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Family Farmers & Rural “Sweatshops” Subsidizing US/World Food


This is a response to:  Brad Plumer, “Map:  Here’s How Much Each Country Spends on Food,” [http://www.vox.com/2014/7/6/5874499/map-heres-how-much-every-country-spends-on-food?utm_medium=social&utm_source=email&utm_name=share-button&utm_campaign=vox&utm_content=article-share-top

The points made in this article and it’s charts about poverty and the struggle to be able to afford food are extremely important.  Nevertheless, on that point and others, I find the chart project to be seriously inadequate, for example, as explained below.

First, the charts show the US as spending the least on food, which raises a number of questions.  Are we the ones most reliant on “sweatshop labor,” and by that I mean, are we the ones who most exploit the farmers of the world, coercing them into subsidizing us in our food purchases?

We should have no doubt, for decades, US and global farmers have massively subsidized the US food system, and all other food systems, below “living wage” (fair trade) levels, below minimum levels, and below zero.  Directly as a result of this, most US farmers have gone broke.  (And yes, this is a huge contradiction to the myth that farmers have been beneficiaries, not victims, of the “farm” bill. [http://zcomm.org/zblogs/first-ever-map-of-farm-bill-net-impacts-by-brad-wilson/])

Meanwhile those purchasing from them have had repeated years of record profits and record returns on equity [http://www.nfu.ca/sites/www.nfu.ca/files/corporate_profits.pdf] (not anything remotely close to a need for being subsidized by farmers, and not with any “means testing” [on means testing for AgBiz:  http://zcomm.org/zblogs/de-mystifying-means-testing-for-commodity-farmers-by-brad-wilson/]).  We can then ask how much of this exploitation of US and global farmers was passed on through to subsidize the food of all US consumers.

Global farmers have become “undernourished” (i.e. 80% of the “undernourished” are rural, mostly farmers,[http://www.fao.org/docrep/012/i0680e/i0680e00.htm, p. 3]) and beyond that, have starved to death, under this US dominated regime, in which they are exploited in the same way, but to greater degrees than, US farmers (who have been partially compensated by subsidies, which has slowed the rate of bankruptcies, foreclosures, drop outs, etc.).

This then drastically changes the point about “price spikes.”  It’s almost never explained that, from 1997-2005, (after Congress had ended the original farm programs, and under the new “free” trade agreements,) we had year after year of the lowest farm prices in history.  For example, we had 8 of the 9 lowest corn and soybean prices back to 1866 (cotton:  7 of the 8 lowest;  rice:  8 of the 12 lowest; wheat:  9 of the lowest 12).  For 2007-9, then, for wheat, rice and corn, the “price spike” went up only to about as high as the bottom 25% mark.  So the biggest factor was not the 3 years of prices closer to fair trade levels.  What really hurt LDCs, for example, were the previous 55 years of declining prices, (setting ever lower records,) that set the context of extreme poverty, that then made the quick rise back up to the 25% mark so devastating.  LDCs are farming countries (70% rural [http://esa.un.org/unpd/wup/unup/index_panel1.html]) that need fair trade price levels.  As such, they’re so poor that the solution also creates damage, so it’s a savage dilemma.

In recent decades, as farm prices have again fallen to record lows, the reality of the exploitation of US farmers has all been concealed behind the myth of subsidies.  Meanwhile, those who have gotten record profits from the cheap prices, (i.e. commodity buyers,) have been left off the hook, again and again, (i.e. in the 2008 and 2014 Farm Bills).

The same holds for the spin about the big trade negotiations of recent decades, as US and European farmers, the minority of them who haven’t yet gone broke, are portrayed, ironically, as the primary beneficiaries and exploiters in mainstream and much other coverage.  (It was claimed, falsely, that trade agreements, by restricting subsidies in rich countries, would end dumping (exports where the US, Europe, etc. lose money per unit, thus hurting farmers and farm economies across the globe even more than they hurt their own farmers and farm economies).  As it turns out, ending compensations to US/EU farmers for cheap prices from commodity buyers, doesn’t get Cargill, ADM, etc. to pay more to the “rich country” or the “poor country” farmers of the world, (not in any practically significant way).

None of 40 charts explain any of this.  So that’s a pretty big limitation of the project.  I suspect that the creators have never even heard of this side of the issue, as it’s rarely been discussed in mainstream media, Food Movement, academic, etc. circles, at least in recent decades.

Another question raised is my suspicion that the hidden costs of US food don’t feed into the statistic.  One part of that is, as suggested above, that many US family farmers have lost, not only their profits and incomes, but their entire family inheritances that have accumulated over the long haul of history, in the process of subsidizing the cheap food of corporations (& partly passed on through to consumers).  As I recall, we had about a trillion dollars of assets at risk in the 1980s alone [Carol Hodne, North American Farm Alliance?].

Related to the small costs of US food is the oft-cited statistic that one farmer feeds a large number of people.  That leaves out the increasing input share of food production, where each farmer does less work himself, but then purchases the work of the various others, who’s work led to the creation and transport of the inputs.  And increasingly, it’s the farmers’ spouse and off-farm job, (moonlighting), that also make up hidden work(ers), and hidden subsidization of the food system, as other statistics have clearly shown.  (i.e. the surviving farmers of today, increasingly, are those with large off-farm incomes)

Another factor is the subsidization from tax loss farming, where the rich can get write offs of other income by losing money on farm expenses.  Tax subsidies for the rich are 4 x bigger per acre for the rich than for the poor.  That loss of tax income is another hidden subsidy of our food, and another cover over the exploitation of US and global farmers.  Then there are the other hidden and visible subsidies that have kept surviving farmers in business, such as tax free fuels and farm programs.

