Currently browsing posts about: Farm-bill

Adam Davidson in the New York Times Sunday Magazine asks how come dairy farmers have such a hard time making a living?

His explanation: Dairy farmers thought they were in the business of raising cows.  Wrong.  They are in the business of betting on feed prices.

…in the last decade, dairy products and cow feed became globally traded commodities. Consequently, modern farmers have effectively been forced to become fast-paced financial derivatives traders.This has prompted a significant and drastic change.

For most of the 20th century, dairy farming was a pretty stable business…at base, dairy-farming economics are simple: when the cost of corn and soybeans (which feed the cows) are low and milk prices are high, dairy farmers can make a comfortable living.

And for decades, the U.S. government enforced stable prices for feed and for milk, which meant steady, predictable income, shaken only by disease or bad weather.

…[But] by the early aughts, to accommodate global trade rules and diminishing political support for agricultural subsidies, the government allowed milk prices to follow market demand.

…Animal feed, especially corn and soybeans, became globally traded commodities with all the impossible-to-predict price swings of oil or copper.

Davidson points to the 1% of dairy farmers who have figured all this out and are big enough to hire derivative traders to manage their feed stocks.

Farm bill politics, anyone?

Dairy farmer readers: comments please.

Sales of organic foods continue to increase at a faster pace than sales of conventional foods.  This alone makes people suspicious of the organic enterprise.

Another reason is confusion about what organic production methods are, exactly.  If you are part of the food movement, you probably want your foods to be organic, local, seasonal, and sustainable.  You might also want them produced by farm workers who have decent wages and living conditions.

Unfortunately, these things do not necessarily go together.

• Organic means crops grown without artificial pesticides, fertilizers, GMOs, irradiation, or sewage sludge, and animals raised without hormones or antibiotics.  Certified Organic methods follow specific rules established by USDA.
• Local means foods grown or raised within a given radius that can range from a few to hundreds of miles (you have to ask).
• Seasonal refers to food plants eaten when they are ripe (and not preserved or transported from where they were grown).
• Sustainable means—at least by some definitions—that the nutrients removed from the soil by growing plants are replenished without artificial inputs.

That these are different is illustrated by a recent article in the New York Times about industrial organic production in Mexico.  The story makes it clear that organics do not have to be local, seasonal, sustainable, or produced by well paid workers.

While the original organic ideal was to eat only local, seasonal produce, shoppers who buy their organics at supermarkets, from Whole Foods to Walmart, expect to find tomatoes in December and are very sensitive to price. Both factors stoke the demand for imports.

Few areas in the United States can farm organic produce in the winter without resorting to energy-guzzling hothouses. In addition, American labor costs are high. Day laborers who come to pick tomatoes in this part of Baja make about $10 a day, nearly twice the local minimum wage. Tomato pickers in Florida may earn $80 a day in high season.

The cost issues are critical.  Dairy farms in general, and organic dairy farms in particular, are entirely dependent on the cost of feed for their animals, and the cost of organic feed has become almost prohibitively expensive.  This has caused organic dairy producers to cut back on production or go out of business.  As another New York Times article explains,

The main reason for the shortage is that the cost of organic grain and hay to feed cows has gone up sharply while the price that farmers receive for their milk has not.

While the shortage may be frustrating for consumers, it reveals a bitter truth for organic dairy farmers, who say they simply need to be paid more for their milk.

Why is the price of feed rising?  Simple answer: because 40% of feed corn grown in the United States is being used to produce biofuels.

Why do farmers grow corn for biofuels?  Because the government gives them tax credits and other subsidies to do so.

But in a small step in the right direction, the ethanol tax credit program was allowed to expire last week,”ending an era in which the federal government provided more than $20 billion in subsidies for use of the product.”

One person quoted in the article connected the dots:

Production of ethanol, with its use of pesticides and fertilizer and heavy industrial machinery, causes soil erosion and air and water pollution. And it means that less land is available for growing food, so food prices go up.

Organics do not exist in isolation.  Their production is connected to every other aspect of the food system.

