A lot of people, myself among them, have spent substantial time this year trying to demystify the 2007 Farm Bill. But as it lurches into its stretch run -- with passage possible by year-end -- I fear that the bill is more shrouded in mystery than ever, even among sustainable-agriculture advocates.
The answer ain't blowin' in the wind.
Photo: iStockphoto
Here's what we can all agree on: Late last month, the Senate Agriculture Committee passed a version of the bill that would generally preserve the crop subsidies that have become so infamous. It would also add funding to some important conservation and nutrition programs, the result of hard lobbying by sustainable-ag and anti-hunger activists.
The committee's version has now passed to the full Senate, and is currently under debate. The proposal has unleashed a hailstorm of criticism in sustainable-agriculture, public-health, and environmental circles, where hope had swelled for policy reform. Anger focused primarily on the version's commodity title, which -- like the House version passed last spring -- would continue delivering billions of dollars to producers of a few crops, mainly corn, cotton, wheat, rice, and soybeans.
Writing in The New York Times op-ed page on Sunday, Michael Pollan gave eloquent voice to the dismay. The boost in conservation funding was fine and well, Pollan wrote, but "[a]s long as the commodity title remains untouched, the way we eat will remain unchanged."
Here is precisely where the complexities of our farm policy blind even its most well informed critics. The commodity title has been credited with awesome power -- it has been said to underwrite everything from the obesity epidemic to the explosion in CAFOs in the late 1990s to the dead zone in the Gulf of Mexico. In its spare time, it's steamrolling farmers in Mexico, Africa, and elsewhere.
True, all of those maladies can be traced directly to agricultural overproduction, mainly of corn. But subsidies don't cause overproduction -- and withdrawing subsidies won't end overproduction. With all due respect to Pollan, gutting the commodity title probably wouldn't change much about the way we eat -- or do much to curtail the heavy applications of nitrogen fertilizer in the Corn Belt that are fouling up the Gulf, or end the scourge of CAFOs, or curtail the dumping of agriculture commodities into the global south.
By focusing their ire on subsidies, Pollan and a host of critics -- including OxFam, Environmental Defense, the Environmental Working Group, and others -- are fixating on a symptom of overproduction, not the cause. They're rallying around an alternative proposal from Sens. Richard Lugar (R-Ind.) and Frank Lautenberg (D-N.J.) that would abolish subsidies but likely fail to address the fundamental problem of U.S. agriculture: maximum production of a few commodity crops.
Too Much Of a Good Thing
In their paper criticizing the 2002 Farm Bill, "Rethinking U.S. Agriculture Policy" [PDF], the agriculture economist Daryl Ray and his colleagues provide a lucid explanation of overproduction. It goes like this: Farm productivity tends to grow much faster than the demand for food. In a mature economy like the United States, food demand grows at about the rate of population. But agricultural productivity -- juiced up by genetically modified seeds, the latest high-tech equipment, pesticides, artificial fertilizers, etc. -- tends to grow more rapidly.
In 1926, for example, an acre of corn yielded around 25 bushels. Today, farmers routinely squeeze upwards of 150 bushels from that acre, a sixfold increase. Other major staple crops like wheat and soy have undergone similar booms in yield per acre. But over the same period, population grew by a factor of less than three. So farms have been churning out food way faster than people can consume it, leading to huge surpluses.
This tendency toward overproduction, when managed well, actually benefits society. As Ray and his collaborators put it, "Given that food is essential to life, it is urgent that the productive capacity of agriculture continue to stay well ahead of needs." But for at least 20 or so years now, overproduction has been used to create dubious but profitable products like corn-based ethanol, high-fructose corn syrup, and meat, dairy, and eggs from confined animals.
According to conventional Farm Bill critics, ending subsidies will fix all that. After farmers are subjected to the rigor of the free market, these critics say, booming yields won't be a problem. When farmers overproduce, this line of thinking has it, the price of the commodity drops, signaling that they should plant less the next year. And anyway, foreign countries -- especially in the global south, where populations are rising fast -- can be counted on to buy up some of that surplus, especially if the latest WTO trade negotiations, known as the Doha round, succeed in prying open markets.
There are two problems with that scenario. The first is that farmers -- especially large-scale ones with established markets in only one or two crops -- tend to respond to lower prices by planting more, hoping to make up in volume what they're losing in price. They also scramble to invest in productivity-enhancing technology like the latest John Deere combine or seed variety from Monsanto. And when those decisions are multiplied across hundreds of thousands of farms across the Midwest, you get lower prices leading to more production and more downward pressure on prices.
