Reclaiming Farm Trade Terms

Over the years a variety of terms have been used to mystify the issues of farm trade, in order to push ‘free’ trade agendas against the interests of farmers and the US. A glossary of more adequate definitions is needed to begin to discuss trade in the real world.

Farm trade seems to be characterized by “doublespeak” (George Orwell, 1984,) more than many other topics. In recent decades we’ve seen a series of “trade” or “free trade” agreement negotiations, NAFTA (and other “AFTA’s), GATT (leading to the WTO organizational structure,) KORUS, TTIP and TPP, which was just opened up yesterday.

The Farm Bill is another place where the lexicon of trade shows up. Trends in the Farm Bill since 1953 have been to lower farm prices to the cheapest levels possible, and at the same time to argue that this would be a good thing for farmers and for the U.S. The majority of farmers have always disagreed with this approach, and they’ve been proven correct in these disagreements.

“EXPORTS” Trade involves exports and imports. The standard form of mystification by agribusiness exploiters has been to talk about increasing farm exports, and then improving our “balance of trade,” (by exporting more than we imported). The 1985 Farm Bill, for example, lowered Price Floors, (like minimum wage,) drastically. They claimed that this would help U.S. farmers, because we’d export a greater quantity, and later prices would rise, as farmers elsewhere were put out of business.

Within a year or two this appeared to be coming true. “Exports” were up. That is, if you define “exports” as export volume, then exports went up. If you define “exports” as export value, however, “exports” went down. So it was a bad deal economically that was spun as a good thing, by manipulation of the terms. We see then, that there are a variety of terms.

EXPORTS, can go up or down, but can mean VOLUME (QUANTITY) or VALUE.

BALANCE OF TRADE can be positive (a TRADE SURPLUS) or negative (a TRADE DEFICIT).

All of these terms can mislead us, as they don’t ask a more fundamental question: Are we making a profit on trade? We can increase the volume or the value or both and still lose money per unit. In that case, the more trade, the more money we lose, the more we subsidize foreign entities. So value is more important than volume, but it can still be misleading.

The same applies to balance of trade. We can have a trade surplus, or a trade deficit, but that still doesn’t answer the question of whether we’ve lost money on it or made money on it.

Unfortunately, there doesn’t seem to be a term in use for farm trade that tells whether or not we’re MAKING A PROFIT ON TRADE.

More than that, we also haven’t even been increasing the volume of our farm exports in the long haul, as we’ve maintained farm price levels below the cost of production! (See Daryll Ray links on this, below.)

The mystification is even more fundamental than these distortions, however.

For example, all of the trade agreements focus on what’s called:

FREE TRADE. The myth is that “free” trade gets rid of the red tape and makes economic life easy. You would think then that trade agreements would be short and simple, uncomplicated. In fact, the reverse is true. They’re huge (a 4 feet tall stack of papers?) and packed with endless regulations, telling us what we can’t do in our internal federal, state and local governments. They then can give procedures by which foreign governments can take our federal, state and local governments to trade court, as in the WTO. This is a huge burden to small, poor countries, as it takes a massive new legal infrastructure to respond to or instigate these lawsuits. Basically, it takes a “megamachine,” a power complex, something along the lines of the academic power complex that invented the atomic bomb, (the Manhattan Project) (on megatechnics see Lewis Mumford, “The Myth of the Machine,” 2 vols.).

TRADE versus GOVERNANCE. We see then that the new trade agreements aren’t mostly about trade at all, but are about internal matters of government. They’re global GOVERNANCE agreements, taking over part of our internal federal, state and local government functions. We see, then, in TPP it’s a huge and SECRET agreement that even Congress has NEVER seen, but that a large contingent of multinational corporate leaders HAS seen.

So “trade,” in these “trade agreements,” isn’t mostly trade at all. It’s a front for global corporate government, without any elected representation.

Likewise, if you’re against ‘free’ trade, against losing money on farm exports (and losing money internally in farm states,) then you’re said to be AGAINST TRADE. That is, TRADE is defined in the mainstream corporate media as only meaning ‘free’ trade. If you’re for fair trade, that’s called being anti-trade.

A related term, GLOBALISM, is used to refer to ‘free’ trade and losing money on farm exports, for example. The assumption in the dominant (corporate spoon fed) narrative is that those for fair trade are against global interactions, (against trade). Really, what’s called “globalism” means only CORPORATE GLOBALISM, and it’s not at all in the interests of the global 99%. Really, those for FAIR TRADE are very much in favor of global interaction and trade. What we oppose is the trade war that’s hidden behind terms like “trade” (meaning only “‘free’ trade,”) and “globalism,” (meaning only global corporate domination of our governments and our economies).

PROTECTIONISM is a term used for any effort to maintain profitability in a country against trade regulations that prohibit those measures. So if countries try to maintain profitable farm prices, that’s labeled protectionism, that’s bad. Really, the ‘free’ trade of these trade agreements is massive corporate protectionism.

Related to this is the term COMPETITIVE. Basically, for farm trade, it’s said to be COMPETITIVE when the U.S. has lost money on trade, (although that’s never mentioned). That’s supposed to be more CAPITALISTIC, and even more GREEDY, as we’re seen as bullying other countries around, and running their farmers out of business. Really, we’re losing money massively in our so-called “capitalist” “greed.” (We’ve lost hundreds of billions of dollars on farm exports in recent decades, with the exception of 2007-2014 for 3 crops). On the other hand, being “competitive” goes directly against the basic business value of making a PROFIT! All of this has been clouded in mystification.

We see how U.S. agriculture has been losing money in USDA figures for “Commodity Costs and Returns” (http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx). Most of the major farm crops, (grown on most of the land,) have lost money (vs. full costs) almost all of the time since about 1980-81. The data begins in 1975, so it’s not clear how often US farmers lost money prior to 1975, when we also had lower and lower and lower farm prices from 1953-1972, (as Price Floors were lowered by Congress). I’ve calculated this by taking cost/acre figures for 8 crops, then multiplying this by the yearly production of each, and then adding all 8 crops up for each year and for all of the years 1981-2006. The crops are: corn, wheat, soybeans, cotton, rice, grain sorghum, barley and oats. What this shows is that US farmers lost money on these 8 crops as a whole every year 1981-2006, except 1996. At that point, we had about 7 years when 3 of these crop prices, (corn, soybeans and rice,) were above full costs. Meanwhile, the other 5 crops (cotton, wheat, grain sorghum, barley, oats,) continued to lose money, 6 out of 7 years, 2007-2014.

Dairy is another category, and has been below full costs every year 1993-2014, except for 2007, when prices were a few pennies per gallon above full costs. (See link above.)

Today all 8 crops (and dairy) are below full costs, and projections at present are for more of the same through 2024.

Losing money versus FULL COSTS means that farmers got paid a wage equivalent, but lost money on their investments in land, facilities, and machinery.

What we really see in these trade agreements, then, is CORPORATE PROTECTIONISM, protecting the privilege of corporations to buy from farmers at below our costs, and to drive down global farm prices in order to accomplish that world wide. The protection comes from the fact that ‘free’ market ideology fails, leading to huge opportunities for the corporate buyers of farm products to purchase at below the cost of production. This was fixed by the New Deal Farm Bill, with parity (living wage) farm price floors from 1942-1952. Under corporate pressure, Congress reduced (1953-1995) and eliminated (1996-2023) these programs as a sort of ‘free’ market entitlement for the international corporate buysers, at the expense of U.S. and global agriculture.

Note that these U.S. farm trade policies have been the opposite of what OPEC has done for their oil exports. With something like 40% export share, they reduced production, (managed supply,) and made a lot more money. The U.S., in contrast, has had even bigger clout than OPEC, with bigger export market shares for major crops, sometimes well above 50%, (and even up to 90% at times for soybeans). Instead of using this clout to make money, we reduced and ended supply management and price floor programs in order to make less on farm trade, in a global TRADE WAR, a race to the bottom. The goal of these efforts was to increase our export share, but in fact, it’s gone down, so it was all for nothing. While in the past we had international agreements to prevent trade wars, those have mostly ended.

TRADE WARS are supposed to be when countries prohibit cheap, below-cost imports, leading other countries to make similar restrictions. What’s misleading is that the various countries are really blocking our ability to lose money on exports, that then drive the prices for all farmers down, running us all out of business, and making less money for the United States, the dominate farm exporter. Absurdly, we’re supposed to then say “‘Them’s fightin’ words!”

So there again the truth is the reverse of the dominant narrative. The real agricultural TRADE WAR comes with CORPORATE PROTECTIONISM that forces all farming countries to lose money both internally and externally for the benefit of giant multinational corporations. Since 1953, these trends have run most US farmers out of business.

This is also what STARVES THE WORLD. We’re told by our corporate overlords that we must FEED THE WORLD via overproduction and cheap food. Really, however, 80% of the “undernourished” are rural, mostly farmers, as is 70% of the population in the poorest or “Least Developed Countries.” Until a few years ago, the rural population made up more than half of global population, so impoverishing rural economies is an enormous problem, not just a problem for a tiny fraction of the U.S. population. Our FARM JUSTICE activism here, (activism for fair trade, living wage farm prices,) is especially important, as the U.S. is the dominant exporter. This is a fight on behalf of our country and our government against the multinational corporate overlords who have colonized our government (i.e. USDA, Congress, the Presidency,) to force us to lose money on farm exports for their direct benefit. It’s also a fight for all of the agricultural regions of the world, and against hunger.

Free trade is based on FREE MARKETS, and free markets have not worked very well at all for agriculture under most market conditions we’ve had for 160 years, on into the 21st century. As Williard W. Cochrane has put it, in summarizing the evidence, (The Development of American Agriculture, p. 371,) “We now have an aggregate demand relation and an aggregate supply relation for the agricultural food industry. Both relations are highly inelastic in terms of price.” Or as Daryll E. Ray put it, (see links below) farm products are characterized by a “lack of price responsiveness” “on both the supply and the demand sides for aggregate agriculture.” ‘Free’ markets don’t self correct with an “invisible hand,” (again, not very well at all under most market conditions …). Supply and demand don’t automatically fix themselves on either the consumer (demand) or farmer (supply) sides for the main groups of crops grown in the various farming regions (i.e. in the real world of agriculture).

We see then, (in direct contrast to some of USDA secretary Tom Vilsack’s recent rhetoric, [http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/10/0274.xml&…) that trade agreements like TPP are UNSCIENTIFIC. They’re based upon economic illusions unsupported by any valid body of evidence. The whole purpose is to provide huge profits to a tiny few giant agribusiness corporations at the expense of farmers, of farming states, and of farming countries, including the United States, the dominant farm exporter.

Toward this end, a lexicon of mystification has played a major role.

FURTHER STUDY

League of Rural Voters, “Trading Our Future? Defining Agricultural Trade Rules for the Next Century,” YouTube, Institute for Agriculture and Trade Policy, posted 1/16/15. https://www.youtube.com/watch?v=YjSGgTXauUo&list=PL7K_XwGI3jVS4AMDeEdFfHALIOYnoWg53&index=15

Mark Ritchie, “Alternatives to Agricultural Trade War,” IATP, 12/1/87, https://www.iatp.org/documents/alternatives-agricultural-trade-war.

Brad Wilson, “Why U.S. Farmers Oppose ‘Free’ Trade,” Zspace, 6/22/15, https://www.youtube.com/watch?v=YjSGgTXauUo&index=2&list=PLA1E706EFA90D1767.

Steve Suppan, “Agriculture and Supply Management in the TPP,” Institute for Agriculture and Trade Policy, Think Forward Blog, 8/13/15. http://www.iatp.org/blog/201508/agriculture-and-supply-management-in-the… This is a great update of some of the first insights into the secret TPP trade and governance agreement, related to this discussion of farm-side issues. For example, it expands upon what I wrote above about the 1985 Farm Bill. Learn more about trade from IATP here (http://www.iatp.org/issue/trade).

Lori Wallach, “Trade Act Hearing,” Public Citizen, 5/28/09, http://www.citizenarchive.org/trade/tradeact/. This is a positive alternative to TPP and similar agreements. Public Citizen is one of the best sources on information on these trade agreements.

“Noam Chomsky on Trans-Pacific Partnership,” YouTube, Representative Press, (Laura Flanders show,) 5/31/15, https://www.youtube.com/watch?v=bgqwfCyZpao. A great, brief summary related to my post.

DARYLL RAY COLUMNS ON FREE MARKETS AND FREE TRADE

Daryll E. Ray, “It’s Price Responsiveness! It’s Price Responsiveness!! IT’S PRICE RESPONSIVENESS!!!” APAC, (U of Tenn.,) 5/6/05, http://agpolicy.org/weekcol/248.html.

Daryll E. Ray, “Are the five oft-cited reasons for farm programs actually symptoms of a more basic reason,” APAC, (U of Tenn.,) 10/27/06, http://agpolicy.org/weekcol/325.html. Historical context.

Daryll E. Ray, “Policy premise correct three times a century,” APAC, (U of Tenn.,) 9/23/05, http://agpolicy.org/weekcol/268.html.

Daryll E. Ray, “Exports: Does Lowering the Price to Capture Market Share Work in the Grain Markets?” APAC, (U of Tenn.,) August 4, 2000 #5, http://agpolicy.org/weekcol/005.html.

Daryll E. Ray, “Allowing Grain Prices to Fall Does Not Stave Off Loss of Export Market Share,” APAC, (U of Tenn.,) August 11, 2000 #6, http://agpolicy.org/weekcol/006.html.

Daryll E. Ray, “Free-Market Ag Economists and Agricultural Markets: Premises and Results,” APAC (U. Tenn.,) August 25, 2000 #8, http://agpolicy.org/weekcol/008.html.

Daryll E. Ray, “Our Export Competitors Harvest 36 Million More Acres Following 1996 FB,” APAC, (U of Tenn.,) June 01, 2001 #46, http://agpolicy.org/weekcol/046.html.