Wouldn’t it be nice to have a food system that promoted organic, local, seasonal, sustainable agriculture and paid farm workers a living wage?

Wouldn’t it be nice if the 2012 Farm Bill supported that kind of a food system if not instead of than at least along side of the one we have now?

I will be watching to see what Congress does with the Farm Bill.  Stay tuned.

My monthly Food Matters (first Sunday) column in the San Francisco Chronicle takes out a crystal ball…

Q: What’s on the food politics agenda for 2012? Can we expect anything good to happen?

A: By “good,” I assume you mean actions that make our food system safer and healthier for consumers, farmers, farm workers and the planet.

Ordinarily, I am optimistic about such things. This year? Not so much. The crystal ball is cloudy, but seems to suggest:

Political leaders will avoid or postpone taking action on food issues that threaten corporate interests. Sometimes Congress acts in favor of public health, but 2012 is an election year. Expect calls for corporate freedom to take precedence over those for responsible regulations. Maybe next year.

Something will happen on the farm bill, but what? Last fall’s secret draft bill included at least some support for producing and marketing fruits and vegetables, and only minimal cuts to SNAP (food stamps). Once that process failed, Congress must now adopt that draft, start over from scratch or postpone the whole mess until after the election.

SNAP participation will increase, but so will pressure to cut benefits. With the economy depressed, wages low and unemployment high, demands on SNAP keep rising. In 2011, SNAP benefits cost $72 billion, by far the largest farm bill expenditure and a tempting target for budget cutters. While some advocates will be struggling to keep the program’s benefits intact, others will try to transform SNAP so it promotes purchases of more healthful foods. Both groups should expect strong opposition.

Childhood obesity will be the flash point for fights about limits on food marketing. The Lancet recently summarized the state of the science on successful obesity interventions: taxes on unhealthy foods and beverages, restrictions on marketing such items, traffic-light front-of-package food labels, and programs to discourage consumption of sugar-sweetened drinks and television viewing. Expect the food industry to continue to get Congress to block such measures, as it did with U.S. Department of Agriculture school nutrition standards (hence: pizza counts as a vegetable).

The Federal Trade Commission will postpone release of nutrition standards for marketing to children. Although Congress asked for such standards in the first place – and the standards are entirely voluntary – it just inserted a section in the appropriations bill requiring a cost-benefit analysis before the FTC can release them. Why does the food industry care about voluntary restrictions? Because they might work (see previous prediction).

The Food and Drug Administration will delay issuing front-of-package labeling guidelines as long as it can. The FDA asked the Institute of Medicine for advice about such labels. The institute recommended labels listing only calories, saturated and trans fat, sodium and sugars – all nutrients to avoid. Although the institute did not mention traffic-light labels, it did recommend check marks or stars, which come close. The food industry much prefers its own method, Facts Up Front, which emphasizes “good-for-you” nutrients. It is already using this system. Will the FDA try to turn the institute recommendations into regulations? Maybe later.

The FDA will (still) be playing catch-up on food safety. The FDA got through the 2011 appropriations process with an increase of about $50 million for its inspection needs. This is better than nothing but nowhere near what it needs to carry out its food safety mandates. The FDA currently inspects less than 2 percent of imported food shipments and 5 percent of domestic production facilities. The overwhelming nature of the task requires FDA to set priorities. Small producers think these priorities are misplaced. Is the FDA going after them because they are easier targets than industrial producers whose products have been responsible for some of the more deadly outbreaks? Time will tell.

On the bright side, the food movement will gather even more momentum. While the food industry digs in to fight public health regulations, the food movement will continue to attract support from those willing to promote a healthier and more sustainable food system. Watch for more young people going into farming (see Chronicle staff writer Amanda Gold’s Dec. 25 article) and more farmers’ markets, farm-to-school programs, school meal initiatives, and grassroots community efforts to implement food programs and legislate local reforms. There is plenty of hope for the future in local efforts to improve school meals, reduce childhood obesity, and make healthier food more available and affordable for all.

And on a personal note: In April, University of California Press will publish my co-authored book, “Why Calories Count: From Science to Politics.” I’m hoping it will inspire more thinking and action on how we can change our food system to one that is better for people and the planet.

