| There are three basic parts to the farm bill. The commodity title is the biggest (in terms of economic impact world wide, historically a multi trillion dollar issue,) and most important. The nutrition title is largely about human services, and is in the farm bill largely for political purposes, to better negotiate for urban (especially inner urban) support. The other titles are supplements to try to fix or tweak this or that (better conservation, research to help certain areas, facilitate certain kinds of trade, help rural development, tie in with energy, provide credit help including help to banks, address antitrust issues if where power is concentrated). In part the Nutrition Title is also a supplement. For example, it utilizes some excess commodities, and ties them in to governmental use, in schools, for example.
Of course, in all of these areas, corporate interests and other interests get involved, and Congress and the administration negotiate between them, so the results are mixed, and for decades, much tilted toward corporate special interests. But this has to be evaluated in each case. The Commodity Title is, of course, where the big power and money lies (those multi trillions, remember). So that is always were the big mega fights against corporate domination take place.
In principle, the core of the Commodity Title is fairly simple. The main farm commodities (ie. the food and feed grains, and cotton that are grown on the vast majority of farmland) lack "price responsiveness" on both supply and demand sides. That is, if farm prices (ie. for a group of these commodities) are fairly low, consumers don't eat four, five or six meals a day to take advantage of it, nor do they very easily cut down to two or one meal if prices are fairly high. Do demand doesn't change much. Likewise, on the farm, if prices are fairly low (or high) farmers don't then leave part of their land unplanted (nor are they collectively able to find a lot more land when desired). The amount of farmland is pretty much a given, so supply doesn't change much.
To address this Henry Wallace came up with a system of price floors with supply management to prevent oversupply and prices falling too low. On the top side he came up with price ceilings with reserves (ie. stored grains) that can be released when triggers (extra high prices) are hit. Historically, these mechanisms evolved through several pieces of farm legislation in the 1930s, so the 1933 farm bill doesn't give the best illustration of them.
The way it worked included nonrecourse loans farmers could get on their harvested crops in return for the requirement of idling some acreage for supply management. They could get a so many dollars per bushel, and then, if desired, hold the grain (at home or in the elevator) until prices went up. If the prices didn't go up, they could forfeit the grain to the government, without penalty for it being worth less later. The government would use it in their reserve system, and adjust the amount of idled acres the following year to keep prices high enough.
All of this could then be backed up by tariff protection to prevent imports into the U.S. from destroying U.S. (and world) market prices. It was all fairly easy to do because the U. S. has had a huge world export market share, well over 50% for corn and soybeans, for example (even 90%!).
Our market share has fallen some, but there is another alternative, negotiate supply management agreements with other countries. We do that in the sugar program (here http://www.lavidalocavore.org/... which also has other unique characteristics.) This sort of thing has been supported by the Africa Group at WTO (here http://www.iatp.org/tradeobser... and the European Union (see "The Impact of GATT on World Hunger," Mark Ritchie, speech to International Symposium on Food Self-Sufficiency, Tokyo, August 1988, pp. 3-4.). So if we had been negotiating for that (for making a profit on our farm exports) over the decades, we could surely be implementing these programs with even less risk to the U.S. than in the past.
That's all pretty clear, isn't it?
Unfortunately, however, our ever bigger, ever more multinational corporations fought hard for decades to destroy this very simple, very workable, very pro business, very pro America (where we make a profit per unit on farm exports) Commodity Title. As a result price floors were lowered 1954-1995 and then ended in 1996, along with supply management, price ceilings and reserves. Along the way they won all kinds of complicated ways to break down the legislation (ie. voluntary supply reduction paid for by the government, complicated subsidies). They then fabricated convoluted theories to go along with it, like the decoupling of subsidies. Of course, trying to sort all of that chaff out from the grain, farm bill by farm bill gets quite complicated.
Naturally, it's then easy to see the farm bill as a huge monster. And why not warn potential activists of what they're in for, right? Really though, there are ways of clarification, as I've tried to show here. By avoiding mystification, we better empower people. |
