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First Ever? Map of Farm Bill NET Impacts


(Note:  ZSpace photo albums were taken down in the site upgrade.  Most of the charts are currently available to the public on facebook, (at least to those with facebook accounts).  I’ve started loading them on slideshare:  http://www.slideshare.net/bradwilson581525.

Farm Bill Map: Never Before Seen?

The biggest myths about the US farm bill are closely tied to the biggest issues, which are the market management issues of the Commodity Title and Crop Insurance Title of the farm bill.  Most people think of these matters only in terms of subsidies, which are a small fraction of the larger issue.  Along these lines farm subsidy maps, showing the amount of subsidies going to various states, have been widely available online, from USDA and across the media.1  I find that none of these maps, and their accompanying analysis, represents valid analysis, in that they omit the larger context for subsidies.  They only show what farmers have received.  They don’t show the much larger reductions that farmers lost prior to and concurrent with the receiving of subsidies.  That context is explained below.

I doubt that this has ever been shown before.  I doubt that it has ever been seen, but you can now see it.  The new maps (and more will be posted later,) can be found in my ZSpace Photo Albums.

The specific link to this new map series is here:
http://www.slideshare.net/bradwilson581525/farm-bill-net-impacts-which-state-is-the-biggest-loser

The general link to my data charts and maps is here:   (Sorry, this was removed by Z’s updating of the site.

NEW:  The general link also leads to a series of data charts, “State Farm Bill Impacts,” that better show 4 kinds of data that lie behind the maps, including data for each of the 50 states.  These are:  Crop Subsidies, Crop Reductions, Dairy Subsidies, Dairy Reductions.

The specific link for these supplementary CHARTS is here:
(Sorry, this was removed by Z’s updating of the site.  It’s also on facebook.)

Here’s one, in a smaller format (MAPS ARE BEING REVISED SO SEE LINKS ABOVE):

General Explanation

From 1942 to 1952, Congress authorized supply management and set Farm Bill Price Floors at 90% of Parity, (essentially a fair trade, living wage level).  No subsidies are needed with these programs, and farm programs showed net gains, not costs, through 1948.2  
Under corporate lobbying pressure, Congress reduced (1953-1995) and eliminated (1995-2013) these programs, resulting in cheap corn, cotton, dairy, sugar, etc., hurting farmers, who were forced to covertly subsidize commodity buyers, below fair price standards. (Cf. Wenonah Hauter, Foodopoly, ch. 1.)  Farm Commodity Subsidies were paid for part of the “deficiencies,” starting in 1961, (1964: cotton; 1977: rice; 1998: soybeans;),3 but made up for only a small fraction of the reductions.4  Farmers, the victims receive most of the blame for what has really been a series of “Agribusiness Commodity Buyer Protection Acts.”  
The map shows the net impacts of these changes for 1995-2010:  Value Changes (reductions below previous levels) + compensatory Farm Commodity Subsidies = Net Impacts.  Subsidy data includes Commodity Subsidies only, with no conservation or disaster subsidies, and no livestock subsidies (other than milk).

 

The Commodity crops represented on the maps include corn, wheat, soybeans, cotton, rice, sorghum, barley, oats, peanuts and sugar beets.  Any of these crops, plus dairy, that showed up in the Agricultural Statistics Annual of USDA’s National Agricultural Statistics Service,5 with data on at least 13 of 16 years, 1995-2010, was included for that state.  Those commodities/states that didn’t make the cut are those with smaller amounts, or no amount.  Subsidy data comes from the Farm Subsidy Database6 compiled by the Environmental Working Group, with data received from USDA through Freedom of Information requests.Standards are EssentialThere has been massive discussion related to these major farm bill issues, without any specific mention of fair standards ever entering the discussions, with very rare exceptions.7  We hear of higher farm prices, of the fairness of subsidies, of a global “food price crisis” and of the “Food Price Index,” without any mention of what a fair standard for farmers might be.  In many cases, related to the global food poverty crisis, a return to severe export dumping (ie. to lower farm prices) is the implied solution.  With regard to the eating of healthy vegetables, the implied standard for vegetable and fruit farmers is often lower prices, without any indication of what prices are now, and what would be fair.  Likewise, on the question of farm subsidies the implied standard of justice is:  whatever farmers would have without farm subsidies.  Obviously, if you received $100,000 from the government, you must have it made, right.  These are absurdly injust discussions, as the masses of data I’ve made accessible, here and elsewhere, clearly shows.  One purpose of my farm bill impact maps, as with my other data pictures, is to stimulate discussion of the need for standards, and of the question of specific standards.In this discussion I’ve used “parity” (that is 100% of parity,) as my standard.  There are a number of reasons for this, and in part they are related to a larger understanding of what parity is.8  In this specific case, parity was the chosen standard, and also was very close to the actual data standard for farm commodity price issues during the period 1942 to 1952, the period that I use as my “before” period of time.  My data, then, shows essentially a comparison between the 1942-1952 period, and the years following that period.  The first period was one in which farm commodity Price Floors were set at 90% of parity, and kept there.  It aimed for market pries at the 100% of parity standard for these crops, and the results were very close to the goal.  The parity standard, then, is not just a chosen ideal, it was the reality.

One point should be clarified here.  “Parity Price” data is available from USDA-NASS (in chapter 9 of the Agricutural Statistics Annual,5) for virtually all of the years and crops in my study, (and for dairy, and for many more years, and crop and livestock products, as seen, for example, in my fruit and vegetable series9). and I used this data in computing my results.  That’s another reason for using the parity standard, abundant data is readily available.

Most typically, standards lower than parity are used.  My belief is that those standards should be placed into a context in which a broad spectrum of farm bill goals are discussed.8  For example, instead of causing extensive damage that the public must pay for, but then offering cheaper food (at the farmers expense,) parity is a way of achieving important goals for Public Health, Conservation, Rural Development, Research, Nutrition, and other major purposes (and farm bill titles and proposed titles).10

One answer to those suggesting a lower standard is that that could very well be used, and it would show essentially the same results, but in lesser amounts.  For example, the Food From Family Farms Act of the National Family Farm Coalition has used a lower standard, as did earlier versions of it, such as the Harkin-Gephardt Farm Bill.  Some of these proposals used about 80% of parity, and my numbers could be crunched on that basis.  Other standards include USDA statistics for Commodity Costs and returns, or a ratio related to them.  This, I think, is what Daryll Ray used for the Market Driven Inventory System.

One factor leading me away from a lower standard is that I’d like to see farmers not only get paid a wage equivalent, but to also get a return above that, such as a Return on Equity comparable to the standards of other industries.  Here my analysis has been influenced by the earlier work of Frank Le Roux, who strongly emphasized this kind of a point, and who buttressed it with a variety of kinds of data.  We see, then, that the crop insurance industry has been criticized recently for receiving an 18% Return on Equity, instead of a “reasonable” rate of 13%.  Typically farmers are also criticized, unjustly and nonfactually, in articles on this point.  Farmers are said to be having record prices (false) and receiving record profits (false).  The only way to come up with results such as those is by failing to adjust for inflation, which is absurd.  In fact, the so-called rich farmers receiving crop insurance subsidies have had single digit ROE’s, usually very low ones.  To fail to take these kind of considerations into account is, in my view, demonstrates a kind of (intentional or unintentional, depending on the source,) bigotted and abusive attitude toward farmers.

Higher standards could be proposed, on assumptions of what agribusiness might do.  For example, the prices of soybeans and wheat per bushel, and rice per cwt were once higher than the price of a barrell of oil.  On it’s high year, 1947, corn/bu. was the same as oil/barrell.  Since them OPEC greatly raised oil prices, even to $90/barrell as a yearly average, while the US, with an even greater export market share in farm commodity, lowered these prices and lose money on exports for decades (to secretly subsidize agribusines commodity buyers.  Absurd.  That’s certainly no basis for a valid standard.  And, of course, that gets directly at my point in all of this, as indicated above.

Conclusion

The conclusion is clear.  Farm states are huge farm bill losers.  Iowa, the biggest subsidy recipient, is also the biggest farm bill Net loser.  Seeing only the subsidies is grossly misleading.

I hope this data, in map form, can help advocates to understand how the farm bills have worked, against farmers, throughout history.  Hopefully it can help direct attention toward the beneficiaries, the agribusiness commodity buyers who have ripped off the various states.  Iowa, which Cargill executive Bob Parmelee called “a mine of corn,”11 leads the list, the leading state to be exploited by Cargill and the other major farm commodity buying corporations.  Just turn the minus signs into plus signs for the an idea of what the Agribusiness Output Complex has gained through Congressional lobbying, below the fair trade, living wage standard of parity.

References

1. See USDA, Economic Research Service, “Farm Program Atlas,” http://www.ers.usda.gov/data-products/farm-program-atlas/go-to-the-atlas.aspx#.UbiwTBzqzeE; Washington Post, “Where the Farm Subsidies Go,” 6/13/11, http://www.washingtonpost.com/politics/where-the-farm-subsidies-go/2011/06/13/AGwe4JTH_graphic.html; New Map Compares Farm Subsidies, Harvest Public Media, http://harvestpublicmedia.org/blog/1011/usda-ers-map-compares-farm-subsidies/5.  “Farm subsidy debate could play major role in U.S. Senate race,” Kentucky.com, 7/19/10,  http://www.kentucky.com/2010/07/19/1354649/farm-subsidy-debate-could-play.html#storylink=cpy.

2. Brad Wilson, “When Farm Bills Made a Profit,” ZSpace, http://www.zcomm.org/albums/288

3. “Government payments” “U.S. tables,” “Direct government payments by program, 1933-2011,” http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx#.Ubiy_xzqzeE.

4. Brad Wilson, “The Hidden Farm Bill: Secret Trillions for Agribusiness,” ZSpace, 7/16/12, http://www.zcomm.org/the-hidden-farm-bill-secret-trillions-for-agribusiness-by-brad-wilson.

5. USDA-NASS, Agricultural Statistics Annual, various editions, (http://www.nass.usda.gov/Publications/Ag_Statistics/index.asp); 
6. EWG, Farm Subsidy Database, (http://farm.ewg.org/region?fips=00000&regname=UnitedStatesFarmSubsidySumma7.  Exceptions include the work of Tim Wise, et al, of GDAE at Tufts University and Daryll E. Ray of APAC at the University of Tennessee, and the work on export dumping at IATP in Minnesota.  Both the National Farmers Organization and the National Farmers Union publish parity figures in their newsletters.  The American Agriculture Movement has been a strong proponent of parity, as is the National Organization of Raw Materials.  And on Daryll Ray’s work, see my review of his recent study for NFU, the Market Driven Inventory Study.  My review remains unpublished, but is forthcoming.8. On this point see, Brad Wilson, “Is Parity the Appropriate Standard for Food and Farm Justice?” unpublished, forthcoming.

9. Brad Wilson, “Commodity Crops Vs. Vegetables,” ZSpace, http://www.zcomm.org/albums/299.

10. See Brad Wilson, “The Hidden Conservation Title,” forthcoming.  Cf. Brad Wilson, “Farm Bill Economics:  Think Ecology,” ZSpace, 1/3/13, http://www.zcomm.org/farm-bill-economics-think-ecology-by-brad-wilson; Brad Wilson, “Balance Budget, Win Across the Board with NFFC Farm Bill,” ZSpace, 3/5/11, http://www.zcomm.org/balance-budget-win-across-the-board-with-nffc-farm-bill-by-brad-wilson.

I’ll add more footnotes on some of the details of the “standards” discussion later.  Here’s an oil price link: http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp.

11. Brad Wilson, “The Culture of Corn Farming: Two Paradigms,” ZSpace, 10/15/09, http://www.zcomm.org/the-culture-of-corn-farming-two-paradigms-by-brad-wilson.

 

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