Daryll E. Ray, “Will trade liberalization bring about better prices for farmers worldwide?” APAC (U.Tenn.,) December 19, 2003 #176, http://agpolicy.org/weekcol/176.html.

Daryll E. Ray, “Export measures often need to be put into context to reflect reality,” APAC, (U of Tenn.,) November 5, 2004 #222, http://agpolicy.org/weekcol/222.html. This discusses export “volume” vs export “value,” etc.

Daryll E. Ray, “25 years of export competitiveness and what do you get…”, APAC, (U of Tenn.,) November 10, 2006 # 327, http://agpolicy.org/weekcol/327.html.

Daryll E. Ray, “Export-led prosperity: That sounds familiar,” APAC, (U of Tenn.,) September 7, 2007 #370, http://agpolicy.org/weekcol/370.html.

Daryll E. Ray, “Current farm policy is based on an export-centric narrative,” APAC, (U of Tenn.,) March 26, 2010 #504, http://agpolicy.org/weekcol/504.html.

Daryll E. Ray, “Betting the farm on ‘market access,’” APAC, (U of Tenn.,) August 11, 2006 #314, http://agpolicy.org/weekcol/314.html.

The Harkin Compromise

Introdution:  Restoring a Farm Justice Farm Bill

Tom Harkin has been the greatest Senator of the past 20 years because of his leadership in introducing proposals to restore true Democratic Party farm programs through his farm bill proposals.

In 1985 Harkin introduced the Farm Policy Reform Act, (sometimes called the Harkin-Alexander Farm Bill, as it was co-sponsored by Representative Bill Alexander, [D-AR]).  See more information here:  (“The Farm Policy Reform Act of 1985,” https://familyfarmjustice.me/2016/12/10/the-farm-policy-reform-act-of-1985/ ).

In 1987 he introduced another version of the bill, The Family Farm Act, sometimes called the Harkin-Gephardt Farm Bill, (with Representative Richard Gephardt as a co-sponsor).  See more information here:  (“Family Farm Act of 1987, https://familyfarmjustice.me/2016/12/09/family-farm-act-of-1987/ ).

Harkin continued to support this approach until he became Senate Agriculture Chairman in 2001.

The text below is an excerpt from a longer piece, “Subsidies vs Price Floors in Farm Bill History, Revised,” which is found here:  (https://familyfarmjustice.me/2016/05/25/subsidies-vs-price-floors-in-farm-bill-history-revised/ ).

The Harkin Compromise

In 2002 when Tom Harkin became chairman of the Senate Ag Committee he switched sides. He stopped advocating for price floors and supported a greened up version of the 1996 Farm bill, (the worst Republican Farm Bill since Herbert Hoover). That goes for 2002, 2008, [and 2014]. In 1985, 1990 and 1996, however, Harkin and the other Democrats in Congress and running for President (ie. Gephardt, Daschle, Wellstone, Simon, Hart, McGovern, Dukakis,) totally rejected this kind of a farm bill. With Harking in the chairman roll, however, all of the progressive Democrats in Congress followed Harkin in what I call “The Harkin Compromise,” his “green” version of Freedom to Fail.

During the 1980s mainline churches also supported this kind of farm bill.   Today they support some version of a greened up Freedom to Fail, as do most other progressive groups including the Food Movement, Environmental Movement and Sustainable Agriculture Movement.  This occurs, surely, either because they believe free markets work, (National Sustainable Agriculture Coalition?) or because they don’t really know “what” a farm bill is, (other 21st century progressives).  Efforts are underway to get them all on board for farm justice, to stop then from supporting mere subsidy reforms, (erasing the yellow line on the aqua chart above), for the benefit of animal factories, junk food makers, and export dumpers.

Sustainable and Organic farmers are a special case. During the 1990s in trying to stop Freedom to Farm, the Family Farm [Justice] Movement worked hard to bring in sustainable and organic farm coalitions, (SAWGs, NCSA, SAC,) but failed, and [these other groups] have consistently supported some version of Green Freedom to Fail, [mere subsidy reforms, such as green subsidies or caps], combined with no price floors or supply management [to make CAFOs, junk food makers and export dumpers pay fair prices to farmers]. Their policies provide or would continue multibillion dollar below cost gains for CAFOs and even bigger gains for Cargill and ADM. Sustainable/organic folks have won greener subsidies like organic EQIP and CSP, but at the cost of massive subsidization for unsustainable animal factories to compete against them and drive down their premium prices.

Likewise, when Michael Pollan, in Food Inc. and Fresh, speaks of cheap junk foods, he’s referring to “green” versions of Freedom to Fail policies, [for the cheapest of corn, milk, cotton, rice, soybeans, etc.]. So when Pollan speaks of “subsidized corn” it’s misleading. The low/no price floors caused the low prices and the cheaper high fructose corn syrup and corn/soy transfats, as can be seen historically. The subsidies prevent the destruction of farmers. The bigger the farm, the bigger the losses to be compensated by bigger subsidies. Again, this is rarely mentioned when bashing farm subsidies. (Of course there are some economies of scale with larger farms, which changes their need somewhat, even as they have the biggest reductions in value.)  So ending, greening, and/or capping subsidies are not policies that address the biggest CAFO benefits, processor benefits, ethanol benefits, or exporter benefits against LDC farmers.

By the way, “family farm” advocates and their friends (ie. La Via Campesina with 200 million members) lost over and over on the price floor issue (without much food/consumer/environmentalist/organic help, and still today without help). So some farmers invested in ethanol to try to raise prices (and end processor below cost gains, dumping on LDC farmers). The idea is that when farmers lose money on corn, they’ll make some money it on ethanol, and if they make money on corn, they’ll lose money on ethanol.  It’s a kind of risk management.  No where have I seen this understood in the progressive community outside of NFFC related groups.

(Least Developed Countries are 70% rural. The US has long had huge export market shares of some commodities, bigger than the middle East in Oil, but our leaders tried to get low world prices, not high world prices with it’s clout, (clout of well above 50% export market share for corn and soybeans, for example, or up to +80%, but less each decade).

10 WAYS THE CURRENT FARM CRISIS IS WORSE THAN THE 1980s

(Author’s note:  I’m introducing this as a simple fact sheet.  I hope to provide further detail later.)

INTRODUCTION

Farmers today face a serious crisis, at least if present trends continue, as they are currently projected to do by United States Department of Agriculture’s (USDA) Economic Research Service, (ERS) and the Congressional Budget Office (CBO). A number of factors, (but not all,) make this worse than the 1980s farm crisis.  Here are 10 of them.

10 WAYS THE CURRENT FARM CRISIS IS WORSE THAN THE 1980s

[1.] Farm prices are lower.

[2.] There are no price floor programs.

[3.] these programs have been all but forgotten.

[4.] trade policy is worse.

[5.] Most farms have lost value added livestock, the livestock option.

[6.] As a result, most farms have greatly lost the sustainable crop rotation option.

[7.] The infrastructure needed to support for this value-added diversity has been severely reduced.

[8.] Congress is much worse, much more anti-farmer, including even rural progressives, who are generally much the same as conservatives on the big issues.

[9.] The cheap food lobby is bigger than ever, and has more money than ever, (from the farmers who are forced to subsidize them).

[10]. There are enormous myths against us, beyond what we ever had before, especially the subsidy myth.

Note.  This is all prior to the additional problems of the Trump trade war.  What’s so bad about the trade war is that it goes downward from the crisis that already existed, though that’s rarely reported.

On the positive side, however, the politics has radically changed, as a number of Democratic Presidential candidates have now come out in favor of restoring the core of the original Democratic Party Farm Bills of the New Deal, (in new ways).  Supporters of Price Floor programs, (with supply management,) include Bernie Sanders, Elizabeth Warren, Kamala Harris, (soon to be released,) Tulsi Gabbard, Marianne Williamson, John Inslee, (no longer running,) and, there is interest from others as well.  (Julian Castro, and Joe Biden is proud of his support for these programs in the 1980s.)

Mainstream Media Misunderstands the Farm Bill

Environmental Working Group and most other Food and Environmental groups, and hundreds of Mainstream Media sources, severely misunderstand the farm economy and the Farm Bill.

INTRODUCTION

The Environmental Working Group (EWG) has collected hundreds of editorials that generally support their views of the farm bill, including their focus on farm subsidies and “subsidy reform.” These were then publicized in a series of press releases referring to “252 editorials,” “372 editorials,” “411 editorials,” “475 editorials,” 550 editorials,” “630 editorials,” and “660 editorials,” for example. They represent major newspapers in all of the major U.S. cities and many smaller cities. EWG is the group that operates the Farm Subsidy Database, (https://farm.ewg.org/region.php?fips=00000&regionname=theUnitedStates ) which makes available data obtained from USDA through Freedom of Information.

One example of these summaries of media coverage, (with links to the actual editorials,) is a 2008 EWG press release on Common Dreams (alternative media site,) “372 Editorials Call for Farm Bill Reform.” (Original link to the press release: http://www.commondreams.org/news2008/0211-10.htm , now see https://www.ewg.org/successes/2008/winning-debate-just-not-vote-farm-subsidy-fairness#.WuMNGDvxZ9Q, https://www.ewg.org/release/more-630-editorials-call-farm-bill-reform#.WuMLATvxZ9Q and https://www.ewg.org/research/all-over-map#.WuMIKzvxZ9Q.)

EWG argued that “Two main themes emerge from these editorials.” First, they argued that subsidies go “to wealthy individuals and operations that do not need support,” for example, compared to “nutrition and conservation” programs. A key assumption, then, was that farm subsidies should be reduced, with the money going to these other programs. Second, EWG found the George W. Bush administration to be “far more progressive and reform minded than the Democratic leadership of the House and Senate when it comes to matters of equity and fairness in subsidy payments.”

There are major flaws in EWG’s analysis in this press release and in all others. In general, while the main farm commodity programs are terrible programs the EWG analysis and the editorials don’t explain why or how this is true. In reading hundreds of these editorials, I’ve found none to be correct about any of the basic questions raised by EWG.

THEME I: THE FARM SUBSIDY MYTH

What EWG and the editorial writers apparently didn’t know, and still don’t know, is that the original and early farm bills were designed to fix the economic problem of a “lack of price responsivensess” (http://agpolicy.org/weekcol/248.html ) “on both the supply and the demand side for aggregate* agriculture,” (http://agpolicy.org/weekcol/325.html ,) (*for farming markets as a whole as they occur across the various regions). This was a problem for 60 years prior to the farm bill, and continues today, (see p. 5 here http://agpolicy.org/publication/NFU-April2012-FinalReport-AsSentToNFUApr2-2012.pdf ) with CBO and USDA-ERS projections of it continuing for another 10 years. The main result was chronic low farm prices, below the full costs of production. The farm bill fixed the problem with market management of price and supply. On the bottom side, (for the main problem,) price floors were used, backed up with supply reductions, (as needed to balance supply and demand from year to year). On the top side, price ceilings triggered the release of reserve supplies, as needed to moderate price spikes. These programs worked well when well managed.

The history of the problems, leading to the recent period, is that Price Floor programs were reduced, more and more and more, from 1953-1995, and then ended (1996-2018). Similar changes occurred for livestock and for fruits and vegetables, where programs supported prices in “less direct” ways. The price reductions were implemented by Congress to allow market failure to force farmers to subsidize (via cheap prices) the huge corporate buyers of grains, fruits and vegetables, and other farm products, and through them, to subsidize consumers.

Subsidies, which were occasionally paid to growers of a few crops during the early years, had only tiny impacts in these early farm bills, and there were no subsidies from 1944 (or earlier, or none,) until 1961 for corn and wheat, 1962 for barley, 1964 for cotton, 1977 for cotton, 1982 for oats, 1998 for soybeans, and never for rye and other crops. These subsidies made up for only a small fraction of price reductions, (about 13% on average). These enormous, ongoing and increasing injustices are totally ignored by EWG and in virtually all of the hundreds of editorials.

The programs have been so bad for farmers that most of them have been run out of business during the period of reductions and compensatory subsidies. Market prices were below full costs** every year except one, 1981-2006, for a sum*** of 8 major crops. (**Full costs figures include a wage equivalent for the farmer, so the losses are on the farmer’s investments in land, machinery and facilities. See the raw data here: https://www.ers.usda.gov/data-products/commodity-costs-and-returns/) (***The sum of 8 crops is calculated as follows: full cost/acre minus income per acre for each crop, as measured by USDA-ERS, then all 8 are summed.) Dairy has been below full costs every year since 1993, except for 2007 by a few pennies per gallon.

Although yields increased dramatically over this period, and subsidies sometimes increased, farmers often made less money per acre. In USDA-ERS studies that include subsidies for 6 major crops, each crop was below zero vs full costs over all. (Over various time periods, corn, cotton, rice, barley, sorghum, and including soybeans, which had no subsidies. I have this data, but I can no longer find it online.) Even in recent years, net farm income has sometimes fallen to less than half of what it was during the 1940s. The major subsidized crops, (corn, wheat, soybeans, rice and cotton,) have each performed more poorly, (as measured by percent of parity,) than virtually all (i.e. 45) important fruits and vegetables, even if subsidies are included in the calculations, though fruits and vegetables have also fallen dramatically.

What we see, then, is that, with Congress reducing and eliminating minimum price floor programs, agriculture has desperately “needed” farm subsidies, (especially for the subsidized crops).

The question of rich beneficiaries who do not need benefits also begs for accurate analysis. First, who has stayed in business under these conditions? Increasingly it’s been those with off farm income. In 1960 the ratio of off farm income to farm income for farming households was about 1 to 1. By the 2000s it had grown as high as 10 to 1 for extended periods, and even as high as 20 to 1 on bad farming years. The key here is that farm losses provide tax write-offs for off farm income, and the richer the tax bracket, the the bigger the tax subsidy per acre. For example, the top bracket gets nearly 4 times more than the 10% bracket, per acre, assuming identical farms. We see, then, that major tax reforms are needed as well. This, then, complicates the question of those who are rich, (from off farm income,) getting subsidies for huge farm reductions and losses, (caused by bad farm bills from Congress, in a context of chronic market failure).

