Oregon Law Review
Publication Title (Abbreviation)
Or. L. Rev.
American agriculture is inexorably concentrating into the hands of a small number of large conglomerates. Expanding farms pursuing scale economies would normally have to abide by a system of environmental and other laws that would, in theory, require farms to account for negative externalities. If those laws were observed and enforced, they would help strike a balance between the greater profitability and the larger externalities of scaling up. But these laws are not widely observed nor rigorously enforced, which upsets this balance and gives large-scale farms a cost advantage while insulating them from corresponding responsibilities.
Perhaps nowhere in agriculture is this tension more visible than in the hog industry, which has dramatically transformed itself from one based on small-scale, localized production to one based on largescale, far-flung production. Ninety-six percent of all hogs raised in the United States are now raised on farms of one thousand or more hogs. Thus far, however, the American legal and regulatory systems have not appropriately managed this staggering growth. Lax enforcement of environmental laws against large hog farms has allowed them to grow and realize scale economies without accounting for their exponential increase in water and air pollution. The same can be said for state right-to-farm laws, which insulate many large hog farms from nuisance lawsuits. Further, reckless practices in concentrated animal feeding operations contribute to the development of dangerous antibiotic-resistant bacteria and heighten the risk of a transfer of zoonotic diseases to humans—potentially helping to set the stage for the next pandemic. Finally, the risks of this lax legal structure are not only related to environmental and health concerns. The concentration of hog farming imposes economic costs by reducing competition and variety, all in the pursuit of lower consumer prices that may or may not be actually achieved in the long run. Large agricultural conglomerates should be held to account for these enormous costs, not only because these costs outweigh the productivity benefits, but also because they serve to marginalize small farmers and fundamentally change the nature of farming.
© 2015 Shi-Ling Hsu
Scale Economies, Scale Externalities: Hog Farming and the Changing American Agricultural Industry, 94
Or. L. Rev.
Available at: https://ir.law.fsu.edu/articles/488