ag subsidies

Is a payment cut real reform or just tweaking with the numbers?

Tom Vilsack has certainly got farm-state legislators talking. The buzz generated by the Obama administration's proposal to cut "direct payments" to farmers continues to grow. Unfortunately, all the sturm and drang may be for naught. And not necessarily because the cut to this particular agricultural subsidy will fail, but because it's not really reform.

The original budget language certainly seemed promising as it linked the cut in government subsidies to a new market in "ecological services." Farmers could use this new revenue to offset the losses from the subsidy cut (and would also have a new incentive to farm more sustainably). But based on recent comments from Vilsack, that whole angle seems to have gone out the window. Instead, Vilsack appears to have decided that the best course of action is to pit farmers against hungry kids. According to Reuters:

U.S. lawmakers will need to choose between supporting rich farmers or feeding more hungry children amid a slumping economy and a surging deficit, U.S. Agriculture Secretary Tom Vilsack said on Monday.

Vilsack said he already has heard concerns about the Obama administration's plan to redirect subsidy payments for large farmers into nutrition programs as a way to help end hunger by 2015 and stem the rising tide of childhood obesity.

"We will do our best to frame this discussion in that way, so that people understand: 30 million children, 90,000 farmers," Vilsack told Reuters after speaking to people who work with the nation's food banks and anti-poverty groups.

"It is a tough choice, but it's a choice that folks are going to have to make," he said.

Leave aside the fact that the middle of a severe recession isn't the time to start getting stingy. More importantly, I didn't see anything in the budget that suggested the subsidy savings would go to nutrition -- the stated rationale for the cut was environmental. And it's surprising that Vilsack would go there in the first place. It's no accident that anti-hunger programs are legislated within the Farm Bill -- the better to balance demands from farm state and urban representatives. It's true that, as food writer Michael Pollan has long observed, this marriage of convenience helps perpetuate subsidies. But it's not at all clear that explicitly pitting farmers against hungry children is the way to go.

While a cage match between 30 million children and 90,000 farmers would certainly meet the Hobbsian ideal (nasty, brutish, and short), the legislative process isn't about whose side enjoys a numerical advantage. The only measures of consequence in Congress are the size, strength, and acumen of your lobbying team -- and in that area Big Ag is hard to beat.

The president's budget hints at a coming battle over one kind of ag subsidy

When President Barack Obama said during his recent address to Congress that "in this budget, we will... end direct payments to large agribusinesses that don't need them," he set off a firestorm of speculation. Now that the budget outline has been published, we finally have an understanding of what he meant. Yes, as we suspected, he was indeed referring to a specific subsidy program called "direct payments." Jill Richardson explains:

Direct payments are a result of the 1996 farm bill. Prior to that, subsidies were given based on need. If you couldn't sell your crops at a price the government thought was fair, you got a subsidy to make up the difference...

If you own land where commodities were grown (by you or someone else) in the past, you get a direct payment whether you grow anything or not. You could do nothing, potentially, and still receive a direct payment. Does that sound stupid? I think so too.

Your direct payment is calculated on your "base acres." They keep a running average of how much you grew on your land (or how much somebody grew on your land if it wasn't you), and that yield determines how much you get in government cash. During the past farm bill debate, grain prices were high and farmers were doing well, but the direct payments kept flowing in.

Meanwhile, the budget language looks like this [PDF]:

As part of an effort to transition large farms from direct payments provided to owners of base acres to increased income from revenue derived from emerging markets for environmental services, the President's Budget phases out direct payments over three years to farmers with sales revenue of more than $500,000 annually... Large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat.

Let's mend, not end, ag subsidies

"It's a dead end to try and eliminate subsidies, because then you get all of America's farmers, who have political power out of all proportion of their number, unified against change. Right now the incentives are to produce as much as possible, whatever the costs to the environment and our health. But you can imagine another set of assumptions, so that they're getting incentives to sequester carbon. Or clean the water that leaves their farm, or for the quality, not the quantity, of the food they're growing."