Even more dramatic, and totally left out of EWG’s analysis and the editorials, is the question of the real beneficiaries of these programs, the corporate buyers. While all farm subsidy recipients first face huge reductions in prices and incomes, (with the greatest quantity of reductions going to the biggest farms,) the buyers get their much bigger benefits, and they get them without any prior reductions. Instead they’ve often had record high incomes and returns on equity (often in the high teens or well into the 20% range, or even in the 30% or 40% range). (See A.V. Krebs, the Corporate Reapers, pp. 48 & 419, and this report: http://www.nfu.ca/sites/www.nfu.ca/files/corporate_profits.pdf .) Meanwhile, farm incomes have fallen, more and more, and returns on equity for agriculture have usually been in single digits, and only rarely in the teens (i.e. since 1960).

So there is no “means testing” for these (much much larger) corporate beneficiaries,(https://zcomm.org/zblogs/de-mystifying-means-testing-for-commodity-farmers-by-brad-wilson/ ,) and no transparency as to their subsidies, no public database for the much larger corporate subsidies taken from farmers to give to corporate buyers. Additionally, these larger farmer-to-buyer “subsidies,” since they result from market failure, don’t show up at all in farm bill spending pie charts,(https://www.slideshare.net/bradwilson581525/the-hidden-farm-bill-37959389 ) nor do USDA subsidy maps (https://www.slideshare.net/bradwilson581525/farm-bill-net-impacts-which-state-is-the-biggest-loser ) and articles, (i.e. analysis of subsidy impacts,) take account of them.

While the biggest 4 corn farmers have well under 1% market share,, (i.e., as estimated from the farm subsidy database rankings,) there are huge market shares for various groups of buyers, such as hog and poultry CAFO corps, (top 4 around 50%, http://www.ase.tufts.edu/gdae/Pubs/rp/CompanyFeedSvgsFeb07.pdf ) and exporters (top 3 probably around 80% according to experts, personal communication, but see https://www.researchgate.net/publication/304077247_Vertical_Integration_and_Concentration_in_US_Agriculture ). So the benefits are much much greater per recipient among the corporate buyers, (who’s rate of benefit per unit is 8 times greater than that of farmers, and with no prior reductions, i.e. compared to the farmers who pay these [8 times greater] benefits).

Neither EWG nor any of the editorials demonstrates any knowledge of any of this context either. In arguing for taking money from farmer victims to feed the hungry, they’re penalize one victim group to favor another. In the meantime, strategically and politically, subsidy related farmer bashing and victim blaming leads groups like EWG to be severely divided and conquered, (divided from those who could save them from these severe mistakes, where they end up supporting the biggest exploiters, such as the biggest benefits for junk foods, CAFOs, and export dumpers).

THEME II: THE WRONG SIDE OF FARM BILL POLITICS

The analysis above shows how EWG and hundreds of the editorial writers, (those that discuss proposals from the Bush administration,) were also wrong on the second major theme. The Bush administration, EWG and the editorial writers, in ignoring the need for farm justice more than the Democratic leadership does, are less progressive, not more.(On this point see: http://agpolicy.org/weekcol/589.html and https://zcomm.org/zblogs/ewg-s-ken-cook-debates-former-ag-chair-larry-combest-loses-by-brad-wilson/ ) Real reform, however, requires restoration of market management programs at adequate levels, to eliminate the need for subsidies.(See the major current proposals here: https://zcomm.org/zblogs/primer-farm-justice-proposals-for-the-2012-farm-bill-by-brad-wilson/ .) So none of the above are reformers.

THE MYTH OF “RECORD HIGH” FARM PRICES AND FARM INCOME

Farm Price Records

EWG further claimed, falsely, that the farm economy had seen “record high farm income and record high prices for many crops.” This falsehood has also gone viral all across mainstream media.(i.e. http://www.thegazette.com/2011/03/09/price-of-corn-not-really-a-record ) In fact, however, the much higher prices of 2007 and 2008 were small fractions of the real record highs, (i.e. only about 25% or less of record highs for corn, wheat and rice). They just seemed high because they followed decades of lower and lower farm prices, with the lowest prices in history occurring, over and over, from 1997-2005, (i.e. 8 of the 9 lowest for both corn and soybeans, and similar for other crops; I’ve crunched these numbers). EWG andmainstream media have totally ignored this massive context of hard times on the farm. In the case of The Gazette, (Cedar Rapids,) in the letter linked above, for example, since they regularly buy syndicated articles, and since these articles sometimes contain claims of “record high farm prices,” they can’t help further spreading the myth.

Net Farm Income

Likewise, even with greatly increased yields, Net Farm Income for 2007 and 2008 was well under 75% of 1942-1952, when all 11 years were higher. Only 2013, (later, and following the drought of 2012,) showed a Net Farm Income higher than some years in the earlier period, (and it did not rate in the top 6, including 1973, the record high). 2016 and 2017 Net Farm Incomes, (and projections ahead 10 more years,) are all below 50% of Net Farm Incomes during 1942-52. (Note that all of these recent net farm incomes, including all projections, include farm subsidies.)

The Absurdity of NOT Adjusting for Inflation

Perhaps we can assume that the myth of record high farm prices is explained by simply not adjusting for inflation. In that case, here locally, a June 2008 price for a bushel of corn was $7.01, and a few days later, in June, the price hit $7.03. Really, however, it’s absurd to call that a record high when it’s less than half of the real record high, of $2.16 in 1947, (when it’s only 91¢ in 1947 dollars, GDP deflator). ($2.16 iwas $16.80 in 2008 dollars In that method, for many items that follow inflation closely, every absurdly flawed. Complaining about low wages? “Your last pay raise was a ‘record high.’ Stop complaining.”

In fact, it’s possible for a statistic to be a record low every single year, nominally, andyet really be a record high, also every single year, if you adjust for inflation!

Record High Equals Record Low.jpg

CONCLUSION:  MEDIA COVERAGE OF THE FARM BILL

We see, then, that the two main themes identified by the Environmental Working Group in the 372 mainstream media editorials it obtained are both essentially false. A major problem with them is that subsidies aren’t at all the real problem. Subsidies are a form of justice for farmers, (not injustice,) but they’re also seriously inadequate. Really there should be fair prices, with no need for any subsidies. While there has been a lot of writing on farm bill issues in recent years by mainstream media and among Environmental, Hunger, Food and other progressive organizations, virtually all of it has been so false as to be the opposite of the claims made about farm bill reform. It has led countless organizations to unknowingly side with agribusiness exploiters, include junk food makers, animal factories, and export dumpers, all otherwise severely criticized these days by these same groups. Mainstream and alternative media, for their parts, do not perform any better when it comes to the core farm bill issues.

Pro-Farmer State Strategy: Reconcile Farm Justice with Sustainability

Pro Farmer State Strategy: Reconcile Farm Justice with Sustainability

Here is a proposal for state level strategy to take back the rural vote and fix the farm and food system. It counteracts key approaches through which the Republicans have been winning the farm vote, even though they’re policies and programs have been devastating for farmers and the rural economy, (not to mention environment, climate, public health, animal welfare, and other concerns). The economy was a top priority for voters last time around, and it’s the place where Democrats, and especially progressives, were weak. On the other hand, a focus on the rural economy is probably the most winnable thing that Democrats, especially progressives, can do.

FEDERAL CONTEXT

All of this is in the context of the policies and programs of the federal farm bill, which was great on the core issues from 1942-1952, but which Congress/Presidents reduced (1953-1995) and eliminated (1996-2018). This is the price issue, (which is falsely misunderstood in the dominant narrative and the dominant alternative narrative as the farm subsidy issue). The early programs featured minimum price floors (similar to living wage,) backed up by inventory management to balance supply and demand. That’s primarily a federal issue. THE FOCUS HERE IS ON STATE LEVEL ISSUES, which have their own needs and priorities.

This is a quick draft, so it’s a bit repetitive, focusing on a few key issues in simple ways.

WHAT TO DO

ECONOMICS

A major key to winning is to beat the Republicans (and compromising Democrats) on farm economics. Emphasizing farm and rural economics is much more important to taking back the rural vote than the lists of other progressive issues, (no matter how excellent, i.e. on organic and local food). While many issues are well geared to getting support from those who will vote for you anyway, what’s been missing are leaders who ALSO can take back significant chunks of the rural vote.

QUESTIONS

The key is to fix things in ways that clearly help farmers, that are clearly pro-farmer. So look at what rural candidates are doing and saying, for example at the state level, and ask them:

What are you doing for farmers and the rural economy? (Probably not much.)

Most farms have lost livestock under the current system, and most of the hogs, for example, that are still on farms are owned by a tiny few corporations, by just 4 corporations in fact, such as the Chinese company Smithfield WH Group, (formerly Shuanghui International). Do you support that system, (do you support the 4 corporations,) including Chinese ownership of US hogs? (This is a key area where Republicans have incredibly weak answers, but may have never faced the questtion in this way.)

Do you believe that deregulated free markets work for agriculture? (This especially applies at the federal level, but is so helpful that it should be used at the state level as well. No, these markets haven’t worked very well at all, for 160 years, and right into the 21st century, and projected ahead for another 10 years.)

PLANK

Whereas the state and national farm economy has been devastated by decades of increasingly counterproductive Republican policies and programs, my plan to help farmers (at the state level) is to reverse the pro-CAFO policies and programs, and provide new incentives in the opposite direction. Ultimately, I want much more than a moratorium on CAFOs. I want to see strong incentives to bring livestock out of CAFOs and back to farms, and in diversified ways, where they utilize grass, alfalfa and clover, to strongly support resource conserving crop rotations, giving farmers more freedom, and especially, reducing the costs of farming, by reducing the need to purchase fertilizers and pesticides.

Here’s another example of wording to make these points.

Whereas free markets have lead to a devastating loss of freedom for farmers, including the loss of the livestock option on most farms and the loss of the options for the best resource conserving, multi-year crop rotations, making farmers much more dependent on both the agribusiness output complex, (buying from farmers,) and the agribusiness input complex, (selling to farmers,) with the CAFO complex taking most value added livestock away from farmers, …

More examples of wording.

Whereas CAFOs hurt rural (Illinois) public health, environments, economies and communities, we/I support a reversal to all incentives for CAFOs, including economic incentives, lenient regulations and nuisance lawsuit protections, and in contrast we support measures in support of family-farm-sized and diversified farms.

Whereas (Illinois/US/etc.) livestock production is increasingly owned by a tiny number of giant corporations, including the Chinese, (Shuanghui International,) massively taking value-added livestock away from diversified family-sized farms, leaving them with only low-value corn and soybean production, thus devastating resilience and making farms more dependent upon purchases of inputs from giant corporations, we support measures that will bring livestock diversity back to most independent family-sized farms.

WHAT NOT TO DO

The key thing NOT to do is blame the problems ultimately on farmers, or limit solutions to those that further penalize farmers. Why? Because 1. it is the penalization and exploitation of farmers that has created the problems, and 2. the first and most direct victims are farmers themselves.

This is a big challenge, as the dominant narrative strongly leads us to blame farmers, to push farmers to vote for the Trump Republicans, against their authentic farm interests.

Examples. Don’t just call for further regulation of farmers, for example regarding the environment, and don’t call for regulations first. Your top priority must be support for economic revival for farmers and then that leads to economic revival for rural towns. Republican ideology and programs (pro-CAFO, leaving farmers with low value crops,) have devastated farmers and rural towns.

The CAFO example. The CAFO system has taken value added livestock away from most farms, leaving only low value, below cost, crops like soybeans, wheat, rice, cotton, corn and other feedgrains. That then makes sustainable (resource conserving) crop rotations more difficult, as these rotations utilize livestock feeds, such as alfalfa and clover, grass, and small grain nurse crops such as oats and barley. All of that helps to stop the use of expensive pesticides, seeds and harsh fertilizers, (which are all bad for the soil).

WHAT HURTS FARMERS IS WHAT HURTS SMALL TOWNS

Cheap farm prices, the loss of value added livestock on most farms (to the Chinese, the Brazillians, etc.) and the loss of the freedom and flexibility of livestock systems and diverse crop rotations is what hurts small towns in massive ways, as has been massively documented. SEE THE RESOURCES BELOW.

FARM SUBSIDIES!

ECONOMIC CAUSE. Government subsidies DO NOT subsidize CAFOs (and junk food and export dumpers)! Do not fall for that. They’re subsidized by the failure of free markets, (by believing in Republican free market ideology). This is a chronic ECONOMIC problem that is projected to continue indefinitely into the future, and it’s surely worse since farmers lost the livestock option, (as they’re forced to make worse choices).

POLITICAL CAUSE. The failure of free markets was fixed incredibly well by the Democrats at the federal level, when they invented the farm bill core of market management (of price and supply/inventory). This made agribusiness pay farmers 69% more for corn, 48% more for cotton, 45% more for wheat, etc., on an ongoing basis (1942-52 vs pre-farm bill 1920-35). So the primary POLITICAL cause of CAFO (junk food, export dumping,) free market subsidization is the reduction (1953-1995) and elimination (1996-2018) of the core market management programs at the federal level. The 2 key proposals to fix that are the NFFC farm bill, (Food from Family Farms Act,) and the National Farmers Union (NFU) farm bill, (Market Driven Inventory System), plus a similar NFFC proposal for dairy (and a proposal for dairy supply management related to this was introduced in Congress last time around). https://zcomm.org/zblogs/primer-farm-justice-proposals-for-the-2012-farm-bill-by-brad-wilson/

CAUTION.  Perhaps the most widely misunderstood resources on the subsidy question applied to CAFOs are those of Tim Wise (et al) at Tufts University.  Wise argues correctly that “implicit subsidies” benefit CAFOs.  What’s misunderstood is that “implicit subsidies” are NOT government farm subsidies.  They’re ECONOMIC free market failures, combined with the POLITICAL reduction (1953-1995) and elimination (1996-2018) of Democratic market management policies and programs.  On this point see:  https://zcomm.org/zblogs/philpott-bittman-imhoff-lappe-are-wrong-about-tim-wise/ .

