Neither ‘family’ nor ‘corporate’ farming: Australian tomato growers as farm family entrepreneurs

Neither ‘family’ nor ‘corporate’ farming: Australian tomato growers as farm family entrepreneurs

ARTICLE IN PRESS Journal of Rural Studies 23 (2007) 75–87 www.elsevier.com/locate/jrurstud Neither ‘family’ nor ‘corporate’ farming: Australian toma...

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ARTICLE IN PRESS

Journal of Rural Studies 23 (2007) 75–87 www.elsevier.com/locate/jrurstud

Neither ‘family’ nor ‘corporate’ farming: Australian tomato growers as farm family entrepreneurs Bill Pritcharda,, David Burchb, Geoffrey Lawrencec a

Division of Geography, School of Geosciences, The University of Sydney, NSW 2006, Australia, b School of Science, Griffith University, Nathan Qld 4111 Australia c School of Social Science, The University of Queensland, St Lucia QLD 4072, Australia

Abstract For the past two decades there has been much debate about the future of family farming. The basic question on which this debate has turned is whether current pressures on family farm systems should be understood as symptomatic of a terminal condition, in which farmers are replaced progressively by corporate ownership; or whether family farms will persist as a social formation, albeit increasingly subsumed by off-farm interests. Using evidence from the Australian processing tomato sector, this article documents the changing social and economic formation of ‘family farming’. We argue that in this industry, the appropriate way to describe farmers is through the deployment of that a new category of farming; farm family entrepreneurs. This phrase is coined to describe the situation where family units remain at the social and economic heart of farm ownership and operation, but in the context where they relate to their land-based assets through legal and financial structures characteristic of the wider economy. As this article explores, this formation seems to represent an accommodating modus operandi for farm units within neo-liberal agricultural governance. Nevertheless, however, this duality of family-based structures and capitalist entrepreneurialism inevitably provokes a series of tensions, whose resolution requires a variety of organizational strategies to be put in place. r 2006 Elsevier Ltd. All rights reserved.

1. Introduction The notion of the ‘family farm’ is a powerful ideological construct in contemporary debates on agriculture, the food system and rural society. It harks back to the Jeffersonian ideal of the Yeoman farmer as providing both custodianship of the land and the moral and economic basis for advanced democracy. Yet, for all its ideological weight, ‘family farming’ appears an increasingly ill-equipped notion to account for social and economic structures of farming in countries where agriculture is regulated along neo-liberal lines. In Australia (along with New Zealand, the world’s leading advocate of neo-liberal agriculture: Pritchard, 2005), total agricultural production has risen steadily, but the number of farms has declined progressively, by about 1.3% per year (Lawrence and Gray, 2000, Corresponding author.

E-mail addresses: [email protected] (B. Pritchard), [email protected]fith.edu.au (D. Burch), [email protected] (G. Lawrence). 0743-0167/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.jrurstud.2006.04.001

p. 38). Recent years have seen considerable media attention devoted to the social and economic transformations of rural Australia (Pritchard and McManus, 2000), and central to these discourses has been the so-called ‘crisis of family farming’. In farmer meetings and populist rural literature worldwide, the standard riposte to explain this phenomenon has invoked the concept of farming being ‘corporatized’; that family-owned structures are giving way to the faceless behemoth of corporate capitalist control. Rural social researchers, however, have treated these claims in somewhat circumspect fashion. Few researchers would contest the general argument that farming has been corporatized, in the sense of becoming more capital intensive, involving fewer but larger economic units, and incorporated more directly within the strictures of off-farm supply chains. But at the same time there remains considerable debate on what these trends mean for the future of family-ownership in the farm sector. As an array of rural social research has demonstrated, the ‘corporatization of agriculture’ is a slippery concept that glosses over the considerable

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variability of social and economic processes within the farm sector. As Friedland (2002) discusses, defining ‘agriculture’ has itself become a conceptual problem for rural studies. Taking this debate as a point of departure, this article proposes a new conceptual category and approach for the examination of these issues. We argue that an integral problem in much of the current literature is that it remains beholden to an abiding predilection to understand observed structures in terms of assumed ‘variations’ or ‘incomplete transitions’ between the ideal-typical categories of ‘family’ and ‘corporate’ farming. What we suggest, by way of contrast, is that in neo-liberal agricultural countries like Australia, where agriculture is increasingly dependent on capital-intensive technologies and where food and fiber markets are governed by the global politics of trade, referencing farm structures by way of these ideal-types obscures rather than clarifies the social and economic formations of farming. Such approaches miss the point that the ‘typical’ farm is now far removed from the ideal-typical family farm origins; yet neither is it akin to a corporate farm. Rather, it represents a distinct social and economic formation in its own right. Although farming remains on a restructuring treadmill dominated by pressures to ‘get bigger’ and to become more capital intensive, it does not follow that these tendencies reflect symptoms of an unproblematic and unidirectional pathway towards the ideal-typical model of corporate farming. Farming may well be becoming more corporatized, but it also retains distinctive social properties (based mainly around family ownership) that separate it conceptually from other segments of the economy. To come to grips with these conceptual themes, we coin the phrase farm family entrepreneurs to describe the situation where family units remain at the social and economic heart of farm ownership and operation, but in the context where they relate to their land-based assets through legal and financial structures characteristic of the wider economy. As this article explores, this formation seems to represent an accommodating modus operandi for farm units within neo-liberal agricultural governance. Nevertheless, however, this duality of family-based structures and capitalist entrepreneurialism inevitably provokes a series of tensions, whose resolution requires a variety of organizational strategies to be put in place. We examine these issues through the case of the Australian processing tomato industry.1 This industry provides an exemplary case for the exploration of the dynamics of family farming, because it has been radically restructured under the impact of market-oriented, neoliberal agricultural policies. In 1984, approximately 350 growers supplied 183,000 tonnes of processing tomatoes (Burch and Pritchard, 1996, p. 109) in a highly regulated domestic market place protected by tariffs and with 1 The term processing tomatoes refers to those tomatoes grown specifically to be canned, juiced, dried or converted to paste.

