21st Century Progressivism

Category: Food and Water Security

If we want food and water security, “Fixing the dysfunctional food system must be part of a larger, broad-based strategy for dealing with the economic inequities of our society.”
–Wenonah Hauter, Foodopoly

  • Agricultural Policy and Food Security

    Reading Time: 11 minutes

    I supported Bernie Sanders for president largely because of his support of family farms against the abuses of agribusiness.  I believe agricultural policy and food security should be at the center of our plan for the future. It should be an urgent priority because we have a large global population and dwindling resources. However, agricultural policy in the United States is not concerned with a quality life for farmers, promoting food security, or encouraging the responsible use of resources.  Therefore, we must find a way to end the abuses of agribusiness.

    To get a better idea of what this will involve, I want to discuss an article in the February 2016 issue of Harper’s. It’s entitled The Trouble With Iowa. The problems listed in the Harper’s article are not oversights. They are the result a deliberate effort by industrialists to end the political power of small farmers.  Today, although the abuses of agribusiness are obvious, the financial interests behind the abuses resist efforts to correct the problem

    Restore the Political Power of Family Farming

    Back in 2014  I imagined a new kind of community centered around family farms. I said that one of the priorities of this community would be to develop its own candidates for public office. Sadly, that wasn’t a new idea. That is what farm communities in the United States used to do. We’ve actually been moving away from that ideal.

    Today, agribusiness abuses are rampant.  Giant corporations have made the rivers run so thick with animal waste and synthetic fertilizer that everything the river touches dies.  Clearly food security is not the goal of such corporations. The plight of the family farm raises fundamental questions about what kind of society we want to have. We must restore the political power of family farming.

    Farmers and their enemies

    Farmers have been the vanguard of populism since the Civil War.  They have fought abuses by railroads, banks, grain merchants, and food processors, and government allies of agribusiness.  They’ve also fought the main culprits behind American financial crises–hedge funds. 

    Farmers led the populist uprisings of the nineteenth and twentieth centuries. In that period, unfair economic policies threatened farm family livelihoods. In response, family farmers banded together to form organizations like the Grange, the Farm Alliance, and the National Farmers Union. They also ran candidates and joined with progressive allies in labor and social justice movements. But the result was not what they had hoped. Farmers were systematically run out of business.

    Today hedge funds have become the largest investors in food companies, farmland, and agricultural products. Hedge fund speculation in food commodity markets has contributed to price spikes in corn and soybeans. In addition, hedge funds have been proponents of grabbing land worldwide.  They do this to help their investors speculate on the effects of climate change on agriculture. 1 (Foodopoly, Page 11)  These interests have all worked together to decrease the number of family farms. Farming communities have been destroyed because they are the biggest obstacles to oligarchic pretensions.

    Ezra Taft Benson and the Committee for Economic Development (CED)

    If you’re wondering why you haven’t heard about this struggle, it’s because it’s been erased from history–especially the post-World War II part (Foodopoly, page 13).

    In 1955, Secretary of Agriculture Ezra Taft Benson moved to reduce crop prices. In response, farmers formed The National Farmers Organization (NFO). Benson was both a Mormon apostle and President Eisenhower’s Secretary of Agriculture at the same time. And he was determined to destroy the New Deal program for agriculture that ensured fair farm prices. As a representative of the ‘captains of industry’, he saw farmers as excess labor. So, he and his cabal organized the Committee for Economic Development (CED) in 1942. (Foodopoly, page 13)

    In the early 1960s the CED released a report stating its intentions for labor. It called for getting farm boys off the farm and into vocational training for industrial skills. Then this labor force would be relocated to where their labor was needed. But at that time, farmers still had the strength to fight back.

    Farmers Fight Back

    By the time of the August 1962 NFO convention in Des Moines, Iowa, farmers had a plan.  At this time the CED was headed by representatives of Ford Motor Company and Sears, so the NFO organized catalogue marches in seven cities.  Protesters dumped Sears catalogs in front of their stores and drove Ford cars and trucks in circles around Ford establishments in several cities. These protests caused the companies to reject the report. 

