Petition Against Cheap Corn

by: Brad Wilson

Sat Nov 06, 2010 at 06:32:37 AM PDT

Those who have read my blogs and comments here and elsewhere will know of my concern that there is a major barrier to winning our policy fight against cheap corn and other farm program crops, against most of the main problems identified in the new food books and films, from high fructose corn syrup, to CAFOs and the global food crisis.  That barrier is a misunderstanding of just what the real policy cause is.

Buckle Up for Farm Bill 2012!

by: Jill Richardson

Fri Apr 23, 2010 at 21:46:26 PM PDT

"I've told people we should put everything on the table," said Agriculture Committee chairman Collin Peterson. "My interest is in providing the best, most rational, safety net for the average commercial farmer in this country."

With a two-year lead time, the House Agriculture Committee chairman is opening a review on Wednesday of the U.S. farm subsidies that date from the Depression era and are subject to myriad calls for reform -- or total replacement.

A number of political headaches from farm supports to trade issues, should be treated in the new bill.

Cotton subsidies must be revised to settle a trade dispute with Brazil. Dairy farmers say milk supports failed to stop a ruinous price plunge. Crop insurance costs are exploding. The Obama administration wants to cut subsidies to big farms.

To get there, Peterson invited a debate whether crop supports should be remolded, perhaps into a system that assures overall revenue for a farm. Supports now are paid mostly on the basis of past production of subsidized crops and whether farm-gate prices for them are below targets set by Congress.

Calling the subsidies "Depression-era" makes them sound outdated, but they are really about as outdated as financial regulations. That is, we ought to go back to something much more similar to what FDR gave us, rules that have been changed and dismantled beyond the point of recognition in the past several decades. I'm glad Peterson thinks that everything's on the table, but I am also positive that whatever Peterson thinks the outcome of the 2012 farm bill debate should be is nowhere near what I think it should be. Ditto to Blanche Lincoln, who will hopefully no longer be a sitting U.S. Senator by the time the bill ultimately passes.

If you'd like to make a statement about the hearing on May 3, you can do so by emailing your thoughts to agriculture at mail.house.gov during the 30 days FOLLOWING the hearing (i.e. until June 2).

Pollan's Folly in a Nutshell: "Food Inc.," "Fresh" and Beyond

by: Brad Wilson

Wed Jan 13, 2010 at 11:38:33 AM PST

I'm picking on Pollan here (ie. folly) in the spirit of Noam Chomsky, who often chooses the strongest opponent or argument to debunk.  Pollan clearly is doing a lot of things right.  That's a given for me which I rarely expand upon.  He almost gets this issue right.  Bottom line?  Pollan just ends up siding with Cargill and ADM (see quote below, and then my analysis) as a sort of default policy position.  He leads most others in the food movement, bringing a huge load of folks way up, almost to the peak of the mountain, . . . but then he fails to take the final step and, like Sisyphus, it all goes rolling back down to the valley and down into the depths of the dark canyon (as in food movement, mainline church, progressive positions on the 2008 farm bill) of inadvertent support for multi billions for the giant agribusiness beneficiaries.

Now, Pollan can often be quoted against himself.  The Omnivore's Dilemma is a 450 page book in which he talks briefly about the farm bill here and there, and here and there, and here and there.  He'll talk one way for a while and then say, well, actually that's not really true the way it sounds.  That's usually good.  These are dilemmas that are either reconciled fairly well (as I'm arguing here and elsewhere) or that digress into negantropic vicious circles, as in the 1996, 2002 and 2008 farm bills, or that do the latter in a "green" way, as also in those farm bills.

Actually I spoke to Pollan about this very matter when he was in Iowa City a year or two ago and I thought he was on board.  I must have been wrong, according to the evidence, (the quotes,) I've presented below.

Job Opening: Blogospheric Change for Food Justice: No Pay

by: Brad Wilson

Wed Jan 13, 2010 at 04:53:35 AM PST

We've heard similar things about video.  A video from an ordinary person can suddenly go viral.