EXTRA: KEY DILEMMAS:  SUBSIDIES, DEREGULATION, AND BEYOND

Subsidies have been needed ONLY when Price Floors have been reduced and eliminated, returning to free markets, as in Republican ideology, (as has happened). But in the long run, subsidies instead of fair prices hurt farmers, as the cheap prices force farmers to subsidize the loss of their own value added livestock to CAFOs. So with free markets plus subsidies, farmers face a nasty dilemma. To remove subsidies while not restoring Democratic market management is even worse, and would rapidly devastate the farm and food system. It’s a dilemma, created by Republicans. And then farmers get the blame, not agribusiness.

Republican deregulation of crop farming and of livestock systems calls for ignoring pollution, damage to health, inhumane methods and other large concerns. This helps reduce the costs of production for farmers. Since farmers are grossly underpaid, they need Republican deregulation, (IF almost no one is advocating for the restoration of Democratic market management and the other things that farmers really need). This is a dilemma. The resolution is to find STRONG solutions to the underlying problems that ALSO help farmers. These should be solutions that change farming systems as a whole, not merely back to previous systems, but forward to alternatives that are even more resource conserving than in the past.

I’ve proposed the restoration of fair prices, combined with special market management incentives to bring livestock out of CAFOs and on to forages in sustainable grazing systems. It could be part of supply reduction, to allow much more grazing on supply reduction lands than under previous programs. This would fix problems while helping farmers.

Effective restoration of the livestock option (in a way that encourages grazing and hay production,) then brings restoration of the option for resource conserving crop rotations. This then is a way to strongly address CROP POLLUTION problems, (& loss of carbon, loss of diversity, and etc.) while ALSO helping farmers. While not requiring organic production for farmers, it opens that direction up for all farmers, and supports the infrastructure that organic and other farmers (with livestock and enhanced crop rotations) need. Research by the Leopold Center at Iowa State University found that these rotations are more profitable, but there are now much increased barriers to implementing them. We need policy tools to help overcome those barriers (see above and below).

Additional regulations should be paired with the level of minimum price programs. How much public good should farmers provide? Ok, then manage markets to raise prices to pay for that. The more public good, the higher (closer to parity) that farm prices should be. This should be the first priority, as it doesn’t rely on government spending. Green subsidies for things like organic farming, while maintaining cheap prices that massively subsidize CAFOs to take livestock away from farmers is a strategy that radically fails to resolve this dilemma. So follow my approach first, so farmers first need no subsidies, (and use market management methods to bring back livestock in sustainable crop rotations,) and then if necessary, consider some green subsidies.

Ok, so farmers need subsidies in the short run (immediately!), but the free markets that necessitate subsidies help giant CAFOs MORE than they help farmers stay diversified and flexible. It’s a nasty dilemma where farmers lose out in the long run. And farmers need deregulation because they’re so grossly underpaid, but deregulation helps CAFOs more than it helps diversified farmers with livestock and sustainable crop rotations, so that too is a nasty dilemma where farmers lose out in the long run.

And then we’re divided from farmers and conquered and we lose the rural vote and we all lose.

There are a long list of farmer dilemmas that basically fit this pattern. Another is the tax system. Since farmers are grossly underpaid, (to secretly subsidize agribusiness,) they need a lot of big tax breaks, but those tax breaks are 4 X bigger per acre for the rich in the top bracket (with lots of off -arm income,) than for those in a 10% bracket, (i.e. identical farms). So the tax breaks help all farmers, but they give a huge competitive advantage to the rich, the richer you are. Again, it’s a savage dilemma against the vast majority of farmers.

So don’t advocate ONLY against subsidies, deregulation, tax breaks, etc., to be divided and conquered, as in the loss of the rural vote last time. Reconcile the dilemmas to take a significant portion of votes away from the Trump Republicans.

Republicans grab all of these dilemmas by only one horn, and all too often, successively sell that to farmers. So in the end, the one-horned proposals of Republica always hurt farmers, but they always make it look like it’s pro-farmer, (for lack of adequate opposition). The state strategies I’ve proposed here are designed to counteract that.

VISUAL AIDS!

I like to bring along some visual aids to plop down on the table or podium or hold up and plop on the Q and A microphone. I recommend several key pieces.

[1] John Ikerd’s piece, “CAFOs vs Rural Communities,” can be printed (front back) on a single sheet to be handed out, (I prefer the pdf version http://www.inmotionmagazine.com/ra08/ikerd_low_res.pdf , but I sometimes use the html version for online postings http://www.inmotionmagazine.com/ra08/ikerd_cafo08.html ).

Ikerd’s piece is a sort of table of contents. It refers to 56 studies to buttress these arguments about how Republican farm policy lowers the rate of wealth and jobs creation in rural regions. Ikerd doesn’t link these materials, so I’ve listed them below. He’s an agricultural economist (emeritus)

[2] Here is the document “56 studies,” Curtis W. Stofferahn, “Industrialized Farming and Its Relationship to Community Well-Being: An Update of a 2000 Report by Linda Lobao,” http://www.und.edu/org/ndrural/Lobao%20&%20Stofferahn.pdf . 56 pages, great for plopping! So print it out. There are also other, earlier and later books and reports, articles, etc., but citing Ikerd and then plopping the report, which lists the 56 studies, is a good strategy.

[3] Ikerd also mentions, (but does not cite,) more than 40 health studies behind calls for a CAFO moratorium, so while you’re at it plop that one down also: “Precautionary Moratorium on New Concentrated Animal Feed Operations,” American Public Health Association, Policy no. 20037, 11/18/03 (about 5 pp., 46 footnotes,) https://www.apha.org/policies-and-advocacy/public-health-policy-statements/policy-database/2014/07/24/11/17/precautionary-moratorium-on-new-concentrated-animal-feed-operations ). Again, print it out as a visual aid.

[4] On the top 4 and 25 corporations, including the Chinese (and Brazillians?) owning most (hogs, poultry,) or an increasing share of U.S. livestock, see “Pork Powerhouses 2016: Glut of Pigs,” Successful Farming, 9/29/16, http://www.agriculture.com/livestock/pork-powerhouses/pork-powerhouses-2016-glut-of-pigs, list of top 25 at http://www.agriculture.com/pdf/pork-powerhouses-2016 .

[5] I also like to start by plopping down a copy of “The Economic Cost of Food Monopolies,” from Food and Water Watch, (2012,) http://www.foodandwaterwatch.org/insight/economic-cost-food-monopolies . It has a lot of information on concentration, and focuses on economics. 55 pages.

Dear Ag Sec. Perdue, Why are Peanuts Favored over Corn, Wheat, Soybeans, and Oats?

Questions for Ag Secretary Perdue

In looking at the 2014 farm bill, I find that the PLC subsidy trigger for peanuts, (Perdue’s home state,) and rice are much more favorable than the subsidy triggers for other major crops, (corn, wheat, soybeans, barley, sorghum, and especially oats! Well, compared to full costs as measured by USDA’s Economic Research Service (ERS).

PLC v cost Peanut adv % x5

Subsidy triggers (technically “Reference Prices,”) are the key standards for calculating subsidies. If average market prices for a crop, (as defined in certain ways for a given year,) fall below the Reference price it triggers a subsidy amounting to 85% of the amount below the reference, multiplied by historical yields, which can be up to 90% of recent yields. (85% x 90% = 76.5%) So the subsidy makes up for about 75% or less of the amount below the reference price.

But if the reference price is only about 85% of full costs (and falling over time as costs rise?), as in the case of soybeans (85% x 75% = ) then the subsidy brings you back up to only about 64% of full costs, in the case of soybeans, (less for wheat, barley, sorghum and especially oats; more for corn).

PLC v cost Peanut adv $ x5

Ok, PLC: that means Price Loss Coverage. It’s like the earlier countercyclical program and still earlier deficiency payments. This is the countercyclical option, where subsidies are directly related to the need for subsidies, (unlike in the Crop [revenue] program, ARC, Agricultural Risk Coverage,) so it’s quite important. After the 2008 farm bill, farmers overwhelmingly rejected the crop (revenue) insurance program (ACRE), but then that rejected (insurance) program is the one that Congress pushed for farmers for 2014, with help from some of the big commodity groups, (i.e. National Corn Growers Association, American Soybean Association,) and Farm Bureau (insurance company).

PLC v cost Peanut % adv

Cornbelt and Wheatbelt Ag Committee Members Betrayed Us

Well, except those in Congress advocating for peanuts and rice. Unlike cornbelt and wheatbelt ag committee members in places like here in Iowa, the peanut and rice voices won a strong PLC peanut program for their crops. So their farmers had no need to gamble on revenue insurance programs that don’t help you much at all if prices go low and stay low, (as they have no fixed standard of need, but rather use floating, free market standards, relativism, (technically olympic year averages). And that part about not helping you much at all? That’s exactly what CBO has projected ahead for 10 years, (and similar for ERS). The major farm prices will go low and stay low, (and so far they’ve been mostly lower than projected). And then the subsidies will ALSO be less, because the free market says that the cheap prices are appropriate.

(But, of course, the free market chronically fails for agriculture, as is well known, so the crop [revenue] insurance programs favored by Farm Bureau Insurance and their friends in some of the big commodity groups are basically a “theater of the absurd,” a recipe for existential nausea. No wonder farmer suicide rates are so high!)

Betraying Sustainable Agriculture

How about sustainable agriculture! How about a crop rotation that gets you away from row crops, with sod crops such as powerful legumes (alfalfa, clover,) to take large amounts of nitrogen free from the air, without fossil fuels. And then you need a nurse crop, like oats or barley. But the subsidy trigger for oats is only 47.1% of full costs (barley: 77.1%, wheat: 71.1%)!!! That’s how much Congress is helping sustainability, where it counts, in terms of money!

How About a $4.70 Subsidy Trigger for Corn, Instead of $3.70?

What if the subsidy trigger for corn was $4.70 instead of $3.70? That’s what it would have been if it had been equivalent to peanuts. We need to ask Secretary Perdue about that! A lot more corn farmers would have signed up for PLC! Unfortunately, most corn farmers were encouraged to sign up for ARC, the program that’s projected to be a disaster for farmers.

PLC if like Peanuts

Bottom line: it’s not just that Congress hasn’t restored fair price floors to eliminate the need for any subsidies, to make a profit on farm exports and free up nearly $100 billion for other, better uses. Congress has also reduced subsidies.

Well, not so much for Georgia peanuts and Arkansas rice. It’s really the cornbelt and wheatbelt ag committee members who are betraying farmers at the most extreme levels.

Cultural Leaders Are Responsible for the Collapse of Rural Culture

This paper assumes Albert Schweitzer’s argument in Civilization and Ethics, as described below.  Thus the title!

In 1923 Albert Schweitzer, in volume I of The Philosophy of Civilization, introduced his topic with a section on “How Philosophy is Responsible for the Collapse of Civilization.”[1] Schweitzer went on to write that, philosophy had evolved to the point where “the creative spirit had left her” and “the problems of life had no part in her activities.”[2]

Schweitzer’s predictions of decay proved prophetic as, within two decades, we witnessed a very real, very dramatic “collapse of civilization.” Echoing Schweitzer’s words, Viktor Frankl, a survivor of Nazi death camps later wrote that there is a “straight path” between reductionist views of humanity and “the gas chambers of Auschwitz, Treblinka and Maidenek.”[3]

brad-guitar-alfalfa

Here in Iowa in our time we can paraphrase Schweitzer and consider the role of our own cultural community in “the decay and restoration” of our Midwestern regional culture and the larger civilization in which we participate. I want to give special attention to the process of rural decay and to a lesser extent, the decay of our inner cities. I can illustrate our rural decay with reference to the latest and most dramatic expression of Iowa’s “problems of life:” the rapid takeover of hog farming by hog factories, in accordance with the North Carolina model of megatechnology and corporate welfare, and funded by outside investors such as North Carolina politician and billionaire, Wendell Murphy,[4] and even Chinese and the Brazilian megacorporations.

It was nearly fifty years ago that the cartoon character Pogo, standing amidst environmental destruction, stated: “We have met the enemy and he is us.” Well, let’s look carefully at the contrast between Iowa’s environmental awareness and our cultural awareness, as illustrated by the crisis in our livestock industry at the dawn of the twenty-first century.

While it is true that a hog factory in Iowa can legally pump as much raw sewage as a small town produces into an earthen sewage structure, without being required to build a sewage treatment plant, still, since the very beginning, hog factory proponents have been forced to face the environmental question. They have been forced by Iowa’s environmental community to claim that what they are doing is good for the environment.[5] With the exception of a few kinks yet to be worked out by scientists at Iowa State University, they are not destroying Iowa’s ecosystem, they declare. Iowa’s environmental community, while losing over and over again at the state legislature, has at least forced advocates for industrial agriculture to claim they’re pro-environment. No longer can they get away with the position that being pro-environment is bad for business. Even Governor Branstad, year after year in his state of the state speech, claimed that Iowa has the toughest environmental laws in the nation, even though we now know that Iowa rivers are some of the dirtiest. So he spoke out in favor of the need for strong environmental laws, even if he didn’t support them.

