Why gutting subsidies shouldn’t be the focus of Farm Bill reform efforts
A lot of people, myself among them, have spent substantial time this year trying to demystify the 2007 Farm Bill. But as it lurches into its stretch run — with passage possible by year-end — I fear that the bill is more shrouded in mystery than ever, even among sustainable-agriculture advocates.
Here’s what we can all agree on: Late last month, the Senate Agriculture Committee passed a version of the bill that would generally preserve the crop subsidies that have become so infamous. It would also add funding to some important conservation and nutrition programs, the result of hard lobbying by sustainable-ag and anti-hunger activists.
The committee’s version has now passed to the full Senate, and is currently under debate. The proposal has unleashed a hailstorm of criticism in sustainable-agriculture, public-health, and environmental circles, where hope had swelled for policy reform. Anger focused primarily on the version’s commodity title, which — like the House version passed last spring — would continue delivering billions of dollars to producers of a few crops, mainly corn, cotton, wheat, rice, and soybeans.
Writing in The New York Times op-ed page on Sunday, Michael Pollan gave eloquent voice to the dismay. The boost in conservation funding was fine and well, Pollan wrote, but “[a]s long as the commodity title remains untouched, the way we eat will remain unchanged.”
Here is precisely where the complexities of our farm policy blind even its most well informed critics. The commodity title has been credited with awesome power — it has been said to underwrite everything from the obesity epidemic to the explosion in CAFOs in the late 1990s to the dead zone in the Gulf of Mexico. In its spare time, it’s steamrolling farmers in Mexico, Africa, and elsewhere.
True, all of those maladies can be traced directly to agricultural overproduction, mainly of corn. But subsidies don’t cause overproduction — and withdrawing subsidies won’t end overproduction. With all due respect to Pollan, gutting the commodity title probably wouldn’t change much about the way we eat — or do much to curtail the heavy applications of nitrogen fertilizer in the Corn Belt that are fouling up the Gulf, or end the scourge of CAFOs, or curtail the dumping of agriculture commodities into the global south.
By focusing their ire on subsidies, Pollan and a host of critics — including OxFam, Environmental Defense, the Environmental Working Group, and others — are fixating on a symptom of overproduction, not the cause. They’re rallying around an alternative proposal from Sens. Richard Lugar (R-Ind.) and Frank Lautenberg (D-N.J.) that would abolish subsidies but likely fail to address the fundamental problem of U.S. agriculture: maximum production of a few commodity crops.
Too Much Of a Good Thing
In their paper criticizing the 2002 Farm Bill, “Rethinking U.S. Agriculture Policy” [PDF], the agriculture economist Daryl Ray and his colleagues provide a lucid explanation of overproduction. It goes like this: Farm productivity tends to grow much faster than the demand for food. In a mature economy like the United States, food demand grows at about the rate of population. But agricultural productivity — juiced up by genetically modified seeds, the latest high-tech equipment, pesticides, artificial fertilizers, etc. — tends to grow more rapidly.
In 1926, for example, an acre of corn yielded around 25 bushels. Today, farmers routinely squeeze upwards of 150 bushels from that acre, a sixfold increase. Other major staple crops like wheat and soy have undergone similar booms in yield per acre. But over the same period, population grew by a factor of less than three. So farms have been churning out food way faster than people can consume it, leading to huge surpluses.
This tendency toward overproduction, when managed well, actually benefits society. As Ray and his collaborators put it, “Given that food is essential to life, it is urgent that the productive capacity of agriculture continue to stay well ahead of needs.” But for at least 20 or so years now, overproduction has been used to create dubious but profitable products like corn-based ethanol, high-fructose corn syrup, and meat, dairy, and eggs from confined animals.
According to conventional Farm Bill critics, ending subsidies will fix all that. After farmers are subjected to the rigor of the free market, these critics say, booming yields won’t be a problem. When farmers overproduce, this line of thinking has it, the price of the commodity drops, signaling that they should plant less the next year. And anyway, foreign countries — especially in the global south, where populations are rising fast — can be counted on to buy up some of that surplus, especially if the latest WTO trade negotiations, known as the Doha round, succeed in prying open markets.
