Farm and market structure, industrial regulation and rural community welfare: conceptual and methodological issues

Abstract

The Goldschmidt Hypothesis posits that rural community welfare is negatively associated with the scale of farms surrounding them. The intervening mechanism that links a farm structure dominated by larger farms to negative rural community welfare outcomes is polarized class structure. There have been a number of studies that have found support for the basic relationship between increasing farm scale and negative rural community outcomes. However, since Walter Goldschmidt’s original study was completed in the 1940s, the agricultural market and farming structures have changed dramatically. Market structure is now more differentiated than in previous decades. Vertical and horizontal integration, contract production, organic and other specialty markets, and direct marketing are examples of new marketing forms that have emerged over the past few decades. In addition, as farm and market structure have shifted, some states have enacted public policy to forestall negative outcomes related to the industrialization of agriculture. Previous studies which measured the effects on rural community welfare from the structure of the surrounding farming sector have been valuable contributions to the development of the sociology of agriculture and have led to increased understanding of agriculture and rural development. However, a new generation of studies should be undertaken to address the impacts of changing market structure as well as assess public policy attempts to mitigate negative impacts of agricultural industrialization. To that end I present a discussion of conceptual and methodological issues related to such a research program. And I offer a conceptual model intended to be useful in guiding future research in this area.