Now, let’s take this same issue and turn it around and look at the cultural side of it. Here we find that the same people who have been forced to at least give lip service to the defense of Iowa’s natural ecosystem, still claim that the destruction of Iowa’s cultural “ecosystem” is beneficial for the state. We need a natural ecosystem to stay alive and to thrive biologically. They acknowledge this. What they do not see is that we also need a healthy culture, and not merely to provide “exciting” attractions for tourists and our youth.  We need a sane culture just to survive.  In taking such a hostile attitude to our rural cultural heritage, these academic, business and political leaders dramatically illustrate the overwhelming failure of cultural education in the state of Iowa.

Now, let me explain more fully why I believe, with Schweitzer, that the cultural community, by grossly neglecting to apply their expertise to the very tangible “problems of life” of Iowa’s awesome agricultural/agribusiness drama, is “responsible for the collapse of civilization” here, and driving many our our best young people out of the state.

First, consider this: in his book On Thermonuclear War, Herman Kahn speculated about how many tens of millions dead in a nuclear holocaust would be “acceptable losses.”[6] Erich Fromm, writing about Kahn’s book, argued that “we are dealing here with one of the crucial problems of our age–the transformation of men into numbers on a balance sheet.”[7] Do you hear Schweitzer here? Do you see Frankl?

Now switch from Kahn’s military think tank in 1960 to the Committee for Economic Development in 1962, just two years later. In their report “An Adaptive Program for Agriculture,” the CED called for a program “. . . to induce excess resources (people primarily) to move rapidly out of agriculture,” one third of the farmers and farm workers “in a period of not more than five years,” by lowering price floors for corn and other feed grains.[8] “Excess resources.” Now there’s a term. How’s that for reductionism against Iowa’s rich heritage of rural culture.

Here in Iowa this same exact “balance sheet thinking” has been touted by Iowa State University for forty years. In 1962 Geoffrey Shepherd, in a report, “Appraisal of the Federal Feed-Grains Programs,” included a section called “Need Programs to Facilitate the Migration of Surplus Farmers Off Farms.”[9] Thirty-six years later (1998) Iowa State University Extension publications still carried a 1986 publication which opened with a statement about “a need to move excess resources out of agriculture . . . labor resources.”[10]

In these reports the deliberate destruction of rural culture, of Iowa’s living rural heritage is advocated without the slightest consideration of the civilizational value of this culture.

Another report coming out of Iowa State University and the Iowa Business Council in 1993 makes the cultural issue explicit. In this report they make it very clear. There are two sides, they point out: the reductionists who claim that “farming is a business” and nothing but a business, and the culturalists who insist that, in actual fact, farming is not just a business, its a way of life.[11] In this contrast they give virtually nothing to culture. No, the “way of life” people, they insist, are not fit to survive. The “way of life” people are backward, ignorant losers, they claim, closed off to the magnificent changes which the utopia of reductionism can bring to the state of Iowa.[12]

In contrast, the reductionists, the farming-is-nothing-but-a-business people will be Iowa’s agricultural leaders, they boldly prophecy.[13] They represent the wave of the future. And they’ve got a point there, for as I have suggested, our actual leaders, the dominant academic, economic and political leaders of Iowa fall mostly within the reductionist camp. Why wouldn’t others aspire to share their culturally illiterate views, when I have rarely seen a cultural leader speak out persistently against the onslaught of what Viktor Frankl might call pre-holocaust thinking. Where were they, for example, when, back in 1988, Iowa State University President Gordon Eaton proclaimed ignorantly that “farming is a business, not a way of life.” In my years of living in Springville, Cedar Rapids, Cedar Falls, Iowa City and Des Moines I have not seen where our cultural scholars have come forth to set the record straight.

Clearly, America didn’t listen to Schweitzer. We didn’t hear the fascist horsemen tromping toward us very well, even up to 1940. But Picasso did! He painted Guernica! Rollo May, an American psychologist well read in the humanities described his encounter with Guernica.

When this picture first came to this country, I went down to see it at the Museum of Modern Art in New York. I walked into the room and there was this large picture, all in white and grey and black, a picture showing a bulls head cut off, babies impaled upon swords, torn women lying in the agony of the bomb. The impression on me was so powerful that I could not stand any more than two or three minutes. I had to run out again and walk up and down the street until I could come back and look at it again.[14]

America’s true cultural leaders saw the collapse coming, but knew that most Americans, in our isolation and comfort, were blind to the depth of danger surging up around us. For example, in 1939 Lewis Mumford wrote that,

Probably the most serious mistake a civilized man can now make is to assume that the fundamental values of life have not been altered in the fascist countries. Traveling through Germany or Italy, the naive observer sees lovers kissing, mothers nursing babies, honest peasants cleaving the soil with mattock or shovel: life looks ‘normal.’ . . . The fact that the entire country has become, quite literally, a concentration camp does not even occur to him: . . .

Large groups of people still somehow refuse to believe that nations which use the radio and the electric motor can, by a purely ideological transformation, become hostile to all those traditions that cement together the members of civil society.[15]

One year later he argued the case for the seeing with the eyes of the humanities. First he quoted Herman Melville: “. . . your arts advance in faith’s decay: you are but drilling the new Hun . . . .”[16] Then he warned:

One of the great difficulties in understanding what has taken place under our eyes, . . . is the fact that political and economic disturbances are usually the final symptoms of a collapsing civilization. These visible facts are preceded by a much longer period of inner decay, which only a few people–usually separated from their society by alien beliefs–recognize as the symptom of organic disease.[17]

In our day, family farmers, particularly those experiencing themselves within their own “way of life,” representing therefore, the spirit of an alternative cultural heritage to that of our dominant urban civilization, should be sought out on questions of this fundamental “organic disease” of reductionism. In particular, organic farmers, separated as they have been, laughed at by agricultural extension workers, ignored by agricultural leaders at Iowa State University,[18] cut out of the benefits of farm programs,[19] could, with cultural assistance and support, provide powerful cultural insight to our narrow minded leadership elites. Iowa would then see more clearly that farmers today are echoing Lewis Mumford’s 1940 warning:

Let us not be deceived by outward signs of activity and vitality. In the very generation that Rome finally fell into the hands of the barbarians, there were renewed expenditures, on a grand scale, for public works.[20]

Iowa’s corporate executives need to be more effectively exposed to the dramatic presence of these farmers, for as American poet Walt Whitman put it, “I and mine do not convince by arguments: we convince by our presence.”[21]

Charles Hampden-Turner, a consultant on corporate culture, noted that pesticide company executives for which he worked “shied away from the really ‘monstrous dilemmas.”[22] And no wonder, for as Iowa’s organic farmers have proved, we can produce plenty of food whithout them. In contrast to the Iowa Business Council, Hampden-Turner argued that “We need to create wealth more effectively but, more than that, we need leaders who can stare into the face of the absurd and find in it meaning that could save us all.”[23]

To me it is clear: Iowa needs to hear deeper cultural voices. That’s what I’m trying to do as a folk artist, as a writer and as a public intellectual. As a farmer I’m independent. I have no contracts. I own all of my livestock. I make my own management decisions. No North Carolina billionaire tells me what to do.

I’m also an artist. I’m an independent artist emerging from the private sector. I create folk art and no academic, corporate or political group tells me what I can or can’t do. What I do is place my self inside of rural Iowa’s awesome cultural drama. I stand there, in person, side by side with other advocates for culture and sustainability, head to head against Iowa’s reductionist, anti-culture academic, business and political leaders. Repeatedly we have taken on these leaders, calling them by name and challenging their cherished philosophical illusions. At times we can become overwhelmed by the drama of these encounters. For example, during the mid 1990’s I made a long series of phone calls to Iowa farmers for the Center for Rural Affairs. To me, encountering so many real people, immersed so deeply in pathos, people like my friends and neighbors, became unbearable. It was, I believe, like Rollo May’s encounter with Guernica.

For sustenance I turn first to my faith. I find, however, that immersion within the mythology of faith can make a person vulnerable to radical otherworldly illusions if not checked and balanced by humanism and the humanities. I find, in fact, that the persona of the artist, fortified by an excellent liberal arts education, can, in its turn, provide an awesome, mythically-enriched resource for integrating these deep encounters with the current realities of Iowa culture at the brink of the twenty-first century.

And so, my vision for 2010, (or 2017,) does not ask that Iowa’s business, academic, political and cultural leaders join together to create a “National Center for Rural Culture.” First, I don’t believe that these leaders are remotely capable of completing such a project with integrity. Second, we have almost no small scale models for bringing cultural education into Iowa’s real dramas of life: for bringing cultural literacy to our corporate leaders; enhancing the artistic skills of our farmers;[24] and enabling professional artists to encounter this awesome drama, first hand, at it’s points of depth and authenticity. We are clearly not ready, therefore, to build a National Center for Rural Culture.

What we need instead is something akin to the Highlander Folk Center in Tennessee. At Highlander they immersed themselves, in person, in two powerful dramas, first the labor movement and then the civil rights movement. They built upon the traditions of folk culture and made it accessible to people of pathos all across the South. It was there, for example, that Martin Luther King learned the song “We Shall Overcome.” Highlander accomplished this over and against the top academic, economic, political and cultural leaders of the South. Clearly, if these same leaders had dominated Highlander’s board it wouldn’t have happened.

In his later years the late Myles Horton, the founder and director of Highlander, stated that he hoped to be a part of a third major cultural drama before he died. Now, some years after his death that drama has arrived here in Iowa in what I call “the fight for beauty.” Here we fight on behalf of Iowa, the beautiful land of family farms, rural communities and regional cities. We fight for the natural beauty of Iowa’s savannas and savannah-like checkerboard farms. We fight too for the cultural beauty which is so essential to our quality of life.

For me then, as a farmer, culture is a tradition built into the private sector. It is part of the subsidy which my neighbors and I, (and others like us across the state,) offer to the larger culture as we do business. What we offer is not so much “values added” as “values reconciled.”[25] As a man educated in the humanities I constantly work to make reconciliations explicit. For example, when we sell our lamb, poultry and eggs at the farmer market, we promote our operation as “A Regeneration of Culture.” We call ourselves Fireweed farm, quoting Lewis Mumford’s prodigious work of cultural history: “Great cities might be leveled to the ground, their temples ransacked, their libraries and records burned: but the village at least would spring up again, like fireweed, in the ruins.”[26] We exhort our customers to buy our “fireweed food,” not just because of our “humane husbandry”and “sustainable technology,” but also for our “advocacy for beauty and justice” and our “family farm culture.”

In the concluding volume of his “Renewal of Life” series, Lewis Mumford cited Albert Schweitzer as “a classic example of renewal and integration.” Schweitzer work reached across the humanities and sciences to the very practical matters of survival in nonliterate regions of Africa. As Mumford stated:

In philosophy or theology, in medicine or in music, Schweitzer’s talents were sufficient to guarantee him a career of distinction: . . . But in order to remain a whole man, Schweitzer committed the typical act of sacrifice for the coming age: he deliberately reduced the intensive cultivation of any one field in order to expand the contents and the significance of his life as a whole.

So it is in his actual living, much more than in his words, that Schweitzer excelled, leading him, as it did, ultimately into a healing role within the larger drama of the primitive peoples of colonial Africa. Mumford concluded that,

if Western civilization escapes the evil fate that its over commitment to mechanism and automatism, its wholesale denial of humane values and purposes now threatens it with . . . then the form that life will take and the type of personality that will nurture it is the form and type that Albert Schweitzer has embodied. On such a basis the renewal of life is possible.

REFERENCES

[1] Albert Schweitzer, The Philosophy of Civilization: Part I: The Decay and Restoration of Civilization, (London: A & C Black Ltd., 1947), p. 1.

[2] Ibid. pp. 9, 10.

[3] Viktor Frankl, Psychotherapy and Existentialism, (New York: Simon and Schuster, 1967), p. 123.

[4] See Pat Stith, Joby Warrick, Mealanie Sill, etc., “Boss Hog: North Carolina’s Hog Revolution,” (Originally a series in Raleigh, N.C.: The News and Observer, May 12- 1996).

[5] See, for example, Thomas Urban, et al.“The Food Production System in Iowa, Gaining World Market Share,” (Iowa Animal Agriculture Council in collaboration with the Iowa Business Council: January 1993). Note: first we are reassured that the environment will improve “as we would wish” if farmers have access to boh capital and new technology. (p. 4) But later we are cautioned about environmental concerns (pp. 15, 16) and told that “All must work diligently to remove any and all, impediments to the generation of technology and effective use of capital. . . .“ (p. 17)

[6] Herman Kahn, On Thermonuclear War, (Princeton, NJ: Princeton University Press, 1960).

[7] Erich Fromm, May Man Prevail: An Inquiry Into the Facts and Fictions of Foreign Policy, (Garden City, New York: Anchor Books, 1961, 1964), p. 197.

[8] “An Adaptive Program for Agriculture,” (Committee for Economic Development, 1962), pp. 25, 42, 59.

[9] “Appraisal of the Federal Feed-Grains Programs,” Research Bulletin 501, (Agricultural and Home Economics Experiment Station, Iowa State University of Science and Technology: January 1962) p. 374.

[10] “Policies and Programs to Ease the Transition of Resources Out of Agriculture,” (Cooperative Extension Service, Iowa State University, May 1986).

[11] “The Food Production System in Iowa, op. cit., pp. 1, 2, 12.

[12] Ibid.

[13] Ibid.

[14] Rollo May, “Creativity and Evil,” in Paul Woodruff & Harry Witmer, Facing Evil: Light at the Core of Darkness, (LaSalle, Ill.: Open Court, 1988), p. 76.

[15] Lewis Mumford, Men Must Act, (New York: Harcourt, Brace & Co., 1939), pp. 52-53.

[16] Lewis Mumford, Faith for Living, (New York: Harcourt, Brace & Co., 1940), p.1.

[17] Ibid., p. 13.

[18] In 1990 organic farmers working with Iowa Citizens for Community Improvement negotiated an agreement with administrators from Iowa State University for the provision of practical information on how to farm organically. That promise has never been met (as of 2001). When I visited ISU Extension publications in February of 2001, there was still not a single publication on how to farm organically.

