This is Part I
Part II is here: https://zcomm.org/zblogs/smashing-the-illusion-farmer-clout-part-ii/
A Personal Introduction
As a farmer from Iowa, a top corn and soybean growing state with two Senators and recently two representatives on the Agriculture Committees, I’m supposed to have a lot of clout, clout that, I’m now told, has recently been reduced.1 That’s the news. As a farmer with the “farm” interest, I’m told that I can no longer have my way so easily in Washington.
Compared to reality, this is a fascinating theory, a peculiar story, an imaginative myth. I think it demonstrates a lot about the secrets of corporate clout, media clout, and the political clout of our elected politicians. No one else seems to deconstructing the illusions immersed in the fantasy of farmer clout, so I’ll give it a try. Remember, food activists of the new movement: you heard it here first!
I’ve been around a while. My recollections of listening to my Grandfather and my father discuss farm politics go back about as far as my memory can stretch. Grandfather lost his farm during the Great Depression, but got back into farming under New Deal Programs. Dad, an activist at least from the early 1960s, fought the good fight right up into his last year, 2007. I became active myself in about 1984, though my first action dates to 1967. During the 1990s I worked as a Farm Bill policy wonk. I’ve served as an Iowa representative into both Sustainable Agriculture and Family Farm movement sectors.
A History of “Farm” Clout
As it turns out, in US history, commodity farmers and other farmers (finally) won farm programs that strongly supported their interests way back in the Great Depression, during the New Deal2 and, beyond that, in the Steagall Amendment of 1941.3 What we won were Price Floors plus supply reductions, as needed, to make the price floors work, plus price ceilings to protect the livestock side of the equation. Through the Steagall Amendment, Farm Programs were used by the Banking Committees as a private sector [ie. no government spending,] economic stimulus. That took some clout, and that clout lasted a while. Those programs stayed in place through 1952.
I should probably put this in context, however. Those programs weren’t like some corporate windfall that massively rips off the country on behalf of farmers. On the contrary, the Price Ceilings trigger the release of Reserve Supplies, preventing farm prices from rising very high, thus protecting consumers and corporate buyers of farm commodities. Additionally, as these programs were implemented, farmers themselves fully paid into them, through the mechanism of government interest income on Price Floor loans. Through 1948, the government made a profit (from farmers,) on the programs.4
The farm clout of those years in the first half of the 20th century began to falter, however, not today, as current spin claims, but starting way back in the early 1950s. That’s when we first saw Congress, led by some of our farm state Ag Committee members and the Republican administration in Washington, begin lowering the benefits we received, (lowering price floors, and price ceilings too, thus reducing our incomes.
Data showing the history of these changes, from that time to now, clearly shows that price floors (and ceilings) were lowered more and more, Farm Bill by Farm Bill, decade after decade,5 as the clout we once had shrunk smaller and smaller. That was 1953 through 1995. Then in 1996, price floors were eliminated, and that’s where they’ve been ever since. Zero Price Floors show, of course, that farmers have had very little clout in recent years!
It should come as no surprise to learn that farmers opposed this massive assault on our interests, this massive lowering of our prices and our incomes.6 Part of our response to that assault was to call for consumers to come to our aid, to help to restore some clout for the fight against agribusiness. We warned of a threat to food, of a food crisis, should the switch toward agribusiness interested continue to dominate Congress, especially the Agriculture Committees.7 Unfortunately, too few consumers showed up to give any support for these efforts, and they lost.
“The Farmers Worst Five Years” Seven years! Make that Nine!
These changes were documented with abundant economic data decades ago, in Frank Le Roux’s book, “1961 Through 1965: The Farmers Worst Five Years,”8 a coffee table sized paperback book featuring a wide variety of data charts. He found, for example, that over this time period, U.S. farmers had the:
“Lowest share of the Gross National Product.
Lowest share of the consumer dollar.
Lowest share of the food dollar.
Lowest return on gross farm sales.
Lowest return on total capital investment.
Lowest return on capital investment per farm.
Lowest level of parity of income.”9
Unfortunately, this race to the bottom escalated. Two years later Le Roux published a second book, “1961 Through 1967: The Farmers Worst Seven Years,”9 “and 1967 was the worst of the seven!” A few years later that was then followed by: “1961 Through 1970: The Farmers Worst Nine Years,”10 and 1969 was one of the worst of these, with parity at an all time low, for example.
Here, then, was a mass of data documenting the results farmers had received as their farm bill clout had rapidly shrunk since 1953. Things were going down hill, more and more. Where, in all of this data, is there any sign that the specific “agriculture” interests of “farmers” had clout behind them?
Sadly, Le Roux’s project could surely have been continued over a number of additional decades. Where in his studies, farmers at least had some positive returns, in later years (ie. 1980s, 2000s) they saw farmers’ returns on equity, for example, falling below zero.11 Another measure is agricultural parity, which fell from 80% to 73 % during the 1960s, then down to 70% in the 1970s, but then hit a low of 53% during the 1980s, 40% during the 1990s, and an all time low of 35% in 2009.12
If Farmers Lost Clout, Who Gained Clout?
