Currently browsing posts about: Farm-policy

I am all for making sure that farmers make a decent living but most agricultural subsidies go to Big Ag—the producers of corn and soybeans fed mainly to animals or, in the case of corn, as ethanol for car fuel.

These taxpayer-funded payments are enormous and represent increasing percentages of the income of Big Ag.

For example, see this chart from the Wall Street Journal.

As part of the Trump administration’s effort to get votes from farmers and ranchers, it pledged $37.2 billion to them in the spring and summer with an addition $14 billion in September.

Why is this about the election?  The Washington Post says “Trump’s farmer bailout gave $21 billion to red counties and $2.1 billion to blue ones.”

At a campaign rally in Wisconsin last week, President Trump didn’t mince words about how much his administration had done to bolster the economic fortunes of farmers…I gave $28 billion to the farmers, many of them right here, $28 billion, $12 billion and $16 billion, two years”… That redistribution was facilitated through the Agriculture Department’s Market Facilitation Program. According to data obtained by the Environmental Working Group through a Freedom of Information Act request, that program disbursed more than $23 billion in the 2018 and 2019 program years.

From a report from Agricultural Economic Insights:  USDA’s direct payments to Big Ag will equal 36% of net farm income, up from 22% in 2018=2019.  These payments used to account for around 10% of net farm income.

Check out its map:

Finally, it’s good to review the big picture of what happened to food and farming under Trump.  Civil Eats has an excellent review by Lisa Held.

To offset the effects of the tariffs, in 2018, USDA began distributing cash payments through the Commodity Credit Corporation at unprecedented levels, with no appropriations or oversight from Congress. In 2020, as the pandemic hit the farm economy, it added another source of government payments via the Coronavirus Food Assistance Program (CFAP). Overall, Trump’s USDA has handed out more government dollars to farmers than any administration prior. In both 2019 and 2020, more than 40 percent of farm incomes came from federal assistance—the only thing keeping farm incomes afloat.

Those payments have been controversial because they have almost exclusively benefited the largest farms and agriculture companies. Two-thirds of the trade aid payments went to agriculture producers in the top 10 percent, including corporations, such as the $67 million paid to JBS USA, a subsidiary of the Brazilian-owned meatpacking giant. Small farms, especially diversified operations and those run by socially disadvantaged Black, Indigenous, and People of Color (BIPOC) farmers, have largely been unable to access CFAP assistance.

All of this leaves plenty of room for improvement.

President-elect Biden: get to work!

I have a few suggestions.  Maybe you can think of others?

• Appoint committed experts to head federal agencies dealing with food issues (especially USDA, FDA, FTC, EPA, CDC).
• Rehire the experts who quit or were fired during the Trump administration.
• Bring the Economic Research Service back to Washington DC.
• Rescind the public charge and work rules that have led to SNAP de-enrollment; restore SNAP outreach.
• Refocus agricultural supports on food for people (rather than feed for animals or fuel for cars).
• Promote small- and mid-size agricultural production.
• Provide incentives for agricultural production that conserves and regenerates natural resources.
• Insist on fair pay for farm, packing house, restaurant, and grocery workers, and on safe working conditions.
• Use every means possible to promote diets that reduce the risk of overweight and the diseases for which it increases risk.
• Create a food agency to coordinate existing policies to develop a food system healthier for people and the planet.

Hey, I can dream.

Anything in this direction will be a big step forward.

This Tweet got me started on farm payments.

Good point.  It sent me to John Newton who is an agricultural economist and lobbyist for the Farm Bureau.

The red sector is payments to agricultural producers and processors.  The tiny little sliver goes to food and nutrition.

All of this got me thinking.  What’s the Big Picture here?

Fortunately, Politico has done the work.

• ‘Here’s your check’: Trump’s massive payouts to farmers will be hard to pull back: The president was already spending double his predecessor to spare farmers the cost of his trade war. Now the price is reaching unsustainable levels.

And here are a few other comments on how this is playing out—with taxpayer dollars, recall.

• Million-dollar payments from USDA’s coronavirus fund:  A hog producer, Titan Swine, got the largest single payment during the first month of the USDA’s coronavirus relief program — $1.4 million — and it received two additional checks, totaling $1.1 million, on the same day, reported The Counter.
• A few farmers get huge USDA relief payments while many struggle for pennies.“The fall is going to be an apocalypse for small farms.”  From H. Claire Brown in The Counter.
• Millions of Dollars Heading to Farmers, but Small Farms Won’t See Much of it:  Advocates say young and disadvantaged farmers won’t benefit from the latest stimulus funds, and nor do those selling directly to consumers.