[19] CCI research.

[20] Mumford, Faith for Living, op. cit., p. 17.

[21] For a fuller discussion related to Whitman’s concept of presence see Lewis Mumford, The Conduct of Life, volume IV of his Renewal of Life series, (New York: Harcourt, Brace & Co., 1951), pp. 100-107.

[22] Charles Hampden-Turner, Charting the Corporate Mind, (Reading, Mass.: Addison-Wesley, 1990), p. 134.

[23] Ibid.

[24] Robert Wolfe has enabled farmers to write folk literature. See Voices from the Land and similar books. Likewise, Tim Faye has introduced cultural people to the rural drama in his annual publication of The Wapsipinicon Almanac, for example, with a book review of Jim Schwab’s Raising Less Corn and More Hell: Midwestern farmers Speak Out.

[25] See Charles Hampden-Turner, op. cit., ch. 1, “How Value is Created.” Cf. Charles Hampden-Turner, Creating Corporate Culture, Reading, Mass.: Addison-Wesley, 1990).

[26] Lewis Mumford, The Myth of the Machine: Technics & Human Development, Harcourt, Brace, Jovanovich, 1967.

[27] Lewis Mumford, The Conduct of Life, New York: Harcourt Brace and Company, 1951.

FOR FURTHER READING

This paper, originally written some years ago, I now see as particularly relevant to the the rural Trump vote, which, in my view, is rooted in the drama of rural trauma.  See my other recent writing on this question, starting here.

Brad Wilson, “Election, Rural Vote, Donald Trump: Why and What We Need to Do,” Family Farm Justice, 11/12/16, https://familyfarmjustice.me/2016/11/12/election-rural-vote-donald-trump-why-and-what-we-need-to-do/ .

Brad Wilson, “Rural Trump Vote:  Who’s Behind the Trauma,” slide show (public), Brad Wilson on Facebook, https://www.facebook.com/photo.php?fbid=1149482581772830&set=a.1149482558439499.1073741841.100001332982534&type=3&theater .

Save the Family Farm

THE CRISIS IN AMERICAN AGRICUTURE

Since 1981, over 500,000 of the most efficient producers of American food have been put out of business. Of the 640,000 American family farmers who remain, 120,000 will be shut down within two years, and another 200,000 are teetering on the brink of extinction. While the prices the American consumer pays at the grocery store average 30 percent more than they did six years ago.

1-sffa-farm-prices

Where’s all the money going? To the middlemen – the giant processors and international shippers who re making obscene profits off a federal farm policy that is driving family farmers out of business, undermining the benefits the consumer receives from the competitive structure of agriculture, adding to our national trade deficit, and threateneing to increase interest rates by 2 to 3 percent.

And who’s funding this program? Taxpayers and consumers to the tune of $26 billion in subsidies last year to agribusiness conglomerates. While Kellogg’s return on equity over the last fiver years averaged 33.4percent, the farmers nationwide were receiving a minus 13.4% return. The value of the wheat farmers produced to go into a $1.41 box of General Mills’ Wheaties may have fallen by 42% per bushel, but the price of that 12-ounce box on the grocery store shelf rose by 36%.

If this trend continues, agribusiness monopolies will dictate how our land is used, what we grow, what we eat, and what price we pay for our food.

The Save the Family Farm Act addresses these problems.

2-sffa-farm-share

Falling food prices were disastrous for farmers, but the losses they suffered matched the profits reaped by the next link in the food chain – the processors.”

–Forbes, January 12, 1987

Under current Administration policy, the nation’s farmers realized a return on equity of minus 13.4 percent. According to Forbes, food processing conglomerates over the past five years have averaged outrageous returns on equity.

6-sffa-equity

FARM INCOME

According to the Food and Policy Research Institute of the University of Missouri-Columbia and Iowa State University, the Save the Family Farm Act will double net farm income.

3-net-inc

The A&M study found that only the Save the Family Farm Act would produce a positive net cash income in every region of Texas.

A Texas A&M study concludes that the net farm income for each of the major farming regions of Texas will double and, in some cases, quadruple. The study also concludes that the probability of success for representative Texas farms is between 90 and 100 percent under the act. Income from farm exports will increase nationwide by at least 60 percent.

4-success

The Texas A&M Agriculture Food and Policy Center compared the effects on four representative farms of the Reagan administration’s 1985 Farm Bill and the Save the Family Farm Act. Only the Save the Family Farm Act gives all four Texas farms a high probability of showing a profit.
As a Texas A&M study shows, the Save the Family Farm Act is the best chance we have for ensuring that farms in all parts of Texas survive.”

Jim Hightower, Texas Commissioner of Agriculture

FOOD COSTS

Because the costs of the save the Family Farm Act are paid for in the market pace and not in the tax return, consumers will see an average annual food price increase of 1.6 percent. At the same time, the percentage of the average consumer’s income spent on food will decrease by one-third by 1995.

CONSUMER INTEREST RATES

The debt owed by American farmers is more than the combined debts of Mexico and Brazil. Under current policy, $66 billion (a little over one-fourth the farm debt) cannot be recovered. The debt restructuring provisions of the Save the Family Farm Act will prevent default on over half this debt, greatly reducing inevitable increases in consumer interest rates.

The increased farm values resulting from the Save the Family Farm Act, if passed through in their entirety to consumers, would increase food prices by 1.6 percent per year.

5-sffa-consumer

FOOD ASSISTANCE

The Save the Family Farm Act provides the only avenue before Congress for a full-scale assault on hunger and malnutrition in this country without the appropriation of new funds. It advocates the conversion of a portion of the money now spent on agribusiness subsidies to provide funding and outreach for programs to feed the hungry and malnourished.

THE ENVIRONMENT

Through acreage reduction, the Save the Family Farm Act will remove environmentally sensitive farmland from production. It will also reduce the use of chemical fertilizers in agricultural production.

ACCOUNTABILITY

The current crop monitoring functions of the U.S. Department of Agriculture will enable that department, without hiring any additional employees, to make sure producers are accountable for the business management provisions of the Save the Family Farm Act.

YOUNG FARMERS

Current farm policy has driven most of those who have entered farming in the last 15 years out of business. The Save the Family Farm Act provides a means for young farmers to enter the business and stay in business.

The Save the Family Farm Act is our only chance to save the independent, competitive structure of food production in this country.”

Jim Hightower, Texas Commissioner of Agriculture

WHAT THE SAVE THE FAMILY FARM ACT DOES

• Rescues 160,000 family farmers who would otherwise go out of business and enables 360,000 others to earn a decent living once again.

• Eliminates up to $15 billion in taxpayer subsidies per year.

• From these savings, makes billions of dollars available every year for food assistancew for the poor and near poor.

• Restores a producer-initiated “business management” approach to U.S. farm production.

• Returns credibility to U.S. export policy.

•Ensures that environmentally-sensitive farmland is removed from production.

The Save the Family farm Act gives Americans a way to do far more good for our farm econmomy by spending less.

Jim Hightower, Texas Commissioner of Agriculture

 

From the Texas Department of Agriculture, Farmers Assistance Program, during the administration of Jim Hightower.

FURTHER INFORMATION ON HISTORICAL FARM BILL PROPOSALS

https://familyfarmjustice.me/2016/12/10/the-farm-policy-reform-act-of-1985/ .

https://familyfarmjustice.me/2016/12/09/family-farm-act-of-1987/ .

Videos

IATP, NSFFC, “Save the Family Farm Act Discussion,”https://www.youtube.com/watch?v=7kezwLZqgek&index=27&list=PLA1E706EFA90D1767 .

League of Rural Voters, (IATP), “Beyond the Crisis: Solutions for Rural America,” https://www.youtube.com/watch?v=pEnAZ9_KRRs&list=PLA1E706EFA90D1767&index=8 .

League of Rural Voters, “America’s Stake in the 1985 Farm Bill,” https://www.youtube.com/watch?v=zfgZqgfkxXk&list=PLA1E706EFA90D1767&index=18 .

The Farm Policy Reform Act of 1985

Family Farms: To Be or Not to Be

Much more is invoved in writing the 1985 Farm Bill than just another rewite of commodity programs. This year’s bill– more than any other since the Agricultural Adjustment Ats of 1933 and 1938, will determine the structure of American agriculture for generations. Either by specific design or by defaut, tis bill will answer a fundamental quesiton of public policy: Will the U.S. base its agricultual future on hundreds of thousands of cecentralized, entrepreneurial units (the family farm system) or forsake them and shift contol of agricultural production into the hands of centtralied, integrated food conglomerates and giant farm combines?

The 1985 bill can aanswer that question on one of three ways: (1) by embracing the radical “market clearing” prposal of President Reagan, which will yank the rug out from under productive family farmers and abruptly create massive concentration of agricutural assets; (2) by merely tinkering with target prices and loan rates in the current program, which will only continue the steady attrition in the ranks of good farmers and lead more slowly to a concentrated economic structure, or (3) take decisive steps to put America’s family farmers on sound economic footing again, which will turn them loose to meet their full potential as the world’s best providers of food and fiber.

The Eleventh Hour

If we want to recommit to the family structure of agriculture, 1985 is our last, best hope. Half steps or delayed action will not do the job, because most of these families will not be around two or lthree years from now if positive reform is not undertaken this year.

For more than a decade, federal farm programs have forced America’s famers to overproduce in a hopeless effort to meet rising costs and to take disastrously-low prices for their commodities. As a consequence, for the first time since the Great Deprssion, farmers have suffered four consecutive years of negative return on equity, averaging a loss of 7% per year. The results are now front-page news: Since January of 1981, roughly 380,000 farmers have gone out of business in the U.S., and we now are losing them at a rate of nearly 1,600 every week.

What is the Reagan Administration’s response to the situation? The headlines scream it out: “STOCKMAN: AMERICA HAS TOO MANY FARMERS . . . He supports a “’shakeout,’ not a ‘bailout.’” They’re not kidding. At a time when the market price of nearly every commodity is below our farmers’ cost of producing them, the Reagan Administration proposes to lower price supports drastically to “market clearing” levels.

What the Reagan program will “clear” is the countryside and Main Streets across America . . . unless family farmers, farm community merchants, farm state banksers, farm equipment industry workers, environmentalists, hunger activists, consumers across the country and our political leaders will unite behind an alternative program that will restore prosperity to rural America and gneerate, from the ground up, the new economic activity that will put urban Americans back to work and create a real economic recovery across our land.

The Farm Policy Reform Act of 1985

In a series of farm forums held throughout the country in 1984 and in hundreds of private meetings held during the past two years, farm groups and individuals expressed broad support for a new commonsense program to help efficient farmers bring their surplus production back into some reasonable balance with demand so they can get a fair price in the marketplace, rather than constantly overproducing and having to take survival payments from taxpayers.

In response, a cross section of family farmers, consumers, agriculture lenders, environmentalists, taxpayers and elected officials have developed the “Farm Policy Reform Act of 1985.”

The major features of the proposal are:

1. Elimination of subsidy payments. Producers would receive a fair price for their crops in the marketplace, not from the government. Costly subsidy payments would be eliminated, and the price floor (the pice-support loan rate) for each commodity would be set at a level approximating the full cost of production for that product.

As of last November, for reference, the program formula woud have set the price floors for eight major storable commodities at these levels:

pf-85-d

In each subsequent year of the program, the price floors woud be gradually raised until, in the eleventh year of the program, they reach the level at which farmers’ returns on equity and labor are on a par with the rest of our economy.

2. Balancing production with need. Mandatoryproduction controls (subject to a producer referendum) would limit U.S. production of storable commodities to actual demand, including domestic consumption, export demand, humanitarian need and strategic reserve requirements.

3. Targeted benefits to family farmers. Each producer would have s single acreage base compromised of any acres on which any of the designated commodities were grown in any of the last four years. Each producer would be required to set aside 15% of this acreage base, but in times of surplus, giant operators would e required to set aside a progressively higher percentage of their base (a disincentive to conglomerate and tax-loss ventures).

4. Promotion of sound conservation practices. Locally-approved conservation practices would be required on all set-aside land. In addition, farmers could participate in a National Conservation Reserve, allowing for the voluntary, long-term retirement of fragile land. The Act would also contain prohibitions against “sodbusting” and provisions to encourage better protection of scarce groundwater resources.

5. Elimination of current disaster payments and disaster loan programs. The current myriad of programs would be consolidated into one simplified approach that offers income protection to producers and protects both consumers and livestock producers from shortage-induced price increases. Each producer would annually contribute a portion (probably 3-4%) of production as an “insurance premium” into a national Farmers’ Disaster Reserve (FDR). In the event of a disaster, a producer would receive commodities from the FDR to compensate for up to 90% of the loss.

The current Federal Crop Insurance Corporation should be expanded to cover perishable commodities, which would be insured for a percentage of the previous years marketings.

6. Increased funding for humanitarian food aid. The USDA would be directed to enter into multilateral agreements with other food-exporting nations to fulfill food aid requirements to needy countries. These multilateral agreements should also mandate that additional emphasis be placed on helping needy nations develop food self-sufficiency to the degree possible, with each exporting nation allocating an amount of cash or other resources consistent with their level of food aid.

7. Increased promotion of export markets. Market development would include increases in export credits, negotiation of more multi-year export contracts, and a “monetary adjustment program” allowing foreign buyers to receive, when available, surplus commodities from government stocks to offset the negative impact of the overvalued dollar.

8. Strong support for domestic food assistance. The program would address the right of every American to a nutritious diet and, through the Food Stamp program, the Women, Infants and children program, and other elderly and child nutiriton programs, would povide adequate assistance to eligible needy families and individuals.