There are two problems with that scenario. The first is that farmers — especially large-scale ones with established markets in only one or two crops — tend to respond to lower prices by planting more, hoping to make up in volume what they’re losing in price. They also scramble to invest in productivity-enhancing technology like the latest John Deere combine or seed variety from Monsanto. And when those decisions are multiplied across hundreds of thousands of farms across the Midwest, you get lower prices leading to more production and more downward pressure on prices.
The second problem with the free-market view involves using exports as a safety valve for our overproduction. While it’s certainly true that international trade talks and binational pacts can be used to ram open markets for U.S. agriculture commodities, other countries have the same idea. Brazil’s production of both soy and corn has exploded since the early 1990s, bolstered by investment from U.S. and European agribusiness, the USDA reports. Argentine corn production is on a similar trajectory.
In short, the effort to “feed the world” with U.S. agriculture surpluses has been seriously hindered by competition from countries where land and labor is cheaper and the growing season is longer. And that’s something that the WTO talks, NAFTA, CAFTA, and other agreements can’t fix. And as nations like Brazil and Argentina crank out more product, we can expect to yet more pressure on U.S. farmers to invest in productivity and jack up yields.
So the end of subsidies won’t likely curtail a global push to maximize production of a few commodities by lashing the earth with chemicals, a trend that’s only been exacerbated by the biofuel boom. (Cynics will note that the same two commodities whose overproduction underpins our food system — corn and soy — have been deemed the feedstocks of choice for biofuel, even though both leave much to be desired in that regard.)
The lack of a direct connection between subsidies and overproduction probably explains why the agribusiness lobby is not defending the commodity title in the current Farm Bill debate. The voice for preserving subsidies has come from large-scale farmers themselves, mostly through the American Farm Bureau Federation. They figure that since prices look set to drop long-term, they had better not negotiate away what has become an important source of income.
A Push from Bush
Sustainable-food advocates fighting the Farm Bureau on this point have an unexpected ally: the Bush Administration, which has been renouncing subsidies for a couple of years now. Did Bush read Omnivore’s Dilemma and suddenly become a critic of the industrial-food system? Not likely.
Over the summer I asked Ferd Hoefner, executive director of the Sustainable Agriculture Coalition, what agenda agribusiness giants like Archer Daniels Midland and Cargill are pushing for the Farm Bill. Hoefner has been engaged in farm bill fights since the 1970s. “It’s basically the Bush plan,” he said. Bush’s proposal for the farm bill, released last spring, included steep cuts in subsidies. Agribusiness, it seems, would like to see the commodity title dismantled — it’s holding up progress on the Doha round of trade talks, which would increase global trade in ag commodities. Countries in the global south are refusing to open their markets to U.S. goods until the subsidies fall, and countries like Archer Daniels Midland are eager to comply.
After the Great Depression, which involved a collapse in farm prices brought on by a spasm of overproduction, U.S. farm policy sought to help farmers manage supply decisions in an era of booming productivity gains. All of that changed between the early 1970s and the mid-1990s, when the message from the federal government to farmers increasingly became: produce as much as you can.
Real positive reform in federal farm policy will come from changing that message. If the momentum generated by the sustainable-food movement works to slash subsidies without reforming other aspects of policy, money now earmarked for supporting agriculture will go up in smoke in Iraq — likely gone from the USDA budget forever. And the problems of overproduction will persist.
But we’ll need the money currently in the commodity title to remain available for supporting farming. It could be used to dramatically expand conservation measures, which give farmers incentives to make more judicious planting decisions; and to reinvest in local and regional food-production infrastructure, which has been dismantled over the past several decades. And that agenda, I hope, will be the focus of organizing for the next farm bill in 2012. Given that the terms of the debate presently seem stuck on subsidy preservers (the Farm Bureau) and subsidy cutters (Bush, Environmental Defense, etc.), that looks like the best-case scenario — though there are measures, like the proposed Dorgan-Grassley amendment, that could improve things at the margins.
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