Balance Budget, Win Across the Board with NFFC Farm Bill
By Brad Wilson at Mar 05, 2011
The Weak Strategy of Sustainble Food and Farming
The US farm and food movement has made some strategic mistakes in recent years, because we haven’t worked together well enough. The main food movement has worked quite well with sustainable/stewardship farmers in the movement, but not well with the family-farm/justice sector, as I’ve written elsewhere.
One consequence is that the food movement (from books, blogs and films to conferences, to action alerts) has missed a chance to utilize powerful movement strategies.
For example, following the 2008 farm bill, (around which the food movement usually did not correctly understand the Commodity Title/farm price and subsidy issues) we had a major economic crisis. Inside the beltway, our NGO staff worked hard to get us a piece of the economic stimulus pie, to get Democratic leaders to include us in the stimulus checks being written out. Our issues got some money FROM the government. Our DC organizational staff did not, however, have enough of the family farm justice, grassroots historical perspective to also offer a stimulus TO the government.
(Of course, the power to do that also requires influencing the broader food movement to fully bring a justice perspective in as a major set of priorities. We also didn’t get that done before and/or after the 2008 Farm Bill.)
Now we have a new political climate and the focus is on hacking away at the budget. Once again this is a great time to be proactive and beat the Republicans and the Tea Party at their own game, by offering a stimulus TO the government, but that is still not understood. So here we are, we got some money here and there in the stimulus, and now we’re begging to keep government spending, across the various titles of the farm bill, for example. We were gimme, gimme gimme before, and we’re gimme gimme gimme again. “Write us checks! Write us checks! Write us checks.” That’s our only strategy for this time of economic crisis and balancing the budgets, because we don’t know that anything else exists.
The Stimulus We Offer: A Strong Alternative Strategy for Our Time
The core of our strategy should be to give the country a permanent economic stimulus that the government does not have to pay for. We had that in the past. The New Deal farm programs had no commodity subsidies, but instead used regulation to set a floor under prices and a ceiling over farm commodity prices. Price floors were set at 90% of parity, 90% of a fair trade, living wage price, when the Banking Committees got involved, with the Steagall Amendment of 1941. There was no cheap corn, (and no corn subsidies,) 1942-1952 when US agriculture achieved parity every single year. There was no export dumping of cheap corn on Mexico (botttom side of price)! There were reserve supplies to put on the market to address price spikes (top side of price). Farmers got price support loans, (and yes, that requires start up money for a revolving loan fund,) but then farmers paid interest TO the government, the farmers did not receive commodity subsidies FROM the government. (There were, of course, programs in other titles, like conservation.)
At that time it was argued that one dollar in agriculture generated seven dollars across the economy, and created six jobs. That’s why the stimulus was enacted.
During the 1980s farm crisis, a version of this stimulus (this farm bill,) was offered by Democrats in Congress as the Harkin-Gephardt Farm Bill. Today it’s offered in the Food from Family Farms Act of the National Family Farm Coalition (nffc.net).
These provisions were made permanent in the farm bill. They were not temporary matters, just for the Great Depression and the war, for example. Over the years corporations have opposed this stimulus and forced the US to lose money on farm exports. Price floors were lowered 1953-1995 and then eliminated. Subsidies didn’t cause this, as can easily be proven. For example, there were no commodity subsidies during the early part of the declines in price floors and prices. There were no rice commodity subsidies until 1977! Most of the food movement knows nothing of this, and therefore, like corporate agribusiness (like Cargill and ADM, Like Smithfield and Tyson CAFOs,) advocates for zero price floor positions.
The reason for these policies is that free markets and free trade do not work in agriculture. Farm commodity prices do not self correct on either the supply side (farmers) or the demand side (consumers). They have prices that are very “inelactic,” as abundant economic data shows. They do not self correct very quickly at all, and not very much). As a result, farm prices are usually low. Only occasionally have they risen up close to or above fair trade, living wage levels.
To cap/green/eliminate subsidies, (with no price or supply management) is to believe in free markets, to believe in the corporate ideology and not in the economic data. Such policies subsidize individual CAFO corporations at the multibillion dollar level, (much higher than in the data on (and more recent database of) farm subsidy payments, that compensated farmers for massive losses 1981-2006!)