The second problem with the free-market view involves using exports as a safety valve for our overproduction. While it's certainly true that international trade talks and binational pacts can be used to ram open markets for U.S. agriculture commodities, other countries have the same idea. Brazil's production of both soy and corn has exploded since the early 1990s, bolstered by investment from U.S. and European agribusiness, the USDA reports. Argentine corn production is on a similar trajectory.
In short, the effort to "feed the world" with U.S. agriculture surpluses has been seriously hindered by competition from countries where land and labor is cheaper and the growing season is longer. And that's something that the WTO talks, NAFTA, CAFTA, and other agreements can't fix. And as nations like Brazil and Argentina crank out more product, we can expect to yet more pressure on U.S. farmers to invest in productivity and jack up yields.
So the end of subsidies won't likely curtail a global push to maximize production of a few commodities by lashing the earth with chemicals, a trend that's only been exacerbated by the biofuel boom. (Cynics will note that the same two commodities whose overproduction underpins our food system -- corn and soy -- have been deemed the feedstocks of choice for biofuel, even though both leave much to be desired in that regard.)
The lack of a direct connection between subsidies and overproduction probably explains why the agribusiness lobby is not defending the commodity title in the current Farm Bill debate. The voice for preserving subsidies has come from large-scale farmers themselves, mostly through the American Farm Bureau Federation. They figure that since prices look set to drop long-term, they had better not negotiate away what has become an important source of income.
A Push from Bush
Sustainable-food advocates fighting the Farm Bureau on this point have an unexpected ally: the Bush Administration, which has been renouncing subsidies for a couple of years now. Did Bush read Omnivore's Dilemma and suddenly become a critic of the industrial-food system? Not likely.
Over the summer I asked Ferd Hoefner, executive director of the Sustainable Agriculture Coalition, what agenda agribusiness giants like Archer Daniels Midland and Cargill are pushing for the Farm Bill. Hoefner has been engaged in farm bill fights since the 1970s. "It's basically the Bush plan," he said. Bush's proposal for the farm bill, released last spring, included steep cuts in subsidies. Agribusiness, it seems, would like to see the commodity title dismantled -- it's holding up progress on the Doha round of trade talks, which would increase global trade in ag commodities. Countries in the global south are refusing to open their markets to U.S. goods until the subsidies fall, and countries like Archer Daniels Midland are eager to comply.
In fact, Bush and his right-hand man in the USDA, former ADM flack Chuck Conner, have threatened to veto the current version of the farm bill -- precisely because of subsidies.
After the Great Depression, which involved a collapse in farm prices brought on by a spasm of overproduction, U.S. farm policy sought to help farmers manage supply decisions in an era of booming productivity gains. All of that changed between the early 1970s and the mid-1990s, when the message from the federal government to farmers increasingly became: produce as much as you can.
Real positive reform in federal farm policy will come from changing that message. If the momentum generated by the sustainable-food movement works to slash subsidies without reforming other aspects of policy, money now earmarked for supporting agriculture will go up in smoke in Iraq -- likely gone from the USDA budget forever. And the problems of overproduction will persist.
But we'll need the money currently in the commodity title to remain available for supporting farming. It could be used to dramatically expand conservation measures, which give farmers incentives to make more judicious planting decisions; and to reinvest in local and regional food-production infrastructure, which has been dismantled over the past several decades. And that agenda, I hope, will be the focus of organizing for the next farm bill in 2012. Given that the terms of the debate presently seem stuck on subsidy preservers (the Farm Bureau) and subsidy cutters (Bush, Environmental Defense, etc.), that looks like the best-case scenario -- though there are measures, like the proposed Dorgan-Grassley amendment, that could improve things at the margins.
Mark Warner (D-Va.)
Can EPA regulations on CO2 be blocked?
While scientists fight over BPA studies, Congress could just act
Comments
View as Threaded
baiss Posted 4:46 am
08 Nov 2007
Think of the things that could be done, like research into northern climate year round vegetables and the phasing out of pesticide/herbicide use.
Permalink
Farm Bill Girl Posted 5:50 am
08 Nov 2007
Who are the "real" beneficiaries of our subsidy system? it is farmers? or is it Archer Daniels Midland, Cargill, Smithfield and those who rely on cheap corn to produce HFCS and to expand factory farms?