Ok, something huge was happening. Farmers lost clout massively, but who gained in clout, by gaining the clout that farmers lost. Well, obviously, the interests which benefit from low farm prices are the ones who gained, the agribusiness output complex, such as the food and feed mills and exporters, and giant animal feedlots, and in later years, animal factories of various kinds and those who developed new processing industries based upon the ever cheaper, (and eventually below cost) farm commodities and other farm products. Add to that the food wholesalers and retailers, and then the consumers, if you assume that some of the savings were passed on to them.
In the changes, however, agribusiness interests received support from a wide range of business interests. We see this, for example, in the reports of the corporate think tank, Committee for Economic Development, (representing hundreds of corporations from many sectors). Most strikingly, in their 1962 report, “An Adaptive Program for Agriculture,”13 they called for drastically lowering price floors to put “the farm labor force” out of work, “on the order of one third in a period of not more than five years.”14 Basically they called for harming the US economy, for creating unemployment, for making a lot less money per unit from foreign farm exports, in order to give themselves a bigger pool of people looking for work, to drive down wage rates.
We see then that there are starkly differing interests. Today, however, and in agribusiness spin over many decades, “farm” and “agriculture” interests and clout have been translated (ie. in mainstream media, and from Congress and USDA,) to where it’s the interests AGAINST “farms” and AGAINST those actually working directly in “agriculture” that are labeled as “farm” or “agriculture” or “farm state,” (etc. ie. “dairy,” “commodity crop,” “livestock,”) interests. Here’s where we can turn to George Orwell’s book 1984, or the writings of Noam Chomsky on U.S. “intellectual culture” for some perspective.15
Ok, so understandably, since up is down and down is up, this is confusing and mainstream media articles are less than informative. Basically, everywhere you look, most news about what’s happening in agriculture, including the Food Movement’s take on the biggest Farm Bill Issues (Farm Justice) is what I call, “your brain on agribusiness.” Another factor, of course, and one especially challenging for younger people, is that the bulk of the bad changes were pre-interenet, and there are few old geezer farmers online in places like Twitter and YouTube to tell you about it.
Deconstructing the Subsidy Myth
Here, of course, 21st century readers will be asking about farm subsidies. Didn’t farmers ask for more and more farm subsidies? And didn’t they win them? Hasn’t the income farmers have received (ie. from the government) increased a lot over the years? Aren’t these facts, and aren’t these “facts” anomalies in the paradigm I’m presenting?
Well, first, of course, my whole argument above, which is thoroughly documented and buttressed with facts, and abundantly logical (ie. real farmers have wanted higher, not lower prices), is a huge anomaly to the whole subsidy paradigm. So let’s clear this all up, as it’s a major factor in the illusion that farmers have a lot of clout.
First, as price floors (and prices) were initially lowered by Congress, (led by the Ag Committees,) there was no subsidy issue at all. Price floors were lowered, lowering farm income, and no subsidies were paid back to farmers. This was true until 1961 for wheat, corn and other feedgrains, until 1964 for cotton, and until 1977 for rice (24 years).16
Likewise, in the Farm Justice or Family Farm Movement that emerged, farmers asked for a return to fair prices, not for subsidies, for “Parity, not Charity.” As I’ve shown in footnote #7, this was powerfully illustrated when the Donahue show came to Cedar Rapids Iowa to discuss the 1980s farm crisis, for example. It is seen in the actual policy proposals written by farmers and introduced into Congress in 1985, the Farm Policy Reform Act (Save the Family Farm Act, Harkin-Gephardt Farm Bill), which called for eliminating all farm commodity subsidies, and raising Price Floors. It is also found in the final resolutions of the United Farmer and Rancher Congress of 1986, which also called for eliminating subsidies by eliminating the need for them, by raising price floors. (USFRC involved more than 1,000 delegates elected by many thousands of farmers attending meetings all across the United States).
Instead of representing farmers interests, subsidies were used as a way to take power away from farm activists, by placating them without meeting any of their demands, but by instead moving farther in support of agribusiness interests against farmers.
More specifically, what we see in the historical evolution of these policies is that subsidies were not just given to farmers, but rather they were added when, at the same time, price floors were lowered. Additional subsidies were given to farmers to compensate for these additional reductions, but only partly. It wasn’t that farmers had clout and won free money. Instead, farmers lost clout, and had their incomes reduced, and then as they were reduced further and further, new reductions were partly compensated for with subsidy payments, resulting in bigger, not smaller, net reductions.
We see this clearly in the two major increases in subsidy levels, in the 1985 and 1996 Farm Bills. From 1984 to 1989 (from before to after the ‘85 bill,) the price floor for corn was lowered drastically from $2.55/bushel to $1.65, (ie. by 90¢), while the maximum possible subsidy was increased only from 48¢ to $1.19 (Target Price – Price Floor=71¢). That was the formula, voted into law by Congress. And in fact, in the real world, comparing 1984 to 1989, corn farmers gained a subsidy amount of 15¢/bu., but at the same time had price reductions of 27¢/bu, for a net reduction of 12¢/bu., even as they were blamed and said to have had enough clout to obtain a 15¢ increase.17 No, what the data shows is an intentional and actual decrease. Understandably, those who have been told only about subsidies, and not about the larger context of subsidies, misunderstand “farm” and “farm state” interests, “agricultural” benefits, and clout.