Happy new year!

Grist and Food and Tech Connect have excellent reports on last week’s Farm Bill Hackathon.  This event brought together farm bill experts and designers to try to produce materials that make farm bill issues accessible.

The terrific winning entry: A Clean Farm Bill of Health slideshow illustrating the contradiction between USDA dietary advice policy and that for farm supports.

I could not participate in the Hackathon but having just taught a class on the farm bill I know what I’d like to have: a complete text of the farm bill annotated to include all of the relevant information.

The 663-page 2008 farm bill is readily accessible online, but it is unreadable (by me at least).   This is because it refers to previous bills and other Acts of Congress, which in turn refer to previous bills and Acts, in some cases going back to 1933.

You don’t believe me?  Try this entirely typical section, chosen at random:

SEC. 12001. DEFINITION OF ORGANIC CROP.
Section 502(b) of the Federal Crop Insurance Act (7 U.S.C.
1502(b)) is amended—
(1) by redesignating paragraphs (7) and (8) as paragraphs
(8) and (9), respectively; and
(2) by inserting after paragraph (6) the following:
‘‘(7) ORGANIC CROP.—The term ‘organic crop’ means an
agricultural commodity that is organically produced consistent
with section 2103 of the Organic Foods Production Act of 1990
(7 U.S.C. 6502).’’.

It would be so nice to have a text that gives the relevant information in one place: what the Federal Crop Insurance Act says, what paragraphs 7 and 8 are all about, and what’s in section 2103 of the 1990 Act.

Hackers: anyone want to take this on?

My monthly (first Sunday) Food Matters column in the San Francisco Chronicle:

Q: What’s going on with the farm bill? Any chance for improving it?

A: I wish your question had an easier answer. The farm bill has to be American special-interest politics at its worst.

As Stacy Finz has been reporting in the main news and Business sections of The Chronicle, the failure of the recent super-deficit reduction plan also brought an end to a secret committee process for writing a new farm bill. Now Congress must follow its usual legislative procedures. The farm bill is again open for debate.

Advocacy is much in order. The farm bill is so enormous, covers so many programs, costs so much money and is so deeply irrational that no one brain – certainly not mine – can make sense of the whole thing.

It is all trees, no forest. The current bill, passed in 2008, is 663 pages of mind-numbing details about programs – hundreds of them – each with its own constituency and lobbyists.

The farm bill was designed originally to protect farmers against weather and other risks. But it grew piecemeal to include programs dealing with matters such as conservation, forestry, biofuels, organic production and international food aid.

The most controversial programs cover food commodities – corn, soybeans, wheat, rice, cotton, sugar and dairy – but lesser-known provisions support smaller industries such as honey or Hass avocados.

The elephant in the farm bill is SNAP, the Supplemental Nutrition Assistance Program (formerly food stamps). Fully 80 percent or more of farm bill expenditures go for SNAP.

This year, SNAP costs ran about $6 billion a month, and they are rising in today’s depressed economy. In contrast, commodity subsidies cost “only” about $8 billion a year. Crop insurance adds $4.5 billion, and conservation about $5 billion. Everything else runs in the millions, not billions, mere nothings in comparison to SNAP’s $70 billion 2011 expenditures.

SNAP judgements

What, you might ask, is SNAP doing in the farm bill? Think: logrolling.

Members of Congress who represent farm states need urban votes to pass subsidies. Urban members need farm votes to protect SNAP. This deal works, and both sides like the unsavory system just as it is.

As for irrationality: At a time when preventing obesity heads the public health agenda and reducing greenhouse gases is an international priority, the farm bill firmly protects the status quo.

It promotes production of commodities, but does little to link agricultural policy to policies that promote health or environmental protection. Although the Dietary Guidelines and MyPlate strongly promote consumption of fruits and vegetables, the farm bill inconsistently considers these foods as horticulture or specialty crops that do not merit subsidies or government-supported insurance. Indeed, many farm bill provisions discourage production of fruits and vegetables.

