New Years Eve Daryll Ray-a-thon

publication (4.00 / 2)

Jill, I'm sure you'll notify us when the installments are published, but you know anticipation bedevils us. Can you say something about when and where?

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by: count @ Fri Jan 01, 2010 at 06:57:06 AM UTC

Sure. (4.00 / 2)

Firedoglake (I think) and soon(ish)?

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

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by: Jill Richardson @ Fri Jan 01, 2010 at 06:58:31 AM UTC

[ Parent ]

Interesting, (4.00 / 1)

I just read the article on making a living from the marketplace.

Great article. It's interesting, that attitude he mentions -

What we have heard them say over and over again is they would rather earn their livelihood from the marketplace than the mailbox-a metaphor for government payments.

Farmers and ranchers are generally a pretty independant bunch. It's a point of pride to do for one's self and to stand on your own two feet. Which is one behavioral reason for not wanting payments. Another is a deep distrust of government that many, including myself, feel toward government.

I don't know about anyone else, but one consistent behavioral pattern on the part of government, is that anytime you put your hand out for help of any kind, they've always got a noose to slip around your wrist as they place the money in your hand. My metafor for the stings that always come with government money. When you take the government's money, you have to dance to their music.

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Fri Jan 01, 2010 at 12:27:50 PM UTC

Just finished reading the first article you linked to (4.00 / 1)

Regarding what he says about increasing production and it's ability to address hunger in the developing world, I think one of the problems is that it's always assumed that people will be better off in cities than on the land, and that for those few who will be interested or allowed to remain on the land to farm, they will be better off growing commodity crops at commodity scales in order to fuel industry.

That's what this whole development of the third world looks like to me. It's not for the betterment of the people in those countries, it's all to fuel industry, be it manufacturing of hard goods, soft goods (information), food, etc.

I wonder if, as the years roll on, the industrialists and social engineers are succesfull, and the developing countries wind up like we in the developed world have become, where 95% of the population is no longer self sufficient in food production because they're all living in cities working in the manufacturing and service industries, IT, etc. perhaps they will need to use our 'modern' farming methods. Lots of chemicals, heavy dependance on machinery as opposed to labor, etc.

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Fri Jan 01, 2010 at 12:49:16 PM UTC

Some additional info (4.00 / 1)

regarding the bankrupcy of Pilgrims Pride noted in Daryl's article on policy shifts and grain reserves -

While fluctuating grain prices no doubt had an impact on Pilgrims Pride, driving the cost of production up, the company also over extended itself financially by expanding production, aquiring Gold Kist, etc. There was a suspicion among some of the growers that Tyson, PP's biggest competitor in the poultry market, also dropped the price on their poultry products so low that PP just couldn't compete and make a sufficient proffit to stay in business. It was suspicioned at the time, that Tyson was able to stay proffitable over all because they are diversified in other protein markets - beef, pork, etc. - and that the proffits from those production divisions was able to offset the losses from their poultry divisions.

Basically, PP got into a financial pissing match with Tyson and lost.

If true, that's probably what caused the PP bankrupcy more than fluctuations in the grain commodity prices.

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Fri Jan 01, 2010 at 13:33:19 PM UTC

global reserves (0.00 / 0)

While the article deals with U.S. policy, grain reserves are a global issue.

June 2006

This year's world grain harvest is projected to fall short of consumption by 61 million tons, marking the sixth time in the last seven years that production has failed to satisfy demand.  As a result of these shortfalls, world carryover stocks at the end of this crop year are projected to drop to 57 days of consumption, the shortest buffer since the 56-day-low in 1972 that triggered a doubling of grain prices.

February 2007

The world has consumed more corn, wheat and rice than it produced in six of the past eight years.