Ok, above I gave an example from the 1985 Farm Bill. Here are some facts illustrating the impact of the 1996 Farm Bill, (known to farm justice activist farmers as “Freedom to Fail”). Between 1995 and 1999 (after one of four emergency Farm Bills kicked in to give even more subsidies,) corn subsidies more than doubled, (from 37¢/bu. to 77¢/bu.,) a “lucrative” [as the spin goes,] 40¢ increase, as if farmers had tons of clout. At the same time, however, with price floor elimination, (changing from the low level of $1.89 way down to zero,) market prices fell, from $2.56 in 1995 to $1.89 in 1999, a loss of 67¢, for a net, real world reduction, (even with subsidies,) of 27¢.
Another illustration of the quantity of farmer clout can be measured by 5 USDA Economic Research Service studies of “Commodity Costs and Returns,” including subsidies, for 5 crops. All five crops, (corn, cotton, rice, barley, sorghum grain,) lost money overall, even with subsidies. A similar ERS study of soybeans, (which had no farm commodity subsidies during the eight years covered in the studies,) also showed a net loss over all.18 If farmers have so much clout, therefore, why did Congress change the farm bill in such a way that, as ERS found in the case of each crop studied, farmers, ended up in the red?
We see then that it’s only by leaving out the larger bodies of data, the markets and the costs of production, that people can pretend that farmers and farm states have benefitted from the farm bills and farm programs that were developed, in large part, by farm state legislators over the years. Naturally, leaving this out, the Mainstream Media, (or the “farm state” “farm press,” or the food movement) assumes that the farmers have been beneficiaries, not victims, of these programs, and have had a commanding amount of political clout. Remember, however, that to farm justice advocates, to those familiar with the full context of reality, such views are seen as ludicrous, outrageous, and incredibly naive.
The Agribusiness Bribe: Compromising Yourself to Save Yourself?
To be a part of such a massive loss of clout over your lifetime and that of your family members creates dilemmas. At what point should you give up? What compromises should you make? (Do you wait around for all of the problems of cheap corn, cheap soybeans, cheap cotton, cheap rice, cheap milk to create a massive urban food crisis and global food poverty crisis, and then kick it up again?) In particular, though we haven’t won on the biggest issues, the fight on them has helped us win other issues, like the Farm Credit Act of 1987. The threat of making agribusiness pay, instead of subsidies, helped win that legislation. Of course, farmers have also been given large amounts of farm subsidies. We haven’t had pure Hooverism (low prices, no subsidies).
As it turns out many farmers are not politically active and informed. We thus find organizations that are tied to agribusiness interests and propaganda, but that represent themselves as “farm” organizations, and have farmer members. I call them “farmer front organizations.” Agribusiness loves them. They’re essential to Orwellian doublespeak.
Here’s an example of farmer front groups. During the Reagan administration, John Ford worked for USDA, and was involved in Farm Bill negotiations. When the agribusiness buyers came in to lobby for their interests, he was not surprised that they lobbied for ending supply management, (to promote oversupply and lower farm prices they must pay,) and directly lowering price floors (ie. farm prices). Then he met representatives from two “farm” organizations, the National Corn Growers Association, and the American Farm Bureau Federation. Very strangely, however, though supposedly representing the interests of farmers, (who were struggling severely during the 1980s “farm crisis,” they too lobbied USDA for low prices and oversupply, for further weakening farm programs.19
Meanwhile, a variety of other farm organizations (National Farmers Organization, National Farmers Union, various “farm crisis” organizations and coalitions,) lobbied hard for true farm interests, for balancing supply and demand and for fair trade price floor levels. Ford later became an activist himself, and helped to create a new, alternate corn group, the American Corn Growers Association, to counteract the work of a key farmer front group, the National Corn Growers Association.
We find, then, that Farm Bureau and the various “bad” commodity groups (agribusiness front groups,) though ideologically “conservative,” have lobbied for low prices plus big subsidies over the years. They’ve worked on the side of the agribusiness buyers to change farm program mechanisms away from the business approach (balancing supply and demand, making a profit,) and toward the convoluted welfare/export-dumping programs that they have become today.
Another example of the compromise issue relates to the time when rural Democratic progressives in Congress gave up their tough but unsuccessful opposition to the devastatingly bad Republican Farm bills (1985, 1990, 1996,) and started working instead to make the worst of them better, such as in greening up the 2002 version of the Freedom to Fail (Freedom to Farm) bill. (On this point, see further below.) After they made the switch, the National Farmers Union followed them, and began talking about “safety nets” (subsidy compensations plus below cost grain for agribusiness buyers,) instead of fair prices. Finally, after a number of years of this NFU switched back to some extent, after commissioning an important new farm bill study, and developing an alternative Supply Management and Price Floor proposal.20
In response to all of this the Farm Justice Movement fought back, roasting the front groups and their new allies as farm Tories. Other events reinforced these efforts, such as scandals in the Farm Bureau. Every decade, it seems, a new round of members drops out, insisting that they didn’t realize that Farm Bureau isn’t really for true farmer interests.21
Another example was seen in the fight over the pork checkoff. The National Pork Producers Council and National Pork Board took stands in favor of allowing the pork buyers to compete with farmer sellers by themselves raising hogs in giant hog factories. Here again, these supposedly “farm” groups sided with agribusiness buyers against true “farm” interests. We then had a vote, with NPPC pouring millions of dollars into the spread of propaganda in support of the checkoff, such as the claim that those opposing it were not farmers, but rather were “meat haters.”22 Meanwhile they hired corporate spies to investigate those individual farmers and groups representing true farmer interests, labeling them, for example, as “radicals” who want to “turn back the clock” (ie. to pre-CAFO days,) and with whom NPPC should not even communicate.23 In the end, hog farmers themselves, all across the United States, (who are not generally considered to be “meat haters,”) voted down the checkoff by a margin of 53% to 47%.24 In Iowa, the vote was 60.2% against the checkoff, and 39.8% in favor.
