Impacts of strongConcentrationstrong in Hog Production on Economic Growth.pdf

Impacts of Concentration in Hog Production on Economic Growth in Rural Illinois: An Econometric Analysis* Presented to the American Agricultural Economics Association annual meeting in Tampa, July 31 to August 2, 2000 by Miguel I. Gómez Assistant Professor Illinois State University, Normal, Illinois Liying Zhang Graduate Research Assistant Illinois State University, Normal, Illinois April 2000 Key words: hog production, concentration, economic impacts, rural communities. * Support for this research was provided by the Illinois Council on Food and Agricultural Research. Impacts of Concentration in Hog Production on Economic Growth in Rural Illinois: An Econometric Analysis Miguel I. Gómez and Liying Zhang The size of livestock and agricultural farms has increased dramatically in recent years. Larger facilities are the consequence of agricultural industrialization, a form of food production relying on fossil fuel-based inputs such as fertilizers, pesticides, gasoline, and machinery, which began in the 1970s (Thau and Durrenberger, 1998). These structural changes in food and fiber production have had substantial social and economic consequences for rural communities and their impacts are controversial. Their defendants argue that larger farms often have lower production costs because of economies of scale in agriculture. In addition, they posit that larger farms are likely to have more negotiation power facing an increasingly concentrated food processing sec