Community/Rural/Urban Development, Labor and Human Capital, Livestock Production/Industries, Q13, R11, J61, J43, J28,

Goldsmith, Peter D.

Martin, Philip L.

English

Research Papers in Economics

CHOICES
The magazine of food, farm, and resource issues
3rd Quarter 2006 • 21(3) CHOICES 183
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3rd Quarter 2006 • 21(3)
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Community and Labor Issues in
Animal Agriculture
Peter Goldsmith and Philip L. Martin
JEL Classification: Q13, R11, J61, J43, J28
Animal agriculture is undergoing fundamental change,
driven by new production technologies, changing con-
sumer demand, genetic improvements, new retailing pres-
sures, and globalization. One significant outcome is a
change in the relationship between farms and rural com-
munities. Much production has shifted from independent
operators to larger production units, which are more tech-
nologically advanced, using supply chains and marketing
channels to link to the economy at large. These vertically-
coordinated operations largely bypass community link-
ages. However, new operations may bring new resources,
opportunities and economic growth to local economies.
Large production or processing operations require a con-
centration of workers, who may not be highly paid and
may have to be recruited from other locales. All this chal-
lenges the socio-economic structure of communities where
these enterprises are located. New economic opportunities
may impact the community’s autonomy, norms, tradi-
tions, pace, culture, and control. These impacts include:
(1) a diversification of the population that will add cul-
tural richness to the area, but also increase demands on
local government and institutions with regard to services
for an expanding resident population; (2) creation of new
jobs, but many that will place workers at the lower tier of
the wage structure; (3) local entrepreneurial opportunities
that could build on new value-added market niches; and
(4) increasing possibility of conflicts arising from a differ-
ent set of values associated with the changing composition
of the population, or with animal agriculture-related prac-
tices.
This article draws on a much longer report, The Future
of Animal Agriculture in North America (Farm Foundation,
2006). It provides a factual backdrop to the community
and labor impact question, and suggestions for researchers
and policy makers to help improve the relationship
between animal agriculture and their communities.
Situation and Context
The community and labor impacts associated with live-
stock and poultry production and processing are signifi-
cant, but very diverse. Labor is more mobile than is indus-
try infrastructure and inputs that give a particular region a
comparative advantage in animal agriculture. Livestock
and poultry production adds value to local resources by
creating jobs directly and indirectly as producers and
workers purchase goods and services. The local economic
impact of this industry will depend in part on the commu-
nity’s ability to meet the needs of producers or processors.
In some rural communities where animal production and
processing has expanded, there are more jobs than avail-
able local workers; immigrants increasingly fill these gen-
erally unskilled jobs. Regions of the United States and
Canada are sometimes challenged to integrate new people
and new cultures into existing communities. Mexico,
whose rural communities often supply the immigrant
workers to U.S. and Canadian companies, benefits from
the remittances sent to families. However, the out migra-
tion, and subsequent reduction of human recourses to fill
the jobs in the North, creates challenges in rural Mexico.
Over the last 20 years, four significant trends occurred
in the U.S. livestock sector: growth and concentration,
shifting geographic location, increasing scale, and, in meat
processing, movement of employment to rural areas from
urban locales. The share of meat processing employees in
non-metro areas rose to 60% (300,000) by 2000, from less
than half in 1980. Rural plants are larger. Estimates are
that more than 85% of the beef, pork and chicken comes
from large plants with more than 400 employees. Lower184 CHOICES 3rd Quarter 2006 • 21(3)
land and labor costs, less stringent
environmental restrictions, and
declining transportation costs explain
the shift of meatpacking from urban
to rural areas.
This portends an important pol-
icy issue on the horizon for policy
makers and communities: the poten-
tial movement of meatpacking over-
seas in search of lower costs/less bur-
densome regulation. In recent years,
U.S. foreign direct investment in the
poultry and swine industry in Latin
America has been increasing. Up
until 1990, less than 6% of global
poultry and pork production was
traded internationally. Now almost
14% of poultry and 9% of pork is
traded, and the portion is increasing
rapidly. The next phases of the pork