Shooting Ourselves in the Feet with “Gimme Gimme” Strategies
We need to return to policies and programs that regulate farm commodity markets. Then there will be no possible need for the misguided approach of trying to pay compensations to farmers in rich countries for some of the massive losses of US policies of losing money on farm exports.
Unfortunately, as long as this remains unknown in the food movement, most US advocates will unknowingly side with corporate agribusiness (zero price floors, zero supply reductions and reserve supplies, zero price ceilings). When that happens, it doesn’t just help farm subsidy advocates, it severely damages many other titles of the farm bill. When we ignore the the real Commodity Title needs, and try only to get bigger checks for other titles, we actually cause a lot of damage, greatly increasing the need for money for other titles. We shoot ourselves in our feet, repeatedly. For example.
Conservation Title: Cheap grain gives livestock in giant feedlots and animal factories a competitive advantage over grassfed meats from diversified farms. Farmers then plow up hay fields and pasture, which adds to the oversupply of cheap grain and cotton. Instead of having livestock harvest their own feed and spread their own manure (fertilizer) without fossil fuels, the system is unsustainable. Without clover and alfalfa, farmers then have to buy more nitrogen, in less sustainable forms, from commercial sources. Diversified smaller farmers, like you get with a good Commodity Title, are also better for local food systems. It makes no sense to create more of these problems and at the same time to fight for dwindling government money for conservation and sustainability.
Credit Title: more subsidized credit is needed if farm prices are allowed to be low most of the time.
Research Title: The incredibly cheap farm commodities that the farm bill Commodity Title made available to the agribusiness output complex 1981-2006 was a powerful stimulus for bad ag research, research that strongly favored concentration. The lack of market management caused that. You won’t fix that with the money that’s politically winnable in the Research Title (as the food movement, meanwhile, continues to support cheap corn policies, like zero price floors and supply management).
Rural Development Title: The powerful economic stimulus of price floors with supply management is especially valuable for rural areas. It cannot eliminate the need for a Rural Development Title, (or any other title,) but it can make massive contributions to rural development in many regions. A bad Commodity Title (zero price floors, etc.) devastates rural areas. To ignore that and just keep asking for more and more money to fix what continues to be broken is an incredibly stupid movement strategy, one doomed to failure.
Trade Title: The stimulus described above impacts farming countries worldwide, because the US is often the price leader, setting world prices. If we choose to make a profit (like OPEC in oil,) it’s the most powerful economic for Least Developed Countries, which are 70% rural. But when, long term, we have zero price floors and ceilings and zero supply management/reserve supplies, we usually create massive poverty, massive needs for food aid. Note also that these policies give topside protection to address spikes in wheat, rice, corn, and other prices. They too cause enormous damage. We can’t possibly win enough money to make up for the damage we typically cause with mere subsidy reform policies, (zero price floors & ceilings and supply management including reserves). The policies I’m favoring are endorsed by the Africa Group at WTO and by La Via Campesina, the world peasant movement, but not most of the US food movement (so far).
Nutrition Title: The low prices of zero price floor etc. policies, damage food by subsidizing transfats, high fructose corn syrup and CAFO meats. Our movement had had the very bad strategies of ignoring the need for price floors to address nutritional problems, while calling for the government to write out checks to fix food. Our own movement has been inadvertently endorsing minor or “major” subsidy reforms that do essentially nothing about the giant free market problems related to bad food. Additionally, the economic stimulus I'm describing helps to reduce poverty and create jobs, helping to counteract the rise in need for food stamps, especially in rural areas. It also puts a ceiling on top of farm prices, to protect low income consumers.
In all of these ways, the strategy of ignoring the Commodity Title market management reforms of NFFC is a way to shoot ourselves in our feet (ie. various farm bill titles).
Our strategy must be that, unlike the Republicans (and Democrats since 2002), we’re asking for the US to make a profit on farm exports. Unlike them, we’re asking for less long term spending on the Commodity Title AND an economic stimulus that comes from the private sector, (not a government check,) with help from appropriate government regulation (Commodity Title and Livestock/Concentration/Antitrust Title).