cover an exceptional period in the evolution of the national
urban system.
Perceptions of the nature of structural change in agriculture have
been distorted by these and other similar tendencies to strive for
dramatic effects in reporting the major changes that are in fact
under way. One consequence has been the diversion of attention
from the key questions of who will emerge as owners of the assets
of agriculture, and who will make the investment decisions that will
determine the pace and direction of future agricultural advances.
The investment decision-making function is crucial.
Investment Consequences of Structural Change
A continuing trend toward more highly concentrated and spe-
cialized agricultural production units will generate questions about
the proper source of investment capital and the proper locus of
investment decisions. There has never been a significant demand in
the United States for the social ownership of agricultural land.
Demands of this nature have found little support because the owner-
ship pattern of rural lands has been so widely diffused that occa-
sional large holdings were not perceived as either an economic or
a political threat to conventional goals and values.
If the ownership of agricultural land does become relatively
concentrated, we can expect the demand for land reform in the
United States to accelerate. In the political arena, this will reflect
concerns that are based primarily on questions of equity. In the
economic arena, the issue will be focused on questions of efficiency
in the provision of capital, and on the quality of investment deci-
sions.
One consequence of concentration in agriculture is to inject a
managerial link into the decision chain that relates investment
decisions to production outcomes. Is this link needed? Doesit serve
a useful purpose?
If investment decision-making is to be taken out of the hands of
producers, there should be some persuasive reason why they can no
longer be permitted to determine the direction of future develop-
ment in agriculture. It seems reasonable to argue that no determina-
tion of this kind has been made, and that the question of “who will
make the investment decisions in agriculture” has not been asked.
Instead, a more likely explanation for the emerging concentration
of economic power, and of a managerial cadre linking capital to
labor in agriculture, is the institutional structure that makes it
difficult for individuals to generate capital on the scale now needed
in modern farming. The proprietary farm firm suffers from two
disadvantages:
(a) It must purchase production inputs at retail and pay retail
sales tax.
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