Global grain consumption expands nearly every year due to increasing population and incomes. However, grain production has fallen behind and reserves have been used to satisfy expanding demand. Total grain use (coarse grains, wheat and rice) increased from 5.11 tonnes per day in 1999-00 to 5.60 in 2006-07. At the same time, global grain reserves declined from 114.7 days of usage to 56.7 days. World grain reserves have fallen to this level only one time inmodern history... from 1972 to 1974. That period is termed the "great grain robbery" as Russia purchased unprecedented quantities from the US. Grain prices were pushed to historic highs in that period and the US government placed an export embargo on further sales to avoid domestic shortages.

President George W. Bush gave a speech in May 2008 decrying countries who were using export controls and export bans.

October 2008

At a recent roundtable at the Center for Global Development, Washington DC, World Bank Chief Economist Justin Yifu Lin pointed out an element of market failure in the crisis-due to rising expectations, hoarding, speculation, and grain export restrictions.

"The food crisis highlights the need to restore confidence in global grain markets," said Lin, "The recent price fluctuations reflect a collapse in market confidence, not just a temporary imbalance in supply and demand."

When grain prices surged in 2007, most countries had reduced their public grain reserves to almost zero, and so lacked the means to stabilize the grain market. A few countries that did have substantial reserves held on to them to protect domestic consumers, when even a few million tons freed into the global market would have prevented price surges.

This situation grew worse when governments in exporting countries adopted various measures to restrict exports, including high taxes on exports and even export bans, in order to stabilize their own domestic prices.

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by: count @ Sat Jan 02, 2010 at 10:54:27 AM UTC

[ Parent ]

Pilgrims Pride (0.00 / 0)

Sounds reasonable to me. The PP acquisitions program was breathtakingly aggressive for a few years, and the company was burdened by a monster debt load. Grain prices would have affected Perdue Foods, a much smaller poultry competitor, the same way it affected PP, and grain prices would have increased the cost of production in all of Tyson's protein divisions.

I don't know anything about underhanded Tyson machinations but, regardless of that, this seems to be true:

Basically, PP got into a financial pissing match with Tyson and lost.

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by: count @ Sat Jan 02, 2010 at 11:02:15 AM UTC

[ Parent ]

Yeah, (4.00 / 1)

that was my point about that one specific thing regarding PP. If this is actually what did happen, then what the grain prices were doing really wouldn't have had much if any impact on PP's financial situation.

I don't know if that type of business practice is even illegal. I mean, there's no law that says you HAVE to sell at a proffit. Hell, if you're a business and you loose money every year, IRS will let you keep you status as a business as long as you're acting like a legit business. And especially if Tyson was loosing money like crazy but making a proffit in their other divisions, no one would think twice, except the competitor who was getting their clock cleaned.

That's business for ya.

I agree otherwise with Darell's analysis of the benifits of grain reserves, I just think as far as the PP bankrupcy, reserves would have been irrelevant.

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Sat Jan 02, 2010 at 13:59:42 PM UTC

[ Parent ]

And one of these days I could (0.00 / 0)

spell his name right. Sorry Daryll....

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Sat Jan 02, 2010 at 14:01:15 PM UTC

[ Parent ]

Morphing Crop Insurance (4.00 / 2)

Another entity crop insurance morphs into is the Farm Bureau. They operate under all sorts of different names selling crop insurance. It would be interesting to know which insurance parent companies control what percentage of this more or less mandated crop insurance. I bet there are only  few and all give generously to members of the Ag and Ag appropriations committees.

Thanks for all the links - great information.  

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by: AnnN @ Fri Jan 01, 2010 at 15:55:57 PM UTC

Daryll Ray and Subsidies (4.00 / 1)

A key point Daryll Ray makes is that the main farm commodities lack price responsiveness on both the supply and demand sides.  Therefore free markets rarely work (the worked 1910-1914, WWII, 1973-1974) and the government is needed in agriculture to put a floor and ceiling on prices.  This was done in traditional farm programs with no compensatory (ie. for losses) subsidies, since none were needed.  So bad government programs shouldn't lead us (as in one comment here) to go to free market policies where farmers/farm states/farm countries (like the US and LDCs) almost always lose money, as we have on exports.  

