Farm bill postmortem billions down the hole

By Shane Lopez,2014-06-27 10:17
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Farm bill postmortem billions down the hole ...

Farm bill held hostage by economy’s momentum: billions down the hole

Hal Hamilton

    Farm and environmental leaders are pouring over the latest stew cooked up by Congress, identifying the good and bad in a $170 billion farm bill. There is some good, but most of the money will again be sent through the checkbooks of the nation’s commodity farmers into the hands of the companies buying crops we have too much of already. It doesn’t have to be this way.

    The achievements of grassroots groups are real: new or expanded pots of money for clean energy projects, rural development, sustainable agriculture, wildlife protection, and community food security. Lots of groups can claim credit, both farm and environmental. Many are teamed under the banner of the National Campaign for Sustainable Agriculture.

    Unfortunately, as usual, tens of billions of dollars will go to commodity programs. The persistent drag of low farmer income always seems to doom farm bills to pouring dollars into the farm economy, with the biggest operations getting the most money. This system is flat-out crazy, not just because thousands of businesses have to receive taxpayer money to barely survive, but also because farmers only keep the money for a very little while. After farmers get through being squeezed by landlords and supply dealers, and finally get a crop out and harvested, then they get squeezed again on the marketing side, with a few huge corporations buying low and selling high, therefore grabbing most of the profits. Politicians make up the difference between costs and prices with subsidies.

    Large companies are quite happy for taxpayers to pay for farm income so that crops and livestock can enter the food chain at prices cheaper than costs of production. The farm bill protects the profit margins of corporations, and they have nurtured an immense political force through their agents: the Farm Bureau and commodity organizations funded with farmer “check-off” dollars (money taken out of farmers’ checks when they

    sell commodities).

Lobbying power and venality, however, don’t explain the persistence of these programs

    through decades of different presidents, political climates, and farm bills. We have to look below the level of political maneuvering to find structural reasons for this persistent vortex of expenditure. Imagine a heavy flywheel on an old tractoronce you get the

    flywheel spinning it develops enough momentum to keep pushing the engine through its cycles.

    Congress could, of course, vote to spend the bulk of farm bill money on conservation, water quality, rural development, and a transition to high-yield sustainable agriculture. In the short-term, however, if commodity subsidies were shut off, the current structure would collapse, leaving hundreds of communities bankrupt. A period of transition would be needed, but with sufficient intelligence and political will, we could have the agriculture we want instead of this nutty situation few people really want but which has so much flywheel momentum.

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    Most farmers play persistently into the hands of companies. Most vote Republican. This phenomenon is not easily explained with a theory that boils down to, “They’re duped.” Farmers are behaving rationally within the system that shapes their decisions. Understanding these decisions takes us a long way toward explaining the flywheel of farm bill billions.

    Each farmer makes annual decisions about production and the “inputs” he or she needs to buy to achieve that level of production. Farm income perpetually experiences downward pressure, and the intelligent decision for each individual farmer is to increase production in an attempt to squeeze a living out of smaller margins on higher volumes. So a farmer might buy a neighbor’s farm, a bigger tractor, and the latest package of seeds and chemicals so that he has the best possible chance for survival.

    Farmers are not the only ones on this treadmill. People working to build the traded value of their companies, Members of Congress writing farm bills—they’re all captive of a

    larger system that measures its success with one indicator: dollar value of output minus dollar value of input. To be successful in business you have to maximize one and minimize the other. Big corporations have a whole lot more leverage than thousands of competing farmers, but the game is the same. We have a complex maze of institutions organized around economic efficiency, and neo-classical economists are the high priests of its sustaining ideology.

To change behaviorof farmers or companies or Members of Congress—we’d have to

    change the structure and ideology. Not an easy task because the driving force of economic efficiency is not only our undoing but also the key to our economy’s extraordinary productivity.

    Somehow, at the very bottom line of decision-making when the most important decisions are made, social and environmental goals need to be equal to economic ones. This would require a shift in rules and incentives including a drastic overhaul of tax and fiscal policy. To get there we’d have to assemble sufficiently powerful advocates to overcome the

    power of entrenched interests.

    Accomplishing this overhaul will be easier if we position ourselves around what we are forachieving social and environmental goals as well as financial onesthan around

    what we are againstabuse of power and concentration of wealth.

    Agriculture is one of those economic sectors, like fishing and forestry, where people most directly impact the Earth and harvest it’s bounty. We value the economic efficiency with which farmers do their harvesting, but we also value stewardship, cultural tradition, rural employment, wildlife, and the aesthetics of a working landscape. All of these goals will need to be rewarded in addition to economic efficiency.

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    Imagine a farm bill that tackled system redesign. Farmers would prosper not only for their efficiency but also for their production of public goods and services. Landscape and community would be measures of success, equal to yield per acre.

To maximize farm production of these benefits, we’d have to do more than tinker with

    farm policy. For farmers to be able to include the cost of environmental services in the price of their products, nobody would be allowed to “externalize” the costs of pollution or exploited labor on the larger society. We’d have a lot fewer messes to clean up, like

    fouled waterways from factory hogs, if no operations were allowed to pass along those costs in the first place.

    Some farmers will head toward niche markets. Regional food will be much more successful, however, when the costs of transport include the true costs of fossil fuel consumption, particularly the global climate change costs. Our grocery stores are now a mirage, like imagining an oasis in the desert, obscuring all the true costs of delivering such a cornucopia of variety and cosmetic beauty.

    Markets for bulk commodities like soybeans, corn, wheat, rice, and cotton, also need to be much “smarter” than they are now. It’s stupid to continually overproduce, straining the soil and enabling buyers to have all the bargaining power over prices. Production limits and cooperative bargaining power could “level the playing field.” Farmers would no longer be competing solely on per-unit cost.

    There’s a new order emerging all over the world. Movements are resisting the worst messes of the old orderhog factories and genetically modified crops, for exampleand

    creating alternatives. These resistance movements and experiments will only cascade into system change when we can coalesce around a shift in the whole economy. Agriculture will never steward landscape and community within an economy that only rewards profit. A structure and ideology of profit-seeking turns everything into a commodity, with costs either minimized or pushed out somewhere else.

    If we redesigned markets to reward all of our goals, not just the economic ones, producers would compete on the efficient creation of community and landscape as well as of money.

    When José Bové and his seven French farmer neighbors went on trial a couple of years ago in the town of Milau, over the town along a bluff huge white letters proclaimed, “Le

    Monde N’est Pas Une Marchandise, Moi Non Plus.” [The world isn’t a commodity, me neither.]


    Hal Hamilton is director of Sustainability Institute in Hartland Four Corners, Vermont (; Hamilton is also a part-time farmer and

    a Food and Society Policy Fellow.

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