Recently someone suggested to me through my YouTube channel that Twitter was the place to be:  "I recently came across your zmag blog .... Much of the way that discussions about food/ag are getting moved into the mainstream is via twitter....  the tech has shifted."  It's hard to keep up.

Of course, we've also heard that information on the internet can be unreliable.  It doesn't have the standards of scientific scholarship, or even of the mainstream media of the past.  Information can go viral AND be false, half true and/or technically true but misleading.

So how does this all play out for farm and food justice work within these domains?

To Pollan: Farm Bills Were Never Quaint, Antidrama

by: Brad Wilson

Sun Jan 10, 2010 at 14:43:33 PM PST

As a result, Pollan predicted, like many others, that the 2008 farm bill process might well be different, as a result of these important new players becoming involved, along with that very important group, "eaters."  (He leaves out that "quaint" group, farmers.)  Pollan's statement reminds me of the North Carolina "Water Keeper" who came into Iowa some years back predicting that some how shot lawyers were going to get rid of hog factories in short order.

Well, it didn't turn out that way (in either case), which certainly didn't surprise me, because Pollan's views of both the farm bill and the movements were way off the mark.  That's how it looks from where I stand.

For Effectiveness, Don't Mystify the Farm Bill

by: Brad Wilson

Sun Jan 10, 2010 at 14:37:32 PM PST

Imagine bringing city folks into that kind of movement work?  (Oh, you are city folks, 'er people?  Congratulations for sticking with it this long.)  The great organizers usually say that you build an organization with people who are directly affected, not with sympathizers.  Take, for example, the farm credit cases of the 1980s.  They were at risk of losing all they'd worked for in their adult lives and often the lives of their ancestors.  People like that will put up with a lot to win.  

But in any case, I think the farm bill can be easily explained.  

Do you support the "Farm Coalition Group"

by: Brad Wilson

Fri Jan 08, 2010 at 10:55:09 AM PST

Did you support the Senate Bill?  House?  Kind/Flake?  Grassley/Dorgan?  Ok, what you supported, did it include supply management (production controls) for wheat and other grains?  None of the bills above included supply management for grain.  

Did you support farm bill principles from one group or another?  Did you write any letters?  Make any phone calls?  Was there anything about supply management?  

No?  Well, that's great, says the "Farm Coalition Group."  (You're for farms, right?)

Here's a vintage letter (also footnoted in Al Krebs book, The Corporate Reapers.

"*Farm Coalition Group
1750 K Street, NW #700, [oooops, they moved, probably to Crystal city?]

                                                                    October 24, 1985
Dear Senator:

For many months now, the organizations listed below have been working with Congress to develop a viable, long-term food and agriculture program for this Nation.

Given the current economic and credit situation within the farm community and its related industries, we recognize the necessity and importance of government involvement in the 1985 Farm Bill.  However,
we believe that a gradual transition toward a long-term market-
oriented agriculture program is in the best interests of all -- producers, suppliers, processors, consumers, and taxpayers.

It is for these reasons we urge your support in removing the mandatory wheat referendum provision in S. 1714, the Agriculture, Food, Trade and Conservation Act of 1985.  We are opposed to this provision because:

1) mandatory production controls weaken U.S. agriculture's ability to effectively compete for export markets while it encourages our competitors to increase their world market share; and,

2) higher domestic costs will exacerbate the current farm
income situation as the other segments in the food distribution chain (farm input industry, processors, livestock feeders, etc. all the way through to the consumer) modify their domestic purchases as a result.

We urge that you support the amendment to strike the referendum provision for mandatory government production controls.  We would also appreciate your opposition to any other amendments establishing such a referendum.

Sincerely,

American Bakers Association, National-American Wholesale Grocers Association, American Cotton Shippers Association, American Meat Institute, National Broiler Council, Biscuit & Cracker Manufacturers' Association of America, National Confectioners Association, Chamber of Commerce of the U. S., National Fertilizer Solutions Association, Chocolate Manufacturers Association, Farm & Industrial Equipment  Institute, National Food Processors Association
Florida Phosphate Council, National Pasta Association, Food marketing Institute, Potato Chip/Snack Food Association, Independent Bakers Association, Millers' National Federation, Ralston Purina Company, The Fertilizer Institute"

Which side were you on?  Did you advocate for supply management?