and poultry industry may involve sig-
nificant offshore production. This
would have important implications
for local communities currently
dependent on meatpacking and live-
stock for jobs and economic activity.
The makeup of the industry’s
labor supply has changed with the
inclusion of a significant number of
immigrants from Latin America. It is
estimated that 10.3 million unautho-
rized foreigners live in the United
States, including 1.7 million children
less than 18 years of age (Passel,
2005). Fifty-seven percent come
from Mexico and 24% from other
Latin American countries. Unautho-
rized migrants represent an estimated
5% of the general U.S. workforce,
but account for 29% of farm, 19% of
food preparation, and 27% of animal
slaughter workers.
The percentage of young people
less than 34 years of age continues to
rise in Mexico. These demographic
conditions, combined with a rela-
tively weak Mexican economy, have
created a strong labor export market
within the NAFTA community. The
sizeable new supply of labor from
Mexico complements the high rate of
job growth over the last 10 years in
the United States. The highly flexible
labor market allows the United States
to absorb a lot of immigration.
Within the NAFTA context, it was
expected that trade barriers would
fall, allowing resources to be effi-
ciently allocated. The labor exodus
from Mexico though was not antici-
pated because of expectations for
expanded foreign direct investment
in Mexico. Most United States policy
makers had concerns about opposite
job flows, from the United States to
Mexico. This raises an important
policy question of what is pre-
ferred—a well-functioning NAFTA
where capital and labor move freely,
or somehow differentiating capital
from labor in order to address impor-
tant short-term social issues arising
from migration.
The situation in Canada differs
significantly from that of Mexico and
the United States. In the past 30
years, immigrants have accounted for
a progressively smaller share of a farm
population in Canada. Today, in
Canadian agriculture, an immigrant
is likely to be a farm operator from
the Netherlands, Britain, Switzer-
land or Germany. The number of
immigrants moving to rural Cana-
dian communities is still small in
absolute terms.
Economic Impacts 
In communities across North Amer-
ica, the economic benefits generated
by the animal agriculture sector go
beyond producers. Communities and
regions where business is conducted
receive indirect economic benefits
through job expansion and enhanced
entrepreneurial activity to serve the
industry.
Economic multipliers reflect the
effect of changes in one sector across
a whole regional economy. Each dol-
lar generated by economic activity in
animal agriculture generates addi-
tional economic activity—directly
through job creation, indirectly
through the procurement of goods
and services, and from increases in
income and spending resulting from
more active markets. While the mag-
nitude of these effects differs by sec-
tor, animal agriculture has higher
economic multipliers than such sec-
tors as mining, textiles, forestry or
crop agriculture (Goldsmith and
Idris, 2001).
Jobs, taxes and other economic
benefits of animal agriculture are
realized beyond the local level. Glo-
bal trade liberalization—including
the inputs that supply livestock farms
and products from animal agricul-
ture—opens communities to outside
competition, new market opportuni-
ties, and greater access to new
resources and input supplies. This
may affect economic multipliers by
changing historical patterns in which
inputs are sourced locally. As U.S.
businesses compete globally, their
suppliers and the business environ-
ments in which they operate must
also be globally competitive. This
implies that a community seeking
industrial investment needs to assure
its business environment is competi-
tive with other communities around
the globe. For example, information
and communication technologies
and infrastructure, critical for mod-
ern animal agriculture and processing
businesses, have historically lagged in
rural communities. Communities
may receive technological spillovers
that benefit other industries and con-
sumers as they upgrade information
infrastructure to better serve animal
agriculture and processing.
Specialized support occupations
in such areas as accounting, law, vet-
erinary medicine, breeding, and mar-3rd Quarter 2006 • 21(3) CHOICES 185
keting may develop clusters of exper-
tise surrounding communities that
engage in new higher-technology
meat and livestock businesses. These
clusters of expertise create benefits
for communities that include high-
income employment and additional
demand for information and com-
munication technologies and infra-
structure. Entrepreneurship in the
form of technical services in the areas
of veterinary care, nutrition, environ-
mental and human resource manage-
ment, construction and mainte-
nance, information management,