Another clear example, where the main Farmer Front Groups are listed, thus giving the illusion of farmer clout, is in sign-ons, for “free” trade agreements, for example, like KORUS, the agreement with Korea. “Free” trade is a key to forcing farm prices down globally, and directly contradicts authentic “farm” interests. It enables other countries to come in and dump farm commodities and below fair trade, below cost price levels, thus lowering farm income. During the years of NAFTA and WTO, for example, we saw the lowest farm commodity prices in history.
In a major sign-on25 for KORUS we see groups like the National Corn Growers Association, the American Farm Bureau Federation, and the National Pork Producers Association, (already discussed) and the National Milk Producers Federation. We also see the major farm commodity buying groups (that have long favored the lowering and elimination of price floors and supply management). These include, for example, Cargill, the Corn Refiners Association, Grocery Manufacturers Association, National Grain and Feed Association, the largest animal factory corporations (ie. Smithfield, Seabord, Tyson,) American Peanut Product Manufacturers, Inc., National Confectioners Association, Sweetener Users Association. These are the groups of the agribusiness-Output-Complex, buying from farmers. We also see a prominent representative from the Agribusiness-Input-Complex, the North American Equipment Dealers Association. Those groups oppose any supply reduction (management) mechanisms, as fewer inputs then need to be sold to farmers. These latter groups are the ones that have all of the clout, (all the money for Congress,) but they typically remain hidden or de-emphasized in the Mainstream Media (and the Food Movement,) as the front groups are instead assigned their clout, (and blamed for the visible [ie. subsidies, not the absence of Price Floors,] Farm Bill results of their influence,) which is, of course, massive.
The positions of these kinds of groups have long been known, if not to the consumers and the general public, at least to activists in the Farm Justice Movement. While Michael Pollan tells Food Movement activists, “you’ve never heard of them,” that’s never been true for the Farm Justice (Family Farm) Movement over the five decades of massive activism that came prior to the Food Movement. You’ll see their names frequently in issues of the NFO Reporter, an organizational newsletter for the National Farmers Organization, during the 1960s and 1970s, for example. They’ve always been at the center of our viewfinders.
Agribusiness has gone under various names over the years, such as the “Farm Coalition Group,” and the “Agricultural Policy Working Group.” For example, in a widely photocopied (by our movement) letter to Congress, ACP groups lobbied against supply management programs.26 Likewise APWG put out a series of reports and used their influence to leverage other resources, such as Universities and research institutions.27 One of the latter examples is FAPRI, which was the leading research group showing the harm done by lower farm prices prior to these efforts, and then later moved away from that work. Behind all of this we see the big obvious “commodity” representatives that are directly opposed to farm interests, Cargill, ADM, Kelloggs, and their various associations, the bakers, millers, grocers, confectioners, processors, shippers, food marketers, with some input groups thrown in, like a couple of fertilizer groups and the Farm & Industrial Equipment Institute.
The position of the agribusiness-complex is often ignored and downplayed, as though it didn’t at all dominate the biggest Farm Bill and farm trade issues in Washington. In fact, I was amazed to find that a report by, AGree, made the claim that agribusiness no longer tries to influence the farm bill! “…Agribusiness interests have not been very active politically on either side of general domestic farm policy debates in recent years.”28 Wow, absurd. Who says this? As it turns out, behind the report is an objective sounding task force, including legitimate representatives of the Sustainable Agriculture and Local Foods Movements, the Environmental Working Group, and a variety of other “politically correct” categories, the National Corn Grower Association, plus agribusiness reps from places like Dupont and Cargill.
On the other hand, farmer clout has been so incredibly low, with such small amounts of support for Farm Justice Proposals (ie. support against cheap corn, cotton, milk,) from the Food Movement, that there has been little threats against the dominant zero price floor, zero supply management regime of agribusiness proper. The Food Movement, in direct contradiction to the great mass of their rhetoric, strongly supports agribusiness by default on these mega concerns, (ie. cheap prices for transfats, HFCS, CAFOs, export dumping).
There is, of course, a lot of controversy in the farm bill over farm subsidies, but that makes no difference either way to the unnamed MEGA beneficiaries. The controversy is not a threat, but rather is a highly valued diversion from the real issues. As the Food Movement passionately leads the charge against “Big Ag!” (the biggest victims of agribusiness exploitation,) Agribusiness just leans back in the chair and raises a toast with a glass of champagne. Subsidies are largely irrelevant to Mega AgBiz concerns, and the core authentic concerns of farmers.