    The farmers won that battle. House agriculture committees and the U.S. Senate held hearings to discredit the report. (Foodopoly, page 15) Unfortunately, the oligarchs have plenty of time, connections and money. And they had been busy in those years between 1942 and 1962.

    During the CED’s first fifteen years of existence, thirty-eight of its trustees held public office and two served as presidents of the Federal Reserve Bank. The organization maintained strong relationships with the Truman, Eisenhower, and Kennedy administrations, helping to direct government research dollars as well as to provide funding for academic research. The strong ties to academia resulted in policy prescriptions shrouded in sophisticated economic rhetoric and focused on weakening the reform-liberalism of the New Deal. They couched their proclamations on shrinking the farm population as moving ‘labor and capital where they will be most productive.’

    The CED Influenced President Kennedy to Support a Massive Tax Cut

    In 1962 a CED report called for ‘a prompt, substantial and permanent reduction’ in taxes.  The CED helped organize the Business Committee for Tax Reduction. Kennedy endorsed this effort, and the committee actively lobbied Congress. The result was the passage of legislation in 1964 cutting individual tax rates by 20 percent across the board and reducing corporate tax rates.

    The propaganda arm of the CED aided in these efforts. The CED’s information committee included members of several advertising agencies. They included the editors of the Atlanta Constitution and Look, the publisher of the Washington Post, the head of the Book-of-the-Month Club, the board chairman of Curtis Publishing, and the presidents of Time-Life and the Columbia Broadcasting System (CBS). The CED’s 1958 pamphlet, ‘Defense Against Inflation,’ was discussed in 354 papers and magazines, reaching 31 million people. Everything was done according to plan.  (Foodopoly, page 15)

    Immediately after its formation in 1942 the CED began creating a postwar program to expand chemical-intensive agriculture and to grant industrial and financial interests more control over it. It worked to create a postwar economy built on massive and profitable industrial growth in the North, which would require an enormous pool of cheap labor.

    Today the industrial cities that were so important to the oligarchs are gone. But family farms and food security are nowhere on the horizon.

    Agribusiness Has Become Too Powerful

    The Harper’s article ends with these words:

    The standoff that results from all of this plays out across our continent. Those endeavors that produce food and energy need scale and landscape and are of necessity rural and are of necessity unspeakably destructive. The industries involved must be free to operate on their own terms in the landscape in the nation’s midsection, where the states are red and square. As Stowe Says, all they have to do is to protect the status quo. To do that, they don’t need to play to checkmate; stalemate and gridlock are success enough. Iowa’s caucuses, and for that matter the whole presidential ritual, will do nothing to change this.

    This quote is a statement by William Stowe, head of the Des Moines Water Works. Mr. Stowe has received death threats from the people he’s trying to serve. But not because of a decrease in water quality. People are upset with him because his department has sued county operators of drainage districts over the fertilizer and hog manure they are dumping into Iowa’s waterways and drinking water. If agribusiness can engender death threats for a public servant, it has become too powerful.

    Obama was not able to Rein in Agribusiness

    In the Fall of 2011 the Republican-controlled House of Representatives denied funding for enforcing regulations at the Departments of Agriculture and Justice. A similar fate befell the post-World War I effort by populists to abolish futures trading. Commodity speculation, one of agribusiness’s most destructive abuses, continued to plague farmers right up to the 1929 stock market crash.

    Today, populists face the same powerful forces. But they have a drastically reduced number of family farms. In addition, labor unions are in a state of dysfunction.  This makes it difficult for politicians to keep campaign promises once they take office. President Obama is one example. In 2008 Obama found he was not able to rein in agribusiness. One of his campaign promises was the reform of industrial agriculture.  That’s why he appointed Tom Vilsack as Agriculture Secretary. Vilsack’s appointment made sense. He had been governor of Iowa and a supporter of reform. But his appointment did not have the hoped-for effect.