9. Farm credit and debt restructuring. Congress should immediately enact a temporary moratorium on farm foreclosures until the Act takes effect, at which time any foreclosed borrowers would be offered first right of refusal to repurchase any of their land or equipment not yet disposed of. The Act would contain provisions to allow deferral of principal payments for one to five years if the borrowers can project an adequate cash flow by the end of the deferral period to resume payments on the principal.

In addition, the higher price support levels and the FDR crop insurance program in the Act should greatly increase lenders willingness to make operating loans to farmers and should halt the decline in the value of most farmland.

Material above was published in Des Moines, Iowa: Iowa Farm Unity Coalition, Iowa Farm Unity News, Vol. 1, No. 1, May 1, 1985, p. 3.

It’s up to us!

The Farm Policy Reform Act can be the 1985 farm bill. It’s up to us. Members of Congress from both parties are looking for an approach that restores prosperity to rural America but reduces the exorbitant costs of current farm programs. A number of them are already committed to fighting for the Farm Policy reform Act. Others have indicated their agreement with the program in principle but have expressed doubts that farmers woud support a mandatory program.

If you want to see this program enacted this year, let your members of Congress know. Show this flier to your family, your neighbors and your local merchants. Have them sign the petition and add a page or two when it’s filled up. Then, whether your petition has one signature or a hundred, send it or carry it to your elected representatives in Washington.

Don’t wait. The farm you save may be your own.

MORE INFO:  HISTORICAL FARM BILL PROPOSALS

https://familyfarmjustice.me/2016/12/10/save-the-family-farm/ .

https://familyfarmjustice.me/2016/12/09/family-farm-act-of-1987/ .

Videos

League of Rural Voters, (IATP), “Beyond the Crisis: Solutions for Rural America,” https://www.youtube.com/watch?v=pEnAZ9_KRRs&list=PLA1E706EFA90D1767&index=8 .

League of Rural Voters, “America’s Stake in the 1985 Farm Bill,” https://www.youtube.com/watch?v=zfgZqgfkxXk&list=PLA1E706EFA90D1767&index=18 .

IATP, NSFFC, “Save the Family Farm Act Discussion,”https://www.youtube.com/watch?v=7kezwLZqgek&index=27&list=PLA1E706EFA90D1767 .

Family Farm Act of 1987

S.658 H.R. 1425

The Introduction of the Family Farm Act is the culmination of a year of intensive behind-the-scenes work in Washington and in the countryside. The heart of the bill – the price and supply management sections – remains similar to the Farm Policy Reform Act of 1985, which was defeated by the Administration and agribusiness interests. But at the conclusion of the 1985 Farm Bill fight work began immediately on fine-tuning provisions of the Reform Act, adding major new sections and restructuring the national grassroots coalition to take the policy back to Congress as quickly as possible.

In late 1985, the National Fair Credit Committee was formed to develop comprehensive debt restructuring legislation to accompany our price and supply management bill. The organizations comprising the National Coordinating Committee for the Farm Policy Reform Act were joined by new groups from across the country in this effort. The resulting Fair Credit Plan, coupled with the price increases provided through our bill, would keep more than 95% of our farmers on the land and in business, according to university economists.

In January of 1986, the National Coordinating Committee and the Fair Credit Committee merged to form the National Save the Family Farm Coalition (NSFFC). This structure has provided our greatest organized strength yet to carry out grassroots policy development and public education. Some 38 grassroots organizations covering 28 states are now members.

A working group comprised of members of Congress, their staff, and farm organization representatives was structured in April and met throughout the summer months. The NSFFC has been a key player at the negotiating table. The progressive national farm organizations — The American Agriculture Movement, the National Farmers Union and the National Farmers Organization – are now united behind our bill. And our friends in the House and Senate are now together on one bill with a common strategy and the strong leadership of Harkin and Gephardt.

All of these developments, on top of the absolute failure of current legislation, have put us in the strongest position yet with our legislation. It is up to all of us to make sure that we do achieve its passage!

Bill Summary:

The Bill would accomplish the following goals:

1. Allow our Food Producers to Earn a Living Again

The Bill would establish commodity price floors which would allow efficient family farmers to earn a reasonable return on their investment and labor. Int he first year the price support loan rate would e set at 70% of parity or roughly equal to the cost of production. Using current parity levels, the 70% formula would establish the price floors listed below. Note that in each case, the price floors under the Family Farm Act, while considerably higher than current prices, are still significantly lower than the ten-year average market prices of these commodities in the 1970s when adjusted for inflation.

Fig. 1, Net income, FAPRI Staff Report #2-87, February 1987, (http://ageconsearch.umn.edu/bitstream/244143/2/fapri-sr-02-87.pdf ).

nfi-88-95

In each subsequent year of the program the floors would be increased by one percent of parity until they reached 80% of parity.

picture-10
*In 1987 dollars; annual production volumes were weighted for calculating average price of each commodity for ’70-’79 decade. Prices from ’70s do not include any federal subsidy payments also paid on these crops.

The economists of FAPRI – the Food and Agriculture Policy Research Institute of Iowa State University and the University of Missouri – project that the Family Farm Act would, on average from 1988 through 1995, generate over $21 billion more in net farm income annually than the current program.

2. Balance Supply with Demand

Mandatory production controls (subject to producer approval in a nation wide referendum) would limit U.S. production of program commodities to the projected amounts needed to meet actual demand, including domestic consumption, export demand, humanitarian need and strategic reserve requirements. A farmer would only be allowed to market a volume of commodities equal to his authorized acres times his historic per-acre yield. Any excess production would be stored and applied against the following year’s marketing quota.

3. Slash Farm Program Costs

According to the FAPRI projections, federal Commodity Credit Corporation (CCC) outlays from fiscal 1988 through fiscal 1995 would average $14.4 billion a year less under the Family Farm Act than under current legislation. Costly subsidy payments would be eliminated. And with production reduced to better reflect actual demand, producers would sell their production in the market place, not to the government, thereby eliminating costly storage payments.

Additional savings would also come from the livestock transition program contained in the bill. In the fist three years of the Family Farm Act, the government will be allowed to recoup billions of dollars of its investment by selling a significant volume of these commodities to livestock producers. Under this transition program, which is designed to “ease” livestock producers into the higher grain prices, they would be allowed to purchase government-owned grain at below-market prices. In the first year, each producer could purchase up to $50,000 worth of grain at approximately the price at which the government had acquired it. The prices would be increased in subsequent years until, at the end of the transition period, the livestock producers would again be required to purchase their grain on the open market.

4. Target Benefits to Family Farmers

The percentage of acres each farmer would be required to set aside would be determined by the size of his/her operation Smaller and mid-sized producers would set aside the minimum (20-25%) while the largest producers would be required to set aside up to the maximum of 35%. In other words, the larger the producer, the more he/she will be required to set aside.

An additional pro-family farm provision in the bill requires that the crop acreage “base” on a piece of land be reduced by 10% if the land is sold to anyone other than a family farmer. These bases would then be re-allocated by the local committee with priority given to: 1) farmers, who by practicing sound conservation practices such as crop rotation are left with an understated crop base and 2) new farmers.

These provisions are designed both to direct program benefits to this target group – small and medium sized family farmers – and to discourage a new advantage of an improved profit picture in agriculture.

5. Increase Our Export Earnings

For the past half-century, the world market price for storable commodities has effectively been established by U.S. federal price support loan levels. The U.S. remains the dominant force in the world agricultural export market with its share of the world’s corn export market exceeding 60% and its share of the world’s soybean export market exceeding 70%. Historical trends, current economic pressures and their own assurances indicate that, once U.S. crop prices are raised, our major export competitors would eagerly follow our lead and raise their prices as well. To avert any possibility that compteting exporters might attempt to boost their production and increase their market share at our expense, however, the Family Farm Act instructs the President to enter into multilateral negotiations with other food exporting nations to increase world market prices and maintain market shares.

export-valu-88-95

Fig 2 Export earnings, FAPRI Staff Report 2-87, February 1987, (http://ageconsearch.umn.edu/bitstream/244143/2/fapri-sr-02-87.pdf ).

If an agreement has not been reached after nine months, the Secretary of Agriculture is mandated to use bonus commodities (or, of necessary, cash subsidies) to maintain U.S. exports. To implement the bonus program – the “export PIK hammer” – the Secretary would offer sufficient bonus commodities along with purchased U.S. commodities so that the aggregate per-unit price to our competitor’s intended customer would be low enough that we either win the sale or at least make it clear to our competitors that any price-cutting market raid would be unprofitable.

Economists at FAPRI, operating under the assumption that a multilateral agreement on trade will be reached, project that the value of U.S. exports of program commodities would increase by more than $10 billion during the first year of the Family Farm Act (to $20.6 billion) and would continue rising in subsequent years as prices improve (to $36.4 billion in 1995-96, the last year of the FAPRI projection).

In fact, the FAPI projections indicate that the export value under the Family Farm Act would 1) average over $12 billion more annually than under the so-called “export-oriented” 1985 farm bill and 2) average over $17 billion more annually than U.S. exports during the 1986/87 marketing year.

While our export volume of a few (but not all) of these commodities might drop off some initially due to the price increase, the total value generated by the higher per-unit returns more than offsets (by far) any decline in volume as well as value in subsequent years of the program.

6. Improve Farmer Efficiency

Recent farm programs have forced farmers to try to make up in increased volume what they denied in price, and government and agribusiness promotions have convinced farmers that “efficiency” means maximizing output per acre. The Family Farm Act, by specifying up-front the maximum volume each farmer will be authorized to sell at harvest, would immediately redefine efficiency. Rather than the one who maximizes his use of fertilizer and pesticides, the most efficient farmer would be the one who can produce his predetermined crop allotment while finding ways to minimize his input costs!

The bill would allow a local soil conservation committee to approve a farmer’s conservation plan under which he proposes to produce his quote by using more of his acres but reducing his per-acre yield by farming his land less intensively – a practice with both economic and environmental benefits.

7. Protect Farmers and Consumers from Disasters

The USDA would maintain a Farmer Disaster Reserve (FDR) initially composed of government-owned surplus commodities. In the event of a disaster, a producer would receive commodities from the FDR equivalent to 90% of his marketing certificate, minus the amount actually produced. The value of commodities received by a producer may not exceed $360,000 annually.

Once surplus stocks are reduced the government would puchase enough commodities to replenish the FDR to adequate levels. In most cases this would be done by purchasing commodities at half the price-support loan rate (or less) from farmers who have a good year and end up producing more than they expected or are authorized to sell under their marketing certificates.

8. Relieve the Farm Debt Crisis

Debt mediation and restructuring provisions in the Family Farm Act will enable many heavily-indebted producers to remain on their land until, with the improved commodity prices set by the bill, they can farm their way out of trouble.

Meanwhile, the improved profit picture in agriculture will reverse the downward spiral of land values, alleviating lender pressure on numerous producers whose plunging collateral value no longer provides adequate security to cover their indebtedness. Important effects would e: 1) to reduce or eliminate the need for annual $2-3 billion federal bail-outs of the Farm Credit System and 2) to restore the viability of much of the $30-50 billion in farm debt currently considered to be unrecoverable even through foreclosure, thereby forestalling the 1.5-2.5% increase in U.S. interest rates that writing off such debt would potentially cause.

9. Encourage Improved Conservation Practices

When they can afford it, American farmers are the best conservationists in the world. Price, peer pressure and a clear understanding of their own long-term self-interest demand it.

Unfortunately, current U.S. farm policies effectively force farmers to maximize their crop production with intensive use of fertilizer and other chemicals, much of which all too often runs off into nearby streams and rivers and leaches into the underground water supply. Because of deteriorating conditions in agriculture, many farmers are unable to invest in adequate soil erosion control projects.

In return for improved crop prices established by the family farm Act, farmers would agree to reduce their production to levels needed to fill actual projected demand and locally-approved conservation practices would be required on all land removed from production under the program.

Also, the crop volume they would be allowed to market would be based upon their past per-acre yield history. Thus, the bill would eliminate any incentive to increase yields with additional chemical use and, instead, would reward the efficient producer who can fill his production quota with the lowest possible input costs.

10. Stimulate Real Economic Growth in the U.S.

Economists estimate that every dollar of farm income adds from three to seven dollars to the overall economy as it percolates through the system. By the same token, every dollar of farm income lost costs the U.S. economy many times that amount.

New farm income generated by the Family farm Act will: 1) add tens of billions of dollars annually to our national economy; 2) restore prosperity to Mainstreets across America, creating new jobs not only in rural America but also in the farm equipment manufacturing sector; 3) generate billions of dollars in income taxes from farmers and rural merchants who have been losing money for years and 4) help defuse the rural debt bomb (an estimated $30-$50 billion in farm debt currently unrecoverable even through foreclosure) that threatens to force interest rates up 1.5%-2.5% and drag our already sluggish economy into a severe depression.

11. Attack Hunger at Home and Abroad

A portion of the government savings under the Family farm Act will be used to boost food stamps and other domestic hunger programs in order to shield low income Americans from the impact of any rise in retail food prices attributable to the program.

The bill instructs the President to seek agreements with other exporting nations to increase and coordinate food aid and famine relief outlays although not to the extent that these free or discounted commodities would undercut Third World farmers or discourage the development of underdeveloped nations.

And by raising world commodity prices the bill answers the pleas of numerous world hunger experts fo the U.S. and the European Community to stop the dumping of heavily subsidized commodities in the Third World, a practice which is bankrupting many Third World farmers who are unable to compete against these underpriced imports.

12. Protect the Health of U.S. Consumers

The Family Farm Act contains struct prohibitions against 1) importing food produced using any chemicals not allowed for sue by U.S. producers and 2) the importation of any food containing chemical residue levels exceeding the legal tolerances applicable to food produced in the U.S.

The bill also requires that any imported food (or food product containing one or more imported ingredients) be labeled as such to inform U.S. consumers.

