Philpott & Bittman are wrong about Tim Wise

Some good points but (4.00 / 1)

I don't know what Philpott and Bittman have written about this. I do know that Jill Richardson is correct when she writes

If Paarlberg had consulted researcher Timothy Wise of Tufts University, he would have received data proving that our subsidy system more or less provided savings of billions of dollars to the factory farm industry in the form of underpriced commodities over a recent period.

The Tufts authors have been careful to repeatedly indict "U.S. agricultural policies" and "U.S. farm policies" and have refrained from using the terms USDA direct payments, crop insurance, etc. Nevertheless, as a result of the 1996 farm bill, the former system undeniably was replaced by, as Jill writes, a subsidy system.

True, government payments did not entirely make up the gaps between market prices and the costs of production from 1997 through 2005. Farmers and farm families made up the difference as best they could with off-farm income, but it can be argued that government subsidies were a critical component enabling people to continue selling their goods below production costs. I have difficulty finding a meaningful difference between saying "subsidies enable people to sell their goods below production costs" and "a subsidy system enables people to sell their goods below production costs."

I think your continual harping about the ignorance of others obscures the value of your concern for the next iteration of ag policy. However wrong Bittman and Philpott may or may not be, they probably do not advocate ferocious unrestrained capitalism as the alternative to our present subsidy system. The present system will be modified or replaced eventually. Focus on that. If someone says subsidies or a subsidy system "causes" something, don't tell them how stupid they are. Advocate for your preferred alternative to subsidies.

For all I know, the causes of low prices might be the same as the causes of high prices - global oligopolies and monopolies. I know there's more to it than supply and demand.

The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform

Throughout, we draw on US-Mexico trade in maize as an illustrative case study. We conclude that subsidy reduction is unlikely to reduce economic pressures on Mexican maize producers from below-cost US exports, nor are such measures likely to improve the economic prospects for similar small-scale farmers growing food primarily for subsistence and the internal market. Instead, policy reforms should focus on ending agricultural dumping, reducing global commodity overproduction in key crops, and reducing the market power of agribusiness conglomerates.

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by: count @ Tue Apr 12, 2011 at 23:23:19 PM UTC

Thanks and Clarification (4.00 / 1)

Thank you for entering the discussion.  This is a matter that a lot of people have thought is crucially important for 50 years, (but you very rarely find them on food blogs). I appreciate your willingness to listen.

It seems clear to me that you don't understand the point I'm making, or why it is important. That's my opinion, based upon what you've written, as I'll explain below.  Correct me if I'm wrong.  I don't mean in any to suggest that anyone is stupid, though I understand that this is an easy conclusion to draw while misunderstandings exist. thank you for that feedback as well.

First, here's why it matters.  If politically possible subsidy reforms (ie. capping, greening, elimination) will NOT fix the problems of cheap corn, etc., then to advocate for those "reforms" and teach others about them is to give people false hopes and mislead the movement away from an effective solution. A staff member at NFFC told me, for example, that after explaining this at a meeting, an audience member responded basically with: "So you're telling me than in my advocacy for the 2008 farm bill against subsidies, I advocated on the wrong side.  I advocated in favor of agribusiness" (ie. in actions but not in spirit or intention).  To which they replied: "Yes, that's what we're saying."  

Ok, does that make sense. If I'm correct, then what Philpott, Bittman, Jill and you here have written in these places is, practically but not intentionally, in support of agribusiness. Put into your words, I'm saying that, generally, "Bittman and Philpott ... do ... advocate ferocious unrestrained capitalism as the alternative to our present subsidy system," (not at all intentionally, quite the reverse, but) because they do not understand the facts of the matter.  Obviously, this is not the intention of anyone in the food movement. Anyone sharing these values and wanting to stop the food movement from siding with agribusiness might therefore see "harping" differently.  That is, I understand that it would be merely "harping," if your assumptions were correct, but if in fact the food movement has been advocating directly opposite to their own values, then it takes on a very different light.