statutes designed to protect farmers’ collective bargaining powers and rights. By 2004, just 32 growers produced 360,000 ton of product to a liberalized market place characterized by intense import competition and in which the commercial interaction between growers and processing companies has been deregulated (Pritchard and Burch, 2003, pp. 102–126). For the purpose of this article, the specific empirical question we seek to answer is: how has the removal of more than 90% of farmers in this sector within two decades affected the farm enterprise structures, and operations, of the survivors? Face-to-face interviews were undertaken between April and June 2004 with 50% (16 out of 32) of farmers in the Australian industry. While the numbers of farmers surveyed may appear small, this is a reflection of the very phenomenon we are investigating, namely the high level of concentration that has emerged in this sector. Moreover, with a 50% response rate, the survey provides a representative record of the social and economic conditions of farm enterprises in this sector. Respondents were selected following extended discussions with industry personnel in order to ensure a representative mix of farmers. The survey design incorporated a series of set questions administered through a questionnaire, in combination with a semi-structured open-ended section that allowed farmers to explore with the researchers key issues regarding the social and economic construction of farming. Interviews were conducted in farmers’ houses or fields, or at small group meetings of tomato growers held in public spaces like hotel/pub dining rooms. Because the interviewers were known to farmers through previous research, the micro-geographies of interviews blended a complex insider/outsider set of relationships. Additionally, some of the insights reported here ultimately derive from extended participant-observation of the industry in various conferences, workshops and grower meetings during the past decade. As with any single-industry case, caution needs to be invoked when extrapolating from the findings. The Australian processing tomato sector is still subject to the constraints associated with the social and biophysical distinctiveness of this commodity. In the case of the processing tomato, the most significant factor in this regard involves the rigidities associated with three-month growing period between planting and harvest, and the issues associated with a reliance on expensive irrigation water. Growers in Australia can only sell their product to four processing firms, through contract farming arrangements. At least three of these companies are global in their operations and continuously benchmark their Australian operations against those in the US, Canada and New Zealand, which generates considerable uncertainty regarding the longer-term viability of the industry. These particular agri-commercial dynamics mean that the patterns and outcomes apparent in the Australian processing tomato sector may be very different from those in other agri-food sectors. Nevertheless, the sector’s transformation

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over the past 20 years from conditions of managed regulation to neo-liberal market-oriented deregulation, accompanied by the greater and more direct levels of international competition, justify its use in providing relevant insights into the evolving transformation of the farm sector under conditions of neo-liberal agriculture. 2. Rural social research on family farming As introduced by Heady et al. (1953), the concept of ‘family farming’ implies a structure in which ‘the farm business and the farm operator’s household [are]y viewed as highly intertwined, with production and consumption occurring at a central place’ (Mishra et al., 2002, p. 4). In these units: farm families provided most of the inputs used in production and supplied most of the farm’s labor and management. There were few, if any, other claimholders involved in the farm business. Early in the 20th century, farmers and their families did little off-farm work because the costs of such participation were prohibitive. Farm families relied on farming as their primary and usually sole source of income (Mishra et al., 2002, p. 4). Using the analogy of a Venn diagram, then, family farming can be understood as a social and economic formation defined by the intersection of three characteristics. First, family farming takes place on land owned and operated by family units. Thus, family farming differs from share-cropping or corporate agriculture, in which land may be held by landlords and/or investors, but worked by some other group or individual. Second, the agricultural activities on that land are undertaken mainly by family labor under conditions essentially controlled by those same family units. Of course, labor usage varies considerably between different types of agriculture, and at different times of the year (such as harvest or shearing periods) farms may make considerable use of wage-labor. The essential point here is that the family farming system depends vitally and extensively on family-based labor. Third, the concept of family farming assumes that farm families draw their main source of income from the sale of agricultural outputs produced on their farms. That is, they do not farm as a ‘hobby’ or depend upon outside earnings or transfers (such as direct payment subsidies) to maintain family livelihoods. Analyzing the changing fortunes of these units and the rise of larger farm enterprises has been a central concern within rural social research during the past 20 years or so, with two research problems dominating much of this literature. Firstly was the problem of classification. From US research in the 1980s and 1990s, it was observed that intensified economic pressures encouraged differentiation within the farm sector, with some farm enterprises ‘scalingup’ to become larger and more capital intensive, and others falling into ‘part-time’ mode (Buttel, 1998). Related to this, farm-size differentiation encouraged a ‘disappearing mid-

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dle’ in farm sectors (Buttel and LaRamee, 1991). As rehearsed by Albrecht (1992), the argument went something like this. The trend toward fewer, larger and more capital intensive farms is related to technological innovation in the context of a competitive agricultural marketplace. Technologies lower per unit production costs, with those farmers taking advantage of the new technologies gaining temporary profit gains. But as the technologies became generalized, and the windfall gains disappeared, the farm sizes at which further technological innovation could produce financial benefits tended to rise, placing smaller producers at a relative disadvantage. These less competitive farms eventually became uneconomic. They either existed as non-commercial entities propped up by off-farm work, or were sold, allowing land to be consolidated into larger, and more profitable, units. Over time, therefore, the nation’s farm output became progressively associated with very large production units. For our purposes, an interesting aspect of these observations are the difficulties of nomenclature they created when it came to dealing with and classifying the newly emergent class of large, capital-intensive farms. Rodefeld (1978, 1980) and Buttel and LaRamee (1991) adopted the term ‘larger-than-family-farms’ to describe these entities, but perhaps because of its ungainly nature, this term was little used in subsequent research. Other frameworks developed along these lines include ‘Corporate-commercial agriculture’ (Thomas et al., 1996)2 and ‘commodity agriculture’ (Lyson and Guptill, 2004). For its part, the US Department of Agriculture (USDA) has employed a typology that distinguishes between ‘large family farms’, ‘very large family farms’ and ‘non-family farms’ (Table 1). Whatever the terminology adopted, obvious questions arise regarding the composition of each category. For example, the approach suggested by Thomas et al. (1996) has been construed as rather schematic and static—failing to grasp the complex internal social and economic relations, and the dynamic nature of decision-making about life-stage income options, that characterize most farm households (see Mishra et al., 2002). Especially problematic, in this regard, is the relationship between income earned from farm activities, and the total income earned by farm families. Mishra et al. (2002, p. 5) argue that off-farm work has become, in the US, a rational and widespread means of securing income not out of necessity, but as a legitimate career choice. Dual careers are now a feature of at least half the farms in the US with incomes 2 Thomas et al. (1996, p. 357) propose a threefold classification for US farms. The Corporate-commercial form is that of corporately owned, high grossing, farms with large numbers of hired workers. The farming-firm form of agriculture is commercially oriented but involves less ownership of farm land and buildings than does the Corporate-commercial type. Farm operators reside on their land and have quite large investments in machinery and equipment. Small-farm agriculture is that of individuallyowned and family-operated properties, relatively small acreages, and low gross sales.

