The New USA Farm Crisis

Subject: Another Farm Crisis (8/98 Progressive Populist)
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THE PROGRESSIVE POPULIST:
A MONTHLY JOURNAL OF THE HEARTLAND
August 1998 -- Volume 4, Number 8
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EDITORIAL - Another Farm Crisis

What will it take to get consumers interested in the plight of independent
family farmers?

Millions of people lost their farms in the 1980s after the government
urged them to load up on debt in the 1970s and then cut off their markets
while the bankers cut off the credit. Even when the tractors rolled on
Washington, people in the cities couldn't care less because they didn't
see how the turnover of family farms into corporate agriculture affected
them. Some of the displaced farmers, with no place else to vent their
rage, joined militia movements, as Joel Dyer explored in his book, Harvest
of Rage, reviewed in this issue, but most of them simply left the land
their parents and grandparents tilled and found wage-earning jobs in the
towns and cities.

The past 20 years have seen a consolidation of agribusiness industries,
giving farmers fewer choices of where they can buy their seed and feed and
where they can sell their grain and livestock. The Justice Department's
antitrust division, meanwhile, is nowhere to be seen. A Democratic
Congress in 1994 passed the North American Free Trade Agreement that
opened American markets to Canadian and Mexican crops and a Republican
Congress in 1996 passed a "Freedom to Farm" bill that removed price
supports and put farmers at the mercy of the "free market" rollercoaster.

The result has been a decline in personal farm income between 1996 and
1997, a time when large agribusinesses were reporting record profits.
According to USDA estimates cited by U.S. Sen. Tom Harkin, D-Iowa, lower
corn and soybean prices could cause a $1 billion loss of farm income in
Iowa alone, which could threaten up to 19,000 jobs in the state. In North
Dakota, according to the Farm Service Agency, 2,511 wheat and cattle
farmers have folded in the last two years, and an additional 1,807 are
expected to quit this year, leaving only about 26,700 farmers in this
heavily agricultural state, the New York Times reported. Farm income has
nose-dived 98 percent in North Dakota to $15 million in 1997 from $764
million in 1996, the Department of Commerce said.

In the South, poultry processors have successfully gained a virtual
monopoly on production by controlling the farmers that are contracted to
raise chickens and turkeys for them. Farmers are required to make capital
investments to the specifications of the processors and they take the
risks in raising the birds before they are returned to the processor for a
marginal profit in a good year [See Editorial: "Shut down chicken
racketeers," 5/96 Progressive Populist]. Now pork and cattle producers are
moving in the same direction, towards integration of producers and
processors, where the meatpackers contract with farmers to raise livestock
to the packers' specifications.

Small pork producers have been the backbone of the Midwestern farm
economy, where the sale of a few hundred hogs might tide over a family
farm in a year when the corn and soybeans prices weren't enough to pay the
bills. The movement of large-scale corporate producers into the market
threatens to make the small pork producer a thing of the past.

Again, most city dwellers are apathetic as long as the price of beefsteaks
and pork chops stays low, although Roger Hoffman of the Idaho Rural
Council notes on page 5 that meat prices at the supermarket remained
unchanged while farmers and ranchers were getting 15 to 20 percent less
for their cattle last year. Meanwhile, meatpacker IBP doubled its profits,
to $180 million. Small pork producers have similar complaints.

With just over two million farms remaining in the country, and more
farmers giving up every day, small farmers and ranchers need to look for
other groups to help. The Northern Plains Resource Council, a
Montana-based grassroots family agriculture and conservation organization,
expressed a newfound solidarity with organized labor in July when it
organized a fund drive to buy 1,200 pounds of U.S. beef for striking auto
workers and their families. "We wanted to do something to show some real
sympathy and to start making friends," said Jeanne Charter, an NPRC board
member who ranches north of Billings. Charter acknowledged that ranchers
aren't known for seeing eye-to-eye with unions. "But the more people
thought about it, the better an idea it seemed to do something to start
building a broad enough alliance to challenge the multinationals'
predatory job and ag trading practices," she said. "We can't let them get
away with the age-old divide and conquer strategy."

Another potential ally of family farmers is the environmental movement,
which agriculture has held at arm's length.

Large-scale producers claim the right to put a factory farm with thousands
- or hundreds of thousands - of hogs anywhere they want, no matter how the
neighbors feel about the gut-renching stench. Family farmers who raise a
few hundred pigs seem almost pristine in comparison.

Hapless neighbors are forced to rely on spineless state environmental
agencies and the Environmental Protection Agency, which can fine the
corporation after the waste spills into the local water supply (after the
hogs are sold at a profit that makes the fine little more than a business
expense). Good luck trying to enforce air pollution regulations, even if
state pollution regulators were inclined to crack down.

Environmental groups have called on the Clinton administration to enact a
national moratorium on large livestock feeding operations until the EPA
can put meaningful regulations in place. Plainly, legislatures are not up
to the task - at least not until consumers get energized. Perhaps the
courts can be called upon to uphold the right of neighbors to enjoy clear
air and clean water over the right of polluters to create public nuisances
in the name of the free market.

Consolidation of the nation's banking system also ought to raise concerns
among the nation's food consumers. Wells Fargo recently merged with
Norwest, which previously had taken over local banks in many Midwestern
towns. When San Francisco-based Wells Fargo sends in a new branch manager
to take over the bank in a small farming town, what's that young banker
going to tell the farmer who needs an operating loan but isn't sure he
wants to use those "Roundup Ready" soybeans or genetically engineered corn
or he doesn't want to inject his dairy cattle with hormones to increase
milk production because it isn't natural? The banker is going to tell the
farmer that if he doesn't do whatever Monsanto tells him to do, the banker
won't lend him the money and the banker probably will call in any other
loans he's holding. Where will the farmer turn then? Chase Manhattan or
Citibank?

As Jim Hightower says, if you eat, you are involved in agriculture, so get
active.

First, write President Clinton, 1600 Pennsylvania Ave., Washington, DC
20500, and urge him to impose a moratorium on large livestock feeding
operations. Such a moratorium need not interfere with the operations of
small farmers.

Second, write your senators c/o the Senate and your representative c/o the
House, U.S. Capitol, Washington, DC 20515. Tell them that you want the
USDA to follow the recommendations of the National Organics Standards
Board (NOSB), the organics industry group whose advice the USDA ignored in
writing the proposed organics rule. that is, you don't want synthetic
chemicals, non-organic feed and antibiotics in your food. A sample letter
and background information can be found on the Pure Food Campaign Web site
at http://www.purefood.org.

Third, support legislation by Senate Minority Leader Tom Daschle and Sen.
Harkin to restore farm income protection that was removed in the 1996 farm
bill. Their legislation was defeated along party lines in a Senate floor
vote in July. It would have removed the caps on marketing loans and set
the loan rates according to recent market prices.

Eventually new legislation will be needed to put a wall between producers
and processors. And the Justice Department will have to start applying the
antitrust law to banks and agribusinesses as well as Microsoft. But
consumers will have to realize that they have a stake in the survival of
small, sustainable farms and ranches. - Jim Cullen

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