transportation and logistics, and
marketing may add even more eco-
nomic growth within the surround-
ing region. 
Community/Social Impacts
The siting of large animal production
operations can generate considerable
local controversy at the same time
economic activity expands. Issues of
contention are: potential odor prob-
lems, water availability and use,
manure disposal, and the desired
structure and size of farm businesses.
Common complaints are that:
• recipients of economic benefits
are not local,
• jobs associated with animal agri-
culture are of poor quality,
• changed demographic makeup of
the workforce is problematic,
• there is a negative impact on
property values,
• there are negative health conse-
quences for nearby communities
due to changes in air and water
quality,
• there will be a deterioration of
infrastructure, specifically roads
and bridges, and
• there will be traffic congestion
and increased manure and dirt on
the roadways.
In the United States, meatpack-
ing attracted newcomer immigrants
with relatively little education and
sometimes few English language
skills a century ago, but the meat-
packing labor force was mostly U.S.-
born as recently as 1970, when
immigration was at historic lows.
Since then, immigration has
increased sharply, and a third of
meatpacking workers today may be
foreign-born. Hispanics were 15% of
the U.S. meat industry’s labor force
in 1990, and 35% in 2000. The
arrival of Hispanic or Asian workers
quickly changes the face of rural areas
that have not experienced significant
immigration in recent years. Most
areas, especially those losing people
and jobs, welcome new residents
because they buy homes and shop at
local markets. But there are also ten-
sions which accompany demographic
change.
Positive impacts on communities
from an influx of immigrant workers
include:
• most workers are married, and
while not known with any cer-
tainty, it is thought that increas-
ing numbers of spouses are also in
the United States since crossing
the border has gotten more diffi-
cult,
• a higher proportion of Hispanic
or Asian men participate in the
workforce than from other popu-
lation groups,
• workers do unwanted jobs that
are necessary in today’s society,
• repopulation of rural areas,
• a younger workforce, and
•r e p l a c e m e n t  f o r  a g i n g  b a b y
boomers.
Potential negative issues with the
changing labor force include:
• increased demand for social ser-
vice resources in the community,
• increased need for bilingual
workers in public safety, health
and other key sectors,
• more students with limited
English proficiency,
• low propensity to continue edu-
cation because of English being a
second language, a low educa-
tion level, or limited access to
educational resources,
• increased poverty among unau-
thorized migrants,
• greater demand for health care at
local clinics and emergency
rooms,
• lack of health insurance placing a
strain on limited health resources
in rural areas,
• a higher prevalence of infectious
disease, diabetes and maternal
health issues,
• fiscal stress on local governments
as increased tax income may not
keep pace with increased service
needs, and 
• strain on local housing stock as a
result of an influx of immigrants
(which at times results in immi-
grants being placed in poor, over-
crowded housing).
Future Options and Implications
Economic Development
Rural communities in North Amer-
ica compete in a global environment.
Provinces, states, regions and com-
munities seeking investment need to
assess how their location will poten-
tially make animal agriculture opera-
tions globally competitive. This cre-
ates challenges in a world of varied
wage and regulatory conditions.
Industry has a responsibility to
the community in which it does busi-
ness. Industry needs to be proactive
and a responsible citizen, providing
leadership in creating positive experi-
ences for communities. The inability
to create these positive community186 CHOICES 3rd Quarter 2006 • 21(3)
experiences will only limit their abil-
ity to site or expand.
This phenomenon, whereby
communities oppose the siting or
expansion of livestock and meat facil-
ities, is no longer unique to the
United States. The opposition is
structural and can be found in many
communities around the globe. It
reflects both direct concerns about
changes to their neighborhoods and
larger concerns about globalization,
new technologies, large farms, and
multinational food companies. At its
heart, communities feel a loss of local
control and see rapid change in the
face of these large and sometimes
unfamiliar neighbors.
As a result, the industry needs to
complement the numerous economic
benefits it brings with a set of posi-
tive social impacts. Some communi-
ties will always oppose the industry,
but many would welcome a partner
to help them socially and economi-
cally develop.
By no means inclusive, this article
has highlighted some of the needs
that industry can help address: the