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Table 1 Farming typology for the US Small family farms (sales less than $250,000) Limited-resource farms: small farms with sales of less than $100,000, farm assets less than $150,000, and total operator household income less than $20,000 Retirement farms: small farms whose operators report they are retired Residential/lifestyle farms: small farms whose operators report a major occupation other than farming Farming-occupation farms: small farms whose operators report farming as their major occupation. There are two subcategories:  lower sales farms: sales less than $100,000  higher sales farms: sales between $100,000 and $249,999 Other farms Large family farms: sales between $250,000 and $499,999 Very large family farms: sales of $500,000 or more Non-family farms: Farms organized as non-family corporations or cooperatives, as well as farms operated by hired managers. Source: Mishra et al. (2002, p. 9). All in US dollars.

over $500,000 per annum (Mishra et al., 2002, p. 7). This complexity in terms of income sources thoroughly complicates the social meaning of the classification schema adopted by the USDA. As suggested by Sofer (2001), this is not a problem confined to the US, with international research indicating considerable variation in the extent to which farm families are pluriactive. In very broad terms, it would seem, we can conceive three classes of pluriactivity within the farm sector: (i) farming households, which derive most of their income from agriculture (ii) mixed households, which derive a significant, but often declining, share of the household income from agriculture, and (iii) non-farming households, which derive a small proportion of their total income from agriculture. The second research problem in the literature has related to the deeper question of how to account for these ensuing agricultural structures. Whereas the reasons for the increasing size of farm units can be explained readily in terms of technological change and the like, less clear was why most remained family-owned as opposed to being taken over by corporate interests. In Australia it is estimated that family units provide the organizational basis for 94% of farms. Corporate-ownership in the farming sector tends to be widespread only in a few specific industries, notably cotton, viticulture, poultry and hogs (Tonts et al., 2003, p. 7). Importantly, Australia’s dominant broad-acre grains-livestock farming systems remain overwhelmingly family-owned, with one estimate suggesting that family structures provide the ownership vehicles for 98% of these farms (Garnaut and LimApplegate, 1998). The key entry point to explain this persistence of familyownership is a set of insights promoted within the ‘new political economy of agriculture’ school that was developed in North America from the late 1970s (Rodefeld et al., 1978; Buttel and Newby, 1980). As recounted by Buttel (2001), this school was inspired by a wish to escape the rigidly apolitical frameworks of orthodox rural sociology.

Scholars connected to the ‘new political economy of agriculture’ sought to position the experiences of farming within the structural logic and development of capitalism. This encouraged detailed consideration of the so-called ‘problem’ of family farming; why family-based ownership systems apparently persist in agriculture to a greater degree than in many other sectors of the economy. Mann and Dickinson (1978) proposed that the divergence between the turnover time for labor and the biological basis of agricultural production delimited capitalist penetration in agriculture. Also at about this time, Karl Kautsky’s The Agrarian Question became partially translated into English (Banaji, 1980), and the re-discovery of this classic text (first published in 1899) provided an important set of conceptual tools for researchers interested in interrogating the relationship between capitalism and agriculture. Writing some years later, Michael Watts summarizes Kautsky’s argument thus: Kautsky concluded that industry was the motor of agricultural developmenty but that the peculiarities of agriculture (its biological character and rhythms—see Wells, 1996), coupled with the capacity for family farms to survive through self-exploitation (i.e., working longer and harder to in effect depress ‘wage levels’) might hinder some tendencies, namely, the development of classical agrarian capitalism. Indeed agroindustry— which Kautsky saw in the increasing application of science, technology and money to the food processing, farm input and farm finance systems—might prefer a non-capitalist [i.e., non-corporate-owned farming] sector (Watts, 1996, p. 232). In general, the ‘Mann/Dickinson thesis’ and research influenced by Kautsky encouraged a line of argument emphasizing the distinctiveness of farming, vis-a`-vis other sectors of a capitalist economy. According to this position, the logic of capitalism is injected into farming obliquely, through formal subsumption, rather than through the direct

