Industrial animal agriculture is detrimental to the food security of surrounding rural communities

MFA Livestock and Food security finished
In this next section, I focus on confined animal feeding operations (CAFOs) that are the hallmark of industrial animal agriculture, and how they impact the food security of surrounding communities.

Note, this section primarily relies on references and reports on CAFOs in rural USA. The US farming system is the most studied farming system in the world, in both length of study and depth of study. However, given that CAFOs in other countries often explicitly model themselves on US CAFOs the lessons are likely to be applicable to other countries. For example, the US model of contract poultry farming is growing across India and Vietnam.

According to its proponents, there are two key benefits of industrial animal agriculture that are relevant to food security: Firstly, it can produce animal products cheaper, so they become more affordable for all. Secondly, CAFOs contribute to the surrounding rural economy. The food security case for CAFOs is that with lower prices and a growing economy (and presumably growing incomes), food security is improved though greater food access. While these points sound good in theory, in practice it is often not the case. I address both these points in turn.

Industrial animal agriculture and food prices

Intensifying animal agriculture does not inherently lead to lower prices for consumers. It is true that larger farms can exploit economies of scale to reduce costs. However, a 2009 review of the US agricultural census found that once a farm grows beyond a certain size threshold, getting bigger no longer brings any productivity benefits. Strikingly, in the case of US hog farming, this "productivity maximizing size" is actually below the size of the majority of modern CAFOs. This suggests that farms do not need to be nearly as big as they are in order to reap all of the benefits of economies of scale. One factor that consistently improves with size however, is political power. Meat corporations (often called “integrators”) may be long past the point where scale makes them more efficient, but their ability to influence the market to their advantage continues to grow.

More damningly, where CAFOs can reduce costs, they may not pass most of these savings onto consumers. Interestingly, agricultural economist John Ikerd has pointed out that it is theoretically possible for large meat integrators to use economies of scale to outcompete smaller farms and maintain market dominance, whilst capturing all the extra revenue for themselves and not reducing prices to consumers.

A report on Iowa hog farms by Food and Water Watch found some evidence that this has indeed happened. They studied the effects of the industrialisation and consolidation of hog production in Iowa from the 1980s until present. They show that only half of the price savings from intensified farming were passed onto consumers. The other half were absorbed as profits by slaughterhouses, meat processors and retailers. We can infer this by the fact that the price paid to farmers per pound of hog decreased by $2 between 1982 and 2017 (adjusted for inflation). At the same time, pork prices for consumers only fell by $1. A blog post analyzing USDA data between 1999 and 2012 also suggests cost savings from US industrial beef and chicken production have not been passed onto consumers.

![][image5]

Why are the touted price benefits so small, even as we see falling animal prices for farmers? Integrators are now extremely large, and often the only option for cow or pig farmers to sell their livestock to. As a result, they hold enough power to dictate terms to farmers. In the extreme case of contract chicken farming, the integrators actually own the chicks that they give to farmers to raise. Contract farming represents 90% of US poultry, and is also highly prevalent in countries across the world such as Thailand, though is less prevalent in Europe

Another way that industrial animal farming can fail to deliver promised price reductions is when large corporations avoid competing with each or, or worse, collude. A report by the University of Johannesburg suggests this may be happening in Southern African countries such as South Africa, Malawi and Zambia. Concentration in the poultry market may be particularly vulnerable to anti-competitive practices, because of high barriers to entry (making it hard to disrupt collusion) and the lack of meaningful differentiation between products (limited innovation in chicken genetics makes competition difficult and collusion a more appealing way to increase revenue). They note that just two multinationals, Tyson Foods of the USA, and the EW Group from Europe, now control more than 90% of commercial poultry breeding stock across these countries. Whilst direct evidence of collusion is predictably hard to find, we can speculate about it, as both companies own shares in each other (cross shareholding), and conduct joint ventures. Moreover This may have contributed to the fact that Southern African poultry producers pay relatively high prices for day-old chicks.

The argument that CAFOs can drive down prices for consumers rests on the assumption of fair and competitive markets. But the reality is that the integrators themselves have broken the market to their advantage. Even the USDA has warned that since 2016 there are signs the aggregation of the beef industry is hurting farmers and consumers. In sum, industrializing animal agriculture does not improve the food access of animal products through price nearly as much as is claimed.

CAFOs reduce food access through damage to local economies

Far from being pillars of rural communities, industrial animal agriculture has been almost entirely negative for rural America. A report by the Pew Commission summarizing nearly all research on the topic up to 2008 concluded that "more than 100 studies and reports referred to herein make it clear that whatever benefits might accrue from increases in market power resulting from industrialization are not realized by affected rural communities".

By damaging rural economies, CAFOs make surrounding populations more food insecure. When a local economy declines, the income and wealth of the population also declines, reducing their ability to afford a sufficient, nutritious diet. This is the second way that CAFOs reduce food access. It is particularly tragic that CAFOs damage the economies and food security of rural communities, as they are more likely to suffer from food insecurity in the first place.

