North America and shaking the confidence of agri-food firms.

These problems are a direct result of an agricultural system that encouraged all-out production. A thriving collaboration of sustainable agriculture, environmental and consumer groups are challenging the propaganda by large agribusiness firms that all-out production is essential. Excessive production may benefit processors, but society as a whole realizes little benefit since low farm gate prices do not readily translate to lower food prices. By definition, a democratic society cannot allow an oligopoly of agribusiness firms to control the entire agri-food sector. Nor can such firms be allowed to demolish open, free and transparent markets.
If market oligopoly in the food system is not stopped, then competitive options disappear and farm producers become highly vulnerable within a structure of geographic-specific contract production.
The "new agriculture" perspectives identified above suggest very different future geographies. The "supply chain" perspective leads to concentration within the hands of a few global agri-food giants. With only a few (but huge) farms required, fewer businesses and communities are needed. The countryside becomes exclusive pockets of mono-cultural production.
In the other perspective – perhaps best called "civic agriculture" – the countryside is complete with diverse farm communities and vibrant rural life. Productive farms are independently owned, family focused and properly managed by stewards of the land. This alternative perspective, however, requires a dramatic change in public policy that realigns political and economic forces. This cannot likely occur without a social and cultural struggle. Thus, there is a clear and present need for a prophetic voice.

IV. Action of the Church and Catholic Rural Associations
The clearest policy statement of the U.S. Catholic Bishops on agriculture is the 1989 publication Food Policy in a Hungry World: The Links that Bind Us. This statement was developed by a task force of bishops who looked at food and agriculture issues from the perspective of the 1986 pastoral letter Economic Justice for All. This pastoral message, which examined the impact of the economy on people, devoted a section to food and agriculture. Food Policy in a Hungry World continued the bishops’ analysis of the U.S. food system and provided directives for actions.
The bishops began with their pastoral experience: Hunger existed in North America and abroad despite abundant global production. They recognized many other social realities:
• Farm families were forced to leave their farms under a prevailing economic dictum of "get big or get out."
• Exploitation of farm labor and food process workers continued as a result of agricultural industrialization.
• Grain companies, livestock packers and food retailers took a large and disproportional share of the food dollar, leaving farmers with dwindling income.
• National trade regulations harmed local food systems in favor of global firms.
• Monocultural farming practices, supported by government policies, caused damage to land and water resources.

In response, the U.S. Catholic Bishops warned that current production practices – vertical integration and concentration – would consolidate power in the hands of a few. They called for a food production system that maintains widely dispersed and diverse agricultural communities. The core Christian values of community and family life, environmental stewardship, and civic participation – all traditionally expressed in rural life and culture – should be supported through public policies that assist the economic base of widespread ownership of productive land. This goes hand-in-hand with the thriving of democracy.

Therefore, the U.S. Catholic Bishops affirmed that:
• farming is a valuable form of work;
• opportunities for beginning farmers should be expanded;
• farms ought to be moderately sized and widely dispersed around the country;
• protection of natural resources must be central to farm policy; and
• food security is best managed through local food systems.

Public advocacy by the U.S. Catholic Conference and the National Catholic Rural Life Conference have consequently focused on:
• Countering agribusiness concentration.
• Supporting sustainable agricultural practices.
• Calling for authentic rural development.
• Upholding rights of migrant farm workers.
• Standing in solidarity with minority and small farmers.

In a spirit of solidarity with farm, labor, consumer and environmental groups in North America, the National Catholic Rural Life Conference works towards a just agricultural system rooted in principles of social justice found in the Church’s sacred teachings. These principles – also called a Catholic rural ethic – uphold and respect the following: dignity of the human person, the common good, solidarity, subsidiarity, universal destination of goods, integrity of creation, and preferential option for the poor.

Conclusion
In the 1995 encyclical Evangelium Vitae, the Holy Father reminds us that when cultural, economic and political currents encourage an idea of society excessively concerned with efficiency, a "conspiracy against life" is unleashed and a "culture of death" is promoted. Pope John Paul II instructs us not to embrace such a culture in the name of progress.
Thus, the National Catholic Rural Life Conference calls attention to the crisis in American rural life. We ask our members to pray and act in charity. We invite faith groups and parishes to exercise their role within communities and renew urban and rural connections. We urge people of good will to look critically at our acquisitive society and seek new paths to address our cultural aspirations. We wait with eager longing for those individuals who "walk as children of light" and bring about a creative transformation of our conflicted lives.
In the spirit of Evangelium Vitae, we acknowledge that Christ alone is master of all the events of history: We, the pilgrim people, the people of life and for life, make our way in confidence toward "a new heaven and a new earth" (Rev. 21:1).

_________________________________
National Catholic Rural Life Conference
Domus Mariae / Rome, Italy
November 9, 2000