Some older Daryl Ray pieces, ie. on the 1996 farm bill are helpful.  He has long and short pieces on price responsiveness.  I've listed some on my blog under Farm Bill Primer, and with APAC to identify them.  http://www.zmag.org/zspace/bra...

Daryll isn't clear enough (for non farmers or young farmers) about the four key commodity policies in the farm bill (subsidies, which are largely irrelevant, except to compensate farmers for losses under the chosen free market losses via  lack of price responsiveness, are not among the four key policies).  They are:  price floors with supply management on the bottom of prices and price ceilings with commodity reserves on the top, as in NFFC's farm bill proposal http://www.nffc.net/Learn/Fact...  Rarely does the food movement support this/these real solution to the long list of problems (bad oils and fats, fructose, CAFOs, dumping on LDCs, unfair competition against pastures, etc.)

Ray's major proposal (http://agpolicy.org/blueprint.html) utilizes a price floor just high enough to get rid of subsidies, but he doesn't explain that.  I'm not sure he even explains that it is a price floor.  That's his choice.  It would be a huge improvement.  Early farm bills had a price floor at 80% of parity (ie. fair trade/living wage price).

Historically, these good policies were weakened starting in 1954.  Commodity subsidies co-relate with the lower prices which are really caused by dropping price floors.  Well, subsidies ONLY correlate after 1961 for corn/feedgrains and wheat, 1964 for cotton, 1976 for rice.  There were no subsidies prior to these dates, so there is zero co-relation of subsidies with price drops (and the list of problems:  obesity, diabetes, poverty) from 1954 to these dates.  After these dates subsidies compensate for continued drops in price floors and make drops politically easier to  impose on farmers  (in the 1980s there was relatively little support from consumers as farmers fought these issues alone).  Ok, then in 1996 price floors and the other 3 policies were ended.  See more sources on all of this at my blog.  So traditional (non subsidy) farm programs ended in 1996, unlike the myths you hear.

We must get the food/hunger/church justice/sustainable agriculture movements to change and advocate for the real changes needed next time, because the subsidy diversion ends up supporting Cargill, ADM, Tyson, Smithfield, etc., and that's what these movements supported last time, by mystification, not by intention.

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Fri Jan 01, 2010 at 16:11:46 PM UTC

Selling Daryll (0.00 / 0)

Daryll Ray may be a tough sell on a blog like this.  Why is he so important?  That needs to be said, but how?

I'm not sure the intro or links capture it.  

Then there's the part where the food movement would have to unlearn a bunch of stuff and learn something different that sounds technical?  A bunch of negatives?

Ray is great for those who really want to know the facts, in a plain, understandable way.  His columns are short and on many topics, nearly 500 in the new series and the old ones on totally dumping the traditional farm bill in 1996.  They're in Word, pdf, or html, by the way.  Then he has a bunch of powerpoint presentations with charts to clearly show the data.  Then he has the longer publications.

He's an ag economist.  He breaks a lot of the popular food/subsidy myths (what the farm bill [commodity title] really is and why; why subsidies are a false issue).  He gives some of the political history of how we got such a convoluted farm bill.  He shows what has failed in the newer programs.

Really, if you really want to know, and you have little background, he's immensely helpful.  If you want to become an expert, he offers tons of help.  He's great for browsing!

I recently met a food guy who knew all about bashing corn, so I pointed out that it's all about low corn prices, and he seemed to agree.  So we need high corn prices!  Wow, that went outside the box for him.  If corn is bad, why pay corn farmers more money (ie. above full costs).  Is that counter intuitive to those who comment here?  These are the biggest issues in the farm bill, bigger than the nutrition title in economic impact world wide.  

Good luck teaching the food movement about Daryll Ray!