A rare glimpse into how it all seems works comes from the John Ford example, cited above.19 In a top level, behind the scenes negotiation for 1985 farm bill, at a crucial moment, the representative for the National Corn Growers Association left the room to call Duane Andreas, (prior to the era of cell phones,) head of ADM, essentially to ask for permission to set the Farm Bill’s price mechanisms at whatever standard Duane recommended, and then he brought that requirement back into the room, and into the final bill.
What’s also important to look for in the KORUS example is: who’s missing? What we quickly find is that no groups that take strong stands in favor of fair trade farm prices are represented. Among those not there are the National Farmers Organization, the American Agriculture Organization, the National Farmers Union, any members the National Family Farm Coalition, and alternative (good) commodity groups like r-CALF and the American Corn Growers Association, American Raw Milk Producers Pricing Association and the Midwest Organic Dairy Producers Association. These are the only kinds of groups that represent authentic “farm” or “agriculture” interests. (There are also no members of the National Sustainable Agriculture Coalition on the list.)
Note that in a review of the hundreds of mainstream media articles about farm subsidies that have been collected by the Environmental Working Group we find a mass of benefits assigned to farmers, as if they dominate Farm Bill debates, while the Agribusiness buyers who have received eight times as much in benefits are hardly mentioned (remember, farmers get 8x reductions + 1x subsidies).29
This, then, is part of the reason for the confusion about “farm” clout. Farmer front groups, those “farm Tories” who compromise themselves and accept their welfare “safety nets” compliantly, can appear to be representing the “farm” interests of U.S. “agriculture. Since the pro-agribusiness positions they take win in Washington, (no surprise there,) they have “clout.”
The Clout for Getting Subsidies
On the other hand, with low or no price floors, all commodity farmers clearly “need” subsidies. This is a standard fall-back position that we all must support to some extent. This is the position of African American cotton farmers, for example. They’re well aware that they need subsidies, but that what they really need is Price Floors that are set at “living wage” levels, as a study by the Federation of Southern Land Cooperatives has shown.30
This then complicates the interpretation of farmers views of the various subsidy programs, and related claims about our clout. On one hand, farmers influenced by the dominant views of agribusiness in the mainstream media and farm press, and coming out of farmer front groups, or who have given up all hope of consumer side support and real reform, may have lost track of price floor alternatives, even poor ones, like those we had in the decade prior to 1995. Younger farmers especially lack information about these program alternatives.
With higher corn, soybean and rice prices since 2007, all of these issues are confused. For context, note that during the Great Depression, before the New Deal, for my family, corn prices crashed to 7¢/bushel at the local elevator. They lost the farm and had to borrow money from relatives, and even move in with them, until my grandfather found a job and they moved out of state. With no price floors today, that could happen again.31 Subsidies provide some protection against that.
Since farmers lost money (in sum) on eight commodity crops every single year 1981-2006 (except 1996),32 we can argue, they decided to give farmers an arbitrary amount of Direct Payments every year. (I discuss the ideological justifications of Direct Payments below, under “de-coupling.”) While it was a really stupid idea to give DP whether farmers needed them or not, with farm prices registering IN THE BOTTOM 10 OF ALL TIME PRICES NEARLY EVERY YEAR, (dating back more than 100 years,) the decision was made. A limited amount of Counter-Cyclical subsidies can be added to that on years when prices are especially low. If prices really tank out, LDP subsidies kick in. All of this is restricted by payment limits, so that big farmers experiencing the lowest prices in history (as a result of Congressional irresponsibility and anti-farm, anti-U.S.-farm-export-profit ideas,) don’t get too much government help. Unfortunately, if prices tank to rock bottom levels (7¢ corn?), most full-time family farms may hit the LDP payment limit.
This subsidy approach was changed toward Revenue Insurance subsidies with a push from farmer-front groups like the National Corn Growers Association and the Farm Bureau (Insurance Company). Like Direct Payments, their earlier idea, this approach also represents the ideology of “de-coupling,” (see below) which was formulated by an ex-Cargill political appointee. De-coupling theory helps (well, theoretically helps,) to rationalize US farm programs in the face of WTO and other “free” trade agreements. Few farmers chose to sign up for Revenue Insurance after 2008. Though the choice was a clear gamble either way, as one group was certain to get less, based upon unforeseen market conditions, and the other more, thus saving the government money while penalizing farmers, one way or the other. Perhaps the reason for the rejection of the insurance approach is that, if things crash and stay down, as they did 1981-2006, (or as with 7¢ corn,) Revenue Insurance stops helping, as it has no absolute standard (such as cost of production, or a price/unit).33
Farmer clout can be seen in these events in several ways. First, the hugely unpopular “Freedom to Fail” bill of 1996 was designed, not just to end Price Floors, but to end all subsidies after a period of years, and to return farmers to Hooverism (the risk of 7¢ price levels with no subsidies at all). Because this failed quickly and massively, farm bankers flocked to Washington, as they had during the 1980s, and they used their clout to help farmers get what they could not get by themselves, starting with four emergency farm bills in four years, (where Counter-Cyclical subsidies were re-invented,) and continuing by the making these emergency programs permanent in the 2002 and 2008 farm bills. Had this not happened, there would also have been a massive closure of a wide variety of farm input businesses (selling to farmers), so that’s another kind of clout that showed up to support farmers, whose own clout accounts were incredibly weak, (obviously, as seen in the planned total abandonment of farmers, in the return to full Hooverism).
