Is it because the labor force in large part could share in the capital
gain in land values? Is this why the structure of agriculture could be
altered so drastically without leading to violent protest?
One possible argument is that a structure of small, privately
owned farms reduces the social cost of exit from agriculture because
it remains reasonable to believe that entry is possible, or reentry. If
entry into agriculture is closed, or very difficult, it will retard exit.
The difficulty of getting started in farming is thus of much wider
significance than is typically assumed. It mirrors the “freezing-up”
of the agricultural sector, which was the last major sector that
offered relative freedom to small-scale entrepreneurs. With agricul-
ture practically closed to entry by any but the wealthy, how is it
possible to maintain the illusion of an open economy guided by
freely functioning markets?
Loss of flexibility reflected in a growing concentration of control
in agriculture thus has a significance that extends far beyond the
agricultural sector. It erodes the empirical base for a belief in a
market economy.
Why Be Concerned About Agricultural Structure?
Legislative and congressional support for teaching, research, and
extension in the entire field of agriculture will be determined in the
future by the votes of non-farm people. This does not mean that
farm support is unimportant.
It will be essential to retain the loyalty of the farming community.
I see some evidence that support for agricultural research from that
source is eroding. But support from the farming sector alone will
not be enough to insure the flow of public funds for investment
in the agricultural educational effort that we believe is needed.
It is in this context that the questions of structure, organization,
and control in agriculture acquire their critical importance. Concern
with the structure of agriculture is not primarily a question of
efficiency in resource allocation, although that is a major considera-
tion.
It is above all a concern with equity, and increasingly with equity
as it is perceived by the non-farm population. It is primarily their
money that is being spent in the agricultural colleges, experiment
stations, and extension services.
In the institutional structure that has prevailed in the past it has
been reasonable to assume that the investment of public funds in
agricultural education, in all of its dimensions, has not been creating
a rentier class. If opportunities were created by this investment, and
particularly in research, for the capture of economic rent it was
assumed that freedom of entry, ease of access to land and capital,
and competitive markets would prevent the capture of these rents
by a small group of unintended beneficiaries.
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