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Talking Points: 2012 Farm Bill

by: Brad Wilson

Sun May 13, 2012 at 09:32:01 AM PDT


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The biggest ideas in the 2012 farm bill debate seem to be:

Eliminate Direct Payments and,

Expand Revenue Insurance.  

Here are key, targeted, talking points to bring food advocates and farmers together to win this debate.  The Talking Points are followed by a few key References.  

Brad Wilson :: Talking Points: 2012 Farm Bill
Talking Points for Farmers, Consumers and Food Movement Activists

1.   Revenue Insurance*:  The New Direct Payments. Direct payments were based upon absurd, unrealistic, ideological, free-market ideas (ie. "de-coupling," see below**).  They are given whether you need them or not, which, for strange reasons, sort of made sense in the past, (they would have been "needed" by farmers every year 1981-2006, except 1996!).  The same holds for Revenue Insurance. Under some conditions, (such as when market prices are high and stay high, then slowly come down,) you get them even though you don't need them.

2.     Farmers Often Do NOT Get Revenue Insurance Subsidies When the Need them!  Revenue Insurance subsidies are even more absurd.  They're based upon a 5 year "Olympic average," (5 years of previous farm prices, minus the highest and lowest average price years,) not any fixed standard, such as the cost of production. If prices go low, and stay low, (like they did 1981-95 and 1997-2005,) then the formula's don't result in any Revenue Insurance subsidies

3.   Most Farmers Rejected the Revenue Insurance Programs of the 2008 Farm Bill! "Only 8% of farms with about 13% of eligible acres were enrolled" in the ACRE program.

4.   Farm Program Subsidies Compensate Farmers for Bad Farm Programs!  Here's how it works:

        First, economically, farm commodity supplies and prices don't self-correct under most market conditions we've had for more than 100 years, (not very well at all for the groups of commodities that farmers choose from in the real world).  Farm Commodity supply and demand just don't balance out.  It's a lack of "price responsiveness on BOTH the supply and demand sides.  Economically, therefore, farm commodity prices have usually been very low.  

       Second, this was fixed politically in the New Deal, as farm programs were run like a business, balancing supply and demand and putting a floor under market prices (for farmers) and a ceiling over prices, (for consumers and other buyers,) leaving room for market adjustments in between the floor and ceiling.  

       Third, Congress (& Presidents), under corporate pressure, reduced (1953-1995) and eliminated (1996-) price and supply mangment programs, to usually provide farm commodities to US and foreign corporations at prices below fair market value, and often below the cost of production.

       Fourth, government (taxpayer) farm commodity subsidies were added later to partially compensate farmers for these bad programs.  There's never been any need for subsidies other than to compensate farmers for massive reductions in income.

5.    Subsidy Caps & Subsidy Elimination Do NOT at All Fix the Farm Bill.***  There are huge farm and food injustices caused by cheap market prices for corn and other farm commodities.  These, include cheap grain from crop farms to covertly subsidizes animal factories, and processors of junk foods and junk food ingredients.  Numerous studies have shown that capping or eliminating subsidies does not fix any of this.

6.   Most Subsidy Recipients are Not Full-Time Farmers.  Full-Time family farmers, (and similar in size and structure to family farms,) who primarily raise commodity crops, make up less than 10% of farm subsidy recipeints, and they're almost all in the top 10% of subsidy recipients (or 20% for less specialized farmers of these crops,).  They make up the majority of subsidy recipients who are full-time farmers.  The bottom 80% of subsidy recipients average only about 7% of the size minimum-sized full-time corn/soybean farm of 200 acres.  The bottom half is about 3% of full-time, or less.****

7.   Farm Costs are Skyrocketing, like they did after the 1970s price spike, but the 1980 Farm Bill was Much More Sustainable than 2008 and 2012 Proposals.  Crop farmers could quickly be devastated by a massive crisis if the farm bill isn't fixed in 2012.  Cheap feed crop prices push livestock off farms and into animal factories.  This eliminates the economic need for legume forages like clover and alfalfa (which "fix" free nitrogen from the air).  This takes away the flexibility of Resource Conserving Crop Rotations, turning farmers into victims of the fertilizer and farm pesticide agribusiness power complex.

8.   The Dairy Crisis Shows the Acute Failure of Farm Programs (and Proposals).  What can (and did) happen with these bad farm programs can now be seen in Dairy, where family farming is being rapidly devastated.  We've had a few years of higher prices for crop farmers, but they could end up in a crisis like dairy.

9.   All of This Can be Easily Fixed with 3 Great Farm Bill Proposals*****.   These proposals eliminate, or greatly reduce farm commodity subsidies, by eliminating the need for subsidies.  They run farm programs like a business, not a welfare program, balancing supply and demand and setting a floor under and a ceiling over, market prices.  In this way they achieve both farm and food justice, serviing both farmers and consumers.  The 3 proposals are:

       a.   NFFC's "Federal Milk Marketing Improvement Act of 2011" (SB 1640), to fix the dairy crisis without subsidies.  This is the essential and effective farm justice solution to the most acute farm/food crisis of today.

       b.   NFFC's "Food from Family Farms Act:  Commodity Title," (FFFA,) to fix the biggest, (historically multitrillion dollar,) issues in the farm bill for sustainabilty, public health, farm justice, food justice and other important purposes, all without subsidies.

       
c.   Farmer Owned reserves:  NFU's "Market Driven Inventory System," (MDIS,) a great, well researched alternative proposal to item b, directly above.  In a modest way, it would result in huge improvements in farm market supplies and prices, and save huge farm bill costs, by eliminating the need for most subsidies.

10.  These Three Proposals Free Up More Money for Other Farm Bill Purposes than Any Other Options.  These proposals fix the fundamental economic problems that Revenue Insurance, subsidy caps and all other "reform" proposals ignore.  

QUICK REFERENCES:

* Brad Wilson (compiler):  Primer: Revenue Insurance in the 2012 Farm Bill, La Vida Locavore, 5/11/12, http://www.lavidalocavore.org/...

**De-Coupling:  The best thing to read for an in-depth understanding of the strange philosophy behind Direct Payments and WTO subsidy ideas is:  IATP, "The 'De-Coupling' Approach to Agriculture: History and Analysis of 'Decoupling' Policy Proposals," September, 1988, http://www.iatp.org/documents/... http://www.iatp.org/files/deco...

*** Brad Wilson, "Cap Farm Subsidies at $250,000, or $25,000, or $0?," La Vida Locavore, 3/11/12, http://www.lavidalocavore.org/...

**** Brad Wilson, "Subsidy Narratives: How Foodies Unknowingly Bash Family Farmers," http://www.lavidalocavore.org/...

***** Brad Wilson, Fact Sheet: Farm Justice Proposals for the 2012 Farm Bill, La Vida Locavore, 5/11/12,  http://www.lavidalocavore.org/...

For more depth see:  Brad Wilson, Primer: Farm Justice Proposals for the 2012 Farm Bill, La Vida Locavore, 5/11/12, http://www.lavidalocavore.org/...  This resource also includes the best online PowerPoint presentations and video resources related to the farm bill proposals described in item 9., above.

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