If ever we needed accountability—and rational agricultural policy—the time is now.

Food trade is a mess right now, but I keep trying to keep up with it.  Here are some recent items that caught my attention..

Trade deals dump U.S. junk foods in Central America.  The University of Buffalo sent out a press release about a study of the effects of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) on dietary practices in that country.

Our analysis demonstrates that low-income consumers face increasing household food expenditures in a context of overall food price inflation, in addition to relatively higher price increases for healthy versus ultraprocessed foods. Neoliberal policies not only contribute to restructuring the availability and pricing of healthy food for low-income consumers, but they also exacerbate social inequality in the food system through corporate-controlled supply chains and farmer displacement.

Current tariff policies threaten nearly 1.5 million jobs and raise prices.   This is the conclusion of a 75-page report conducted by economic consulting firm BST Associates .

A new study commissioned by the Port of Los Angeles finds that U.S. tariffs put nearly 1.5 million American jobs and more than $185 billion in economic activity at risk nationwide – based solely on the impact of tariffs on cargo handled in the San Pedro Bay port complex….China is the primary target of the Trump administration’s tariff policy, and Chinese producers account for about half of the imports passing through San Pedro Bay. Chinese retaliatory tariffs affect China-bound American exports, and Chinese buyers account for nearly a third of the American products headed overseas out of LA and Long Beach…“With 25 percent fewer ship calls, 12 consecutive months of declining exports and now decreasing imports, we’re beginning to feel the far-reaching effects of the U.S.-China trade war…With the holiday season upon us, less cargo means fewer jobs for American workers.”

The USDA has released the second collection of payments compensating agriculture for losses due to the trade war with China.  This comes to more than $14 billion on this round.  This is on top of the previous $9 billion already paid.  All of this is way beyond what the Farm Bill authorizes in agricultural support.  Supporting Big Ag this way sets an expensive precedent.  And guess where the payments are going.  To “a bundle of states that are essential to his re-election chances,” according to the Los Angeles Times.

As for why those payments are needed:  USDA’s complicated-to-read economic report explains how farm debt is increasing and income decreasing.  As the Des Moines Register reports, Iowa’s farm debt reached $18.9 billion in the second quarter of 2019—the highest level in the nation.  USDA’s farm income and wealth statistics are here.

In the meantime, what’s happening to small farms?  They face extinction, according to Time Magazine.

A mess indeed.  Fixable?  Only with political will.  It’s hard to be optimistic at this point.

As I’ve confessed many times, I have a hard time getting my head around how US farm policy works in practice.  Fortunately, we have Politico to help.

Politico Morning Agriculture, its not-to-be-missed daily newsletter, has a few gems on payments to agricultural producers under current farm policies.

Last ten years: farm payments have averaged $11.5 billion per year (the peak was $13.8 billion in 2018)

2019: payments are predicted to exceed $21 billion. How?

• $14.5 billion in direct trade aid for 2019 production.
• $11.5 billion in direct payments

Politico notes: These payments contradict “Trump’s claims that he’s turned the farm economy around.”

It also notes that federal payments are likely to account for 27 percent of farmer income this year.

Is this reasonable agricultural policy?  No.

Don’t we need a better and more sustainable system?  Yes.

The New York Times carried a plea this week for more attention to food and nutrition policy from presidential candidates.

Civil Eats is tracking what they are saying.

So is Jerry Hagstrom, who has given permission to re-post these links from his Hagstrom Report, a daily newsletter about “agriculture news as it happens,” to which I gratefully subscribe (the Washington Post just ran a story about him).

Hagstrom collected agricultural position statements posted by candidates in Iowa.

▪ Joe Biden — The Biden Plan for Rural America
▪ Pete Buttigieg — A Commitment to America’s Heartland: Unleashing the Potential of Rural America
▪ — Securing a Healthy Future for Rural America
▪ John Delaney — Heartland Fair Deal
▪ Kirsten Gillibrand — Rebuilding Rural America for Our Future
▪ Kamala Harris (video) — Kamala Harris answers question on Rural America, July 4, 2019, Indianola, Iowa
▪ Amy Klobuchar — Plan from the Heartland: Strengthening our Agricultural and Rural Communities
▪ Tim Ryan — Improving Our Agriculture and Food System
▪ Bernie Sanders — Revitalizing Rural America
▪ Elizabeth Warren — My Plan to Invest in Rural America
▪ — The Farm Economy
▪ Donald Trump — Land and Agriculture: President Donald J. Trump Achievements