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corporate ownership of farms and the implementation of wage-labor forms.3 As such, family farmers could be understood as ‘disguised’, or ‘propertied’ wage laborers (Davis, 1980; and see Mooney, 1988) who were subservient to agri-industry. In the UK writers such as Marsden and colleagues (see Marsden et al., 1986; Marsden et al., 1991; Marsden and Whatmore, 1992) and others associated with the countryside change initiative (see Centre for Rural Economy, 1993) investigated the broader processes of agricultural restructuring which included gentrification of rural areas, a decline in productivism, the emergence of new landscape forms, and landuse planning regulation. One of the main insights from this considerable body of work was that by understanding the diversity of countryside types (‘contested’, ‘clientilist’, ‘preserved’, and ‘paternalistic’) in the UK it was possible to identify not only different forces shaping the structure of, and processes within, rural areas, but also allowed a much more nuanced understanding of the dynamics of change within farming (see Marsden et al., 1993). Thus, in the preserved countryside, agricultural intensification that might damage the environment was seen to be inappropriate. Yet, in the clientelist countryside, large-scale capital was attracted because of opportunities to gain advantage from returns to scale in the context of widespread acceptance that farming was a legitimate activity in that space. As the authors argued, it was not possible to ‘read off’ one trajectory for national agriculture in such a differentiated countryside (Marsden et al., 1993). A good example, here, of the complex dynamics within capitalist agriculture is the issue of contract farming. For many authors (see Davis, 1980; Gertler, 1991; Burch et al., 1992) contract farming became of critical interest, because it provided an explicit rendition of how the logic of capitalism perpetuated family ownership of farms, but under conditions whereby key controls were held by offfarm interests. For the contracting parties (food processors and large retailers), such arrangements provided the capacity to source products from different locations, at different times, and for competitive prices; while all the time not sinking capital into direct farmland ownership. The significant risks associated with farming were left with farmers (Buttel, 1996). For these parties, entering into these arrangements required complex calculations into the anticipated profits that could be gained from the contracts. In general, larger farming units had greater potential to remain viable under these conditions, and it has been long 3 The concept of subsumption refers to the processes by which economic surplus is extracted for use by capital. In advanced capitalism, subsumption generally takes place through wage-labor processes—so called ‘direct subsumption’. Within agriculture however, it is argued that surplus is extracted via so-called ‘formal subsumption’. According to this line of argument, off-farm actors such as processing companies, agrichemical suppliers or financial institutions extract surplus value through the imposition of contracts, unequal financial agreements, or economic dependencies of various kinds (see Mabbett and Carter, 1999; Burch et al., 1992).

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documented that as contract farming systems evolve, there are strong tendencies for the consolidation of farmer numbers (Winson, 1990). The new political economy of agriculture school was particularly influential in Australia and New Zealand. Through the 1980s and 1990s, a vital question within Australasian rural geography and rural sociology was how to apply these general concepts to the particularities of agriculture in these countries. Lawrence’s Capitalism in the Countryside (1987) introduced to Australian audiences key frameworks for these debates. In New Zealand, the research of Le Heron (1993) and Roche (1992) (see Cloke et al., 1990) sought to explain the processes by which agricultural formations were embedded within national economic and political spaces. Alongside these contributions, Fairweather (1992) examined the dynamics of contemporary restructuring in New Zealand, arguing that since the 1980s corporate entities were entering sectors such as horticulture and dairying altering the nature of farmer/ processor relations.

3. Neo-liberalism and the future of the family farm To date it has been observed that the dominant trajectory of change in the farm sector has been to encourage larger average sizes of farm enterprises, but that these have remained mainly family-owned. Absent from this discussion has been the role of agricultural politics. Like any other form of economic activity, family farming is politically inserted within the capitalist economy via the regulatory and governance arena of the state. Yet what is particularly noteworthy here is that the economic status of family farming has been a highly charged policy field within contemporary agricultural politics. Focusing on Australia, the embrace of neo-liberal policies for agriculture has executed a dramatic u-turn in the assumed political relationship between family farms and the nation-state. An earlier political ideology of agrarianism and ‘countrymindedness’ (see Lockie, 2000, pp. 17–19) held that family farming contributed to the nation’s character and moral fiber. By the 1990s, however, these ideas were interpreted by policy-makers as being quaintly anachronistic for the demands of a global economy. The result, not surprisingly, was the broad scale deregulation or abolition of a range of policies that were supportive of family farming. Philosophically, the architects of these policies were largely disinterested with the fate of the farm families affected by these changes: they argued that farm units should persist only to the extent that they are sustained by the market. In 1998, for example, the Executive Director of the Australian Bureau of Agricultural and Resource Economics (ABARE), the Australian Government’s peak rural economics research agency, recommended that family farmers facing financial hardship should obtain welfare and counselling, and then sell their farms (reported in Gray and Lawrence, 2001, p. 39).

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This deregulatory impulse has given greater expression for the logic of capitalism to be incorporated within the social and economic dynamics of the farm sector. Correspondingly, the restructuring of farming under these increasingly explicit neo-liberal conditions is associated with profound changes in economic activities and ownership structures. Their most obvious effect is to give accelerated encouragement to the concentration of farm production into fewer farm units, which commercially and technically are integrated more closely with downstream actors such as processing firms and retail buyers (see Burch et al., 1996; Gray and Lawrence, 2001; Lang and Heasman, 2004). This amounts to a blurring of the boundary between the farm and the corporate-dominated food industry; farming is no longer a distinctively separate field of economic activity, but is a node within an organized and well-articulated agri-food supply chain. The advent of these structures represents a considerable departure from traditional arrangements within which the Australian rural economy operated. This transformation has been embodied through a variety of policy initiatives motivated by broadly similar philosophical conceptions of market efficiency. Government-owned commodity marketing organizations have all been privatized, and most statutory marketing arrangements have been deregulated (Pritchard, 1999; Morgan, 2003). The application of competition laws to the contract farming system has seen individual contracts replace ‘public offer’ contracts. These impositions unequivocally favor larger over smaller farms, a point emphasized in Pritchard’s (1996) analysis of the dairy industry and Pritchard and Burch’s (2003, pp. 95–148) comparison of the Australian processing tomato sector with the more administratively-regulated Canadian context. Family farming has also been challenged by other government interventions seeking to impose market relations on the rural economy. In Australia, the evolution of family farming was underwritten by an array of facilitative government actions, including low (or zero) priced water, telecommunication cross-subsidies, bounties for agri-chemical inputs, free access to advisory services operated by Departments of Agriculture, targeted public investment (in the form of dams and roads, etc.), and a generous ‘handout’ mentality governing natural disaster relief. However, the paring back of these arrangements in the 1980s and 1990s, in combination with the market-based logic of neoliberalism, has meant that many farms are increasingly illequipped to sustain family livelihoods. As such, families operating farms have had to rely increasingly on sources of income outside of traditional farm production. The net effect of these neo-liberal policies has been to radically destabilize family farming as a social and economic formation (see Buttel, 1998). Thus, during the 1990s, approximately 80% of Australian broad-acre agriculture was unprofitable (Robertson, 1997), and by 1994–1995, the sale of farm products accounted for only 37% of farm families’ income. The remainder was made up

