Commodity Crops Vs. Vegetables? Data Slides Fix the Myth
By Brad Wilson at Jan 29, 2013
(Authors note: This blog introduces a new "Photo album" of data charts or slides called "Commodity Crops Vs Vegetables." Go straight to the slides first, or, to better understand as you go along, open a separate browser window, and open the slide show, here: http://www.zcommunications.org/albums/299. The general link for all of my data slide shows is here: http://www.zcommunications.org/albums/list/bradwilson.)
Are Commodity Crops privileged, while Vegetable Crops are penalized by the Farm Bill? Is Corn a Farm Bill “King,” while Tomatoes and Spinach are paupers? What does the data show?
This blog is a brief introduction to 9 new data slides showing Price Summery data based upon the “Parity standard.” Parity is the traditional standard of fair prices, or what we might call today, a “Fair Trade” or “Living Wage” standard.
A major hindrance to productive discussion about major problematic issues related to the Farm Bill (farmers going broke; transfats & hydrogenated oils; diabetes & obesity; factory farm food; rural brain drain; “rise of ... rural ghetto;” export dumping on LDCs;) is that standards for fair farm prices are rarely a part of the story. These data slides help to fix that.
Parity is not just a standard. It’s a powerful statistic, (and is many other things as well). Parity statistics can be used to clarify and simplify a wide variety of Farm Bill concerns. USDA has yearly parity data on a large number of crops going back to the 1940s and earlier. What Parity shows about farm prices is a bit different from putting prices into constant dollars to adjust for inflation. Unlike those statistics, Parity factors in changes in the cost of production. One reason that that is very helpful, is that USDA has “Commodity Costs and Returns” data for only a relatively small number of crops, and usually going back only to 1975. In recent years, and back in the 1970s, (after farmers were kept in the dark about the secret Soviet grain deal,) production costs have risen rapidly. The Parity standard accounts for this, giving a more accurate picture of economic conditions on farms. Likewise, for some of the biggest crops, the Parity standard has risen more slowly than inflation. It is, in that way, a more conservative interpretation of farm prices throughout history.
“Parity” means 100% of parity. That’s the standard for each crop. Other statistics can then be computed as a percent of parity (ie. farm prices, Farm Bill Price Floors, Farm Commodity Subsidy amounts, various costs of production). Parity numbers can also be multiplied by production data (acres x yields) to generate a variety of large numbers related to farm income for individual crops and groups of crops.
Introducing the Charts
Context. These charts, (which are drafts, and need further proofreading,) are the first such charts to be released from a larger Fruit and Vegetable data crunching project I’m conducting, which is part of a much larger project of using data to present data pictures that tell stories about the Farm Bill. All across the mainstream media, the Food Movement, the Conservative Movement, the Progressive Movement, and elsewhere, we’ve heard stories and seen pictures related to Farm Subsidies, for example, and other Farm Bill spending. This information, and discussions about it, have amounted to a major false paradigm that has dominated Farm Bill analysis for a number of years. I call it the Food Subsidy Paradigm. The data provided here, (and elsewhere,) documents some of those falsehoods. It enables people to actually see in an alternative way.
Method. In these 9 charts, I’ve taken Price and Parity Price, (the traditional standard of fair prices,) data for the big five commodity crops, (corn, wheat, soybeans, rice, cotton, and then computed Percent of Parity. I did the same for 6 Vegetables used for processing, and 13 Fresh Vegetables, and then compared the two data sets on line charts in 3 batches. The same Commodity Crops are represented in each batch. For ease of viewing, (there’s still a motherlode of detail sometimes!) I made separate charts for the Processing Vegetables, and I divided the Fresh Vegetables into 2 batches, in alphabetical order. I limited the Vegetables to those that had few data holes (missing data). I hope to show more examples in the future.
For one of the charts I included both Farm Prices as a Percent of Parity, and a second line, Farm Prices PLUS Farm Commodity Subsidies, as a Percent of Parity.
Findings Shown on the Charts
Dispelling the Myth. The conclusion to be drawn from the data is quite clear. By this standard, the Vegetable Crops consistently fare significantly better in the marketplace than Commodity Crops, and this is even true, much of the time, when subsidies are added in. This is important because market prices are almost always left out of the discussions about Farm Commodity Subsidies. The usual picture is hugely the other way: Commodity Crop Farmers (and Dairy Farmers,) are are believed to be riding high, with “lucrative” Farm Bill benefits. Vegetable (and Fruit,) farmers are said to be severely penalized relative to Commodity Crop Farmers.
A key additional point is that Congress lowered Farm Bill Price Floors severely from 1953 to 1995, and then ended them, (dropped almost all of them to zero,) in 1996. I show this on other data charts at ZSpace, where Price Floor data is included, showing the specific policy reductions legislated by Congress, signed by the Presidents, and then implemented by USDA.
Major exceptions to the trends include the 1970s Farm Commodities price spike, (mentioned above,) and the higher prices Commodity Crop farmers have had (especially for corn, soybeans and rice,) starting in 2007.
A More Important Finding.
The purpose of this blog is not at all to bash Vegetable (or Fruit) farmers, but one major purpose is to stop those farmers and their supporters from bashing Commodity Crop farmers. In fact, as is obvious from the charts, Vegetable Farmers have also had a hard go of it. Their prices have declined severely over the years. (Their prices have been affected by Marketing Order programs, rather than the kinds of Price Floor and Supply Management programs that Commodity Crops have had.) They represent another aspect of this long term “Farm Crisis.”
Obviously, all farmers need to stick together, and Commodity Crop Farmers have often spoken up for Vegetable and Fruit farmers. During the 1960s, for example, the National Farmers Organization organized both kinds of farmers when issues came up. Likewise, during the tragedies of the 1980s Farm Crisis, Commodity Crop Farm leaders called for protection for Vegetable and Fruit farmers. For example, when the Florida citrus crop got frosted, Wayne Cryts of the American Agriculture Movement spoke out in defense of the farmers.
They’ve had a freeze, but they’ve been able to salvage part of that crop down there, they’ve been able to get it to the processors. But are they going to let the citrus prices go up so that farmer can make more money to cover that disaster. They’ve increased the imports coming in to hold those prices down. And what it’s going to do is destroy our citrus industry in this country.
This is the kind of attitude that we need to bring the Farm and Food Movement of today together, in a joint fight against agribusiness exploition, through government, of the U.S. food system. As Wenonah Hauter quoted me in her new book, Foodopoly: Commodity “...farmers can ‘help progressives meet a wide range of policy goals, as well as key movement strategy goals in this time of budget cutting and deregulation.’ Wilson admonishes, ‘Don’t destroy them! Enough already!’”
(Authors note: I hope to add footnotes later.)