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Sat Jan 02, 2010 at 02:36:04 AM UTC

ag economists (0.00 / 0)

Naming someone an agriculture economist is not necessarily a commendation. Earl Butz, who became a convicted felon after his term as Agriculture Secretary, was an agriculture economist, and look where that got us. The point of the 1996 farm legislation, or at least the propagandized point of it, was to expose farmers to the bracing winds of market forces. Farmers were expected to harvest fortunes from export markets. The plight of farmers quickly became so dire that subsidies were implemented to keep farmers on the land. "Emergency aid" to farmers was $15 billion in 1998, $23 billion in 1999, $71 billion in 2001, and the greasy slide has tilted sharply from there. The 1996 farm legislation was advocated and supported by agricultural economists.

Please climb off your "subsidies are a false issue" soapbox, I can't hear you from there. Tens of billions or hundreds of billions of dollars are real, and not a "false issue." OK, so subsidies are a symptom of other problems - if that's your point, make your case.

Don't assume we're idiots.

Canada's farmers face many of the same problems ours do. Canada's supply management system isn't perfect, but farmers have gotten some protection from it. Now Canadian conservatives want to jettison the program, I suppose to replace it with something like our 1996 "Freedom to Fail" legislation. I hope someone up there bothers to look below the border to see what their future could look like.

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by: count @ Sat Jan 02, 2010 at 09:47:57 AM UTC

[ Parent ]

ag economists (0.00 / 0)

Jim Hightower quoted a joke in Eat Your Heart Out (1974):  If all ag economists were laid end to end . . . it would be a good thing.  So, point taken.

Daryll Ray has some interesting analysis on why ag economists that know the basic facts (ie. that commodity prices are "inelastic" and "lack price responsiveness" on both supply and demand sides) then turn around and support policies like Freedom to Farm or Reagan's deficiency payments, or free trade, or any number of odd policy/program ideas.  

Here, I found a couple:  1. (odd title?), "Evil in Public Policy," (ppt) http://www.agpolicy.org/presen...  and appendix B here, p. 55 (p. 61 pdf).  Or even:  "Developing an Alternative
to the Chicago School" http://agpolicy.utk.edu/presen...

I don't think you understand what I've said about subsidies.  I say that because in your answer you gave no indication that you understand where the big money goes (which is not subsidy money, and which is a multitrillion dollar issue historically, and which is bigger than subsidies plus the nutrition title combined).

A key point:  any subsidy based policy change you might support has virtually no impact on the cause of the problems often identified as being caused by subsidies (bad food, hunger, damage to environment).  The other policy changes do affect these matters a lot.  These policies that really make a difference are:  price floors with supply management, price ceilings with commodity reserves.  

Yes it's a lot of money and yes I'm opposed to all comodity subsidies in the big picture, but subsidies don't cause the problems claimed because they have no serious or direct impact on farm prices or over supply.

I'll try to be less obnoxious, but my main point is that the movement needs to"climb off of" their subsidies "soapbox."  It needs to be discussed.  Few outside of the family farm movement (unfamiliar with farm bill history) have ever heard of the issues I raise.  Most recent  (ie. 2003-2008) footnoted documents, books, editorials and movies on the farm bill fail to demonstrate knowledge of these points.  I can give sources on that.  The policies we need were not in the 1996, 2002 and 2008 farm bills.  The big fight took place during the 1980s when the over all movement was much smaller.  Significant  groups who understood it then don't know (ie. change of staff?  ie. churches).  Re 1980s:  so there isn't much info online.  Daryll's 1996 "Farm Bill Series" covers it in a clearer way for new people (archived: http://www.agpolicy.org/archiv... ).

And see these two historical (1980s) booklets.:    http://www.iatp.org/iatp/publi... http://www.inmotionmagazine.co... http://www.inmotionmagazine.co... (2 of 3 parts)

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Sat Jan 02, 2010 at 15:50:22 PM UTC

[ Parent ]

Time machine (4.00 / 1)

price floors with supply management, price ceilings with commodity reserves.

We've been there, so for my information, how far back would be a good time to revisit? Roosevelt? Eisenhower? Carter?