Fortunately for the "Farm Coalition Group," they don't have to worry about such things these days.  Supply management hasn't been in the farm bill since the 1990 farm bill!  Everybody is all worked up about farm subsidies instead.  No need to worry.

Ok, that was 1985. Krebs listed "Most Profitable US Consumer Food Companies, 1988," (chart p. 41, The Corporate Reapers, from Wall Street Journal, 11/7/88):   Kellogg, H.J Heinz, Hershey Foods, RJR Nabisco, Quaker Oats, General Mills, Borden, Pillsbury, Kraft, General Foods, Sara Lee.  More recently the National Farmers Union of Canada published "The Farm Crisis and Corporate Profits," http://www.nfu.ca/new/corporat...  Lots of record profits in 2004!

Ahhhhhhhhhhhhh, yes!  "*Farm" Subsidies!

How Subsidies are really calculated, sort of

by: Brad Wilson

Wed Jan 06, 2010 at 20:25:17 PM PST

So, here's an example of the farm program for four Iowa farms.    It's based upon two of our farms (which have different historical numbers, and other typical examples).  I've rounded off the numbers and given identical (example) farm sizes.

A Crunch of Jill's subsidy numbers

by: Brad Wilson

Wed Jan 06, 2010 at 15:11:05 PM PST

Ok, as a farmer, I start with cost of production per bushel (ERS full costs):
2008 -$3.68. (That's 54% higher costs than 2003, about 9% increase per year.)

Ok on corn a direct payment of 28 cents per bushel (same as 2003) to make up for the loss. (Well, a fraction of that)
2008: $0.28 x historical prog. yield (which might be 80% of real current yield) = $0.23
And then multiply by a percent of the acreage so it's reduced again.
2008: $0.23 x .833 = .19 (it was 85% in 2003, as Jill showed).

Ok, full costs vs income from direct payments.
2008 - $2.68 + $0.19 = - 2.49

So with a 50% rise in costs you get a slightly less in benefits 2008 vs 2003. Theoretically these are the "good" subsidies, "decoupled." (D. Ray: http://agpolicy.utk.edu/weekco... .) You're not "distorting trade." Everyone supports this, right. It's part of WTO philosophy, supported by Bread for the World and the Religious Working Group on the Farm Bill. Of course, that means farmers get the subsidy even on a rare year above costs, like 2008. Green Box? So don't praise it then turn around and bash it? Ok, the idea is that farmers will almost always lose money, (ie. 1981-2006; ie. Ray, lack of price responsiveness) so it's no big deal, right?

Ok Counter Cyclical payments. You only get it when you need it. Bad!!!? Not decoupled. In WTO theory it distorts Trade. (but see Daryll Ray)

How much for corn? If the market price falls below the Target Price you get it, up to the limit.

Ok, remember the full costs above: 2008 - $3.68. Well if the price falls way down to the Target Price, then you get some compensation. Ok, below $3.68 when prices fall you get 19-20 cents to make up for a drop down to the Target price, a drop of over $1.00.

Target Price
2003: $2.60 2008: $2.63 (as costs went up 50%)

You get countercyclical subsidies down to the Loan Rate.
2003: $1.98 2008: $1.95

So the gaps are: 2008: $2.63 - $1.95 = $0.68 subsidy per bushel of corn?
Well, except it's based upon program historic yield (maybe 80%) and acreage rules.
2008 $0.68 x 80%? = $0.54 x .833 = $0.45 (As Jill showed, it was 85% of acreage back in 2003)

So, if prices crash ANOTHER 68 cents (they've already fallen more than $1.00 and you already got a fraction of $0.28), you get about 45 cents as compensation for the free market losses. If they only crash down to, say, $2.65, you get no countercyclical payment.

Ok, subsidy number 3, Loan Deficiency Payments. You only get them if prices fall all the way down to the Loan Rate. Then you get compensated based upon actual yields. If you don't have a yield, (ie. Crop failure) that's a problem.