We see, then, that, in light of the massive emergencies caused by the huge failure of Freedom to Farm, (1996,) the 2002 Farm Bill was actually an extremely rare increase in benefits for farmers, (compared to the 1996 bill). These benefits were continued in 2008, but with no adjustment for greatly increased costs of production, so that bill was another significant reduction for farmers. Now in the 2012 proposals, we’ve seen further large reductions in farmer benefits, such as the removal of Direct Payments, and the sharing of farm commodity subsidy money with insurance companies. These changes, including the huge push to switch subsidies into an insurance form, occurred, not with farmer clout, as is usually claimed, but rather in direct opposition to the most fundamental of farm/agriculture interests, the interest in higher prices. In fact, the choices farmers made in massively rejecting Revenue Insurance, since it’s passage in 2008, were ignored.34 A key factor in the change is that, with insurance subsidies, the pot of money for farmers is split with a new player lending clout to the farmer front agenda, a new level of bureaucracy, private insurance companies. We see, then, that signs of authentic farmer clout have continued to fall. Unfortunately, I’ve never seen this mentioned in the media or the Food Movement.
Understandably, all of this story about the continued reductions in authentic “farm” interests in recent years, when subsidies have been the largest ever (and Price Floors nonexistent, as in the Great Depression,) is hugely counterintuitive for food movement activists, who have been told none of the needed background context behind the thesis. When, in a blog at Daily Kos, I explained the need for the farm subsidies, such as Direct Payments, as a compromise position, (given that no Price Floor proposals were gaining traction or even known in most of the Food Movement,) the discussion comments quickly rose beyond 200. The blog remains a great source of detail documenting the many kinds of myths people believe about these issues, and how these myths are rebutted from within a “Farm Justice” paradigm like mine.35
Showing the Big Data
In the past five years I’ve crunched a massive amount of data on the long term loss of farmer Farm Bill benefits (ie. clout) for specific commodity crops, and made my findings available in blogs, data charts, videos, handouts at conferences, etc., all to try to put an end to this incredible naivete and injustice blaming and farmer bashing. In one project, I’ve computed numbers for all of the major commodity crops dating back to 1942, 11 years of data for “fair trade” price levels, and six decades of dat for the years of declines. In these calculations I’ve used overall farm subsidy data, including that from the Farm Subsidy Database at the Environmental Working Group, and then crunched the market data into comparable forms, including an estimate for income if price floors had not been dropped (which, in my assumptions, includes roughly an extra 10% in supply reductions, pro rated over the years, to support the higher prices). The higher levels, (parity or 1942-1952 average market prices,) are computed based upon parity figures (which are more conservative than straight adjustments for inflation in most cases).
What I find, then, is that subsidies to farmers, not just those in the EWG database, but back to the first subsidies in 1961, and including 10 commodity crops plus dairy, adjusted for inflation in 2010 dollars and summed, add up to more than $500 billion. Wow! $500,000,000,000 in “farm,” “farmer,” “farm state” (etc.) clout? Well, no, as we’ve seen. Instead of that being a net gain for commodity farmers, what the data shows is a gross loss of more than $4 trillion and a net loss of more than $3.5 trillion.36 Some clout!
(Continued in Part II, linked at the top.)
1. As of 1/7/12, I get 80,500 hits for “farm bill extension” AND “lost clout.” See, for example, Mary Clare Jalonick, “Farm Bill Extension Evidence Of Agriculture Sector’s Lost Political Clout ,” Huffington Post, AP, 01/03/13,http://www.huffingtonpost.com/2013/01/03/farm-bill-extension_n_2405822.html?utm_hp_ref=tw
2. Mark Ritchie & Kevin Ristau, Crisis by Design: A Brief Review of U.S. Farm Policy,” League of rural Voters Education Project, 1987, pp. 2-3,http://www.iatp.org/documents/crisis-by-design-a-brief-review-of-us-farm-policy.
3. Iowa Farm Activist, Farm Bill was Steagall, New Deal Stimulus, Daily Kos, 2/06/09, http://www.dailykos.com/story/2009/02/06/693903/-Farm-Bill-was-Steagall-New-Deal-Stimulus
4. Brad Wilson, “When Farm Bills Made a Profit,” data charts, ZSpace, http://www.zcommunications.org/albums/288; “Cost of Current Farm Programs Far Exceeds Higher Loan Approach,” Southwest Farm Press, Thursday, April 28, 1983, featured in “Ammo: Information to Defend Our Rural Communities,” North American Farm Alliance, 1980s. Cf. Ritchie & Ristau, op cit., p. 3.
5. Brad Wilson, “Corn Farmers Have Long Subsidized You, Not the Other Way Around,” Feb 23, 2012,http://www.zcommunications.org/corn-farmers-have-long-subsidized-you-not-the-other-way-around-by-brad-wilson. This has links to data charts showing how Price Floors have been lowered. Cf. Ritchie & Ristau, op cit.