Stewart Smith [http://digitalcommons.library.umaine.edu/mpr/vol2/iss1/13/] has shown how the “farm share” of our food costs fell drastically across the 20th century, as the “market share” and “input share” have grown.  (This is different from USDA farm share statistics, which place the input share [Monsanto, John Deere, etc.] into the farm share.)  Stewart’s numbers project to a zero farm share by 2020.  That’s the trendline.  That’s a key meaning that is concealed behind the small US circle, etc., representing food costs on the maps and chart.

Obviously, then, the costs of food in the US are not really so small.

But one thing is clear.  The symbol of US exploitation that I suggested above, (our small circle,) has some meaning.  It matches the intentions and actions of our (corporate dominated) political leaders, (first of Republicans, and over the past 15 years, of Progressive Democrats, the last hold outs, as well).  Our policies, (our Farm Bills, increasingly over the past 6 decades, and the trade policies that US political leaders have aggressively pushed for,) have been the primary ones that have exploited the farmers of the world, and forced them to subsidize everyone’s food, at below fair trade/“living wage,” below “minimum wage,” and below full cost levels.

We’ve been the dominant exporter, [http://agpolicy.org/blueprint.html, pp. 24-30] so our farm programs have mattered much more than those of others, with other countries being forced into low/no farm export profits as well.  (We’ve chosen the opposite strategy of OPEC, in oil.  OPEC chose to raise oil prices, not lower them, and the wheat/oil ratio has changed from about 2.5-bushel/1-barrel in 1970 (or 1946 when wheat was higher than oil, at 1/.85 or 1973 after the secret grain deal: 1/1.2) to 1/13 in 2013 [wheat:  http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1593, pp. 206-209; oil:  http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp].  We’ve chosen to lose money on our exports, to subsidize foreign countries with our food.  Historically, we started with farm prices set (by the Farm Bill, etc.) at a “living wage,” “fair trade” level, (parity).  Then, starting in 1953 and under pressure from corporate lobbyists, we lowered them, down and down.

USDA-ERS cost of production data generally start in 1975 [http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx#.U7q6DhylT8o].  They show that, after the brief price spikes of the 1970s, farm prices fell below full costs, (i.e. starting in 1981 for a sum of 8 major commodities, but earlier for some of them,) and stayed there, almost always, through 2013, (the latest year of data) (with the exception that, toward the end, [since 2007,] corn, soybeans and rice have consistently been above zero).  That’s also symbolized, at least, by their larger circles.   (i.e. We, [our US farmers,] subsidized through our huge exports, (far bigger than any other country,) the food of other countries, making their food cheaper.)

Really though, none of the points I’ve made here is represented by the 3 charts here or the additional “40 maps” in the larger project.  It has much value, yes, but also, given the larger context of information and misinformation in US mainstream media, academic and movement circles today, misleads.  Especially, it leaves out of the US “cheap food” discussions, the exploitation factor, the “sweatshop” factor.  In important ways, therefore, the projects fails to fairly “explain food in America.”  In particular, it fails to explain the “sweatshop” aspect of the very small US circle of food costs.

I’ve crunched a mass of data and created a couple hundred charts to try show that other story, the US and global family farmers side of the story.  See a sample of some alternative charts in my latest video, here, [http://www.youtube.com/watch?v=VQkeDza3bM0&list=PLA1E706EFA90D1767&index=1, or HERE http://www.youtube.com/watch?v=VQkeDza3bM0].

POLICIES TO FAIRLY BALANCE FARM PRICES

We should not forget the main policies to balance the cost of food staples like wheat, rice and corn.  For the clear, main historical problem of cheap farm prices, we first need minimum Price Floors, (set at adequate, “fair trade,” “living wage” levels,) backed up by Supply Reductions, as needed to reasonably balance supply and demand.  Tinkering with so-called “subsidy reforms,” (such as payment limits,) really does nothing to fix this, contrary to widespread myths that have gone viral online.

Next we need maximum Price Ceilings, backed up by adequate Reserve Supplies, for shortages and the threat of real price spikes.

These policies, though largely unknown today in US Food, Hunger and Environmental Movement sectors, are strongly supported by global peasant farmers (http://zcomm.org/zblogs/via-campesina-with-nffc-support-for-fair-farm-prices-by-brad-wilson/) and poor farming countries, (like the Africa Group at WTO: http://zcomm.org/zblogs/wto-africa-group-with-nffc-not-ewg-by-brad-wilson/), when they know about them.  These policies, not subsidies, were the programs that Henry Wallace (http://zcomm.org/znetarticle/henry-a-wallace-farm-policy-principles-relevancy-for-our-times-by-jay-howe/) created as part of the Democratic New Deal during the Great Depression.

Today there are only 2 organizations that offer proposals along these lines for the US Farm Bill, the National Family Farm Coalition, (http://www.nffc.net/Learn/Fact%20Sheets/FFFA2007.pdf) and the National Farmers Union (http://nfu.org/study).  Unfortunately, these policies and programs have been left out of the advocacy of the New Food Movement, (Hunger, Environmental, Sustainable Agriculture, Public Health, Hunger, Mainline Churches, etc.) which has supported the cheapest of cheap farm prices for global farmers and the risk of shortages and spikes (i.e. no Price Floors or ceilings.  That’s directly contrary to their stated values and goals, however, and is the result of inadequate knowledge of US Farm Bills, in part from inadequate interaction with the Farm Justice Movement, (where family farmers have launched major campaigns on these issues, repeatedly, over the past 60 years). (http://www.lavidalocavore.org/diary/5106/missing-food-movement-history-highlights-of-family-farm-justice-19502000)

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