Overall, the farm bill must be seen as an inequitable means to protect the income of the largest and richest industrial producers of food commodities. It has little to do with serious efforts to protect conservation of natural resources, support rural communities or promote sustainable farming practices that maintain soil quality and mitigate climate change. Nor does it address the real needs of low-income communities.

The current bill favors large farms over small ones, intensive rather than sustainable production methods, and some states and regions over others. It actively promotes risk-taking; the government covers the costs.

It ignores food safety. It promotes production of inefficient biofuels. It does nothing to promote sustainable farming practices in this or any other country. And because it rewards farmers for overproducing commodities, it gets the United States in trouble with international trading partners.

Worst of all, the bill is inherently undemocratic. It is so opaque that nobody in Congress or anywhere else can possibly grasp its entirety. Its size and complexity make it especially vulnerable to influence by lobbyists for special interests and by the corporations most generous with campaign contributions.

Pro and con arguments

Its defenders argue that the present system works pretty well in ensuring productivity, global competitiveness and food security. Tinkering with it, they claim, will not make much difference and could do harm.

I disagree. It needs more than tinkering. Americans need farm policy to be brought into line with health and climate-change policy, and now is our chance.

Those of us who believe that food systems should be healthier for people and the planet have been handed an opportunity to rethink farm bill programs and to make the processes for its development more democratic.

Groups such as the Environmental Working Group ( www.ewg.org) and National Sustainable Agriculture Coalition (sustainableagriculture.net) have been hard at work on these issues. Join them, speak up, and get busy.

This article appeared on page G – 4 of the San Francisco Chronicle

Stephen Clapp, reporting Friday in Food Chemical News (subscription required, alas), had this to say about Congress’s failure to create and pass a farm bill in secret and without debate (see previous post):

The agriculture committees will now try to achieve an unprecedented feat — passing a Farm Bill in an election year. Even in the best of times, passing a Farm Bill is like “passing a kidney stone,” quipped Sen. Tom Harkin (D-Iowa) in 2008.

After the budget SuperCommittee failed to reach an agreement yesterday, Rep. Frank Lucas, Chairman of the House Agriculture Committee, and Sen. Debbie Stabenow, Chairwoman of the Senate Agriculture Committee issued a joint statement about their proposal for the farm bill:

House and Senate Agriculture Committee leaders developed a bipartisan, bicameral proposal for the Joint Select Committee on Deficit Reduction that would save $23 billion.

However, the Joint Select Committee’s failure to reach a deal on an overall deficit reduction package effectively ends this effort.

We are pleased we were able to work in a bipartisan way with committee members and agriculture stakeholders to generate sound ideas to cut spending by tens of billions of dollars while maintaining key priorities to grow the country’s agriculture economy.

We will continue the process of reauthorizing the farm bill in the coming months, and will do so with the same bipartisan spirit that has historically defined the work of our committees.

With their proposal to cut $23 billion from the farm bill over 10 years (~$2.3 billion per year) blown out of the water (see yesterday’s post), the big question is what happens next.

Philip Brasher, who follows such things closely, writes in the Des Moines Register that the existing farm programs expire in two years.  The point of trying to hide the farm bill in the SuperCommittee was to protect farm subsidies from attack on the House or Senate floor:

Critics of using the supercommittee process to write farm policy saw it as an end run by the agribusiness lobby to guarantee growers a continued stream of federal money with as few strings attached as possible.

Now everything starts from scratch:

The conventional legislative process for writing a new farm would include public meetings and votes in committee and on the House and Senate floor. But that’s a long, difficult process for a major bill to navigate even in a year when little else is going on, and 2012 will be a presidential election year.

….Also up in the air is how much agriculture spending will be cut. The debt-reduction committee’s failure to reach a deal is supposed to trigger about $1 trillion in automatic cuts, including a $15 billion reduction in agricultural programs over a 10-year-period.

The agriculture committees had been crafting their farm bill to cut $23 billion, and now that the supercommittee has deadlocked corn growers lobbyist Sam Willett says that the eventual spending cut could wind up higher than that.

“The new starting point is $23 billion, not $15 billion,” he said.