positive incorporation of immigrants
into the fabric of the community,
expansion of IT infrastructure,
investment in entrepreneurial activi-
ties that add value to the current ani-
mal agriculture component of rural
communities, and expansion of
opportunities for education and
training in order to strengthen the
community’s human capital
resources.
There is potential for the animal
agriculture sector to use many of the
tools employed in industrial sector
economic development:
General Tools. 
• Government bodies should con-
sider homogenized industrial pol-
icies, so animal agriculture is not
singled out. Homogeneity of pol-
icy minimizes multiple levels of
industry performance, improves
efficiency in regulatory oversight,
and ensures equal treatment
across industries.
• Focus on rural economic devel-
opment, not just animal agricul-
ture development. Local
communities should avoid trying
to pick winners, but instead use
evaluative tools and policies that
are conducive to an overall
healthy business environment
that is attractive to a variety of
industries and their suppliers.
• Develop industry strategies to
create positive community
impacts. Active communication
about respective needs and strate-
gies to address those needs is crit-
ical for a healthy industry-
community relationship.
• Use provincial, state or regional
economic development resources
and streamline the regulatory
process.
• Conduct research to better
understand the type of contribu-
tions animal agriculture and pro-
cessing makes to a community. 
Specific Industry Offsets. 
• Property tax reductions for neigh-
bors.
• Service and infrastructure
improvements for the commu-
nity.
• Fiduciary bonds to dissipate risk
borne by communities, such as
new demands industry might
place on water resources.
• Appropriately scaled public infra-
structure investments, such as
upgrading roads and bridges,
increasing utility capacities, and
augmenting highway access.
• Compensation for harmed parties
from confined animal feeding
operation impacts as is done with
other industries.
Labor
Local, regional, and national govern-
ment officials need to consider main-
taining immigrant worker programs
that ensure adequate labor supply to
the animal agriculture industry.
Helping immigrant workers adjust to
a new location and culture and help-
ing communities adjust to new
immigrant populations can be advan-
tageous to employers. For example,
communities and industry can work
together helping immigrants learn
English, navigate the social services
system, establish bank accounts and
credit, obtain affordable housing,
and adapt schools and their curricu-
lum to an English-as-a-second-lan-
guage student body.
Mexico and the United States are
examining options to improve the
legal movement of workers between
the two countries. As workers
attempt to earn a livelihood, they
need to be able to take advantage of
work opportunities without running
the risk of violating the law. Potential
options include illegal immigrant
legalization, a guest-worker pro-
gram, and exempting Mexico from
visa quotas. The United States might
consider a program similar to Can-
ada’s Seasonal Agricultural Worker
Program (SAWP) to address seasonal
worker shortages, though seasonality
of work is not as common in the live-
stock sector. At the same time, Mexi-
can and U.S. officials have also dis-
cussed improving conditions for
unauthorized Mexicans in the United
States by ensuring their human
rights, access to health care and edu-
cation resources, and providing
opportunities to obtain legal status
(Rodriguez-Scott, 2002).
For More Information
Farm Foundation.(2006). The future 
of animal agriculture in North 3rd Quarter 2006 • 21(3) CHOICES 187
America. Available online: http://
www.farmfoundation.org/
projects/04-
32ReportTranslations.htm. Oak 
Brook, IL.
Goldsmith, P.D., & Idris, H. (2001, 
November). The economic impact 
of Illinois’ livestock industry. Spe-
cial Report # 94, College of Agri-
cultural, Consumer, and 
Environmental Sciences, The Uni-
versity of Illinois at Urbana-
Champaign. 
Passel, J.S. (2005). Estimates of the 
size and characteristics of the 
Undocumented Population. Avail-
able online: http://pewhis-
panic.org/files/reports/44.pdf.
Rodriguez-Scott, E. (2002). Patterns 
of Mexican migration to the 
United States. The 82nd annual 
meeting of the Southwestern 
Social Science Association, New 
Orleans, Louisiana, March 27-
30.
Peter Goldsmith (pgold-
smi@uiuc.edu) is Associate Professor
and NSRL Fellow in Agricultural
Strategy, Food and Agribusiness
Management Group, Department of
Agricultural and Consumer Econom-
ics, University of Illinois Urbana, IL.
Philip L. Martin (martin@pri-
mal.ucdavis.edu) is Professor,
Department of Agricultural and
Resource Economics, University of
California, Davis, Davis, CA.188 CHOICES 3rd Quarter 2006 • 21(3)

Community and Labor Issues in Animal Agriculture

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