Local Governmental Functions Affected By the Growth of Corporate Agricultural Land Ownership: A Bibliographic Review

Abstract

O NE of the more emotionally charged subjects in the past few years has been the role that corporations have been and will be playing in the agricultural system and rural land ownership patterns in the United States. There have been attempts to establish large-scale agricultural enterprises throughout American history; however, some authorities contend that corporate farming until recently has not been successful in the United States because of an insufficient supply of labor and the lack of tax advantages.1 This is probably an accurate but somewhat simplistic assessment of the situation. Corporate entry into agriculture may be associated with other trends in agricultural technology and development. The continued growth in farm size, rising farm production costs, environmental concerns, tax policies, and rural community changes are all interrelated to some degree, although the relationships are none too well documented in contemporary literature. One basic problem in a discussion of corporate farming and corporate land ownership is that little research has been done to determine the extent of its present influence and the implications of a more extensive involvement for the rural community.2 Richard Rodefeld sees one major problem as that of inadequate empirical information about corporate farming. Indeed, it was not until the 1969 U.S. Agricultural Census that data were obtained on corporations in agriculture. A second problem is that corporate farms vary in size and goals from the large industrial type to the family farm, which may be incorporated to facilitate business transactions. In the interest of accuracy, however, it should be noted that the major reasons for family farms to incorporate have generally been documented as including: (1) estate planning advantages; (2) greater assurance of business continuity; (3) limited liability; and (4) income tax advantages. The facilitation of business transactions has not been viewed as an especially significant reason for family farm operations to incorporate. Discussions about the merits or demerits of corporate farming, however, seldom make these important distinctions. Rodefeld postulates that the family farm will continue to change and that this change will affect the rural community negatively, but at a much slower rate than if there were a change to larger farm units than the present family farm size.8 The legal form of the agricultural production unit would seem to have certain economic and social implications. Among these might be the vitality, strength, and social organization of our rural communities, the cost of agricultural production, and ultimately the price that consumers pay for agricultural products. Marketing systems in agricultural production are subject to various influences, which include