Introduction
Agriculture is a cornerstone of North Carolina’s economy. It is one of the state’s largest industries and generates billions of dollars in revenue each year. Key agricultural products, including poultry, tobacco, soybeans, corn, and sweet potatoes, underpin the state’s economic stability and growth.
North Carolina’s diverse climate and geography allow for a wide variety of crops and livestock to thrive. This diversity ensures the state’s agricultural sector remains robust and adaptable to changing market demands and climatic conditions.
From farm labor to food processing and distribution, agriculture is a significant source of employment for North Carolinians. In fact, around one-sixth of the state’s employment and income comes from the agricultural sector, and many small towns and communities in North Carolina depend on farming and related businesses. North Carolina’s agricultural industry promotes rural development and preserves their unique way of life.
Agriculture is essential in ensuring a stable and accessible food supply for North Carolinians and the nation. The state produces a substantial amount of the food consumed locally, contributes significantly to the overall food production in the United States, and provides exports to international markets.
However, the industry does not come without controversy. From the debate over what is environmentally sustainable farming to fears over hog waste polluting water in rural communities, the state has had no easy time allowing the industry to grow.
In light of such controversies, it may seem reasonable to continue to implement and enforce multiple layers of regulations in order to appease the loudest voices. However, well-meaning policy often is accompanied by severe consequences that can be detrimental to both farmers and consumers. It is vital that legislators instead allow agriculture and the food supply chain to be guided by what Adam Smith deemed the Invisible Hand, with minimal government interference.
Agriculture is vital to the well-being of both the state and the nation. Legislators should always be asking what can be deregulated to make things more efficient in this important sector, instead of thinking of ways to regulate and subsequently disincentivize sector growth.
Key Facts
- North Carolina’s rapidly growing population has made land values increase. The state has seen a sharp decline in total farmland as developers and foreign entities buy up highly desired farmland for other uses. In addition, on average 80% of farm subsidies go to the top 10% of farms, which makes it very difficult for small farms to survive and makes big farms get bigger. Over time, the total average acreage of farms in North Carolina has increased while the number of farms has decreased.
- The number of sawmills has been decreasing in North Carolina for over a decade due to regulatory burdens and foreign competition. In addition, it is expensive and difficult for local sawmills to get lumber graded to be sold. This has led to large amounts of ungraded lumber being thrown out.
- Despite having to meet the same inspection requirements, state-inspected meat processing facilities can sell only within the state, whereas federal facilities can sell across state lines. This restriction makes an already fragile supply chain even more so and harms North Carolina’s small farmers while driving up meat prices for consumers. Currently, North Carolina does not participate in the Cooperative Interstate Shipping Program, which allows meat products from state-inspected facilities to be sold across state lines.
- There is growing demand for the right to repair technology, especially expensive farm equipment, without being compelled to use the manufacturer’s licensed professionals. Consumers want to be able to repair their own property, whereas companies want to protect their intellectual property. Policymakers should be cautious about resorting to legislation because the market is already responding to consumer demands for the right to repair, and legislation could create unintended harms.
- North Carolina’s 1997 moratorium on hog farms became permanent in 2007, severely halting the growth of an industry that our state should be proud to be a part of. For the third-largest pork producer in the country, the industry generates billions and thus greatly benefits the rural areas that dislike the moratorium the most. This is just one example of many questionable regulations on the agricultural sector in North Carolina.
- A regulatory sandbox is a law that allows businesses that opt into the program to use new innovations and technology to conduct business without regulatory burdens. Currently, the state already has a sandbox for finance and insurance. However, agriculture is also an industry much in need of innovation. An agriculture sandbox would open more options for farmers and let them explore new innovations without reactive regulation preemptively closing them off.
Recommendations
1. Expand North Carolina’s regulatory sandbox to include an agriculture sandbox.
This will allow farmers to engage with more innovative technologies.
2. Allow the selling of ungraded lumber.
This will benefit local sawmills, lead to less waste, and make building homes more affordable.
3. Repeal the hog farm moratorium.
Livestock farming is imperative to the North Carolina agricultural sector and should be allowed to grow.
4. Be wary of right-to-repair legislation.
Legislators should further evaluate the issue instead of rushing to pass questionable legislation on the right to repair tractors.
5. Let North Carolina join the Cooperative Interstate Shipping Program.
Doing so will enable state-inspected meat and poultry products to be shipped across state lines, which will benefit North Carolina farmers via an expanded market for their product.
Number of Farms and Average Number of Acres Per Farm in North Carolina, 1850 – 2022
Source: United States Department of Agriculture, Census of Agriculture Historical Archive.