Ok, but under some conditions, this is still better than the ACRE program, which substitutes for some of these subsidies.

Ok, if prices crash (there's no price floor or supply management to prevent it), then, on the way down you get some subsidies, here and there. I've translated it into per bushel terms, like 2003 or 2008 farming, even though that's not how it's actually calculated.

Here's another way I crunched it a while back:
http://www.iowafarmertoday.com...

Subsidies vs Price Floors in Farm Bill History

by: Brad Wilson

Sat Jan 02, 2010 at 18:39:51 PM PST

Some Brief History of Subsidy Politics

The policies in the gray box (price floors etc.) came out of the New Deal, Roosevelt, evolving through several farm bills and the Steagall Amendment 1941 (banking committee) for farm parity as an economic stimulus (like we need today, instead of losing money on farm exports and driving down world prices, hurting wealth and jobs creation in farm areas including LDCs).

Prior to Roosevelt, for decades farm prices were usually low with many "panics." Coming from Hoover into Roosevelt in the Depression, my family saw 7¢ corn and lost the farm.  During the 1980s farm crisis my mother recalled this time (young teen then):  " My Uncle Clyde wasn't able to get my dad a job in the creamery or anywhere else.  This was the summer of 1932,  and the depression got even worse.  We couldn't pay the rent, so in the fall we had to move up to Aunt Alice's and move into their upstairs!  I felt terrible that we had to move in with relatives.  Now I realize how my folks must have felt!  The most humiliating thing of all was that my mother had to get Stewart to drive her over to Uncle Bill's and ask to borrow some money!  I imagine he said, 'I told you so!'"  

New Deal policies take it through Truman, with no commodity subsidies except a few on cotton in the early 30s.  We had 100% of parity in agriculture overall 1942-52.  Program costs in one estimate were about $13 million in the black, meaning that the government made money on the program through interest on price floor loans.  So with price floors and effective supply management, and with international implementation as advocated by the Africa Group at WTO (and by EU in the 80s) it can work.  So no subsidies were really needed.

Under Eisenhower price floors were lowered, however, lowering market prices, as the NFO rose up to oppose the drops.  Price floors were lowered further decade by decade (Under Republican and Democratic Presidents, but pushed more by Republicans in congress for big business) until they were ended (dropped to zero) in 1996.  One exception was the price spike during the 70s caused by the secret Russian grain deal ("The Great American Grain Robbery").  

Introducing Subsidies

But in the mean time, subsidies were added to quiet down angry farmers. Subsidies compensated for farmer losses (which is rarely mentioned in most recent subsidy discussions).  

Subsidy compensations were part of Nixon/Butz policy.  With the 70s price spike costs raced upward.  Farmers won a rise in price supports (Carter) to address skyrocketing costs, but not back up to parity and not enough to prevent the 80s farm crisis.  The rise of the devastating crisis, in hindsight, occurred under the better farm bill than we've seen since.

Reagan greatly increased subsidies, but lowered price floors even more.  Farmers got more from the government for a lowering of farm income.  Bush senior continued this.

Clinton slightly raised the price floor, and vetoed Freedom to Farm once before signing it in the Gingrich era.  FtoF called for new "decoupled" (Direct Payment) subsidies for a few years, declining and ending for a free market (Hooverism/think 7¢ corn).  This was quickly seen as a way to destroy farming, and bankers joined farmers to win 4 emergency farm bills which added a second kind of (counter cyclical) subsidy.  I think LDP (3rd kind) was an administrative option that Clinton implemented to address the crisis.  So farmers ended with another big increase in subsidies and a total reduction in farm income, since market prices with no price floors, fell even more.  This was massive dumping on LDC farmers, not caused by subsidies, but by zero price floors/supply management.  So CAFOs and processors got the hidden benefits.