The great folks at Tufts have documented how cheap corn led the chicken and hog industry to save $11 billion over the past decade. Meanwhile, taxpayers shelled out billions in subsidies to help farmers make up for some of that lost income
http://www.ase.tufts.edu/gdae/policy_research/BroilerGain ...
Having Oxfam, Enviro Working Group and other "reformers" train all their ire at millionaire farmers in Manhatten or Scottie Pippen or even rich cotton farmers is a huge waste of time and fraudulently misleading and misses the point! The real cancers in our food system are the likes of ADM/Cargill/Smithfield who are screwing over farmers, taxpayers, animals, the earth.
Unfortunately, many of the well-meaning religious and public health groups fail to grasp this as they look to subsidies as the root cause of our bad food system.
The Senate Farm bill contains a new livestock title to address antitrust issues that have led Tyson/Smithfield/etc to screw farmers for so long with their monopoly power. These urgently needed reforms will help save some of our independent ranchers. There is a packer ban (to prevent Tyson from also owning livestock and manipulating the market), an office of competitive oversight in USDA created, justice for poultry contract growers being screwed by Tyson. Corporate agribiz is lobbying HEAVILY against these reforms. All the bad guys from the American meat institute, cargill , DC lobbyists are lining up heavily on one side with sustainable agriculture, family farmers on the other.
Yet the "reformers" do not see corporate control of our food systems as the problem and have done nothing to raise awareness or help family farmers in their decades long fight to return some profit and fairness to their beloved rural communities. the NYT/Wash Post and other urban press would rather demonize subsidies and farmers than address the corporate agribusiness giants.
here is an action alert to call your Senators to support the full livestock/competition title!
http://whatcounts.com/dm?id=13381C5DF7D5C4AC3D56921D8FB3B ...
The BUsh Administration HATES all the reforms in the Senate Bill and has threatened to veto on those grounds. It is highly likely we will lose to the highpowered lobbying. Any support on behalf of family farmers and ranchers strugging against these multinationals would be greatly appreciated!
Permalink
Farm Bill Girl Posted 5:53 am
08 Nov 2007
Who are the "real" beneficiaries of our subsidy system? it is farmers? or is it Archer Daniels Midland, Cargill, Smithfield and those who rely on cheap corn to produce HFCS and to expand factory farms?
The great folks at Tufts have documented how cheap corn led the chicken and hog industry to save $11 billion over the past decade. Meanwhile, taxpayers shelled out billions in subsidies to help farmers make up for some of that lost income
http://www.ase.tufts.edu/gdae/policy_research/BroilerGain ...
Having Oxfam, Enviro Working Group and other "reformers" train all their ire at millionaire farmers in Manhatten or Scottie Pippen or even rich cotton farmers is a huge waste of time and fraudulently misleading and misses the point! The real cancers in our food system are the likes of ADM/Cargill/Smithfield who are screwing over farmers, taxpayers, animals, the earth.
Unfortunately, many of the well-meaning religious and public health groups fail to grasp this as they look to subsidies as the root cause of our bad food system.
The Senate Farm bill contains a new livestock title to address antitrust issues that have led Tyson/Smithfield/etc to screw farmers for so long with their monopoly power. These urgently needed reforms will help save some of our independent ranchers. There is a packer ban (to prevent Tyson from also owning livestock and manipulating the market), an office of competitive oversight in USDA created, justice for poultry contract growers being screwed by Tyson. Corporate agribiz is lobbying HEAVILY against these reforms. All the bad guys from the American meat institute, cargill , DC lobbyists are lining up heavily on one side with sustainable agriculture, family farmers on the other.
Yet the "reformers" do not see corporate control of our food systems as the problem and have done nothing to raise awareness or help family farmers in their decades long fight to return some profit and fairness to their beloved rural communities. the NYT/Wash Post and other urban press would rather demonize subsidies and farmers than address the corporate agribusiness giants.
here is an action alert to call your Senators to support the full livestock/competition title!
http://whatcounts.com/dm?id=13381C5DF7D5C4AC3D56921D8FB3B ...
The BUsh Administration HATES all the reforms in the Senate Bill and has threatened to veto on those grounds. It is highly likely we will lose to the highpowered lobbying. Any support on behalf of family farmers and ranchers strugging against these multinationals would be greatly appreciated!