from off-farm activities or post-productivist uses of farm land (for example, farm tourism) (Lawrence and Gray, 2000, p. 39). In what is possibly the most comprehensive attempt to estimate the extent of pluri-activity in Australian agriculture, Barr (2004, p. 79) suggests that on the day of the 2001 Australian Census, 24% of persons who listed ‘farming’ as their primary occupation were commuting to work—a likely indication of their participation in non-farming employment. This pluri-activity has also reshaped gender relations in family farming (Alston, 1995; Liepins, 1998). Alston (2004, p. 40) cites evidence indicating that in 1998, women’s paid and unpaid contributions amounted to 48% of real farm income across Australia. 4. Family farming and the Australian processing tomato industry The Australian processing tomato industry provides an exemplary case from which to explore the issues discussed above. With 90% of growers eliminated from the industry over a period of 20 years, the social and economic characteristics of the remaining 10% should present some significant insights into the evolution of family farming under conditions of intensified global competition and neoliberal governance. The starting point for our discussion is the recognition of the fact that survivor farms in this sector continue to be owned and operated through family ownership structures. In 2004, family units owned all but one of the 32 farm enterprises in the industry. This observation suggests that the dramatic growth in size of processing tomato farm enterprises over the past two decades—in 1984, average output per grower was approximately 520 ton but by 2004 it had grown to approximately 12,500 ton—has not been accompanied by a shift to external ownership, despite the significant increases in capital investment, labor requirements, skill levels and managerial capacities implied by such a shift. Yet, as the aforesaid grower survey elaborates, such issues have raised major problems as family farm units attempt to maintain a foothold in production. From extended open-ended discussions with respondents, four key ‘tensions’ are identified that underpin the persistence (or otherwise) of family ownership in this sector. These are summarized in Table 2 below, along with the key strategy adopted by survivor farms for possible resolution of this tension, and the implications that such strategies have for rural policy. These issues are then further explored in the remainder of this section. 4.1. Tension 1: Maintaining family ownership in the face of increases in scale ‘Family farm’ structures may be persisting in processing tomato industry, but their success and involvement critically depends on the ‘shape’ (flexibility) and economic viability of those families. One important theme identified

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Table 2 Tensions and resolution strategies in the Australian processing tomato industry underlying the emergence of a category of farm family entrepreneurs Tension

Strategy for resolution

Implications for rural policy

1. Maintaining family ownership in the face of increased contracted tonnages and scale of farm business 2. Increasing capital requirements from a family business base

Farm partnership structures built around extended/inter-generational family networks

New categories of farm business that do not readily fall within existing frames

Increased bank borrowings plus attempts to seek greater certainty through multi-year contracts Attention to professionalism and selective entrepreneurialism

Steady organizational incorporation of farm businesses within agri-industrial chains

Increased leasing of land

Increased landlordism in the rural landscape

3. Commodity specialization versus diversification: Increased specialization required in the industry against the advantages to farmers of some diversification 4. Access to more land for growing larger contract tonnages

in the research is that a number of the growers with larger contracted tonnages have structured their farm business around extended or inter-generational family units. In the grower survey, 14 out of 16 farmer respondents indicated that family members wholly comprised their farm businesses. The other two respondents described their farm businesses as a partnership between two farm families. Of the farms wholly constituted by family members, six were husband and wife entities; five were constituted by husbands, wives and sons/daughters, and three were constituted by combinations of siblings and their spouses. In broad terms, these findings correspond with Barr’s (2004, pp. 80–81) conclusion that a significant proportion of Australian farm families contains more than one ‘farmer’. His comparison of the Australian Population Census (which counts people) and the Australian Agricultural Census (which counts farm enterprises) suggests that, on average, Australian farms contain 1.4 farmers. Moreover, as Barr acknowledges, undoubtedly this underestimates the extent of the phenomenon because in the Population Census, many women tend not to self-identify as ‘farmers’. (This is despite the fact that, as Alston (1995) has documented, women frequently undertake extensive ‘farm work’, often—but not exclusively—in the form of book-keeping and other managerial duties.) This general conclusion is reinforced in the current case, where nine out of 15 respondents described the wife of the primary male farmer as being a worker in the farm business.4 Therefore, farming in the Australian processing tomato sector can be conceptualized as largely comprising farm enterprises owned and managed by various combinations of husbands, wives, sons, daughters and other close family members. The family farms with the larger tonnages tend also to be those in which sons, daughters and siblings together 4 Note that one respondent to the survey was not married. Of the remainder, one wife was described as not being employed in any capacity, while five wives had off-farm employment. For clarity of terminology, the female partners of the primary male farmer are here called ‘wives’, regardless of their legal relationship status.

Emergent class of international agri-business entrepreneurs

comprise the family farm unit, thus proffering ready and flexible labor access. Moreover, life cycle considerations define farm structures over time; this includes both the raising of children and issues of marriage and divorce. According to a number of respondents, the size of tonnage these farmers were willing to produce varied as family members became engaged and/or disengaged with and from the farm enterprise. Tomato growers designed their contract tonnage aspirations in line with their life cycle and family circumstances. The survey revealed significant fluctuation in growers’ tonnages from year to year as they sought to accommodate the financial commitments of producing within their wider farm and family budgets: To grow this tonnage [approximately 10,000 ton] is beyond a [husband–wife only] family farm, mainly [because of] pressure on the family unit with the risk of failure. The outlay of money to own the land/water and machinery and therefore to grow the crop can be substantial and pretty disheartening for a young farmer. My family grew 200 ha of tomatoes six years ago and then reduced it to 20 ha before increasing it again to [about] 70 ha in the season just gone. [Grower 16]. Another primary male farmer chose to use his sons’ entry into adulthood as an opportunity to restructure and enlarge the family farm business. Several respondents indicated that the arrival upon adulthood of sons and daughters was accompanied by the legal transformation of the farm business into a partnership. In one case, two contracts together for 10,000 ton of tomatoes were met by a farm business that was constituted by four separate families, all related to one another. The use of extended families in this way was also seen to be advantageous given the intensification of modern agricultural management. In processing tomatoes, the advent of night harvesting was identified as severely interrupting family life; the joint participation of a number of families in one farm business meant that such activities could be shared so that pressures were taken off those participants (for example, families with young children or