I think Harry Reid, for example, is adamantly opposed to anything like you suggest. I've heard a few politicians of various flavors and colors say, in the last couple of years, they would like to end subsidies. Reports were in soundbites, however, and I don't know what they want instead, or why. I fear I'm reflexively with Joanne here - if a politician says he wants to end subsidies, I would willingly believe he wants to go with an even worse scheme.

Are those few politicians the movement to which you refer?

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by: count @ Sat Jan 02, 2010 at 20:14:31 PM UTC

[ Parent ]

Brief subsidy history (0.00 / 0)

In trying to briefly answer some of this farm politics and political history related to subsidies it got a little long, so I'll try to post it as a diary, and get it out tonight.  I'll put subsidies in the title.

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Sun Jan 03, 2010 at 01:19:58 AM UTC

[ Parent ]

Daryl Ray on Economists (0.00 / 0)

I left out this link (Appendix B, here, http://agpolicy.org/blueprint/... p. 55 (61 pdf).  The title is:  "Sources of the Current Agricultural Crisis: Views and Policy Prescriptions"

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Fri Jan 08, 2010 at 19:27:32 PM UTC

[ Parent ]

defense of climbing my soapbox (0.00 / 0)

Here (http://www.lavidalocavore.org/showDiary.do?diaryId=3018) in a diary  I give a longer answer to a comment further below (time machine).  It also gives the historical context for my argument that subsidies are a false issue that is also not understood, to which you responded here.  I welcome other views.

Basically, if I'm correct, (that the food movement and most others who share our values miss the biggest food and farm issue in the farm bill, and then advocate on the wrong side of it,) then my "soapbox" deserves toleration, respect, attention, study and distribution.  At the least, what I see (true or false) should lead anyone onto a big soapbox.

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Sun Jan 03, 2010 at 02:56:39 AM UTC

[ Parent ]

I agree with Brad that Daryll and his writings are an incredible resource. (0.00 / 0)

His articles on agriculture development in the developing countries and how it should be tailored to cultural and social food systems present in those countries as opposed to forcing our own cultural and cropping systems on them, is a breath of fresh air. I thought I was the only one in the world who thought like that.

It seems to me that the subsidy programs, the export markets, free trade schemes such as NAFTA, WTO et al, and this whole "We gotta feed the world" battle cry don't have anything to do with making farmers rich or feeding poor people anywhere on the planet. It's all about feeding industry and the companies who act as middle men getting commodities from the farm to the manufacturer and then the finished products back tot he consumer.

Farmers and poor people are just the distraction that the policy makers and and large manufacturing/trade companies are using in a huge slight of hand magic trick. How's that for a metaphor?

Normal people scare me. But not as much as I scare them.....

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by: Joanne Rigutto @ Sat Jan 02, 2010 at 14:16:45 PM UTC

So therefore, farm policy (4.00 / 1)

So therefore we must understand the key policies that are really needed and advocate for them, like NFFC's Food From Family Farms Act (price floors with supply management on the bottom side and price ceilings with commodity reserves on top) and the kind of trade reform advocated by IATP.org.  See links at:  http://www.zmag.org/zspace/bra...

And we need to spread the word in the food movement and related movements, since few even know about this.  And we need to explain what is a "scapegoat," ie  subsidies, as African American farmers have pointed out here:  http://lists.iatp.org/listarch...

And see my reply just above to "count."  

Since most groups in this huge movement didn't understand/advocate on these real issues last time and we got a bad 2008 farm bill, naturally, we want to get everybody on board before the next farm bill.  We need to stop advocates on our side from advocating for policies that make no difference to the massive hidden* subsidization of the output complex.  (* it's not in the subsidy database, even though it's bigger.  It's not in the federal budget.)

Clear as mud?

"We're trying to warn this nation of a tidal wave ..., and it's coming your way, whether you want to know it or not...!"  female family farm activist in Iowa warning against agribusiness, Donahue Show, 1985

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by: Brad Wilson @ Sat Jan 02, 2010 at 16:00:51 PM UTC

[ Parent ]