The main way that CAFOs damage local economies is by extracting profits without reinvesting those profits into local communities. CAFOs are often highly vertically integrated, meaning they use their own suppliers and employees. Whilst a local farmer might have machinery fixed by local mechanics, get feed from local suppliers, and employ local veterinarians, CAFOS handle all of this themselves, depriving local professionals of work.

When CAFOs ignore local communities and purchase products and services from their own networks, local economies stagnate and jobs are lost as local businesses have few people to deal with. One review found that CAFOs had negative effects on community wellbeing in 41 out of 51 studies. No studies found consistent positive effects. Communities near CAFOs see their businesses decline. Wages stagnate, their middle class disappears and poverty rises. There is higher pressure on local government, leading to poorer quality schools and public services. Ultimately, there is a deterioration of community social fabric, with lower civic participation, and fewer churches and community organizations.

Other issues include reduced home values, with properties within 3 miles of a CAFO losing up to 25% of their value. The only facility type that hurts housing prices more than CAFOs are landfills. When Greenpeace Interviewed communities living near CAFOs in Spain, France, Italy and Denmark, people reported being unable to go outside due to air polluted with ammonia from animal waste. Residents with poor health also mentioned how expansion of these farms would force them to abandon their homes and leave the area. CAFOs not only force people to move, but mean that people get a lower price for their home when they sell it. This means that CAFOs directly reduce the wealth of people living near them, even if they move away. In the face of all of this, communities may struggle with food security as they do not have the means to ensure food access.

Counties with CAFOs see jobs decline over time. Food and Water Watch documented that between 1982 and 2017, counties in Iowa with larger industrial hog farms experienced greater declines in median household income and greater job losses than the state average. On the other hand, the high welfare, low intensity hog production (from the brand Niman) generates 3 times as many jobs as the average Iowa CAFO, twice as many indirect jobs, and twice as many "induced jobs". Induced jobs here refer to jobs that are supported by agricultural workers spending their money locally. While Oregon’s dairy CAFOs have increased production by over 50% in the past 20 years, jobs have grown only half as fast, and 0 net jobs have been created in the last 10 years. It has grown into a $1B industry, yet has employed just 2,504 people, providing 0.13% of jobs in the state. Whilst positive from a GDP perspective, it is plainly not a significant job creator.

Globally, multiple countries are seeing reduced agricultural employment as they industrialize. Brazil's number of agricultural jobs peaked in 2005, and China’s in 2009:
![][image6]
Figure 4: Brazilian meat productions vs agricultural jobs
![][image7]
Figure 5: Chinese meat productions vs agricultural jobs

Medium-long term, CAFOs also compromise food security of communities by damaging the surrounding land and waterways. This can compromise food security directly by damaging crop production and drinking water, but also indirectly, if the local community relies on nature-based tourism for their livelihoods. There are countless cases of CAFOs producing so much manure/excrement that local streams, rivers and lakes are polluted. Industrial chicken farming in the UK has polluted the River Wye with so much phosphorus, experts claim that damage to local wildlife may soon be irreversible. As a result, the industrial agricultural corporation primarily thought to be responsible, Avara Foods, is currently facing a multi-million pound legal case that hopes to see local residents compensated for loss of business (among other demands). The Mayan Community of Homun, Mexico has successfully resisted the building of hog CAFOs on their lands. They argued that the CAFOs would pollute the “Cenotes”, which are caves containing wells with spiritual value. In addition to the cultural heritage arguments against the CAFO, there is arguably a food security argument, as some cenotes provide income to the community through tourism.

![][image8]
A picture of a cenote, a spiritual water cave with high cultural significance to the Mayan community of Homun, Mexico. Picture reproduced from this report.

Industrial animal agriculture may also distort markets and damage communities in neighboring countries. Over the last 20 years, US Integrators such as Smithfield Foods have exploited holes in US-Mexico trade policy to drive Mexican hog farmers out of business. They produced animal feed in the US and sold it to their farms in Mexico for extremely low prices. With feed costs that were sometimes as little as half that of their Mexican competitors, US companies stormed their way to being 30% of Mexico’s Pork market in a few years. They were able to do this because the feed was grown using generous US agricultural subsidies (i.e. US taxpayer money). In the past few years the US has made up 86% of Mexico’s pork imports, which is 46% of its demand, meaning that 40% of Mexico’s pork comes from US companies in the US with more from US owned companies operating out of Mexico. Far from improving food security by producing cheap food, industrial pork production has driven Mexican farmers out of business using US taxpayer money, and helped Mexico become the most overweight nation in the world.

In sum, industrial animal agriculture compromises the food access of surrounding rural populations in a number of ways. It decreases jobs and hollows out rural economies.