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aged family members) to whom this work would be a significant burden. Part and parcel of these challenges has been to establish appropriate legal structures in which farm operations are owned and managed. Outside of a couple of specialist research publications (Voyce, 1996; Swan, 2005), there has been little documentation of the legal-corporate structures in Australian family farming. Of the number of various legal options for managing family farms (sole traders; partnerships; proprietary legal companies; discretionary family trusts), the most common ownership structure in Australia is that of ‘partnership’. This type of entity is relatively easy to establish, but can present a complicated legal minefield upon disputes between partners or when it comes to be dissolved. At the very least, it seems noteworthy to comment that what is generically understood by rural social researchers as being ‘family farms’ might appear very differently to lawyers. The incorporation of extended family networks within legal-corporate structures of various kinds appears to point to a means of accommodating the tensions between the (Kautskian) benefits of family ownership in the farm sector on the one hand, and the more formal and managerial functions associated with running a large business enterprise, on the other. Notwithstanding the increasing formalization of farm management credentials, much farming continues to be dependent upon informal knowledge systems taught by parents or learned ‘on the job’. Furthermore, the temporally unpredictable nature of farm work operates to the benefit of owner-managers who can incorporate work into flexible time-budgets, rather than wage-rate systems where labor costs are contingent on formal hourly participation. As one respondent indicated, ‘‘dirt under the fingernails’’ is an essential requirement for effective farm management. But as another noted, the shift to larger contract tonnages involves an inevitable shift from ‘‘farm to [home] office’’ in terms of farm managers’ participation. The construction of large farm businesses built around family ownership seeks to resolve these tensions. 4.2. Tension 2: Increasing capital requirements from a family business base The second tension raised by the survey concerns a range of themes relating to capital and finance. The dramatic increase in contracted tonnage volumes over the past decade required additional capital investments, and raises the question of what commercial strategies these farm families have undertaken in order to increase the scale of their operations. When respondents were asked about how increased production has been financed, it became apparent that there was a continued reliance on the traditional medium of bank borrowings. Eleven out of the 16 respondents indicated that over the past five years they had increased their borrowings from financial institutions, while the remaining five had drawn down their existing

financial reserves. The significance of this finding is that it reveals no evidence of farmers accessing capital for their enterprise via ‘corporatization’, that is, through attracting non-farming interests to invest in their farm business. Again, this insight from the survey reinforces themes expressed elsewhere in the analysis of Australian farming. During the turbulent economic period of the 1980s, there was considerable political and media attention given to the spectacular rise in farm debt across Australia (Argent, 1996). In the context of double-digit interest rates and allegations that lending institutions were not always fully disclosing the terms upon which monies were being lent to farmers, the extent of farm debt became an issue of considerable social concern, and led to the development of an extensive community infrastructure of financial advisors dealing with debt management issues for farm businesses. In discussing this issue with survey respondents, it seems apparent that the low-inflation/low-interest rate macroeconomic climate of Australia since the early 1990s has led to an acceptance of what is considered to be a ‘manageable’ level of debt that is higher in real terms than in previous years. Yet, at the same time, the inherently higher financial vulnerability associated with large debts and the uncertainties surrounding the continued viability of the tomato processing sector in Australia, has encouraged growers to develop strategies for defraying farm income risk. The attempt to gain multi-year contracts from processors has been central to this agenda. Traditionally, processors would contract with a single grower for one year only, which posed considerable problems regarding the reliability of cash flows and the capacity of growers to repay loans on fixed capital associated with tomato production, for example, harvesting machinery (with larger contracted tonnages, many growers now are required to have more than one harvester) and drip irrigation. Multi-year contracts have been struck between some growers and processing firms, and in some instances, processing firms have provided financial facilities to assist growers to invest in necessary farm-based capital expenditures. These initiatives however come with the proviso that individual growers become increasingly dependent upon single processing firms, and there remains a robust debate within the growing community on the pros and cons of these developments. 4.3. Tension 3: Commodity specialization versus diversification The third key theme uncovered by the survey is the increased specialization and professionalism of those farmers who have remained in the industry. Twenty years ago, when there were several hundred growers of processing tomatoes in Australia, the typical farmer incorporated tomato cultivation within a diversified set of farm operations, ranging across horticulture and livestock (Rendell McGuckian et al., 1996). However, with the high attrition rate amongst growers, and the increased average

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tonnage per grower, the survivors now commit a dominant share of their farm business operations to the production of processing tomatoes. Fourteen of the 16 growers surveyed in 2004 indicated that the sale of processing tomatoes accounted for at least 50% of their household income. (Note that this includes all household income, which not only includes monies made from farming but also income generated from non-farming activities by other family members; for example, from salaries earned by spouses, sons or daughters.) Whereas all growers had at least one agricultural side-line (most commonly grains), there was an evident sense that the ability to cultivate processing tomatoes under contract conditions required a high level of professional and technical skill, which growers had acquired as farms got larger and grower numbers were reduced. In this industry, at least, there was no evidence to support findings from other Australian contract farming case studies that decision-making by off-farm actors had led to contract growers being de-skilled (Miller, 1996; Rickson and Burch, 1996). Rather, there was a clear process of re-skilling, as growers moved out of the diversified production of a range of commodities, towards a more complex, specialized and capital-intensive production profile. Also, as specialization has occurred so, too, has the reliance upon the logic of productivist agriculture. The typical farm relies almost exclusively on seeds, chemicals, fertilizers and machinery supplied by agri-business firms. While rotation of crops is practiced (see discussion below), tomatoes are produced as a ‘high tech’ monoculture—with all the productivity-gaining advantages and negative ecological outcomes that that implies (see Gray and Lawrence, 2001; Lang and Heasman, 2004). This level of specialization is significant given that all growers in the survey group had been in the processing tomato industry for an extended period. On average, these farmers had been growing tomatoes for 21 years, with the ‘youngest’ grower having been in the industry for nine years. This suggests that over time, these growers have progressively specialized in this single product. Tracing this transition suggests a ‘chicken and egg’ trail of causality. To some extent it was processor-led; those growers perceived by processing companies as being ‘reliable’ and ‘good’ were rewarded with progressively larger production contracts. At the same time it was also guided by self-selectivity; growers who invested in new technologies and who actively participated in industry initiatives, positioned themselves to be offered larger contracts. An extended cost-price squeeze on gr owers has provided the backdrop to these trends. When inflation is taken into account, the price per tonne of processing tomatoes in Australia fell by almost 70% from 1975 to 2002 (Pritchard and Burch, 2003, p. 104). Although yields have improved during this time, lower real prices for tomatoes encouraged many growers to leave the industry and placed additional burdens of scale and efficiency on those who remained.