Chris Clayton, writing for the Progressive Farmer, gives some of the juicier gossip about what led to this point.   He quotes  Senate Agriculture Ranking Member Pat Roberts, R-Kansas, complaining that even he had been left out of the loop:

In recent weeks, the chairs of the House and Senate Agriculture Committees have worked on a farm fill proposal, largely without my input and the input of the other members of the two committees. The last proposal was so ‘secret’ that I still have not seen final legislative language and scores.

If you thought the process was nasty up until now, I’m guessing what comes next will be worse.  Lobbyists for every piece of the farm bill will be working even harder to protect their employers from budget cuts.

The big ticket items are, in order, food stamps, commodity supports (including crop insurance), and conservation.  The fights will not be pretty, especially in a Congress that seems to care much more about who’s in power than about creating a healthy, sustainable agricultural system.

Additions, November 23: The National Sustainable Agriculture Coalition (NASC) has produced two analyses of the situation with the farm bill.  Part One reviews what has just happened and what it may mean (short answer: up in the air).  Part Two provides NASC’s analysis of the leaked bill proposed by the secret committee (the actual proposal has not yet been released).

As of this morning, it looks like the SuperCommittee process has failed.  This committee was supposed to recommend specific budget cuts by tonight.  If it fails, automatic budget cuts, half to the military, go into effect in January 2013—after the 2012 election.

What does this mean for the farm bill?

The chairs and vice-chairs of the House and Senate agriculture committee have been meeting in secret—from the rest of the agriculture committee members as well as from the public—to recommend how to cut $23 billion from agriculture appropriations.

On Friday, the Environmental Working Group obtained a leaked copy of the secret recommendations.

These recommendations, rumored to be not quite final, were to go to the SuperCommittee today.  Now what?

I’m guessing the farm bill is up for grabs and will now have to go through the usual legislative processes.  This could be good or bad, depending on the politics.

In the meantime, I counted 97 recommendations in the secret committee’s report.  A few of the most interesting:

Commodities

• Eliminate direct payments, counter-cyclical payments, average crop revenue election, and supplemental revenue assistance payments to create $15 billion in savings.
• Expand crop insurance for “underserved” crops, including fruits and vegetables.
• Create a special program to protect cotton producers.
• Protect commodity producers against both price and yield losses.
• Restrict benefits to farmers who make less than $950,000 per year (adjusted gross), or twice that for couples.
• Set payment limits of $105,000 per producer, or twice that for couples.
• Do something complicated with dairy by replacing two programs with two others.

Conservation

• Cut the budget by an unspecified amount (continuing a long tradition of cutting conservation).
• Reduce reserve acres from 32 million to 25 million over 10 years.

Nutrition

• Cut SNAP (food stamp) benefits by about $4 billion a year, by eliminating automatic enrollment for anyone who gets energy benefits.
• Require retailers to stock more fruits and vegetables.
• Give USDA the authority to require documented need for states to allow SNAP benefits to be used in restaurants by the disabled and homeless.
• Give USDA $5 million per year to prevent trafficking of benefits.
• Require USDA to set rules to prevent lottery winners from getting SNAP benefits (what is this about?).
• Grant $10 million to encourage whole grains in school meals.
• Grant $20 million a year for incentives for SNAP recipients to buy fruits and vegetables.

“Specialty” crops (translation: fruits and vegetables)

• Fund promotion program for farmers’ markets at $20 million a year
• Give USDA $5 million to collect data on organics
• Provide $61 million a year for programs to prevent agricultural pests
• Give $70 million a year for grants to states to promote specialty crops
• Allot $15 million a year to run the National Organic Program
• Provide $40 million a year for specialty crop research.
• Provide up to 75% of the cost of organic certification (maximum $750).

As in the past, SNAP takes up about 80% of the total farm bill budget, with the remainder going mainly to commodity support and insurance programs.

As always, large agricultural producers get most of the support money—$ billions—but this plan throws a handful of small benefits ($ millions) to help fruit-and-vegetable growers.

How any of this might work in practice is unclear, as is what happens next.  A whole new opportunity for lobbying, perhaps.  Stay tuned.