Plenty wrong with U.S. agricultural policy

by Hiroaki Sato

NEW YORK — The U.S. farm bill — a blanket term for all measures related to agriculture, some barely so — appears doomed this year. The House version passed at the end of July, but the Senate version has been stalled in such a way that there’s even talk that its enactment may not occur until after the next administration takes over in 2009. The bill is rewritten every five years or so.

I noticed there was controversy over it last summer. A newspaper reported that a congressman from a farm state was calling for substantial reforms in U.S. agricultural policy because, among other things, he said, it harms America’s trading partners.

That surprised me. For years I’d thought the U.S. attitude toward international matters was, “We can do this, but you can’t,” with agricultural trade policy typifying the approach. I recall, for example, Charlene Barshefsky, President Bill Clinton’s Trade Representative from 1997 to 2001, pronouncing Japan’s policy “destructive,” even as America’s own was garnering a good deal of criticism.

But here was Rep. Ron Kind, a Wisconsin Democrat, who announced: “The current system (of farm subsidies) facilitates a cycle in which farmers produce for the government paycheck, resulting in overproduction and depressed prices. This has international implications as well because keeping prices artificially low hinders the ability of developing countries to strengthen their own agriculture industries.”

Among the countries close to the U.S., Mexico may be the prime victim of U.S. farm subsidies, but Jamaica is not far behind. Stephanie Black’s 2001 documentary for PBS, “Life and Debt,” depicted what happened when the island nation was forced to keep its tariffs low to service its international debt. Subsidized U.S. sugar and grain flooded the island, driving its farmers up against the wall.

By the time the Wisconsin Democrat’s legislation, “The Healthy Farms, Foods, and Fuels Act,” was taken up by the media, it was already in a precarious state, of course. That, along with what has happened since, shows that efforts to reform something fundamentally seldom go anywhere. Reading up on the subject, though, I’ve picked up some fascinating tidbits.

U.S. farm policy had its origins, as may be readily guessed, during the Great Depression. Farm prices plunged, so did farm income, and there were riots. The government judged overproduction was the cause. As a result, 4.046 million hectares of cotton were plowed under in August 1933 and “6 million little pigs” slaughtered in September 1933 — “not acts of idealism in any sane society,” the agronomist-turned-secretary of agriculture Henry Wallace wrote. Wallace, who went on to serve FDR as vice president and ran against Harry Truman for president in 1948 advocating less strident international policy, would surely be disconcerted to see that the steps he took to save poor farmers from overproduction have become the cause of perennial overproduction.

How has this reversal come about? Farm subsidies, which were later altered to include the confusingly named categories of largess, “counter-cyclical payment” and “loan deficiency payment,” guarantee that the farmers who receive subsidies never lose a penny no matter what happens. (Two-thirds of farmers do not get government money.) In addition, because the payments are constructed in such a way as to exceed the market price, the subsidy recipients gain more by producing more.

Up to 90 percent of farm subsidies go to the growers of feed grains, wheat, cotton, soybeans, and rice. Between 1995 and 2005, the top 10 percent of subsidy recipients accounted for 73 percent of all subsidies. Most top recipients are agribusinesses, though the list includes Ducks Unlimited, the organization that famously aims to preserve wetlands so its members may continue to shoot ducks and other waterfowl.

Among the subsidy recipients are “urban farmers” — residents of Manhattan, San Francisco, Washington and so forth, where you are unlikely to see “a whole lot of wheat and corn and cotton grown,” as Ken Cook, the head of the Environmental Working Group, put it. Some of them are very rich: Edgar Bronfman (owner of Seagram), Leonard Lauder (cosmetics), Paul Allen (cofounder of Microsoft). Constance Bowles Peabody and her late brother George each received $1.2 million between 2003 and 2005.

The subsidy recipients include the dead. The General Accountability Office, the investigative arm of Congress, found 181 cases of payment to the dead, or a total of $1.1 billion, between 2001 and 2005. During the same period, $15 billion out of the $95 billion given out as farm subsidies could be termed simple waste, The Washington Post found.

The case of Ducks Unlimited reminds us: Rep. Kind wanted to emphasize land conservation and rural development over outright subsidies and other “market-distorting policies.” But if “land conservation” includes the aim of enabling hunters to shoot more ducks, “rural development” encompasses much greater ground. Under Henry Wallace and FDR, the term meant electrification and other steps to help poor rural areas. Today it covers 40 categories of loans and loan guarantees that even those administering them can’t explain. Some money has been used, for example, to upgrade museums on Cape Cod and to renovate a Martha’s Vineyard tavern.

When you start reading up on American farm subsidies and such, one writer you may end up running into is Michael Pollan, professor at the University of California, Berkeley, and a wry commentator on foods in America. In a recent article on the farm bill as it has shaped up, Pollan noted that all the nutrition programs incorporated into the legislation wouldn’t be needed if farm subsidies “didn’t do such a good job making junk food and fast food so ubiquitous and cheap.” His main culprit is corn. In the year he spoke of in “The Omnivore’s Dilemma” (Penguin, 2006), 530 million bushels of corn was turned into “17.5 billion pounds of high-fructose corn syrup,” a food barely known before 1980. The problem is not just that this sweetener is now used in an astonishing variety of foods; it has become a simple addition to the existing sweetener, sugar, instead of offsetting it. This has considerably added to the growing problem of diabetes and obesity among American citizenry.

The renewed farm bill would add subsidies, not cut back on them. But one added category could do some good: It would encourage farmers to sell their produce in nearby cities, a boon to urban dwellers like me. “The typical fruit or vegetable on an American’s plate travels some 1,500 miles (2,414 km) to get there,” Pollan points out. No wonder the great variety of fruits and vegetables displayed in a supermarket, however wondrous to the eye, so often taste like cotton.

Hiroaki Sato is a translator and essayist.