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As their dependence on processing tomatoes has grown, so the members of this group have engaged more forthrightly with the industry’s broader institutional structures. A striking social characteristic of this group of farmers is the extent of its international networks. Since the late 1990s, Australian growers have been very active in organizing study trips to key growing sites across the world, including Israel, Turkey, Italy, the United States (California) and Canada (Ontario). They have initiated links with kindred grower organizations in North America and Europe, and have been well represented at the biennial meetings of the industry’s premier event, the World Congress on the Processing Tomato. As an illustration of the visibility of Australian growers, at the 2002 Istanbul World Congress they outnumbered their counterparts from Italy, despite the fact that Italy’s processing tomato output is roughly 10 times larger than Australia’s, and that geographically, the Italians had considerably less distance to travel to the World Congress. Significantly, the Australian growers who attended the Istanbul Congress formed the kernel of the organizing committee of the 2004 World Congress, which was held in Melbourne. Keen entrepreneurialism underlies this international activism.5 In survey interviews, a common perspective emerged from many respondents to the effect that the Australian industry would not survive unless it was continually ‘‘at the crest of the wave’’ with regard to innovations and new technologies. In this regard, growers attending the World Congress and other international meetings display an acute interest in gathering information. At the 2002 Istanbul World Congress Australian growers collectively organized amongst themselves to attend different sessions and then reported back to the whole group at the end of each day’s proceedings. Growers also prepared conference diary reports for distribution within the industry at the conclusion of all meetings. Perhaps more importantly, attendance at the World Congress and other conferences provides a basis for the informal exchange of information and the building of contacts at the global level. In recent years a number of leading growers have used their participation in these forums to cultivate new business opportunities in cognate agricultural fields. In short, the shift towards large and specialist processing tomato growers has been accompanied by the rise of a well-travelled class of farmer who values the pursuit of information and the development of international contacts. In terms of farm structure, the key implication from this development is that extensive processing tomato interests are being incorporated in new and diverse ways within individual farm enterprises. Growers are actively seeking new (and often niche) product areas to accompany the 5 Also of note, the Australian growers have been centrally involved in information exchange with their Californian and Canadian counterparts, and make extensive use of the Internet in tracking price trends, weather conditions and overall industry affairs.

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seasonal, agronomic and cash flow patterns associated with the tomato sector. In this way, farm enterprises in this sector are restructured so that large-scale processing tomato cultivation becomes the business anchor providing cash flow and income for an ensemble of lesser-scale agriindustrial activities, participation in which is determined through a highly entrepreneurial zeal for ‘picking’ the market. 4.4. Tension 4: Access to more land Fourthly, although farm businesses continue to be owned by family units, survey data reveal a complex relationship emerging between the roles of farmer and the role of landowner. As noted earlier, the seminal social construct of a family farm implies a unity between a single farm property and a family whose livelihood is sustained by the agricultural outputs from that property. Yet, the combination of increased tonnages plus the agronomic requirements of the processing tomato sector work against the maintenance of these structures. One of the traditional reasons farmers with single properties involved in this industry typically diversified their operations relates to the soil and disease benefits of crop rotation practices for tomato cultivation. On-farm diversity provided a means for farmers to rotate field uses between seasons and thus optimize their productive potential over time. The same logic of crop rotation however, poses considerable farm management issues for specialist tomato growers with large tonnages; put simply, a grower seeking to produce more than 10,000 ton of tomatoes annually needs a huge amount of land if he/she is to rotate this output across a landscape of variable soil types. Furthermore, growing this volume of tomatoes raises the risk thresholds facing individual farmers, especially with regard to extreme weather events. In northern Victoria, the summer ripening period for tomatoes is occasionally affected by localized hail, which can destroy an entire crop within a single field. At other times (and particularly in recent years) drought has led to significant increases in the price of irrigation water. The farm water management regime established by the Australian State and Federal governments provides an annual allocation per hectare of farmland, and if farmers require additional water, this has to be bought on the open market. Accordingly, if rain fails to materialize over a single property in the key ripening period of mid-summer (January–February in the southern hemisphere), growers may face the financial burden of having to purchase water at high prices, or face the loss of their crop. These tensions of land, risk and the scale of production are resolved through the progressive fracturing of the unitary relationship between farm families and single properties. In the processing tomato industry, the only way growers can meet their large contracted tonnages is either to purchase a number of different properties, or to lease land from other parties. Of the 16 surveyed growers, only three grew their contracted tonnages of tomatoes from

Metric tonnes

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20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 1

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3

4

5

6

7

8

9

10 11 12 13 14 15 16

Respondents ranked by tonnage Fig. 1. Surveyed tomato growers making use of leased land, 2003–2004 season. Key: each bar represents a single grower. Hatched bars represent growers who grow tomatoes only on land they own. Black bars indicate growers making use of leased land.