-- Michael Pollan, reflecting a growing consensus

Until real middle-class wages start rising, we can't end agricultural subsidies

Watching this gripping animation (h/t Ezra Klein) that charts the spread of Wal-Marts across the country got me thinking. I felt like I was really watching the spread of wage stagnation across the country. I'm not suggesting there's any clarity as to which came first -- Wal-Mart or the grinding halt in middle-class wage growth. But Wal-Mart's accelerated growth in the 1980s matches this chart on wage inequality nicely (note the bottom two lines).

It's a pointless chicken-and-egg debate at a certain level. You can't blame Sam Walton (much less Sebastian Kresge or James Sinegal) for the fact that discounters that thrive on downward price pressure represent the only means most Americans have of maintaining the illusion of a rising standard of living.

Picking the battles will be key to reforming food policy

Ah, the House Agriculture Committee. Never will you find a more wretched hive of scum and villainy.

Well, maybe that's a bit of an overstatement, but not by too much, I don't think. As Michael Pollan put it, "It's where decent ag legislation goes to die."

Does sustainable agriculture have any hope of support there? Well, we can be somewhat cheered by the fact that, with the Republican caucus as small as it has been in decades, the House Ag Committee has a mere 17 Republicans in contrast to its 29 Democrats. And the House being the House, you can be sure that those 17 Republicans will have plenty of time to work on their canasta skills (or whatever it is minority members do with all their spare time) because they certainly won't be writing legislation.

Unfortunately for us, the Democratic membership is mostly comprised of Blue Dogs (i.e. conservative Democrats) from farm states who have no real interest in or incentive for reform. And one thing is certain: Committee Chair and Blue Dog extraordinaire Rep. Collin Peterson (Minn.) is no Henry Waxman, the hero of reform and oversight now leading the way on climate change and health-care reform.

In some ways, it's good news that the Farm Bill won't come up for re-authorization for several years. First, it means President Barack Obama doesn't have to dive right into this political-capital destroying mess of subsidy reform -- he has, after all, promised to eliminate subsidies for farmers who make more than $250,000 in farm income, two-thirds less than the current limit (and he put it in writing, no less). But more importantly, it gives us time to plot.

What should a foodie do between now and then? Now that we've got our shiny new President, it'd be nice to take him out for a spin, food policy-wise, even if we can't immediately head for the rocky terrain of the Farm Bill. Dave Murphy has written about what we might expect from the USDA, the good as well as the bad and the ugly. But what about some of the other areas that impact food and agriculture policy beyond the USDA and beyond what's contained in the Farm Bill? I thought I might do a series of posts on some of these areas since they'll deeply affect the development of sustainable agriculture. Let's start small. How's international trade policy grab you?

Grist cooks lunch for America’s leading food writer

Today Grist had the somewhat surreal experience of hosting Michael Pollan, the nation’s premier food writer, for lunch. And just to make it more stressful, we decided to do a potluck — each of us brought in a dish. Cooking for Pollan! Yikes! Happily, he enjoyed the food, and we had a nice conversation. We’ll […]

Food sovereignty needs to be the center of renewed negotiations

With each new event or international conference in 2008’s saga of economic and food crises, there are calls to complete the long-running Doha Round of World Trade Organization negotiations. The international players all act as if achieving a Doha agreement, seemingly any agreement, will help solve one or more aspects of these crises. The latest […]

How commodity grain farmers have sown the seeds of their demise

In “Dispatches From the Fields,” Ariane Lotti and Stephanie Ogburn, who are working on small farms in Iowa and Colorado this season, share their thoughts on producing real food in the midst of America’s agro-industrial landscape. —– A field of dried soybeans ready to be combined. Although “that time of year” in corn and soybean […]

Outline for a move to a sustainable agriculture system

The agricultural industry is one of the biggest users of water, energy, and chemicals on the planet. Overall it poses one of the biggest threats to global biodiversity, which is why it deserves significant attention from the environmental community.

But when it comes to defining what is meant by "sustainable agriculture," there is a lot of confusion. Many people think "organic," or "local," or "non-GMO," or even "biodynamic." It will come as little surprise that economists don't think of the issue in this way; they primarily examine the basic conditions for the efficient use of resources in the agricultural sector.

The following outline is the beginning of what a move toward a sustainable agricultural system would entail: