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Exposing the Myths in a USDA-ERS Document


This is a third example of how USDA fails as an objective source on farm bill information, including farm bill history.(1) It’s an answer to a question from email:

Question: “Brad, how would you comment on this USDA farm policy info piece?”

Carolyn Dimitri, Anne Effland, and Neilson Conklin, “The 20th Century Transformation of U.S. Agriculture and Farm Policy,” USDA, Economic Research Service, Economic Information Bulletin Number 3, June 2005, http://www.ers.usda.gov/public…

PARADIGM: This is the typical perspective that you get from the government. This sort of thing has influenced the Food Movement. You find these kinds of documents on web sites and in the footnotes of food books and organizational

reports, as if they’re neutral and objective. It expresses the dominant paradigm, the view of those that the mainstream media puts into articles. This paradigm is for those who have been wrong, repeatedly, on the big farm bill issues, but who are then again seen as the “experts” the next time, the next time, ad nauseam.

AGBIZ? A quick text search: “corporate?” missing; “agribusiness?” missing. So a big factor is what’s missing. The whole politics of farm bill change, of why, really, the farm bill was changed, is completely omitted. Well, if you told that story, you wouldn’t sound “neutral” and “unbiased” and “objective.”

‘NEUTRAL’: It’s not overtly political, clearly, it’s just a false paradigm. It’s a classic example where professed “neutrality” has huge political impacts, in massively & secretly funding a handful of multinational agribusinesses (esp. commodity buyers) at the expense of everyone else.

CIVILIZED: In general it shows a lot of civility. There’s no harsh blaming (ie. of agribusiness, Congress, Presidents,) for severely damaging and destroying important components agriculture and the food system). This kind of civility fits well with the values of respectable people. Civility works for PR, for marketing, (cf. Noam Chomsky, Manufacturing Consent,) for being civilized, for civilization.

But what’s “civilization?” It’s the power complex, the megamachine. (Cf Lewis Mumford, Transformations of Man and also The Myth of the Machine: Technics and Human Development, ch. 10, “The Burden of ‘Civilization’”) We need to transform ourselves beyond the cultural model of civilization, to become post- civilized (or post MEGA-civilized). Note that there’s very little that is negative in

this anywhere. It’s all for the good. Only toward the end do they briefly mention that not everyone liked the changes.

STATS! It’s vary data oriented, providing a lot of evidence. You see 5 statistical charts, two statistical maps, and 2 lists of historical milestones, and then 17 very scholarly footnotes at the end, which are full of government statistics (16 from government, one from Harvard. How is a blue collar farmer to argue with that?

Well, basically it’s this. There are a lot of statistics which are correlations. And then the correlations are assumed to be causations. But really they’re not.

Really corporate lobbyists got Congress to make the big changes in their interests and against the interests of the US and it’s various farming states. The important statistics, of political influence, and of the stupidity of the changes for the US and for agriculture (like I show), for example, are left out. So in just 14 pages, a lot of statistics are shown. And yes, they happened at the same time.

And in small ways some of them (ie. decline in number of farmers) show relevant damages from the changes. But this is all misinterpreted.

BASIC NEEDS? So a key to the basic thesis (or question asked) is that the farm bill was changed based upon an objective assessment of changing needs, which is called “a common point in the debate,” which it is (ie. it’s “common,” it’s all over mainstream media, mainstream farm press, government documents, etc.). In particular, the report says that it was meant to provide income to temporarily poor farm families, as an emergency response to the Depression.

[BRAD’S VIEW: As Agricultural economist Daryll Ray emphasizes,(2) the farm bill was created to address a basic economic problem that had existed for 60 years prior to the Great Depression: the “lack of price responsiveness” “on both the supply and the demand sides for aggregate agriculture,” (ie. not just for individual crops in isolation). And it did. This is NOT direct income support, nor is it based upon family needs, nor is it a response to the Great Depression, (though that event made it politically possible, and it did help end the Depression, by massively generating wealth and jobs). A related frame is that the Banking Committees (not Agriculture) sent it out in 1941 as a private sector economic stimulus.(3)]

So it addresses a myth that has also been accepted by the food movement, that the farm bill was designed for conditions that no longer exist (as “income support” for a lot of farms that were poor, as poverty relief for the Great Depression, as “emergency” legislation).

[BRAD’S VIEW: So, in fact, the lack of price responsiveness has continued right into the 21st century,when we’ve had the lowest farm prices in history (ie. 8 of the 9 lowest corn and soybean prices, 1997-2005). So the conditions still exist, and it was never designed as “temporary” legislation, as Henry Wallace made clear in 1940.(4) It may have been initially spun as “temporary” for political reasons, but it was not designed for any temporary problem, but rather for an enduring problem, chronic low prices resulting from the lack of price responsiveness.]

Better than almost all recent farm bill reports from USDA, however, this one discusses Price Floor and supply Management history. It defines that history as starting in the Depression (when demographic conditions were x) then changing in 1965 with a “compromise” (p. 9), at a time with different demographic conditions.

[BRAD’S VIEW: Really, key changes were: 1942-1943 when Price Floors were

set at 90% of parity; 1953 they started lowering Price Floors; 1961 (corn/feedgrains & wheat; 1964 cotton, 1977 rice, 1998 soybeans) they started adding subsidies to compensate for part of the reductions; 1996 they ended the farm bill for most crops, but gave temporary subsidies, with a goal of returning to “Hooverism” (pre-New Deal); 1998-1999-2000-2001 4 emergency farm bills to account for the massive failure of what we called “Freedom to Fail.”]

Page 9: Here it uses the term “market-oriented” farm policy, saying that is what was needed and implemented. Why? “To help American farmers.”

[BRAD’S VIEW: Oh my! Duck!!!!!!!!!! You’re gonna get clobbered!!!! This is standard spin. Really, Price Floors and Supply Management, (market management) are what is really “market oriented.” That is what responds to market conditions. This approach follows markets, submits to them, and loses money, as abundant data predicted and shows after the fact. “market oriented” is a code word meaning to become more “competitive,” (a related code word,) meaning to lose (ie. more) money on farm exports, to export more (more “exports,”) but at a loss (less total export income, and losses on every bushel or other unit that is exported). So the “advantage was to grow more and sell more, (but to sell it for less total money, and as a loss on each bushel, such as losses 1981-2006 for a sum of 8 crops, every single year except 1996. Ok so this explains how it’s commonly framed in the dominant paradigm, and what it really means.) And the evidence shows that this is what happened, Congress made the changes and the US made less on exports. The export strategy failed to deliver. (5)]

Page 9: So it was to “take advantage” of rising demand in export markets.

[BRAD’S VIEW: “Take advantage” by losing money on exports, to export more. Note, at the same time that the US chose to make less and less and less per unit

on farm exports, OPEC managed supply and raised prices. So in 1947, adjusted for inflation in 2012 dollars, corn was $17.58/bushel (the record high, a drought year), oil was $17.58 per barrel, wheat was $18.64/bushel, soybeans was $27.11/bushel and rice was $48.60/cwt. Much later, after each went their separate ways, (OPEC up, U.S.A. down,) in 2008 it was widely claimed that BOTH oil and farm commodities were “skyrocketing,” and people (UN, Bread for the World) created indexes that showed them at about the same levels. Really, corn skyrocketed UP to $4.30, oil skyrocketed UP to $96.80, wheat skyrocketed UP to $7.19, soybeans skyrocketed UP to $10.57, and rice skyrockted UP to $17.81.

You might think that the basic economic value of making a profit would motivate the US, but Congress, including farm state people on the ag committees, rejected that. Meanwhile, over the years, we’ve often had a much bigger share of the export market than OPEC, for corn and soybeans, for example. So we had the clout, but we used it against ourselves. The Economic Research Service left this out of their report.]

Page 9: Then we read that Price Floors, ie. “loan rates used to support prices never again rose to the high levels of the 1940s and 1950s,” as if that was a macro-economic event that was beyond human control, automatic, inevitable, a response to objective conditions.

[BRAD’S VIEW: Corporations lobbied for the changes to eliminate “excess resources (mainly labor),” two million … plus a number equal to a large part of the new entrants,” “a reduction … on the order of one third in a period of not more than five years.”(6) This was then reinforced by the Land Grant University System, which called for the same thing, for example, at Iowa State University and other “North Central” agricultural universities. Congress enacted it into law and Presidents signed it. So note the passive language in the ERS report.]

Page 9: So then we jump ahead again to the 1985 farm bill & 1990, which “helped create A. incentives to encourage marketing commodities (rather than B.

forfeiting them to government-held surpluses), as well as some C. flexibility in planting decisions.” (lettering added)

[BRAD’S VIEW: A. So the incentives were for agribusiness to buy it cheap from farmers. In 1985, farmers got their prices reduced by more than they were given back in added subsidies.(7) The 1990 farm bill, the last one that managed markets, so it was the worst of them all. Until 1996 and beyond, with no market management Farm Bill.]

B. This makes it sound like you’re not even selling it, and that the government gets stuck with it instead of exporting it to make money. Really, when we have adequate price floor and supply management programs, farmers get a price floor loan, and they don’t have to pay it back, so it’s the same as selling it. The government keeps the grain. But not mentioned is that the government manages supply to keep prices up, so if they do that well, they don’t get stuck with it to lose money on it. So instead of producing a lot and getting little money back into farm states and into the US as export income, we produce less, with less costs, and also get paid more money for it, as foreign countries pay us not only above zero, but fair trade, living wage prices for it.

C. Farmers were given more choices, technically, but really prices fell so low that it massively subsidized CAFOs, so now we have only 4 hog farms, for example,

well, 4 corporations, that own 66% of all hogs, and 4 poultry corporations (50%+), etc. So farmers lost hugely on “flexibility,” de facto, exactly the opposite of the positive claims by USDA-ERS here. That is, they lost the value added of livestock, so to stay the same size economically, they had to find more land to farm (and they did, as farmers were going out of business, as most have under these changes). But on that land, without livestock, they lacked the economic rationale for Resource Conserving Crop Rotations (grazing and hay, and when you grow alfalfa or clover forage/hay, you grow oats or barley or wheat or rye as a cover crop. So most of this diversity was lost in reality, even as they got more flexibility in theory. So then farms were less sustainable (due to the low prices and loss of livestock,) and couldn’t get the huge free nitrogen from growing clover and alfalfa, so they had to buy more fertilizer and become more dependent on ever bigger corporations, and ditto for pesticides, as they lost the benefits of crop rotations, and grassfed meats became less profitable, as CAFOs set a very low standard based upon below cost grain. So in general this is the MAJOR direction of changes, and the report views them almost always in positive ways, as meeting basic needs of the nation and of agriculture, (as seen directly below) but the reverse has always been true.]

They summarize, near the bottom of page 9: These overall changes “undoubtedly reduced the economic inefficiencies of resource misallocation and price distortions associated with farm programs.

Page 11, repeated on page 12: “Although farm policy and related programs have evolved since the 1930s, commodity programs have retained two key features: commodity specificity and a focus on income support.”

[BRAD’S VIEW: Really, the Price Floor and Supply Management programs supported farming in interactive ways, as I described above, and you could graze your supply reduction acres in the fall and winter. You had diversity. So the “specificity claims are not really true, de-facto, though they are, perhaps, in theory. Secondly, as I showed above, the farm bill was really market management (of price and supply), not income support, though it helped incomes. That then changed as Price Floors were lowered more and more, then subsidies were added then increased, then Price Floors were ended, and then the transition from market management to income support was complete. Except the income support was still based upon the market management approach. It was a compensation for market reductions, so if you were a big farm, you had a big reduction, and a big subsidy. So all of the demographic changes studied, plus

this comment about income support, imply that it was originally designed to be oriented to poor families (it was not) and that that has changed (but the lack of Price Responsiveness, the need for subsidies, when you have no Price Floors, has not changed, and again, it’s a bigger reduction (need) for bigger farms.) Note:

in the NFFC proposal, bigger farms are required to have bigger supply management reductions in production, when these are needed.]

Page 11: “90% of farm household income is derived from off-farm sources,” so farm programs are not needed so much for households any more.

[BRAD’S VIEW: Well, as in the false theory that they started as antipoverty programs. What really happened is that the programs became so bad that few could farm unless they had big off farm income to also help to subsidize it (or grandma to rent for little of nothing, or just don’t buy health insurance, or you bought cheap machinery from a broke neighbor, etc. This thing that farmers are paid well enough because they have good off farm income is a popular myth.]

Page 12: “Overall farmers found ways to adapt to the changes…” So farmers went away in various directions, apparently seizing opportunities, and farming became a “lifestyle” choice, not an economic choice.

[BRAD’S VIEW: This is absurd. Most farmers went out of business! That’s not adapting!

Then we FINALLY get the qualification, it’s not all “been voluntary or preferred,” and, for example, minority farmers have not benefited.

[BRAD’S VIEW: This tiny qualification is hardly adequate. Page. 12: It began as “emergency income support in the 1930s.

[BRAD’S VIEW: No, it was, in real life, designed to address a chronic problem, one that still exists, the lack of Price Responsiveness.]

Page 12: It “slowed the movement of labor out of the farm sector,” BUT Price Floors are what caused “planting rigidities” and “specialization.”

[BRAD’S VIEW: Reducing Price Floors caused and speeded up the movement of labor. Subsidies slowed it a bit. As I’ve explained above, Price Floors did just the opposite. They supported diversified operations. The positive changes claimed by ERS, lowering income, giving cheap livestock feed to CAFOs, farms losing livestock and crop rotations: these are what caused specialization and planting rigidities, making farmers much more dependent upon corporations that exploit them.]

Page 12: “New Century.” Demographic, etc. changes described in the report continue. Fewer and larger farms are happening (ie. not deliberate, but a consequence of inventions, market changes, etc., inevitable, not someone’s fault).

[BRAD’S VIEW: No, Congress caused it, signed by Presidents. The problems caused are massive and global. The US chose to lose money, even though we’ve been the dominant exporter. Absurd. Ignored in the article.]

Page 12: Keeping the goals of “contemporary objectives for maintaining the well- being of farm households and for sustaining the agricultural economy.”

[BRAD’S VIEW: Those are false goals. The changes ran farmers out of business. They didn’t support those goals. The farm bill was designed to manage markets,

so farming (and the US as a whole in it’s farming and dominant farm exports) would be balanced and profitable.

In all of this, there were changes in technology and other factors that affected

things like farm size, specialization, and concentration. As Henry Wallace said in 1940(3), the basic economic problem stays the same, but programs must be adjusted as conditions change. We really have no idea of just what farming would look like, of how much it would or would not have changed as it did, if Congress had taken a different route. There are many other governmental factors as well, such as lack enforcement and legislative weakening of antitrust laws, wrong- headed research and extension, a neglect of the new paradigm of sustainable agriculture (which takes the basic model of farming and places it into a scientific paradigm that is more advanced than the older industrial and mega industrial model that was followed, and that is essentially praised in the report).

Stewart Smith, from the University of Maine, for example, has shown how the government has supported system changes that are less efficient, and that remove activity from farming (ie. managing crop rotations with livestock,) and give it instead to the input sector (ie. buying products in a box from Monsanto and hiring the elevator to spray them onto your fields).(8) Those trends, projected ahead, point to zero “farming” by 2020. It’s a bad idea, and it’s the idea supported in this report.

Footnotes

1. Brad Wilson, Secretary of Agriculture Vilsack: Exactly Wrong on the Senate Farm Bill, Sep 05, 2012, https://zcomm.org/zblogs/secretary-of-agriculture-vilsack-exactly-wrong-on-the-senate-farm-bill/ Brad Wilson, Deconstructing USDA Spin on the Farm Bill, Sep 04, 2013, https://zcomm.org/zblogs/deconstructing-usda-spin-on-the-farm-bill/ .

2. Daryll E. Ray, “Are the five oft-cited reasons for farm programs actually symptoms of a more basic reason,” Policy Pennings, APAC U of Tenn., 10/27/06, http://agpolicy.org/weekcol/325.html . Daryll E. Ray, “It’s Price Responsiveness! It’s Price Responsiveness!! IT’S PRICE RESPONSIVENESS!!!” Policy Pennings, APAC U of Tenn., May 6, 2005, http://agpolicy.org/weekcol/248.html .

3. Iowa Farm Activist , “Farm Bill was Steagall, New Deal Stimulus,” FEB 06, 2009, http://www.dailykos.com/story/2009/02/06/693903/-Farm-Bill-was-Steagall-New-Deal-Stimulus

4. Henry Wallace, Achieving a Balanced Agriculture, USDA, 1940, https://catalog.hathitrust.org/Search/Home?lookfor=%22Achieving%20a%20balanced%20agriculture%22&searchtype=all&ft=&setft=false .

5. Daryll E3. Ray, “Export-led prosperity: That sounds familiar,” September 7, 2007 #370, http://agpolicy.org/weekcol/370.html . Daryll E. Ray, “Current farm policy is based on an export-centric narrative,” Policy Pennings, APAC U of Tenn., 3/26/10, http://agpolicy.org/weekcol/504.html .

Daryll E. Ray, “Agricultural Policy: Premises and Alternatives,” University of Tennessee, Agricultural Policy Analysis Center, presentation to West Kentucky No- Till Association, Russellville, Kentucky, February 24, 2005, no longer online; Daryll E. Ray & Harwood D. Schaffer, “Corn exports: A case of unrealized expectations and farm policies that did not deliver,” Policy Pennings, APAC U of Tenn., September 6, 2013, (no longer online).

6. Committee for Economic Development, “An Adaptive Program for Agriculture,” 1962.

7.  Brad Wilson, “Corn ‘Safety Net’ (85 F.B.),  It shows in red first the goals of lowering market price standards (top) and then the actual results of lowering market prices. In blue it shows that the subsidies got bigger, but were not as big as the reductions, either in the design of the program (top) or in the real world results (bottom). The net results, therefore, get smaller (red plus blue).

8. Stewart Smith, “Sustainable Agriculture and Public Policy,” Maine Policy Review 2.1 (1993) : 68 -78, http://digitalcommons.library.umaine.edu/mpr/vol2/iss1/13/

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