Ok, so I'm pointing to evidence that subsidies do NOT restrain capitalism (they merely cover up the lack of restraint, the lack of the needed policies). What did restrain capitalism (in the farm bill), what does raise farm commodity prices, is a price floor system backed up with supply reductions as needed.  That's for the bottom side of price.  The top side of restraining free market capitalism is a price ceiling to trigger the release of reserve supplies as needed.

I in no way deny that there appear to be logical or intuitive reasons why subsidies might be the main cause low farm prices. Jill has given some of those in the cited piece she wrote. You have also given some of these reasons, (ie. "it can be argued"). So I don't disagree that the points you've made sound intuitively correct. Another reason is that subsidies correlate closely with low prices over periods of years where there were subsidies. (Other evidence, however, shows that this scientific correlation is not a causal relationship.)  

In your response, you did not mention the policy matter that I said originally is the important one, so that is part of what makes it look like you really didn't pick up on my main point.  That policy matter is price floors (with supply management). Except you mentioned "the former system," pre 1996 farm bill.  What happened with subsidies in 1996 is that they were increased somewhat, and then in four emergency farm bills, they were increased some more. But what also happened is that price floors and supply management were ended.  The corn price floor was dropped from $1.89 to zero, the most drastic change in the history of the program. Prior to that, price floors were lowered more and more, from 1953-1995, so they were quite low in 1986, the first year of some of the Tufts/IATP data.

Ok, now on the point where you think Jill is "correct." Yes, the various Tufts documents present evidence that farm policy, (not subsidies,) caused those billions in savings to agribusiness. But no, to say they were caused by the "subsidy system" is to mislead people into thinking that changes in subsidies will fix them in any practically significant way. They were caused by the absense of effective price floors, etc. The subsidy part isn't the part of the Commodity Title of the Farm Bill that caused the low prices. No kind of subsidy changes will fix the problem.  Ok, so after we make it to that conclusion, let's all help the food movement to change how they advocate, so they advocate against agribusiness corporate welfare. (You and others may not yet agree with me, but I made reference to various proofs and documentation.)

Ok, I think people do not easily understand that Daryll Ray and Tim Wise agree with me on this, and not with these other writers.

PS: My "preferred alternative" is anything that can be proven to cause the problems discussed in the Tufts documents. I strongly oppose any false solutions.  Ok, so if I'm correct, I'm doing a great but thankless job. If I'm wrong, anyone who wants can go to my four proofs and disprove them. (I listed and numbered them in a comment on Jill's recent Paarlberg blog, and gave a link to documentation.)

Again, thank you for responding. At least I'm not treated like a nothing.

"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 @ Wed Apr 13, 2011 at 02:43:07 AM UTC

[ Parent ]

More clarification (0.00 / 0)

The fact that I did not regurgitate your words does not mean I do not understand your points. I should understand, you've been repeating them for a long time. So yes, you are wrong to the extent you think I don't understand and you may be wrong when you think others don't understand. When I wrote "the former system", I knew what the former system was, and when I wrote "preferred alternative", I assumed you would be making the case for supply management and price floors, as you have done all along, and I understand why your points are important.

Just to repeat the obvious, I did not say either subsidies or our subsidy system "cause" low prices or "cause", in the words of the Tufts authors, the implicit subsidies to the livestock industry. I said the subsidies or the subsidy system, together with off-farm income,  enable farmers to survive despite prices below production costs. Your point here is crucial, and I agree with you -

...subsidies do NOT restrain capitalism (they merely cover up the lack of restraint, the lack of the needed policies)

That's good insight and a better way, perhaps a more effective way of saying what I tried to say. Eliciting good insights is why we have these discussions.

I also agree that the subsidy system is agribusiness corporate welfare, not just for livestock producers but also for seed and chemical companies, equipment companies, land agents and bankers. A farmer might be the first beneficiary, but the money stays in her bank account for about a microsecond before it is whisked into some corporate bank account. Hence the folk saying, "That sow is as fat as a Monsanto salesman's wallet."

Agreeing with you again, my understanding is that the emergency farm bills you mentioned were "caused" - there's that word again - by the overproduction and consequent low prices that followed the 1996 farm bill. That overproduction and those low prices cannot be said to have been caused by the subsidies in the 1996 bill or the four subsequent bills except that, as you and I agree, they masked the basic faults of the new regime. Do I have that right?