Exports

Q. Under this bill won’t we price ourselves out of the world export markets?

A. The so called “market oriented” policy that we have in effect now is a disaster. We’ve lowered our prices to rock bottom level, disrupted farm economies around the world and we are still not seeing a significant increase in our exports. In the FAPRI projections of the ’85 farm ill (see fig. 3), our current market oriented farm policy does not significantly increase exports in terms of the number of bushels we export. The important factor is not the total number of bushels exported, but the total value of the exports (see fig. 2). Through 1996, the ’85 farm bill is only going to yield $137 billion worth of exports while the Harkin-Gephardt bill will bring in $248 billion over this same time period. What matters to farmers and to the economy as a whole is how much money is brought into the economy, not the amount exported.

Q. Won’t other countries undercut our prices?

A. Because the U.S. is such a dominant influence in the world market, raising our domestic prices would tend to raise world prices. Our share of the world export market exceeds 60% for corn, 70% for soybeans and 35% for wheat making us a tremendous influence in the world market.

A fundamentally new trade initiative was incorporated in the Family Farm Act. It directs the President to negotiate with other countries to establish multilateral agreements on orderly marketing procedures, world floor prices and shared production cutbacks. Many of the major traders are willing to do that. If, however, after nine months some of the major countries do not join in a multilateral agreement and attempt to take away our markets by undercutting our prices, the President is directed to implement a targeted export subsidy program. The program, called an export PIK hammer, is a lever to use on countries who refuse to negotiate using our tremendous surplus stocks as a hammer to bring the offending country to the table.

Q. Won’t this cause a trade war?

A. In essence, we have a trade war going on right now. As we have increased federal subsidies to our farmers and forced the price of their products downward, the other major exporters have responded in kind, increasing their subsidies enough to keep their export prices just below ours. Many countries feel that what we’ve got in the U.S. is a $25 billion export subsidy program in the form of target prices.[1] Under this bill, the U.S. would provide leadership to negotiate an orderly world marketing system and turn world trade policy in a positive direction.

export-vol-corn-soyFig. 3, Exports, FAPRI Staff Report #2-87, February 1987 (http://ageconsearch.umn.edu/bitstream/244143/2/fapri-sr-02-87.pdf ).

Q. Won’t these higher commodity prices be an incentive for other countries to increase production?

A. One of the major reasons developing countries like Brazil and Argentina have increased production and exports, is their demand for foreign exchange to service their debt load. As president Alphonsin of Argentina pointed out during the ’85 farm bill debate, as the United States forces down wold prices with its “market clearing” farm policy, Argentina will continue to bring more land into production, lower its p rices and export more to be able to meet its debt obligation. Higher world prices would relieve the pressure to produce more.

Consumers and Taxpayers

Q. How will taxpayer costs be reduced by the Family Farm Act?

A. The most important feature of the Act, compared to the 1985 farm bill, is the total elimination of all deficiency payments. It will eliminate direct subsidies by taxpayers saving $12-$15 billion each year. The Act ensures fair prices in the market place, not through the federal treasury. In addition, the Act calls for effective supply management provisions to eliminate costly surpluses.

Q. How will farm prices be raised without government subsidies?

A. the single most successful farm program of our nation has been the Commodity Credit Corporations (CCC) non-recourse loan program. By establishing a floor at 70% of parity using CCC loans, and then reducing supply with effective production controls, farm prices will be stabilized at cost-of-production levels. Because market prices will rise above the loan rate, farmers will not have to forfeit their grain to the government and costly surpluses will be eliminated.

Q. Won’t the price of food go up under this plan?

A. The direct impact of the act would be to raise food prices by about 5%. while the impact would be felt more strongly in the price of meat and dairy products, prices for bread, flours and other grain products would increase only slightly. For example, a $1.20 box of cornflakes would increase by only two cents while the price of corn more than doubled. Americans spend the lowest percentage of their disposable income on food of any nation in the world – roughly 15%. Many opinion surveys have, in fact, indicated that Americans would willingly pay a little extra for their food if they felt it would help family farmers.

It is important, however, that we maintain an active interest in the plight of those who, even at today’s food prices, are going hungry. The Family farm Act calls on Congress to restore deep cuts made by President Reagan in the food stamp, Women Infants and Children (WIC) and other nutrition programs. By restoring prosperity to Agriculture, we will restore economic vitality to other sectors of the economy, thereby taking concrete steps towards eliminating poverty – the real cause of hunger.

cpi-foodFig. 4, Food prices, FAPRI Staff Report #2-87, February 1987 (http://ageconsearch.umn.edu/bitstream/244143/2/fapri-sr-02-87.pdf ).

Livestock

Q. How would te Family Farm Act affect livestock producers?

A. Since livestock production has historically been at the heart of the family farm system in this country, the farmers who constructed the Family farm Act have always shared a deep concern for the needs of the livestock industry. Dairy farmers are well protected by the dairy program in the bill which FAPRI projects would lead to significant increases in net dairy income.

For real meat producers, the underlying assumption of the Family Farm Act that is born out by the historical charts and the gut instincts of every experienced producer: cheap corn means cheap hogs and cattle. According to historical patterns, if feed grain prices are stabilized at higher levels, we can expect red meat prices to adjust and stabilize on a higher plateau.

Indeed, FAPRI projections show that after the first two years of the program hog and cattle prices would reach increasingly higher levels over the next eight years compared to the current program.

The concern is over the transition period of two to three years during which the liquidation of some corporate feedlots, no longer able to compete without subsidized cheap grain, and the slaughter of dairy cattle would pressure red meat prices. For this reason a livestock transition program in the bill would allow family sized farmers to purchase up to $50,000 worth of CCC feed grains at a subsidized cost for the first three years of the program.

In addition, the National Save the Family Farm Coalition is developing a companion bill to the Family Farm Act which would enact a variable levy on livestock and red meat imports to bolster prices during the transition period.

The important point is that the transition would be toward a greatly restructured livestock industry. The trend toward corporate domination of livestock production would be reversed as corporate feedlots, denied their cheap grain subsidy, would give way to an industry made up of more family feeders. Cattle feeding would return to the Midwest, and the growth of corporate “hog factories” would end.

Economists at Texas A & M have stated that the higher grain prices of the Family Farm Act would be the single greatest factor in reversing the displacement of red meat consumption by poultry. With 60% of poultry production costs in feed expenses, cheap grain gives poultry a cost advantage that will cripple the red meat industry if not reversed.

The Family Farm Act would improve the competitiveness of ruminants like cattle and increase the importance of grass-fed beef. The result would be an increased value of range and pastureland and a reversal of the increasing practice of plowing up highly erodible land.

The Opposition

The strength of a great idea can sometimes be measured best by the opposition it generates from those with power. The Family Farm Act has stirred up a hornet’s nest in Washington among Administration supporters, the corporate agriculture elite and the American Farm Bureau Federation and its allies.[2] According to the American Agriculture Movement, the revolving doors between the USDA and corporate agribusiness have led to the development of the “Coalition for a Better Farm Policy” to help kill the Family Farm Act.

Former Assistant Secretary of Agriculture for Economics, Richard Lesher, left USDA to farm his own consulting company, which has a proposal afloat to defeat a supply management farm bill. The “coalition” would be comprised of various farm and commodity groups as well as agribusiness giants like Cargill, who jointly contribute a quarter of a million dollars to help defeat the bill. Before forming Lesher and associates and serving USDA, Lesher was associated with Secretary of Agriculture Richard Lyng in a similar private consulting firm. Sound familiar?

Farm Bureau economists are also worried about the bill, and are rushing to counter the positive findings of the Texas A & M and FAPRI studies. In a February memo, the Bureau concluded that “More realistic economic assumptions would make the 1984 farm bill look more favorable when compared to the Harkin bill.” Such “tough” analysis by Bureau economists (??) is typical of the weak and unsubstantiated claims of these opponents to a bill that poses a threat not to family farmers, but to the economic self-interest of those that most benefit from federal policy as it now stands.

Farmers and ranchers don’t ave to develop “more realistic economic assumptions” to analyze their disastrous situation today. WE only have to look at our cash flow and empty neighborhoods to realize that the ’85 farm bill is a disaster. And to win the fight for The Family Farm Act we also have to be aware that some of the organizations we belong to and some of the businesses that we buy from are out to do us in. It’s time to put a stop to that way of doing business. It’s time to stop feeding the hand that bites us, and to start working for a federal farm policy geared to family farm agriculture!

Full Compliance

Q. Isn’t it unfair to enact a mandatory program?

A. No. What’s really unfair to farmers is the endless successions of farm programs that have set commodity prices below farmers production costs. Mandatory participation in the programs won’t take place unless there is a majority vote by producers of each commodity in a national referendum. The program is actually more democratic because producers will have a chance to vote on it. (That’s more than you can say about the ’85 farm bill.) Even though the current program is called “voluntary,” every farmer knows he or she has little choice about participating. If we’re going to have a federal farm program, we might as well have one that guarantees a fair price to the producer.

FAPRI Study

The Food and Agricultural Policy Research Institute (FAPRI), a joint project of the University of Missouri and Iowa state University, is the most respected “think tank” in the country for farm program analysis. In 1987 they completed a comprehensive computer analysis of the Family Farm Act wich provides the most reliable projections to date. Here are the facts:

Compared to current legislation, the Family Farm Act would:

• Generate on average from 1988 through 1995 over $21 billion more in net farm income annually. This is an average of $46.7 billion a year as compared to an average net farm income of $24.4 billion annually projected under the current program.

• Cost the government, on average, $14.4 billion less annually for these commodity programs than we spent in fiscal 1986;

• generate, on average, $12 billion more in export earnings annually; and

• increase the U.S. inflation rate, on average for 1988 through 1995, by less than a quarter of a percent; and

• increase food costs to consumers, on average, by only 1.6% more annually than current legislation.

Intensive pressure from corporate donors and opposition politicians has forced FAPI economists to at times present a distorted picture of the results of this study. Don’t let them fool you – look at the data. No farm bill alternative meets the goals of effective farm legislation like the Family Farm Act.

Gov Costs 88 95Fig. 5, Government cost, FAPRI Staff Report #2-87, February 1987 (http://ageconsearch.umn.edu/bitstream/244143/2/fapri-sr-02-87.pdf ).

SOURCE: National Save the Family Farm Coalition

BRAD’S REFERENCES

[1.] It is important that readers are clear on the price and subsidy issue. Subsidies do not cause the cheap prices in any practically significant way. (https://zcomm.org/zblogs/michael-pollan-rebuttal-four-proofs-against-pollans-corn-subsidy-argument-by-brad-wilson/ ) The failure of ‘free’ markets to self-correct well on either the supply or the demand side causes the cheap prices. (http://agpolicy.org/weekcol/248.html ; http://agpolicy.org/weekcol/325.html ) Price Floor programs fix that when they are adequate. Price Floor programs were lowered, more and more, starting in 1953, and they were ended in 1996 for most crops. Subsidies were started in 1961 for feedgrains (including corn) and wheat, in 1964 for cotton, in 1977 for rice, and in 1998 for soybeans. (Agriculture Fact Book 1994, Appendix Table A-3, p. 174, “Direct Government payments, by program, 1950-92.”) Prior to these dates (and after 1942) there were no subsidies. There is, therefore, zero correlation between the lowering of prices, (by lowering price floors, starting in 1953,) and the paying of subsidies (prior to these dates,) as there were no subsidies. Though there are correlations after these dates, (i.e. starting in 1977 for rice,) they are correlations but not causations. Additionally, subsidies have never come close to making up for the full amount by which prices were politically lowered, (by which the market failed, thus resulting in lower prices).

[2.] This section on farm politics may be confusing to some. Some groups claim to represent “agriculture” or “farmers,” and have farmers as members, and have similar names, but do not support fair market prices to keep farmers in business, and to keep ownership of livestock widely dispersed on farms, (instead of owned by a few giant corporations, as in the case of pork and poultry). These groups include the American Farm Bureau Federation and the big “commodity groups,” such as the National Corn Growers Association, (which does not support fair prices for corn). (https://zcomm.org/zblogs/farmer-front-groups-and-the-agribusiness-bribe/ ) The American Corn Growers Association is an exception, and was strongly supportive of the Family Farm Act.

[3.]  LIVESTOCK: I need to add another piece covering the livestock issues. I actually have dozens of additional data charts that show many additional findings in today’s dollars. Here are important quotes about the implications for LIVESTOCK systems and sustainability/environment/ climate.

“a major shift in the type of meat produced would occur concurrently with the shift toward less production.”

“As feed costs increase toward an 80% parity level, producers shift away from grain-fed animals and utilize available forage to add weight to beef.”

“… the higher costs of beef production associated with parity crop pricing would likely push the industry toward an animal which matures (finishes) at a lighter weight and could be forage-fed for a substantial part of the weight-gaining process.”

“Such an adjustment would be costly to current feedlot operators.”

“… provisions of the parity program allow qualifying livestock producers to purchase up to $50,000 worth of grain at prices far below parity prices through 1990. Consequently, low volume livestock producers benefit relative to large producers.”

MORE INFO:  HISTORICAL FARM BILL PROPOSALS

See this video on the Family Farm Act of 1987:  https://www.c-span.org/video/?56729-1/family-farm-act .

https://familyfarmjustice.me/2016/12/10/save-the-family-farm/ .

https://familyfarmjustice.me/2016/12/10/the-farm-policy-reform-act-of-1985/ .

Videos

League of Rural Voters, (IATP), “Beyond the Crisis: Solutions for Rural America,” https://www.youtube.com/watch?v=pEnAZ9_KRRs&list=PLA1E706EFA90D1767&index=8 .

League of Rural Voters, “America’s Stake in the 1985 Farm Bill,” https://www.youtube.com/watch?v=zfgZqgfkxXk&list=PLA1E706EFA90D1767&index=18 .

IATP, NSFFC, “Save the Family Farm Act Discussion,” https://www.youtube.com/watch?v=7kezwLZqgek&index=27&list=PLA1E706EFA90D1767 .