How US Companies Should Help Farmers Increase Sustainability

That's the title of an article by a marketing guru, Doug Austin, in the Farm Journal.

While some of the discussion is sensible, I found it a bit interesting to see the "solution" proposed to increased sustainability:

When large companies partner with farmers, they have more influence on how farmers take their products to market, and they’re involved much earlier in the process. For instance, a corporation could instruct a farmer to plant 10,000 acres of corn without any pesticides, GMO seeds, etc., and the farmer would be under contract to deliver. This is a big shift away from the traditional farming mindset that uses yield as the primary success metric.

First, I don't know that corporations "instruct" farmers. They can offer incentives.  They can offer premiums.  Or, as Austin suggest, they can offer contracts.  

The idea is hardly new.  And indeed, the rate of contracting is already increasing at a rapid clip, precisely for many of the reasons suggested by Austin - food companies trying to achieve more uniformity ad price stability, and to be responsive to consumer concerns.  

Here for, for example, is a graph out of a USDA report by William McBride and Nigel Key on the percent of hogs marketed in the US under contract from 1992 to 2009.  In some parts of the U.S. virtually 100% of hogs are produced under contract.

There are many advantages to contracting (mainly protection against price or production risk), but the practice also opens up food production industries to all kinds of criticism (e.g., see how Tyson was vilified in The Meat Racket for its use of contracts).  If a corporation wants to exert the kind of control it needs to achieve various end-use characteristics, that means farmers conceding some freedom (in exchange for certainty of income).  However, this relationship can get construed as "big bad market power exerted by Big Food."

The contracting situation isn't unique to hogs.  Many (perhaps most) vegetable growers produce under contract with processors.   And, here is another graph from the USDA-ERS by James McDonald on the extent of contracting for the major commodity crops

The other problem with the quote above is the implicit assumption that the use of GMOs or pesticides are not sustainable.  Or, that yield isn't one metric of sustainability.  Corporations may (one day in the future), in fact, want to contract with farmers to plant certain GMOs precisely because they are more sustainable.