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by: count @ Wed Apr 13, 2011 at 04:02:10 AM UTC

[ Parent ]

next step (0.00 / 0)

Ok, thanks.  I see you understand what the important things are to me. Let me reflect a point or two that you made to further check and clarify. Ok, so you know that I'm emphasizing that the operative "system" is not a subsidy system at all, but rather is a price floor/supply management (etc., or market management) system.

Perhaps specific definitons would help:  
"Subsidy System:" the system of compensatory payments to farmers that does not cause cheap prices.  The subsidy system is not very relevant to the changes we need, except that it's used in spin, and mainstream media thinks it causes cheap prices. To talk about a subsidy system is to encourage people to reform subsidies, which is just fine with agribusiness grain buyers.  Reform that irrelevant system all you want.  
"Price floor (& ceiling & supply management) system:" the system of reforms that we need to fix cheap (and spiking) farm commodity prices. This is the system to emphasize in books and films, blogs and videos to build a movement to end agribusiness corporate welfare (below cost grains and other commodities) and achieve justice.

Ok, we see, then, that I do not agree that the "subsidy system is agribusiness corporate welfare," since it doesn't lower prices, and the buyers receive no financial benefits from subsidies.  The fact that a farmer is compensated with subsidies does not cause agribusiness to get cheap prices (rather the reverse, farmers subsidies caused by cheap prices).  So here's some confusing language again. But that's not what you meant?  You meant the way I've worded it?  Or not? Ok.

Ok, so you agree that everyone in the food movement should advocate against the cheap price system (no price floors etc.) and for adequate (or high enough so that no compensations are needed) price floors and supply management, reserves and price ceilings, (ie. NFFC's Food from Family Farms Act, Daryl Ray's POLYSYS solution) instead of mere subsidy reforms, which fix nothing?  So you agree that the books, films, blogs and short videos should help people distinguish between the effective solution and the false one?  So you disagree with Bittman's way of framing the issue?

Are we close to being on the same page?

PS: My view is that farmers mainly did not "survive," but rather most have gone out of business since they started lowering price floors in 1953. Others survive by being lucky in the gamble, or through lucrative inheritance, or by getting very low rent from family or a neighboring widow, or by not maintaining livestock facilities, or by children moving away to get other jobs, or by being older farmers who have more capital, or by buying land after the 1980s crash, or by using 30 year old machinery, or by getting cheap machinery/land from from despairing farmer, as well as from spouse and off farm income, on and on, or a combination of factors like these.

"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 @ Wed Apr 13, 2011 at 13:54:43 PM UTC

[ Parent ]

Dan Imhoff joins Bittman and Philpott on this issue, as seen (0.00 / 0)

at the website for Imhoff's book (specifically, http://www.foodfight2012.org/t...  Imhoff quotes the data and analysis from Tim Wise et al, putting it on a chart, that supposedly illustrates the "real winners" (Tim's words) "in the subsidy explosion of the last decade" (Imhoff's words).  Clearly, like Bittman and Philpott, Imhoff is claiming that subsidies caused the cheap prices, the results of which Tim Wise analyzes.  Again, Tim Wise knows that subsidies are not the cause behind his results.  

"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 @ Wed Apr 25, 2012 at 15:57:03 PM UTC

Add Physician's Committee for Responsible Medicine to the list. (0.00 / 0)

In their report, "Agriculture and Health Policies IN CONFLICT:  How Food Subsidies Tax Our Health," (http://www.pcrm.org/health/reports/agriculture-and-health-policies-ag-versus-health)  two documents from GDAE at Tufts University, and co-written by Tim Wise, are cited.  First see footnote 51.  

They write that "Elanor Starmer and Timothy Wise ... suggest that ... taxpayers ... have, in effect, been subsidizing [D.] FACTORY FARMS' feed purchases."  And in fact, in the report they also write (the lettering, A. to D., is mine, and I've added the emphasis in CAPITAL LETTERS):  

A.  "The data above suggests that they HAVE COLLECTIVELY SAVED ALMOST $4 BILLION PER YEAR since 1997 - A TOTAL OF NEARLY $35 BILLION IN NINE YEARS."

