Farm Economists Speak Out: Technology Policy is not Farm
Policy Needed: National Trade Association of Family Farmers

August 11, 2000
The AGRIBUSINESS EXAMINER Issue # 84
Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs Editor\Publisher

Technology policy has been left in the hands of increasingly powerful multinational
companies, but technology policy is not farm policy, according to University of
Minnesota economist Richard A Levins.

Writing in the current American Agricultural Economics Association publication,
Levins expresses alarm that the goals of "powerful" agribusiness firms are in
direct opposition to those of farm policy. He says instead of large farmers doing
in small farmers, powerful agribusiness interests may be doing in both.

He points out that companies such as Pioneer, Monsanto and Cargill went from
relative insignificance in the World War I era to international dominance by the
1960s due to the technological revolution in agriculture.

"The goals of large agribusiness companies --- more production, lower farm
product prices and fewer farmers --- were in direct conflict with those of farm
policy," Levins emphasizes. "Farm policy devolved into ways of cleaning up
the mess, of making the best of a bad situation, and of convincing people that
the wreckage lying before them was all for the better."

Scorning the current Freedom to Farm policy that governs farmers Levins
characterizes it as "completely wrongheaded. It set out to more completely
level the playing field for farmers. But if the government's goal was to strengthen
the farm sector, it set out to level the wrong playing field.

"Meanwhile, the multinational processors and input suppliers went on about
their business of mergers and acquisitions in an all-out effort to become less
competitive. Competition lowers profits, while economic concentration has
the opposite effect."

A new approach is needed if the public chooses to continue its long-standing
commitment to the independent family farmer, Levins warns. "The farm sector
can no longer be viewed as acting independently of wealthy processors and
input suppliers," he says. "We must realize there's a new generation of economic
power that poses a great challenge for U.S. food and agriculture policy."

One "new" approach. long advocated by family farm activists, was recently
reiterated by Willard Cochrane, professor emeritus with the Department of
Applied Economics at the University of Minnesota.

There's a better option for family farmers than "folding their tents and stealing
away into the night," he observed. "Farmers could form a national association
and call it the National Trade Association of Family Farmers (NTAFF),"

In an article in the Minnesota Agricultural Economist, published by the
University of Minnesota Extension Service, Cochrane points out that
"agriculture is a high-risk, unpredictable and unstable industry. History tells
us that boom times are the dangerous times for farmers --- they tend to get
carried away. They expand their operations with generous applications of
credit and forget that boom times have always been followed by hard times
--- times when those who have over-extended their credit, unfortunately, go
broke."

A powerful trade association of family farmers could bargain with Congress,
state governments, suppliers and processors.

Cochrane suggests that family farmers could bargain with:

* Congress for new farm legislation that favors small farms and reduces the
amount of support that currently goes to corporate farms.
* State governments to implement favorable tax provisions for family farmers.
* Suppliers for the kinds of inputs that meet the requirements of small family
farmers.
* Handlers and processors to find new market outlets and buyers for products
of the family farm. They could also "negotiate contracts with suppliers that
benefit family farmers, such as giving them the same discounts enjoyed by
corporate farmers."

"Trade associations have worked well for other sectors of the agricultural
industry," Cochrane reminds his readers. "Sugarbeet growers, cotton producers
and wheat farmers all formed trade associations that clearly benefited members.

"A strong trade association of family farmers would give them real market power
and real political power," Cochrane concludes. "By organizing, family farmers
could once again become a vital and thriving part of our nation's economy."

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