Videos of all the “soapbox” speeches, In alphabetical order

▪ Sen. Michael Bennet, D-Colo.
▪ Former Vice President Joe Biden
▪ Sen. Cory Booker, D-N.J.
▪ Montana Gov. Steve Bullock
▪ South Bend, Ind., Mayor Pete Buttigieg
▪ Former Housing and Urban Development Secretary Julián Castro
▪ New York City Mayor Bill de Blasio
▪ Former Rep. John Delaney, D-Md.
▪ Rep. Tulsi Gabbard, D-Hawaii
▪ Sen. Kirsten Gillibrand, D-N.Y.
▪ Sen. Kamala Harris, D-Calif.
▪ Former Colorado Gov. John Hickenlooper — Withdrew from race Thursday
▪ Washington Gov. Jay Inslee
▪ Sen. Amy Klobuchar, D-Minn.
▪ Rep. Seth Moulton, D-Mass.
▪ Rep. Tim Ryan, D-Ohio
▪ Sen. Bernie Sanders, D-Vt.
▪ Former Rep. Joe Sestak, D-Pa.
▪ Hedge fund manager and activist Tom Steyer
▪ Sen. Elizabeth Warren, D-Mass.
▪ Former Massachusetts Gov. Bill Weld, Republican
▪ Author Marianne Williamson
▪ Entrepreneur Andrew Yang

Because our dysfunctional Congress did not pass the farm bill by midnight on Sunday, the 2014 bill has expired.

What does this mean?  Basically, the USDA hasn’t decided anything yet but a lot depends on the authorization status of each program (recall: the farm bill covers hundreds of programs).

• Programs with permanent budget authorization—SNAP and Crop Insurance, for example—keep going.
• Programs without authorization—the 40 or so “orphans”—terminate.
• Programs authorized by the farm bills of 1938 and 1949 that have been updated and modernized revert back to the rules for those those years—certain dairy programs are especially affected.

The Congressional Research Service has a quick summary of the implications of the non-passage of the farm bill.

As for why Congress couldn’t get this bill passed, the big barriers are SNAP and conservation.

Recall that SNAP, formerly food stamps, is in the farm bill as a result of classic logrolling in the Johnson era.  Johnson got legislators from farm states to vote for food stamps in return for votes from urban legislators for farm supports.  At the time, the food stamp program was piloted in 40 counties and 3 cities with a total of under 400,000 participants.  Its cost was a fraction of the total farm bill cost.

In 2017, SNAP had more than 42 million participants at a total cost in benefits and administration of $68 billion—nearly 80% of the total cost of the bill.

SNAP looks like a honey pot to legislators looking for funds to make up for the tax cuts.  They have proposed additional work requirements.

These are sure to reduce enrollments.  Mathematica Policy Research says the House farm bill (HR 2 (115)) would cause 2 million households to lose SNAP eligibility.

Conservation is another issue.  Senators write that they cannot support a farm bill that does not promote conservation.

New to the farm bill?  Want to find out more?

• Knowable Magazine’s Rachel Ehrenberg explains the farm bill’s role in health (I’m quoted).
• Ehrenberg’s article comes with a wonderfully illustrated timeline.
• The Sustainable Food Center tells you five things you need to know.
• The National Sustainable Agriculture Coalition’s website is the place to go for deep information and analysis.

I find the details of trade policy almost impossible to understand (so many arcane rules, so many countries), and am grateful whenever I read something crystal clear.

Politico explains (behind a paywall, alas) how our trade war with China is hurting US soybean farmers, beginning with:

The good news: The European Union is buying lots more US soybeans than it used to.  Purchases are up 133% over last year, and now account for 52% of EU soybean imports.

The bad news: The EU is buying US soybeans because they are cheap.  Because China is not buying US soybeans, there is a glut; prices have fallen by 20%.

Estimates are that the EU will buy $2.5 billion this year.  But last year, China bought $12.3 billion in soybeans.  That’s nearly a $10 billion loss unless other buyers can be found (the estimate is a $7 billion loss).

China is now buying soybeans from Brazil, and at premium prices.

Here’s what the American Soybean Association has to say about all this.

One more indicator:  Politico also mentions an article in the Milwaukee Journal Sentinal detailing how more than 2,500 US dairy farmers have resorted to GoFundMe campaigns to save their farms.

I wish we grew more food for people instead of food for animals or fuel for cars, and that our agricultural policy linked to health policy.

Maybe if we did that, we wouldn’t be in this situation.  But GoFundMe campaigns?

Maybe we just need real agricultural policies.