B. Again, THE GAP between the low market price of feed and the high costs farmers pay to produce corn and soybeans HAS BEEN FILLED BY SUBSIDIES

C.  AND BY FARM FAMILIES' OFF-FARM INCOME."  

Ok,  this is somewhat technical.  What matters is how such an understanding impacts advocacy.  My analysis:  

A. TRUE.  

B. Partly TRUE. It is false that the gap has been completely filled. It's only been partly filled, as I've shown in my blog "Subsidy Narratives: How Foodies Unknowingly Bash Family Farmers."  Tim Wise, et al, may not have ever seen good data on that.  Note also that for Wise, "the gap" is defined conservatively as coming up to zero, getting enough money to break even, (covering costs, but not making any money while farming).  He doesn't use a standard of making a "minimum wage" price, a "living wage" price or achieving a "fair trade" price above zero, such that farmers would receive a good return on their investments, like successful businesses elsewhere.

C. TRUE.  

Ok, all are true, or partly true, so far.  

D. FALSE (except perhaps for tiny amounts, as explained below).  

Ok, how can D. be false  if B. is true.  The answer is that the giving of subsidies to farmers [B.] does not lower prices for CAFOs, although Wise and Starmor imply that it does, and seem to state that it does.  Instead, what really lowers the farm market prices is (economically,) price inelasticity plus (politically) the lack of Price Floors, as I've proven 4 ways in my 2 videos "Michael Pollan Rebuttal."  Ok so WHETHER or NOT you give subsidies to farmers, CAFOs get their benefits from zero price floors and zero supply management.  If you didn't give subsidies, (ie. with the zero price floors and the market conditions we had during the period of the study, but without the subsidies,) you would have run farmers out of business faster, and created greater concentration, and pushed even more livestock into CAFOs, so that's not at all an effective solution.

QUALIFYING DATA.  On p. 21 of "The Paradox of Agricultural Subsidies," Tim Wise features a chart showing five major econometric studies which estimate the impacts of subsidy elimination. So, for example, if you got rid of US corn and other subsidies, the cost of purchasing corn by CAFOs would go down  and it would be cheaper, not more expensive, by a small amount, about 2%, according to Daryll Ray's study.  Subsidy elimination, therefore, would not result in even tiny changes in the direction that Wise and Starmor suggest, but would rather be (tiny) in the opposite direction.  Other studies give a couple of percentage points for corn and other crops above zero.  IN this tiny way, yes, it can be said that taxpayers sort of subsidize some cheap prices.  I don't doubt that there are some tiny impacts on market prices, up or down (depending upon the crop and the relation between the various crops,) for getting rid of all subsidies on all commodity crops.  

In any case, these studies, very clearly, in no way suggest that price inelasticity does not apply, and in no way show that subsidy elimination would have resulted in above zero, "living wage," parity, or "fair trade" commodity crop prices, given the market conditions for the years of the Tim Wise study, (1997-2005,) when we had the lowest farm commodity market prices in history.  

On the other hand, in the Paradox document, Wise (p. 22) references Daryll Ray's 2003 study involving supply management and price floors, which found, (given Ray's price floor and supply management standards,) that CAFOs would have to pay 37% more with the kinds of policies I'm recommending.  Very similar findings came from 3 similar studies by FAPRI (U Mo. & IaStatU) during the 1980s, and from research at Texas A & M.  (Note, IATP's studies on dumping [data also used by Tim Wise] shows clearly that these tiny amounts come nowhere close to ending dumping, which was as great as 65% (below zero) for cotton.

PCRM also references Tim Wise in footnote 41, where they generally write about  "the relationship between federal subsidies and retail prices of commodity products" and how "abundant, low-cost commodity inputs distort the market for unsubsidized products and give unhealthful foods."  Again, their assumptions about this are false, and Tim Wise surely knows that they're wrong, as indicated by his knowledge of the econometric studies on subsidy elimination supply management and Price Floors, as referenced above.  

"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 Apr 28, 2012 at 02:42:33 AM UTC