Veggie of the Week - Farm Subsidies
sponsored by Coleman Farms
This week we'll again discuss something you won't find at the Farmers' Market: farm subsidies. Subsidies are big business in the U.S. - twenty something billion a year paid to less than .1% of the population - and they're currently in the news, since a new Five Year Plan is before Congress. Although virtually no Market farmer receives farm subsidies, which are tied to 'commodity' crops like soybeans, cotton and corn, subsidies affect pretty much all farming, directly or indirectly; moreover, there's an alternate Farm Bill being proposed which would directly effect our Market farmers.
The current U.S. subsidy program stems from efforts to stabilize farm incomes and prevent foreclosures during the Great Depression. Farm families constituted about a fifth of the total population, and it was important for economic recovery to keep them on the farm, since there were no urban jobs going , and to keep them solvent, since they constituted a large market for manufactured goods.
You'll still hear talk about 'saving the family farm' in connection with giving out farm subsidies. It doesn't ring true. In California, for example, about 73% of subsidies paid out in the last eleven years went to ten percent of the recipients, who received on average over $80,000 a year, while 80% of recipients received less than two thousand dollars on average annually. Fewer than ten per cent of California farmers receive any subsidy at all. So the subsidies go to small group of farmers raising one of about half a dozen crops, and the bulk of the subsidies go to farmers working on a fairly large scale.
You'll also hear the argument that farm subsidies make food cheaper. Well, maybe they do: meat - raised on subsidized fodder - seems to be cheaper here than in the rest of North America or in Europe. But to suppose it's really cheaper is to assume something comes from nothing, whereas the subsidies that may reduce the retail price of certain groceries are real money, part of US tax revenues, so the groceries are cheaper to the immediate purchaser because someone else is picking up part of the tab. Well, not necessarily 'else': if you're in a high tax bracket, your groceries cost you more than they would unsubsidized, while they cost you less if you're in a very low tax bracket.
This looks like progressive redistribution of income, since relatively well-off taxpayers are helping less well-off ones buy their groceries, effectively raising their incomes; and so it probably looks like a good thing. But the thing about people and economics is, if something's cheap, they tend to use more of it, and if it's really cheap they may use more than they need. It's probably not a coincidence that the main nutritional concerns in the U.S., stem from obesity and fat blood, which generally result from the (over) consumption of foods which are supported by subsidies. Corn seems to get a particularly bad rap here because of corn syrup, but there's also wheat-based snacks and then there's meat, which is at least indirectly subsidized through subsidized feed (soybeans and, again, corn). So the suggestion is, maybe food, or this kind of food, is too cheap, and the redistribution of income associated with subsidies is not a good thing.
You'll see claims made that Big Food is responsible for the nutritional problems mentioned above, and delvings into the possible - nefarious - motives of the makers and purveyors of stuff like corn syrup. Accepting this kind of reasoning involves supposing consumers have diminished, or no, free will, that they are not free to choose what they buy and eat; and supposing this tosses the whole market theory of economics out the window (as far as food is concerned, anyway: cars, clothes and entertainment might be different?). This is pretty drastic treatment of classical notions of individual responsibility and of economic theory, treatment which can be avoided by accepting that Big Food, too, is a member of the market and when they find something that seems specially cheap, they'll try to figure out how to use more of it. And so, corn syrup: cheap enough to make and made cheaper still in comparison to traditional sugar,
whose price is artificially high due to tariffs (subsidies in reverse). It also has neat properties that sugar doesn't have, making moister baked goods (look at pre-War recipes calling for Karo) and being easier to use in various other processes. It's cheap and good at it's job: market economics explains why it gets used. If we need to name a villain here, the economic finger points at farm subsidies (and tariffs, here) which make products like corn syrup artificially competitive against traditional sweeteners, and meat against vegetables.
The finger can keep on pointing. The fundamental problem with subsidies is that they distort the market, not just in foodstuffs but throughout agriculture. Subsidies create spurious value in farm land, raising land prices and making it difficult for new farmers to get started, and small farmers to expand or even stay in business. Large subsidy incomes, on the other hand, help large farmers grow larger, buying out smaller farmers. Subsidies reward immediate productivity rather than efficiency and sustainability, encouraging over use of inputs such as pesticides, herbicides and fertilizer, with consequent adverse effects on the environment. And subsidies discourage diversity, both agro- and bio-.
Backers of the new farm bill congratulate themselves that they've taken some of this into account. For example, one of the populist innovations, which will reinforce support of small farmers, establishes a sliding scale for subsidy payments, so that they decrease as a recipient's pre-subsidy income increases. This takes effect at an income of a million dollars a year or higher (not per farm, but per individual notional farmer).
There is, as we mentioned, a competing farm bill, which would provide some support to local, sustainable, organic farming and marketing, reaching many of the small farmers who haven't qualified for support under recent bills. As a political move, thus recasting the farm bill blunts the criticism that subsidies support only, or mainly, agribusiness. Is this what we want? We've already seen how government involvement in setting a standard for production of organic produce has changed the nature of organic growing and marketing, taking a concept pioneered by small farmers who practiced agriculture with old-fashioned sustainable methods and were concerned with bio-diversity and reshaping it for corporate farming and marketing,
so that produce grown with methods and inputs a traditional organic farmer wouldn't use and environmental impact he wouldn't accept can now be labelled "USDA Organic".
The effects of farm subsidies on agriculture and consumer choice are quite like those of political donations on elections and voter choice. In both cases money distorts the market, assigning value to product or policy where it doesn't intrinsically exist, and favoring one set of citizens over another. Small farmers, consumer choice, and concern for the longer term all thrive in the absence of farm subsidies. Perhaps this should carry across to politics.
Yet another thing you won't find at the Farmers' Markets is nuclear weapons. Concern with nuclear weapons, real, potential, and imagined, has driven much of our government's policy for the past five years, but you don't hear much about American nuclear weapons. We take this opportunity to mark the sixty-second anniversary this week of the introduction and use of the atomic bomb, by the United States of America.