Another trend here is that many farm state Democrats continued to advocate for New Deal style programs over the decades of decline.  During the 1980s when farmers were again activated in a large number of groups such a farm bill was formulated and won quite a few votes in congress.  It was known variously as the Farm Policy Reform Act, The Save the Family Farm Act, and the Harkin-Gephardt Farm Bill (Harkin in Senate, Gephardt in House, both Democrats).  Today it continues as the National Family Farm Coalition's "Food from Family Farms Act."  The main groups supporting this bill or similar concepts include the National Family Farm Coalition and its members, the Institute for Agriculture and Trade Policy, Food and Water Watch, the American Corn Growers Association (not the National Corn Growers Association), the American Agriculture Movement, and the National Farmers Organization.  

In 2002 when Tom Harkin became chairman of the Senate Ag Committee he switched sides.  He stopped advocating for price floors and supported a greened up version of the worst Republican Farm Bill since Hoover, a green Freedom to Farm.  That goes for 2002 and 2008 farm bills.  In 1996, however, Harkin and the other Democrats (ie. Gephardt, Daschle, Wellstone) totally rejected this kind of a farm bill.  But all of them followed Harkin in a Green Freedom to Farm.

During the 1980s mainline churches also supported this kind of farm bill.  Today they support some version of a Greened up version of the Republican Freedom to Farm, as do most other progressive groups including the food movement, environmental movement and sustainable agriculture movement.

Sustainable and Organic farmers are a special case.  During the 1990s in trying to stop Freedom to Farm, the family farm movement worked hard to bring in sustainable and organic farm coalitions (SAWGs, NCSA, SAC) but failed and they have consistently supported some version of Green Freedom to Farm (big subsidies, no price floors or supply management).  Their policies provide or would continue multibillion dollar below cost gains for CAFOs and even bigger gains for Cargill (beyond billion in CAFO gains) and ADM.  Sustainable/organic folks have won greener subsidies like organic EQIP and CSP, but at those costs.  Likewise, when Michael Pollan, in Food Inc. and Fresh, speaks of cheap junk foods, Green Freedom to Farm Policies, with no price floors, do not raise the prices on corn, etc.  So when Pollan speaks of "subsidized corn" it's misleading.  The low/no price floors caused the low prices and the cheaper high fructose cory syrup and corn/soy transfats, as can be seen historically.  The subsidies prevent the destruction of farmers.  The bigger the farm, the bigger the losses to be compensated by subsidies.  Again, this is rarely mentioned when bashing farm subsidies.  Of course there are some economies of scale with larger farms, which changes their need somewhat.

So ending, greening, and/or capping subsidies are not policies that address the biggest CAFO benefits, processor benefits, ethanol benefits, exporter benefits against LDC farmers.  By the way, "family farm" advocates and their friends (ie. La Via Campesina with 200 million members) lost over and over on the price floor issue (without much food/consumer/environmentalist/organic help, and still today without help).  So some of them invested in ethanol to try to raise prices (and end processor below cost gains, dumping on LDC farmers).  So they lose money on corn, but then make it on ethanol, or in 2008, made money on corn but lost in on ethanol.  No where have I seen this understood in the progressive community outside of NFFC related groups.

(Least Developed Countries are 70% rural.  The US  has long had huge export market shares of some commodities, bigger than the middle East in Oil, but our leaders tried to get low world prices, not high world prices with it's clout, (clout of well above 50% export market share for corn and soybeans, for example, or up to +80%, but less each decade).

Subsidies vs Price Floors for the 2008 Farm Bill

Today these issues appear to be almost totally unknown outside of NFFC and its friends.  EWG listed 477 mainstream media articles supporting their position in support of a Green version of the Republican Freedom to Farm Act.  The Kind Flake Amendment and probably all others amount to the same.

Sometimes Republicans support Hooverism instead of what we have had  since 1996, which is Hooverism (free markets and free trade) with subsidy protection for farmers in rich countries.  Low subsidy caps are a way to force large farms out of business or to force them to break up.  It would probably be a kind of land reform, like forcibly running them out of business or making them illegal.  Note that in the 90s we had a $50,000 cap and called for $25,000, while well meaning progressives have recently called $200,000 cap a good step.  But these measures have nothing to do with price floors, and do not solve any of the big problems.  

