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Business as Usual

Dec
17
2007

I have a lot of respect for Robert Reich, former Secretary of Labor for much of Bill Clinton’s presidency. For an economist he generally seems to have appreciation of the effects of economics on the little guy. But he missed the point of much of the debate over the 2007 Farm Bill when, on Tuesday’s Talk of the Nation, he argued that a concern for family farms was misplaced because Big Ag is producing so much food so efficiently.

He is clearly missing the ramifications of where and how food is produced and delivered and it’s effect on the quality of people’s lives in making that statement. But, then again, almost everyone, including the senators who have decided to avoid almost all reforms, are ducking a serious conversation not just about how our food is produced but why it’s produced the way it is.

The farm bill is revisited once every five years and this year it was back up for renewal. There was an effort to reform the system in 1996 in something called the Federal Agriculture Improvement and Reform Act of 1996 (1996 FAIR ACT). This act was intended to wean farmers from subsidies and allow market forces to take over. However, the act actually put considerable pressure on small and individual farmers while enabling corporate and industrial farming operations to continue to thrive. This is because the Farm Bill’s susidies are paid on just a few commodity products (primarily corn and rice) and it’s structured in a way that favors huge farms. In fact only 25 of farm operations receive susidies and of those, 10 percent receive 75 percent of the funds.

There was considerable pressure this year to make genuine reforms and to spread the wealth by offering some assistance to the those who raise food that people actually eat. For instance, people who grow grean beans, or raise grass-fed chickens. But such measures failed in the House this past summer when that body voted to essentially maintain the status quo. The remaiing hope for reform was then in the Senate’s hands. And this past week the Senate also voted for the status quo.

Right off the top, the Dorgan-Grassley amendment to cap subsidy payments at $250,000 was defeated 43 to 56. No, that isn’t a typo, they changed the rules so that it required a 60 vote super-majority to pass. This cap would have produced savings of more than $500 million over the five-year life of the bill. Instead, the Senate bill is raising subsidies by increasing support for some crops and adding new crops. All of this when the USDA is forecasting that net farm income will be a record $87.5 billion this year and will remain high for the next five years. In fact, the planned mandate for increased use of ethanol will make sure that prices stay high.

In Status Quo I mentioned my friends Mellani and Mike who have a small sheep farm in Missouri, they got slammed this past summer by the drought, but there was no help for them, they just had to take their losses. Another friend Martha owns a huge corn farm and although her place didn’t particularly suffer from the drought, she and her husband still received subsidies for their feed corn.

So I had hopes for another reform amendment that would have required means-testing to receive subsidies (if your income was greater than $750,000 you wouldn’t be entitled to a government handout) but it was also defeated, in this case 47 to 48. That means that millionaires will continue to receive million-dollar payments from you and me and the small farmers who continue to try to grow food that might be healthy and delicious.

Although it was Senators Dorgan (D-ND), Grassley (R-IA), and Harkin (D-IA) who were sponsoring the reforms, their fellows in the Big Ag states — mostly Democrats — that engineered the super-majority rule, which just goes to prove that if money’s involved, the party is irrelevant.

The bill isn’t a complete disaster. It provides $4 billion for land and wetlands conservation. It also initiates much needed restrictions on major meat processors and opens up small state-inspected meat plants to sell across state lines provided they adhere to federal food safety standards which potentially opens up new markets for small farmers such as my friends at Locust Grove.

There are also provisions for better interest rates and terms for Beginning Farmer and Rancher Down Payment Loans and the bill creates a USDA Office of Small Farms and Beginning Farmers and Ranchers to ensure coordination and goal-setting for all small and beginning farmers and ranchers programs. Also benefiting beginning and minority farmers is a new eligibility program for rural development loans for processing and other infrastructure for local food systems.

Nevertheless, the lack of significant reform to the subsidy system means that the short-sighted continuance of past farm policies will continue to distort the fabric of this country’s food supply by affecting what is grown and what isn’t, who grows it and where, and what’s on your table tonight.

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