a single property. A further two met their contracts from production on two or more (non-contiguous) properties they owned, and the remaining 11 utilized leased land. For nine of these 11 farmers, production on leased land accounted for more than half of their contracted volume. Not surprisingly, the farmers with the larger contracted tonnages tended to make greater use of leased land than those with smaller tonnages (Fig. 1). According to the respondents to the survey, land is usually leased for at least two seasons, a period of time deemed necessary in order to provide lessees with the ability to recoup the capital costs associated with the introduction of tomato cultivation (notably, irrigation infrastructure costs). Depending on the circumstances, land can be leased with or without accompanying rights to irrigated water. The leasing of land involving the rights over multiple properties can be understood as the enactment of a strategy by growers to selectively gain access to properties with soil profiles that facilitated optimal-yield tomato cultivation. This strategy reveals the land tenure implications of the dramatic concentration of tomato production outlined elsewhere in this article. However, it may be that the practice of leasing land involves us in some redefinition of what constitutes the ‘family farm’ in this context. Is it likely that we could have expected to see the emergence of a viable and efficient processing tomato sector in Australia if the remaining growers had not had the option of leasing land, but instead had had to purchase additional land? And how does the capacity to lease land lead us to seek a more flexible definition of what constitutes a family farm? At what point—20% leased land, 50% or 80%—do we say that a farm ceases to be a family farm, and becomes something else? We do not attempt to answer these questions at this point, but indicate the need for some greater conceptual clarity if we are to continue to utilize the concept of ‘family farm’ to good effect. 5. Conclusion This survey of processing tomato growers has demonstrated that the boundary of the farm becomes increasingly

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porous as, on the one hand, processing firms and retailers integrate farm activities into coordinated supply chains; and, on the other, the sale of farm produce takes place through privatized channels. The desires of processing firms and retailers to source product from fewer but larger farm enterprises encourages increasing unevenness in terms of farm size and commercial viability. For traditional family farm operations, this leads to a situation in which economic viability is increasingly dependent on sources of income outside farm production. Neo-liberal policy settings in Australian agriculture have systemically threatened to dislodge family farming as a dominant social and economic formation, as family farms are restructured to become ‘family farm entrepreneurs’. Such entities operate as a node within a wider array of agricultural-based commercial and investment activities. Neither strictly family-farm based, nor corporate, the main characteristic of the remaining, successful, processing tomato producers is the harnessing of land and labor, outside the close family unit to fulfill contracts that are too large for any single traditional farming enterprise to manage. These actors conduct business in a different manner from those who, in past decades as ‘family farmers’, relied on the sales of produce from single farms as a main source of income. Where these latter producers have managed to stay in the industry it has been via an articulation with the new ‘class’ of land-based entrepreneurs who require their services to fulfill contractual obligations with processing firms. The small number of processing tomato growers who continue to farm in Australia are not Kautsky’s self-exploiting producers who survive on the margins of capitalism. Rather, they exhibit behavior that is more reminiscent of any entrepreneurial capitalist involved in input into an industrial chain. They have captured a degree of production flexibility in such arrangements while avoiding having become corporate structures. They could, in recent USDA parlance, be considered ‘large family farms’ or ‘very large family farms’ but those descriptors do little to alert us to their production trajectory—something that, as Lang and Heasman (2004) contend, will become increasingly important in defining their acceptability to other players in agri-food chains. The survey results suggest that the persistence of familyowned structures in this industry is underpinned by at least four ‘tensions’ and related strategies for their resolution. In turn, for each of these vectors of change there are implications for the rural policy imagination. They point to a need to revise traditional conceptions of the fate of ‘family farms’ and to revisit the debate about their transplantation. In seeking to maintain family ownership, properties are increasingly relying upon extended and intergenerational family networks. To overcome the difficulties of securing borrowings from banks they are searching out and signing multi-year contracts with processors. In order to extract economic security in a context of heightened international competition, they are becoming more professional and entrepreneurial. And, in

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seeking to increase output (to meet large contract tonnages) they are leasing rather than buying, additional land. Yet, these farm family entrepreneurs continue to utilize artificial chemical inputs and other products of agribusiness thereby conforming to, rather than challenging, the productivist paradigm that has been implicated in continuing environmental degradation in Australia. The transformation which is occurring is one that is encouraging hybrid business structures that do not fit ‘neatly’ into the family farm mode. Indeed, the organizational forms that are surviving are doing so through incorporation with agri-industrial chains, with all that implies. For example, the new entrepreneurial farmers need to interact with large-scale agribusiness. To do so, they must be economically informed and be prepared to invest in renting additional land if it means securing the quotas necessary for expansion and increased incomes. They are an example of a corporately-linked farm ‘business’, rather than a supposedly independent ‘family farm’. Just as importantly, however, they are exceptionally entrepreneurial, market-sensitive, technologically-oriented, knowledgeseeking and highly capitalized. This emergent farming category of entrepreneurial farmer cannot be readily ‘boxed’ into current conceptions of farmers that rely on any single, or even multiple, use of categories such as farm size, income level, income sources, or commodity type. As this social category evolves, the tensions discussed in this paper will gain increasing prominence within rural political discourse. In key sectors of New Zealand agriculture such as dairy and export horticulture, where recent trajectories of farm restructuring bear close similarity to key themes identified in this paper, there is already robust debate over issues such as land stewardship versus productivist aspirations, large scale share-farming versus hired labor, and the ownership of rural industries by farmer-cooperative share issues, versus other forms of capital. These insights, then, provide the primary conclusion arising from this paper. The farming structures observed in the Australian processing tomato industry seem to represent a distinct social and economic formation in which family units remain at the social and economic heart of farm ownership and operation, but in the context where they relate to their land-based assets through legal and financial structures characteristic of the wider economy. References Albrecht, D., 1992. The correlates of farm concentration in American agriculture. Rural Sociology 57 (4), 512–520. Alston, M., 1995. Women on the Land: The Hidden Heart of Rural Australia. University of New South Wales Press, Sydney. Alston, M., 2004. Who is down on the farm? Social aspects of Australian agriculture in the 21st century. Agriculture and Human Values 21, 37–46. Argent, N., 1996. The globalized farm-finance relation: South Australian farm families and communities in a new regulatory environment. In: Burch, D., Rickson, R.E., Lawrence, G. (Eds.), Globalization and Agri-Food Restructuring: Perspectives from the Australasia Region. Avebury, Aldershot, pp. 283–299.

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