6. See for example, Willis Rowell, Mad As Hell: A Behind the Scenes Story of the NFO, Gauthier Pup. Co., 1984.
7. See this in action, in video, FireweedFarm, “Food Movement 1985: Were You There? We Were.” YouTube, 9/28/10, http://www.youtube.com/watch?v=O2UY2jXvYfM&list=PLA1E706EFA90D1767&index=11.
8. Frank Le Roux’s, “1961 Through 1965: The Farmers Worst Five Years,” Walla Walla, Washington, 1966.
9. Frank Le Roux’s, “1961 Thru 1967: The Farmers Worst Seven Years,” Walla Walla, Washington, 1968.
10. Frank Le Roux’s, “1961 to 1970: The Farmers Worst Nine Years,” Walla Walla, Washington, 1971.
11. A.V. Krebs, The Corporate Reapers: The Book of Agribusiness, Washington, D.C., 1991, pp. 417-419; National Farmers Union (Canada), “The Farm Crisis and Corporate Profits,” 11/30/05, http://www.nfu.ca/sites/www.nfu.ca/files/corporate_profits.pdf. For more comparisons, google Krebs CARP “return on equity,” etc.
12. Parity Ratios can be found in Statistical Abstracts, Bicentennial Edition, Bureau of the Census, pp 488-489, Series K 344-353, “Indexes of prices Received and Paid by Farmers and Parity Ratio: 1910 to 1970,” http://www.census.gov/compendia/statab/past_years.html, and more recently in the annual, Agricultural Statistics, USDA-NASS, Washington, D.C., U.S. Government Printing Office,http://www.nass.usda.gov/Publications/Ag_Statistics/. For example, the 2011 edition, has parity ratios for the years 2001-2010 in p. Table 9-35, “Prices received by farmers: Index numbers by groups of commodities
and parity ratio, United States, 2001–2010,” p. IX-33. More recent figures can be found in USDA-NASS, “Agricultural Prices,http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do;jsessionid=F154BA78C7C50C021C8CA924EDB72FD5?documentID=1002. See a chart summarizing overall parity ratios, (image 8) in Brad Wilson, “Farm Bill Slides 2,” http://www.zcommunications.org/albums/277.
13. Commttee for Economic Development, “An Adaptive Program for Agriculture,” 1962, http://www.normeconomics.org/adaptive.html.
14. Ibid. p. 59.
15. See, for example, Noam Chomsky & Edward S. Herman, Manufacturing Consent: The Political Economy of the Mass Media, Pantheon Books, 1988, or http://www.youtube.com/watch?v=1FKdU_xL4O8.
16. Download USDA-ERS data on to see these various dates as follows: go to: http://www.ers.usda.gov/data-products/farm-income-and-wealth-statistics.aspx#27428, scroll down to “Government Payments: U.S. tables: “Direct government payments by program, 1933-2011,” click to download the spreadsheet.
17. See a data chart of this example, in FireweedFarm, Michael Pollan Rebuttal, Debunking Pollan’s ‘Corn Subsidy’ Argument,” YouTube, 10/1/2010, at 1:06 (starting at about 1 minute and 6 seconds into the video).
18. The spreadsheets showing these examples, for example G-USCorn.xls. Scroll down to the bottom half of the data, “U.S. corn production economic costs and returns, including direct Government payments and program participation costs, 1991-1995.” These figures can then be plugged into production data for the relevant years to get a true average, and figures for the total losses that corn farmers experienced, even with subsidies. For corn the per acre bottom line figures, (“Residual returns to management and risk,”) were: 1991: -19.84; 1992: 5.84; 1993: -49.41; 1994: 5.08; 1995: -14.48. Note that both paid labor and unpaid labor figures are included, so the farmer and farm laborers got wages, but after that was accounted for, the farm owner had a negative return on his investments on 3 of the 5 years and overall. I obtained these spreadsheets online at USDA-ERS (Commodity Costs and Returns, etc.) but I can no longer find them online.
19. I first heard John Ford at a Farm Bill hearing in Des Moines, probably in the 1980s. His stories are widely repeated among older farm justice leaders.
20. See a fairly comprehensive list of links to this new Farm Justice Proposal in Brad Wilson, “Farm Justice Proposals for the 2012 Farm Bill,” ZSpace, 5/11/12, http://www.zcommunications.org/primer-farm-justice-proposals-for-the-2012-farm-bill-by-brad-wilson.
21. See an example here, “60 Minutes: Farm Bureau (Part 1),” YouTube, FamilyFarmCoalition,http://www.youtube.com/watch?v=c4iiV8e0Y6A&list=PLB3930A40B35D3A6A&index=6, and part 2, http://www.youtube.com/watch?v=ehDfBl_VKEQ&list=PLB3930A40B35D3A6A.
22. For more on this story see the section “Pork Check-Off News & Analysis,” online at In Motion Magazine,http://www.inmotionmagazine.com/rumnhogs.html, which has a wealth of information that helps to illustrate my thesis here.