Cargill and DAM (and to a lesser degree, Tyson and Smithfield) are the huge beneficiaries of all the diversionary talk about subsidies, with no mention of price floors.  What they've bought in Congress is policy that blames farmers and leads to no mention that the policies are designed primarily to benefit them, even at the expense of America losing money on farm exports of the major commodities virtually every year for a quarter century.  If you look at the EWG 477 editorials, you'll probably find hundreds of criticisms of farmers (who are merely partially compensated for losses caused by the lack of price floors) for every criticism of these real beneficiaries.  Not also that Cargill, DAM, (processors and exporters) Tyson and Smithfield (poultry hog CAFOs) and the others (ie. Kelloggs).

You can find footnotes for much of this in my Zspace blog articles, as well as many links to online sources.  I am also one place that explores this movement crisis online.  I've seen NO other place online that writes much on these issues, especially in reference to mainline churches, hunger groups (Bread for the World and Oxfam are among the worst on the Commodity Title issues I raise), sustainable agriculture, and the food movement.  (I link a few things from IATP on myths and APAC's Daryll Ray on some media/etc. misunderstandings, however.)  

Further Reading and Links

From my blog see especially my "foodie" and food movement pieces, such as my comparison of the National Corn Growers Association with so called progressives that supposedly hold radically different views:  http://www.zmag.org/blog/view/...

My "Farm Bill FACTs: Commodity Title: A Family Farm View" briefly goes right down a list of the main things I hear in the food movement and among the other groups I see as similarly missing the real issue, and then proves them wrong with online links:  http://www.zmag.org/blog/view/...

If you look around at (http://www.zmag.org/zspace/bradwilson) you'll see where I have footnoted pieces.

The Farm Bill Again? Already?

by: Jill Richardson

Fri Dec 18, 2009 at 16:21:23 PM PST

Picture Diary of Santa Cruz Farmers' Market

by: Curtis Abbey

Thu Apr 23, 2009 at 10:40:39 AM PDT

Malia & Sasha Obama Get Organic School Lunches; Your Kids Get Bailout Chicken From Big Ag

by: Obama Foodorama

Thu Jan 08, 2009 at 12:51:34 PM PST

Farm Bill update from USDA

by: kacie

Wed Oct 22, 2008 at 12:48:30 PM PDT

Rural development "got the very short end of the stick" in Farm Bill

by: desmoinesdem

Fri Oct 17, 2008 at 09:17:48 AM PDT

I learned today from the Public News Service that Jon Bailey of the Center for Rural Affairs

has done an analysis of the 2008 Farm Bill, and found 233 times more spending on commodity subsidies than on rural development.

"Initiatives that would help start businesses, create jobs, make communities attractive places for people to relocate to, were left out of the farm bill."

In contrast, Bailey notes, the Farm Bill allocates $35 billion for commodity subsidies, which makes the amount for revitalizing rural areas seem paltry.

"There are only three programs totaling $150 million for rural development in the final Farm Bill. Rural development got the very short end of the stick."

Bailey noted that the 2002 Farm Bill included "more than $1 billion in mandatory spending for rural development programs."

If you go to this page at the Center for Rural Affairs, you can find a link to a pdf version of the full report.

As much as I admire Senator Tom Harkin, I was very disappointed by how the Farm Bill (officially known as the Food, Conservation, and Energy Act of 2008) turned out. I have no idea what can be done to get Congress to redirect government funding toward sustainable farming practices and programs that improve the quality of life in rural areas.

Meanwhile, Susan Heathcote, the water program director of the Iowa Environmental Council and a member of the state Environmental Protection Commission, wrote a good guest editorial for the Des Moines Register about the need for better monitoring of drinking-water sources.

She mentioned two recent incidents of conventional farming polluting drinking water in the Des Moines area. Farms 80 miles upstream contributed to high ammonia levels found in the Des Moines and Raccoon Rivers last spring, and a cyanobacteria "algae bloom" prompted the Des Moines Water Works to stop drawing from the Raccoon River in August.