Reform School

Note: This is the third of a three-column series on the 2007 farm bill. The first two columns are here and here. The author promises not to return to the topic for at least a few weeks -- but will likely backslide from this pledge in his Gristmill blog posts.


In this series, I promised to lay out new models for federal food and farm policy. But after two long columns, I still haven't catalogued the full depth of the failures of current policy. Doing so is a necessary exercise, because the official terms of debate surrounding the 2007 farm bill will be dominated by the failed policies of the past.

I learned that lesson last week, when the Bush administration released its agenda for the bill. The Bush plan seeks to carefully balance its own need to cut the federal budget and further its free-trade agenda with its desire to appease an important farm-state political constituency. What the proposal doesn't do is address the massive environmental and social problems haunting U.S. food production.

Of course, the Bush team's move is a first parry. The congressional agriculture committees have only begun to debate the farm bill, and so far the farm-state legislators who dominate those committees haven't revealed much about their own specific plans. But initial public reaction to the Bush plan doesn't offer much hope for real reform.

Oxfam America, which has been a tireless critic of U.S. farm policy from a social-justice perspective, declared the Bush plan "encouraging," evidence that the administration is "willing to move American agriculture in a new direction." To see why the Bush plan is actually another push down the same old road, let's dig yet again into the parched soil of recent U.S. agriculture history.

Same Old, Same Old

For about a century, the main problem facing U.S. agriculture has been abundance. Powered by the great 20th-century agricultural innovations -- hybridized and later genetically modified seed varieties, synthetic fertilizers and pesticides, and petroleum-powered machines -- farmers consistently churned out much more food than people could eat, causing prices to drop.

According to classical economics, farmers should respond to the "signal" of lower prices by cutting production, which would cause prices to stabilize. Instead, as I discussed in the first column of this series, they've tended to respond by scaling up -- investing in land and technology to boost production. They hoped to make up in volume what they were losing in price -- creating a vicious circle of rising productivity, lower prices, and recurring farm crises.

Since the Great Depression, U.S. farm policy has at least ostensibly tried to smooth out this structural imbalance between supply and demand -- first by limiting supply, and later (after 1972) by trying to jack up demand. Both efforts flopped. Until the recent spike in grain and oilseed prices caused by surging biofuel demand, farmers have for years been routinely selling commodities such as corn, soy, cotton, wheat, and rice for less than the cost of production, with subsidies paying the difference for the biggest farms.

According to the Environmental Working Group, the federal government paid farmers $164.7 billion in subsidies between 1995 and 2005. The largest 20 percent of farms drew fully 88 percent of that cash. The real winners were the big grain-buying firms like Archer Daniels Midland and Cargill, which made billions in profit by buying up cut-rate grain and turning it into dubious "value-added" goods like high-fructose corn syrup and ethanol, for which they rigged up markets using their political influence. Large meat-packers like Smithfield and Tyson also thrived, turning a windfall of cheap corn and soy into highly profitable beef, poultry, and pork markets.

Meanwhile, U.S. farms have failed by the millions. Since 1950, the number of U.S. farms has plunged [PDF] from around 5.5 million to just over 2 million. The ones that remain tend to be much bigger, and more focused on ever-fewer crops.

To lament these trends isn't merely to indulge in agrarian nostalgia. Federal farm policy has not just been stubbornly ineffectual at achieving its aim of bringing supply and demand into line, despite annual cash infusions routinely in excess of $10 billion. It has also given rise to, or at least done nothing to check, a food-production and -distribution system that inflicts vast environmental and public-health destruction on this country as a matter of course.

Making Ourselves Sick

According to one reckoning [PDF], U.S. agriculture racks up "externalities" -- i.e., environmental and public-health damage not paid for by farmers or agribusiness, but rather by broader society -- of between $5.7 billion and $16.9 billion per year. And that's just from the actual act of growing food. According to the USDA [PDF], diet-related maladies such as diabetes and obesity cost the U.S. economy some $70 billion per year. Another study [PDF] puts annual health-care expenditures related to obesity alone at $98 billion to $129 billion annually.

Apologists for U.S. agriculture policy point out that these titanic annual subsidy payments and external costs at least buy us the world's cheapest food system as a percentage of disposable income. But even on these allegedly populist grounds, U.S. food policy fails. The USDA reports that fully 11 percent of U.S. families -- representing some 35 million people -- chronically lack access to sufficient food.

Given the depth of these dysfunctions, the Bush administration's carefully crafted agenda for the 2007 farm bill is weak medicine indeed. Essentially, it tinkers with funding formulas in hopes of appeasing free-trade obligations, throws some extra cash at conservation programs, and crosses its fingers and hopes that the biofuel boom will keep corn and soy prices high enough to keep direct payments to farmers down.

It offers nothing substantial to remedy agriculture's structural supply-demand imbalance, nor does it seriously address the gaping public-health and environmental damage being wrought by the food-production system. And I fear, given Oxfam America's endorsement, that the Bush plan might end up the acceptable "reform" agenda as Congress takes up the farm-bill debate.

Truly New Directions

The time has come to reject these old models and ask new questions. How can federal farm policy align the needs of farmers with those of consumers -- including low-income ones? Can the health of farm economies be aligned with public health and environmental protection?

The Bush farm-bill proposal, for all its claims of fiscal restraint, would still cost taxpayers $87.8 billion over the next five years, USDA chief Mike Johanns acknowledged last week. Rather than paying out that cash directly to farmers, what if we invested it in rebuilding local food infrastructure (including season-extension equipment), in helping farmers transition to organic production, and on research into increasing the productivity of sustainable agriculture?

What if grassroots urban-farming projects, with their proven record of delivering fresh, healthy food to low-income citizens while also creating jobs, became a major funding priority?

The most encouraging farm-bill initiative I've come across yet is the Farm and Food Policy Project, a broad coalition of sustainable-agriculture, anti-hunger, and environmental organizations that have been working together for years to forge a new model for farm policy.

The agenda [PDF] they've cobbled together is must-reading for anyone tempted to support the meek and inadequate "reform" plan being marketed by the Bush team.