Subsidies: Is Farm Bill Girl Right?

I don’t know. I don’t know enough about this behemoth piece of legislation commonly known as the Farm Bill to answer definitively, but in her diary from a week or so ago on Daily Kos, Farm Bill Girl quickly made me question what just a day or two earlier I had felt was a good idea (so much so that I wrote an anti-subsidy post on it): to support and promote an amendment to the Farm Bill authored by Rep. Ron Kind, D-WI, that has generated some serious noise on the Hill called Farm 21.

But before any more on that, there’s a reason why this is important. According to Mark R. “Mental Masala” over at the absolutely excellent Ethicurean blog, the House Agriculture Committee today started what will be three days of work on finalizing a farm bill to send on to the full House.

So the next two days could be crucial. But back to subsidies and Farm Bill Girl...

FARM 21 would end the massive subsidies programs in the farm bill for commodity crops like corn and soybeans, and instead create “risk management accounts” for farmers.

These subsidies have been demonized by many well-intentioned people -- including the author of the wonderful book Omnivore’s Dilemma, Michael Pollan, and the Environmental Working Group – as a root cause of the problems created by the farm bill (e.g., its impact on obesity, the environment, illegal immigration, etc.).

But Farm Bill Girl (whom I will refer to as FBG for the remainder of this post) argued the opposite. She said that subsidies were a symptom of the serious systemic dysfunction created by the farm bill.

The root of that problem is corporate consolidation of agriculture, where a few agribusiness companies dominate global trade markets (i.e. ADM/Cargill for corn, Smithfield/Tyson for livestock, WalMart and various other corporations who dominate supermarkets in Europe, the US) to the misery of all farmers suffering from low prices that never meet their costs of production.

This resonated with me. It made sense, particularly after reading Fast Food Nation some years ago and, more recently, an excellent expose of factory pig farms in Rolling Stone and the aforementioned Omnivore’s Dilemma.

FBG continues talking about commodity subsidies, and our food system, which is

premised upon letting the "market" set prices for commodities, and then using subsidies when those prices are driven too low. Subsidies do barely keep rural America afloat. Ken Cook [of the Environmental Working Group] deliberately distorts his database to look like it's all going to "millionaire farmers" and that 66% of farmers never receive farm payments. Well, most of that 2/3rds are "rural residence" farms, meaning a lot of wealthy landowners with their hobby farms, not real farmers. For full-time farmers, most do receive some sort of subsidy, and farmers I know that are family farmers are in the top 10% of that database, receiving about $20,000 a year (remember though, this was when prices collapsed after 1996. This year, those numbers will be significantly decreased because of the higher prices). Also, most payments are going to districts like North Dakota and South Dakota and Iowa and Nebraska (Scott Kleeb's district he ran in). What do these have in common? They're not known for millionaires. They're known for tough economies where young people are leaving in droves and no one young goes into farming. So clearly, subsidies are going to places that need it, but they clearly aren't doing much to keep these places alive or growing.

FBG goes into some of the history before the farm bill, before gross agricorp consolidation. You can read more about this history in a great primer on the Farm Bill by the Institute for Agriculture and Trade Policy.

All of it is much more than I wanted to go into here. But the history does point to the wisdom of reinstituting a policy from years past that helped to curtail the overproduction of crops, which keeps prices low for the big agribusinesses (prices below what it costs the farmers to produce the crops, thus the need for the subsidies, which began in 1996 as “emergency payments”): a reserve for crops that can store well, to keep them off the market and keep prices fair for the farmers producing them.

The IATP, FBG, and other farm groups also advocate the establishment of a price floor for commodity crops. This goes back to the subsidies argument, and again I’ll go back to FBG:

Subsidies DO do all the bad things progressives think it does: fuel agribusiness, fuel factory farms, dumps on third world. But it does NOT cause overproduction. It's the pricing system we need to look at. If farmers got a fair living wage for their product, there would be NO NEED for subsidies.

Again, this really resonates with me. And it makes sense. Pay farmers a fair price for their product, as well as encourage organics, support local food systems, support environmentally sound uses of farm land, and stop indirectly subsidizing the Tysons and ADMs and Cargills of the world. Sounds like a good bill to me!

As for FARM 21, the Center for Rural Affairs’ Blog for Rural America has this to say:

• While FARM 21 would change the basic structure of farm programs, it does little in the way of making sure that farm program benefits flow to small and mid-size family farms (jump to more about this);
• FARM 21 does not close the loopholes used to avoid farm program payment limits (jump to more about this);
• FARM 21 shifts large amounts of money to conservation programs- a laudable goal- but invests most of that money into the Environmental Quality Incentives Program, which subsidizes enormous manure lagoons and the concentration of livestock production (jump to more about this);
• FARM 21 places much-needed resources behind some rural economic development programs, but others receive inadequate amounts (jump to more about this);
• FARM 21 does not include any crucial livestock market competition reforms;

But even any discussion of FARM 21 may be moot. Mental Masala pointed to disturbing statements from House Agriculture Committee Chairman Collin Peterson, D-Minn., on FarmPolicy.com about the Farm Bill’s prospects:

“Reacting to public and private statements by Republicans that they think Congress is more likely to extend the 2002 farm bill than rewrite it, Peterson said, ‘Maybe there’s a bigger strategy. The Republicans don’t want anything [to pass] in the Congress.’”

So clearly activity from the net roots is going to be important to get a truly progressive farm bill through Congress. You can get far more information on this bill at several of the sources mentioned in this post, including the Ethicurean, IATP, Blog for Rural America.