Permalink
mat Posted 6:52 am
08 Nov 2007
i'm sorry, i'm really confused, and i guess i'm also sorry that i have been pinging my congress-people on this issue of farm subsidies.
i suppose i understand what you are talking about, in general, but it is NOT my field, so maybe i should just shut-up.
however, that opens up the original can of worms for me - and i suspect for MOST people - in trying to be more responsible and in trying to do more "good" in the world, we inadverently do bad because i don't trust most of my elected officials
to do what is "right" all by themselves.
i should have been more suspicious about anything the Bushies liked.... they are devious little monsters, aren't they? being naive and trying to affect government policy is bad, bad, bad....
it's too late for anyone to fix this anyway, isn't it, until 2012??
if i could vote against ADM and the other bad BIG companies, i would, but i can't.
Permalink
jarmadi Posted 9:24 am
08 Nov 2007
What is generally meant by the term "subsidy" is often confusing to me. In recent years, I have used the term to refer to, and only to, the "direct payment" to farmers of program crops....a payment that is totally unhinged from whatever the market price for those crops might be. The old style "deficiency payment" ,that only kicked in when the market price was below the target price, I guess is technically also a subsidy, but it is so different in nature from the "direct payment" that I just don't lump them both into the same term. I've seen where CRP payments have also been considered subsidies, even though that payment stems from a quid pro quo contractual arrangement.
I wish that this troublesome concept could be better defined, because my position is to do away with the direct payment, but to have the deficiency payment retained and to just sleep until needed, and the CRP program made even more available. If asked whether I am for or against subsidies, I can't give a simple yes or no answer.
Permalink
dairycoop Posted 10:42 am
08 Nov 2007
Permalink
renegade botanist Posted 1:31 pm
08 Nov 2007
Permalink
Jason D Scorse Posted 1:47 am
09 Nov 2007
If production subsidies ended we would still produce huge amounts of good because we are good at it, but the total acreage devoted to commodities would drop, although perhaps not by a huge amount. Whatever productivity increases may occur would have with out without the subsidies.
The biggest thing that would drop would be the price of land, since the subsidies are capitalized into land prices. But the environmental impacts would be significant since we wouldn't see production on marginal land and farmers would have greater incentives to diversify.
I'm not saying that ending production subsidies would be a panacea, but sorry, farmers can't defy economic laws- you go out of business if you increase costs when the price for your good is dropping- farmers aren't stupid. As the subsidies disappear the land devoted to the production of commodities will as well- this is uncontestable- the converse is evident in that corn planting has increased due to higher prices and ethanol subsidies.
Permalink
Farm Bill Girl Posted 6:37 am
09 Nov 2007
subsidies (the countercylical ones at least) only kick in at low prices. when prices are low, farmers do not cut back on production. they try to max out production to recapture lost income. when prices are high, farmers again will produce a lot to make money. those high prices then lead to overproduction...which then leads to a crash in prices. this is the vicious cycle farmers face adn why we need a price stabilization policy instead of this "free market" policy that only benefits Cargill and ADM.
Also, see coffee. not grown in the first world. no subsidies. still massive overproduction and depressed prices. During the 1960s, under the threat of "Castroism" the U.S. helped to create the Intl Coffee Agreement, a supply management agreement designed to throw a bone to Latin American peasants. this helped stabilize the coffee price and benefitted many countries, though not perfect. Under Reagan, coffee prices were deregulated and he got rid of the Intl Coffee Agreement in the name of "free markets." the result has been a collapse in coffee prices down to Depression-level prices, and massive impoverishment of the countryside in places from mexico, to nicaragua to Ethiopia.
which is why the Oxfam line on how our cotton subsidies hurt WEst AFrican farmers is not quite right. Our subsidies ARE hypocritical, but they are not what is causing the depressed prices and getting rid of them will not magically make cotton prices increase. Only supply management can do that, so everyone wins.
So the equation is
overproduction --> low prices --> subsidies
it is NOT (as is commonly assumed)
subsidies --> overproduction --> low prices
How you view this equation leads you to diff policy responses.
Permalink
JR Posted 6:49 am
09 Nov 2007
Still, the need for reform in current federal ag policy is clear for many reasons----including the very largest operations receiving unjustified sums at the expense and to the detriment of the mid-size and small farms, the environment and natural resources, and the food supply and marketplace. But, for this very reason, I can not understand how the enviro-org reformers Tom identifies can accept and worse yet promote and expand an element of USDA's Environmental Quality Incentives Program (EQIP) that provides $450,000 for the construction and expansion of concentrated animal feeding operations (CAFO). This is the single worst example of directly subsidizing the foundational costs of corporate factories in all of federal agricultural policy (and using "environmental quality" dollars of all things). Considering the documented environmental destruction, the documented economic consolidation and farm losses, and the documented market disruption and domination all created by CAFO and their vertically integrated corporate ownership structure, it is astounding and offensive that some enviro "reformers" would enshrine this worst example of unjust subsidization.
