Causes and Impacts of Institutional and Structural Variation Globalization in the Tobacco and Pork Industries

Causes and Impacts of Institutional and Structural Variation: Globalization in the Tobacco and Pork Industries by Ryan Denniston Department of Sociology Duke University Date: _ Approved: _ Gary Gereffi, Supervisor _ David Brady _ Bai Gao _ Suzanne Shanahan _ Kenneth I Spenner Dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Sociology in the Graduate School of Duke University 2010 ABSTRACT Causes and Impacts of Institutional and Structural Variation: Globalization in the Tobacco and Pork Industries by Ryan Denniston Department of Sociology Duke University Date: _ Approved: _ Gary Gereffi, Supervisor _ David Brady _ Bai Gao _ Suzanne Shanahan _ Kennerh I Spenner An abstract of a dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Sociology in the Graduate School of Duke University 2010 Copyright by Ryan Denniston 2010 Abstract The most significant changes to the agricultural sector in the twentieth century include a sharp decline in employment and the numbers of farms, a decline in the proportion of total value that accrues to agricultural producers, and an increase in farm level and regional specialization Within the U.S., substantial differences in the characteristics of agricultural producers and the spatial distribution of production persist amid industry change These changes coincided with changes in global markets, domestic consumption, consolidation and concentration within the processing and retailing sectors, and government policy The causality that lies behind these developments is the key puzzle that this study addresses This study advances an institutional explanation of industry formation across locations within the U.S Differences in industry constitution at the local level produce different impacts of and responses to global markets, reflected by economic changes and policy developments, as actors work to secure stability and advantage in markets (Fligstein 2001) This study uses the global value chains’ definition of the industry, which incorporates the network of actors arrayed along a process of production, to capture the set of actors with the capacity to affect industry operation (Gereffi 1994) The primary objective of the study is an assessment of the relative importance of local economic characteristics, global markets, organization and coordination within industries, and government policies to where production locates A contrast along the key theoretical perspectives is provided by the research site, the pork and non-cigar tobacco industries in strategic states within the United States from iv 1959 through Within-case comparison is used to construct causal narratives of industry change at the state level Panel and pooled time series analysis assess the relative importance the factors to agricultural change Local economic characteristics largely fade from significance with the inclusion of the theoretical perspectives Total and net trade in agricultural and manufactured products is generally significant across industries for production, although this is not the case for specific tobacco types The proportion of farms composed of small farms is significant for production and for farm structure in both industries The presence of manufacturers is significant for hog production but could not be assessed for the tobacco industry While federal policies are broadly significant for the tobacco industry, identified state policies exhibit few consistent effects for hog production Importantly, farm structure measures were only available for Census years, and the sample size for this analysis was reduced Second, many of the measures are industry-specific, which reduces comparability v Dedication This page is optional vi Contents Abstract .iv Dedication vi Contents vii List of Tables xii List of Figures xvii List of Abbreviations xviii Acknowledgements xx Introduction and Literature Review .1 1.1 The Research Problem 1.2 Literature Review 1.2.1 The General Theoretical Perspectives 1.2.2 Theoretical Concepts 12 1.2.3 Approaches in the Sociology of Agriculture 18 1.3 Research Argument and Expectations 30 1.4 Summary and Outline of the Study .35 Design, Data, and Methods 37 2.1 Case Selection 38 2.2 Data Compilation 43 2.2.1 Agriculture and Agricultural Production 44 2.2.2 Manufacturer Information .47 2.2.3 Trade and Consumption 49 2.2.4 State Policies and Institutions 53 2.3 Conclusion 56 vii The Structure and Operation of the Pork Industry .59 3.1 Industry Overview .60 3.2 Organization and Characteristics of the Hog Farming Industry 63 3.3 Hog Farming in the United States .68 3.3.1 The United States Context 69 3.3.2 Geographical Variation in Hog Farming, Selected States .73 3.4 Meatpacking and Pork Processing Characteristics 78 3.4.1 Meatpacking Characteristics in the United States 80 3.4.2 State Level Manufacturing Characteristics .84 3.5 Consumption and Trade .90 3.6 Conclusion 94 The Structure and Operation of the Non-Cigar Tobacco Industry .96 4.1 Industry Overview .97 4.2 Organization and Characteristics of Non-Cigar Tobacco Farming 103 4.3 Tobacco Farming in the Southern United States .107 4.3.1 The United States Context 107 4.3.2 Geographical Variation in Tobacco Farming, Selected States 111 4.4 Tobacco Product Manufacture Characteristics 116 4.4.1 Non-cigar Tobacco Production Characteristics in the United States 119 4.4.2 State Level Manufacturing Characteristics 121 4.5 Trade and Consumption .125 4.6 Conclusion 133 Federal and State Intervention in Agriculture 135 5.1 Federal Agricultural Policy in the Twentieth Century .140 viii 5.1.1 Constant Crises in Demand: 1920-1954 .142 5.1.2 Limited Market Forces and Cyclical Crises: 1954-1996 146 5.1.3 Income Support and Free Markets: the 1996 FAIR Act .150 5.2 Federal Policy for the Tobacco Industry 152 5.2.1 Tobacco Program Formation and Domestic Instability 152 5.2.2 Tobacco in a Global Context 157 5.2.3 Summary .161 5.3 Federal and State Policy in the Pork Industry 164 5.3.1 Policing Intra Industry Relations: Coordination, Integration, and Consolidation as Challenges to Farming Activities 166 5.3.2 Policing Industry-Society Relations: Environmental Law and Right to Farm Legislation .172 5.3.3 State-level Labor Context .176 5.3.4 Summary .177 The Relative Contributions of the Global Commodity Chains and Markets as Politics Explanations to Spatial Shifts in Agriculture 179 6.1 Variable Specification, Measurement, and Alternatives 180 6.1.1 Spatial Shifts in Agricultural Production 181 6.1.2 Control and Economic Variables 182 6.1.3 The Global Commodity Chains Perspective 184 6.1.4 The Markets as Politics Perspective .188 6.2 Model Specification 189 6.3 Pork Industry .192 6.3.1 Economic and Control Variable Models .192 6.3.2 Global Value Chains and Control Models 199 ix 6.3.3 Markets as Politics and Control Models .207 6.3.4 Compilation and Comparison .217 6.4 The Tobacco Industry 224 6.4.1 Economic and Control Variable Models .225 6.4.2 Global Value Chains and Control Models 226 6.4.3 Markets as Politics and Control Models .237 6.4.4 Compilation and Comparison .244 6.5 Discussion and Conclusion 253 6.5.1 Production Models 255 6.5.2 Structure Models .256 6.5.3 Comparison across Industries 261 Discussion and Conclusion 266 7.1 Summary of Research Findings 271 7.2 Study Contributions, Limitations, and Future Directions 281 A.1 Defining Farms, Acreages, Land Types, and Size Groups 287 A.1.1 Defining the Farm 288 A.1.2 Acreages .288 A.1.3 Farm Size Groups 290 A.1.4 Land Use Estimation 291 A.2 Industry Definitions and Compilation 292 A.3 Product Trade Definitions, Schema, and Conversion .295 B.1 Dependent Variable Diagnostics .300 B.1.1 Linear Transformation Options for the Dependent Variable 300 B.1.2 Correlation Measures of Dependent Variable Alternatives 305 x Park, Dooho, Andrew Seidl, Stephen Davies, and W Marshall Frasier 2000 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