23. Charles Harness and Pat McConegle, Memorandum to State Executives, 1/2/97. Cf. National Pork Producers Council uses checkoff to investigate farm groups,” Brian DeVore, In Motion Magazine,http://www.inmotionmagazine.com/pork.html; “Summary of AMS Audit of NPPC, Hugh Espy, Iowa Citizens for Community Improvement, In Motion Magazine,http://www.inmotionmagazine.com/nppc.html; Secretary of Agriculture “Veneman admits ignorance on pork tax decision,” Campaign for Family Farms, Des Moines, Iowa, May 16, 2001, http://www.inmotionmagazine.com/ra01/porktax2.html.
24. Campaign for Family Farms, “Hog Farmers End Mandatory Pork Checkoff: Independent producers vote down pork tax,” In Motion Magazine, http://www.inmotionmagazine.com/checkvic.html.
25. “Korea FTA Agriculture Coalition Letter,”https://docs.google.com/viewer?a=v&q=cache:n01_YTbttCwJ:commoditymkts.files.wordpress.com/2011/01/korea-1-16-11-fta-agriculture-coalition-letter1.docx+%22applaud+the+recent+agreement+between+the+United+States+and+the+Republic+of+Korea+on+issues%22&hl=en&gl=us&pid=bl&srcid=ADGEESi9Zp1x85Rnmnm_8q9mJFNqk4w0E7fFwbgIf6mtalWiUx2dsasGVkbKL9xrEyI3ZSzasQuxfW0nzhsBnlBtulQBlvgPCxhdAlMzkNydjvfYz2bd303bcMS6Rsd3xFfA3QgfiANd&sig=AHIEtbQvBUcjqXMguSRwJZiNv0S5Fi9Exg. Note, this link has fewer signatories than the copy I have.
26. Brad Wilson, “Do you support the “Farm Coalition Group”, La Vida Locavore, Jan 08, 2010, http://www.lavidalocavore.org/diary/3053/do-you-support-the-farm-coalition-group.
27. IATP, The ‘De coupled’ Approach to Agriculture: History and Analysis of ‘De-coupling’ Policy Proposals,” Institute for Agriculture and Trade Policy, September 1988, http://www.iatp.org/documents/the-de-coupled-approach-to-agriculture.
28. Stephanie Mercier, “Farm Program History and Policy Considerations,” February 2012, p. 7, http://www.foodandagpolicy.org/sites/default/files/AGreeFarmProgramHistoryandPolicyConsiderations_SMercier_0.pdf.
29. Brad Wilson, unpublished research.
30. Jerry Pennick and Heather Gray, “Ensure that Farmers receive a Fair Living Wage,” Federation of Southern Land Cooperatives, Land Assistance Project, (Press Release,) 10/30/09,http://www.zcommunications.org/ensure-that-farmers-receive-a-fair-living-wage-by-jerry-pennick-heather-gray; the study itself, Jerry Pennick and Heather Gray, “U.S. Cotton Program & Black Cotton Farmers in the United States,” Federation of Southern Land Cooperatives, Land Assistance Project, 2006.
31. See the following columns by Daryll E. Ray, University of Tennessee: APAC:
Export-led prosperity: That sounds familiar, September 7, 2007 #370
If corn stock levels turn out to top 2005, would corn price go $2 per bushel?, September 28, 2007 #373
Hope for the best but plan for the worst, December 14, 2007 #384
Fact or fantasy?: Farm legislation need not prepare for $2 corn, December 7, 2007 #383
The hazards of debating farm policy when economic conditions are not typical, January 25, 2008 #390
A new plateau for corn prices would nice but is it realistic?, October 24, 2008 #430
Supply response to sky-high prices: old reliables and an eye-opening new approach, December 5, 2008 #436
Farmers have consistently produced themselves out of prosperity—what about this time?, November 4, 2011 # 588
Exceptionally high prices are nice, but they usually worsen future low-price problems, October 5, 2012 #636
32. Data is from USDA-Economic Research Service, Commodity Costs and Returns: http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx.
33 Brad Wilson, “How About that ACRE Program,” Iowa Farmer Today, 7/15/09, http://www.iowafarmertoday.com/news/opinion/how-about-that-acre-program/article_a38c5f51-c489-5b52-834f-44b6c0f2d9c7.html.
34. Anne Effland and Christine Arriola, “Factors influencing the ACRE decision: Characteristics of enrolled and non-enrolled farms, with analysis of which factors may affect the likelihood of participation in ACRE,” June 2, 2012, Selected Paper prepared for presentation at the Agricultural & Applied Economics Association’s 2012 AAEA Annual Meeting, Seattle, Washington, August 12-14, 2012.
“Only 8% of eligible farms accounting for 13% of eligible acres enrolled in 2009, the first year of the program.” p. 3
35. Iowa Farm Activist, “The Case for Raising Farm Subsidies,” Daily Kos, 05/08/11, http://www.dailykos.com/story/2011/05/18/977094/-The-Case-for-Raising-Farm-Subsidies.
36. Brad Wilson, “The Hidden Farm Bill: Secret Trillions for Agribusiness,” 7/16/12,http://www.zcommunications.org/the-hidden-farm-bill-secret-trillions-for-agribusiness-by-brad-wilson. The blog has links to data charts.