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Corn is the Biggest Farm Bill Loser, and Other Surprises

by: Brad Wilson

Tue Aug 21, 2012 at 14:41:29 PM PDT


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Introduction

Most of what we hear about the farm bill is that commodity farmers are the winners and that corn is "King."  That's based upon the Farm Subsidy Database, and the accompanying analysis by the Environmental Working Group.  

It's all false, because it's based upon too little data and a lack of appropriate standards for making judgements.

I've found a way to fix this, with added data and standards.  I've then placed farm subsidy data into this much more appropriate context.

This blog will make a lot more sense if you open another browser window, and look at the charts as you read it.  The general link is:  http://www.zcommunications.org...

Brad Wilson :: Corn is the Biggest Farm Bill Loser, and Other Surprises
The Hidden Farm Bill Data: Trillions for Agribusiness

I call farm subsidies and other farm bill spending the visualized or "Visible Farm Bill Pie," as it's in the Farm Subsidy Database and often represented in a pie chart.  Hundreds of mainstream media editorials and articles tell about it. It's known all across the food movement and related movements (hunger, church food justice, sustainable agriculture). The Farm Bill Visualizer, for example, only looks at farm bill spending.

So what's the Hidden Farm Bill?  That's the results from market management policies, or the lack thereof, the farm justice, (or family farm,) policies and programs of the decades of the past (1950s, 1960s,1970s, 1980s, 1990s). This includes, in part, all farm bills prior to 1996, especially the Harkin-Gephardt Farm Bill (a.k.a. Farm Policy Reform Act, Save the Family Farm Act, etc.).  Today it's found in the proposals of the National Family Farm Coalition (Food from Family Farms Act) or National Farmers Union (Market Driven Inventory System) and the NFFC dairy justice bill, SB 1640.  [See the primer, fact sheet and talking points here at my La Vida Locavoreblog (click my name).

Debunking Farm Bill Myths, with the Hidden Farm Bill

See the general link to the data above.  The specific link for this section is:  (http://www.zcommunications.org/albums/287).

I used USDA data to show how farm prices for commodity crops have fallen below previous standards, parity and the prices of 1942-1952. To compare prices with subsidies, I multiplied prices by production.  For the parity standard, I reduced the amount of production by about 10% more than what the farm bill set asides did (0% or 5% or 10% or 15% or 20%, based upon price levels on a given year).  In most cases I adjusted for inflation.

It's experimental, and these are draft charts that sometimes have typos.  I continue to experiment with ways of portraying the data (Visible vs. Hidden).

As it turns out then, in comparing the various commodity crops, corn is the biggest farm bill loser.  Corn had the biggest reductions, nearly $1.4 trillion.  Subsidies compensated for about only about 1/6 of those reductions.

(Note:  be sure to close out the first 10 slides and click on "Next" to get to the second group of 10 slides.)

Likewise, Iowa is the biggest farm bill commodity crop loser in a study of 6 states, while California is the smallest loser.  I also find that Iowa is a bigger loser than Texas, the biggest subsidy recipient.  Iowa is also the biggest percentage loser of the 6 (also Kansas, Mississippi, Arkansas, Florida), getting about 12% of reductions back in subsidies, while California got back about 22%.

That all reverses the usual interpretation, which looks at subsidies, but not the reductions in market prices and income.

Big farms, then, have the biggest reductions, plus some subsidy limits, so their percentages are also lowest.   This, of course, is the exact opposite of what we endlessly hear (when nothing is put in context). Over and over we hear only about the subsidies that big farmers receive, and not the reductions. The full data then shows why subsidy caps are not at all effective for achieving farm justice.

Hopefully by seeing this data, people in the food movement can better see the difference between what they mistakenly call "Big Ag" (when they imply that subsidy "recipient" means "full time farmer") and AgBiz (the Agribusiness Output Complex, which got the secret trillions of dollars of benefits from the Hidden Farm Bill.  Hopefully, it will help the food movement to oppose that massive hidden exploitation against US and global farmers.

My big farm/small farm series also shows that most "recipients" in the Farm Subsidy Database are too tiny to be "farmers," as in my blog on "Subsidy Narratives:  How Foodies Unknowingly Bash Family Farmers," (http://www.lavidalocavore.org/diary/5099/subsidy-narratives-how-foodies-unknowingly-bash-family-farmers).  

HERE'S A NEW SERIES of slides: "Subsidy Caps? Ag Biz vs. 'Big Ag'" http://www.zcommunications.org...

The Overall Farm Bill Pies

See the general link to the data above.  The specific link for this section is:  (http://www.zcommunications.org/albums/289).

In a another series of charts, additional myths are debunked by comparing the Hidden Farm Bill Pie with the Visible Farm Bill Pie for ALL farm bill spending. Here we again see the huge farm commodity reductions that match up with spending on programs like farm subsidies. As it turns out, the reductions for the main farm commodities are significantly bigger than ALL farm bill spending.  

These are commodity programs, so we can also see that the Commodity Title is bigger than the Nutrition title in impact, and it's a bad impact, especially on farmers.

In all of this my work is, sadly, a very rare example of viewing the farm bill, and especially farm subsidies, in the larger context of farm markets and market management policies and programs.  I focus on the Commodity Title, but antitrust regulations and enforcement are also a part of market management, as is trade policy.

What Standards are Used for Analysis

I use a standard of parity, with about a 10% overall supply reduction in my comparisons.  That compares with actual market prices multiplied by actual production, and with subsidies. In so doing, I'm using the traditional standard for fair trade, living wage farm prices.  Other standards can be used. For example, IATP and Tim Wise at GDAE use a full costs standard, or zero income above costs in their work.  (They also do not show their findings graphically as they relate to these specific farm bill myths, like I do.) It would be good to see a lot more work along these lines, for example showing the total benefits to Cargill and ADM from all of their US and foreign commodity purchases.

The Environmental Working Group falls back, by default, upon an inappropriate standard.  They really fail to raise the question of standards, or to take a stand on it, but rather make wild assumptions based upon what might be called "city slicker common sense," or what uninformed people might "naturally" believe, seeing only the visible farm bill, and not the secret agribusiness benefits.  Basically EWG defines any "recipient" as a "farmer," implying that each is a full time farmer. That's not at all true.  By the standards I used, all full time farmers, (if they only raise commodities, and especially if they lost their livestock to CAFOs,) are in the top 10%.  They're all defined by EWG as "Big Ag."  Meanwhile, NONE of the Hidden Farm Bill Benefits to AgBiz buyers (Cargill, ADM, Tyson, Smithfield, Kelloggs,) are seen in their Farm Subsidy Database.  No wonder EWG has not supported any of the Farm Justice Proposals that DO make AgBiz pay, instead of subsidies.

These standards can also be compared with how oil prices have changed over the years.  Oil/barrel was the same as corn/bushel in 1947.  Oil was cheaper than soybeans/bu., wheat/bu. or rice/cwt. back about at that time.  OPEC had about a 40% export market share.  They started balancing supply and demand and raised prices.  Oil prices have skyrocketed up to where they are many times higher than these various farm parity prices. Perhap's that's a standard of how high farm prices could go (and food prices,) if an agribusiness megamachine took over US and global farming.

Meanwhile the US did the opposite of OPEC, even though we had twice the export market clout for corn and soybeans, for example. We quit running farm programs like a business, and ran them like welfare programs, (to secretly provide massive corporate welfare to mega agribusiness).

What a mess!  As my charts show, however, in stark contrast to widespread myths, farmers are the victims, not the beneficiaries.  Farmers are the biggest farm bill losers.

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