Permalink
Jason D Scorse Posted 6:53 am
09 Nov 2007
http://www.newfarm.org/features/0303/newzealand_subsidies ...
Permalink
mat Posted 8:16 am
09 Nov 2007
great, this is all good information and i have been doing some of my own research for the past couple of days - i've been slightly upset that i REALLY had hold of the wrong end of the stick! but, Farm Bill Girl and Tom you are not quite right. it IS complicated, and the Farm Bill needs to go farther,
but subsidies have to go away from our various farm scenario's here in America, and i hope they do (however, i'm not holding my breath that they will. i still don't trust congress to do what's right)
i feel better now....
Permalink
jarmadi Posted 11:36 am
09 Nov 2007
Subsidies are also said to cause Farmer to Farmer resentment, that they will inevitably feel that their neighbor has maybe received a better subsidy. In my experience, farmers can find many other things (wives, hunting dogs) to covet that set off more sparks than do the imagined size of one's neighbor's subsidies.
Permalink
George Naylor Posted 1:58 pm
09 Nov 2007
If the farmer has been surviving because of subsidies and along comes a new craze--the ethanol boom, then of course the farmer might shift to greed as a motivator and try to increase production to make some quick bucks to make up for all the years of penury. That's defintely a forward sloping supply curve. The environment will help pay for the greed and the possible bust when all the farmers around the world respond to the hype of good prices in in the forseable future.
On the other hand, if there was a policy--that is a transparent policy--of a price support system that raised prices above they supposed freemarket level with a non-recourse loan and supply managment, the farmer might think, "Well, hell, I don't have to destroy my farm to make a living, maybe I'll cut back on production and take a little more time for the family. (Again a backward sloping supply curve.) If we had a Secretary of Agriculture who could project the farmers and societies interest, he/she would encourage such behavior as good stewards of the land along with family values. The Secretary would also make it clear that higher corn and oilseed prices (the main ingredients in industrialized livestock feed would result in higher livestock prices, so "All you young farmers out there interested in raising livestock extensively with hay, pasture and small grains, go to it. We might even allow some of the land in CRP or other soil conserving programs be grazed or hayed for small operations to bring back small family farm livestock production."
But all the good things that could happen won't happen as long as farmers live under what Secretary Ezra Taft Benson (Eisenhower admin) said farmers needed, "the spur of insecurity" ie. the free market.
Permalink
jarmadi Posted 8:20 am
11 Nov 2007
I don't understand what is objectionable about a farmer using his money to pay his bills. If a subsidy assists in that regard, how is this not supporting farmers? Would financing a vacation be more in line with the "intended effect"? Is it because it "passes quickly"? Does he think that farmers are not adequately stalling in paying their creditors? Very peculiar......
Permalink
BruceMcF Posted 12:31 am
12 Nov 2007
overproduction --> low prices --> subsidies
overproduction --> low prices --> ...
... --> subsidies --maintains--> overproduction
The argument on capping subsidy payments to a total ceiling amount is that if the feedback effect involves producers getting pushed to the edge, its better for that impact to fall on the big producers. On the argument of this entry, that would seem to fall in line with the investment in cost cutting argument ...
overproduction (supply/demand not clearing at a sustainable price)
... --> low prices
... --> investment in cost cutting technology
... --> overproduction (outward shift of supply schedule).
... however, the question I have regarding the investment in cost cutting argument is, when is it ever not in the interest of big agribusiness to invest in cost cutting? Is this a question of where the corporate strategic focus lies, or something along those lines?
Permalink
jarmadi Posted 6:43 am
12 Nov 2007
overproduction-->low prices-->direct payment subsidy-->unchanged production-->unchanged prices
Two:
overproduction-->low prices-->price support subsidies hinged on production limits-->lower production-->higher prices-->no subsidies
Three:
lowered production-->higher prices-->increased costs to agribusiness interests-->higher cost of living indices-->increased possibility of interest rate increases -->resistence from multiple fronts(governmental, agribusiness, and financial interests) and pressures to increase production and lower prices.
Permalink