    Tyson responded to his efforts by joining with Smithfield and other meat producers to mount a multimillion-dollar lobbying campaign, complete with astroturf opposition and congressional arm-twisting. Big Ag outplayed Vilsack at nearly every turn, and he quickly backpedaled on the new rules. Finally, Congress killed the reform effort late in 2011. Two years later, with the fundamentals of its business plan intact, Smithfield sold itself to the Shuanghui Group, a Chinese company. What Smithfield sold to the Chinese was less its pork production than its control of Iowa’s politics and its landscape. The irony of some of the world’s last remaining Communists taking over from Iowa’s swine capitalists is outdone only by Donald Trump, who spends whatever time he isn’t using to bash immigrants in bashing the Chinese. He offers no hint of course, about how he might best the Shuanghui Group, which, through finely honed contracts, now controls the landscape of all that beautiful corn in the Midwest.

    Agribusiness abuses free enterprise

    So what exactly is this business plan passed on to the Chinese by Smithfield? It is modern-day serfdom.  For example, Iowans say their state has been chickenized. Richard Manning thinks it’s more accurate to say it has been Tysonized. Tyson describes the process as vertical integration.

    Thanks to its efforts over the last 30 years the company owns every step of the process, from producing and delivering feed and hatchlings to slaughter, processing and distribution. During that time, Tyson has even managed to redesign the chicken.  They genetically select for animals that will eat high-energy corn and soy while crammed in windowless, climate-controlled factories.

    The process depended on a networked system of growers and farmers, who became contractors. The network was organized as a tournament. Tyson delivered hatchlings, formulated and supplied the feed and antibiotics, and took away the birds when they were ready for slaughter…Growers in a given region were lumped in a pool and paid on the basis of a competitive scheme that ranked them according to the pounds of chicken produced per pound of feed. Everything was tightly monitored by a flow of data that measured corn and soy in, McNuggets out. A productivity gain of a few percentage points meant the difference between bankruptcy and a paycheck for many growers.

    Agribusiness abuses the environment

    So, Tyson not only reformulated chickens, it domesticated farmers. Naturally the pork processors wanted to get in on the deal. A large part of the pollution in Iowa comes from the manure produced by these operations. It is not regulated because unlike factory waste, farm waste is not considered pollution. Never mind that twenty-one million Hogs produce the waste of about 45 million people. (Iowa has a population of just 3 million.) The chickens likewise produce more manure than all the people in the state and almost none of it passes through a sewage treatment plant or septic tank. Most of it goes into the public waterways and drinking water.

    The financialization of food and farming has wreaked havoc on the natural world. The long list of the consequences of industrialized agriculture includes the polluting of lakes, rivers, streams, and marine ecosystems with agrochemicals, excess fertilizer, and animal waste (Foodopoly, page 11, cited below).

    Agribusiness Causes Obesity and Health Problems

    Meanwhile a diet of corn products and products from soybeans, a companion plant of corn, is changing America’s diet. Eighty-five percent of America’s arable cropland is planted in corn, soybeans, wheat and hay. In Iowa, 23 million of 24 million acres is planted in corn and soybeans. This translates into higher consumption of high-fructose corn syrup as well as products containing soybean oil. From 1909 to 1999 the consumption of soybean oil increased a thousand fold. Linoleic acid found in soybean oil is a culprit in the obesity epidemic, and since livestock feed contains soybeans it is even found in the chicken and pork we eat. It may even be responsible for decreased brain development in the population because it supplants omega-3s in our diets. An unhealthy diet is not food security.

    Parity is What Food Security Looks Like

    By contrast with today’s food system, agricultural policy in the United States fostered food security under FDR’s New Deal.  For example, the Agricultural Adjustment Act of 1933 was intended to achieve parity for farmers. This is how the Adjustment Act worked:

    The act provided for acreage reduction and land set-asides to reduce over-production. In addition, the Commodity Credit Corporation (CCC) established a price floor by making loans to farmers when the food processors or grain corporations refused to pay farmers a price that covered the cost of production. Farmers pledged their crops to the government as collateral against the loans.  This ensured that they were paid a fair price. The loan rate, set by the CCC and based on parity, acted as a price floor, because a farmer could sell to a national grain reserve that was established as a last-resort market (Foodopoly, page 15).

    The grain reserve was filled when crops were abundant and prices were low; grain was released when crops were scarce. In this way the reserve prevented crop prices from skyrocketing during times of drought or low production. Since this policy stopped products from reaching the market if the price was not fair, prices inevitably returned to a normal level, and farmers could pay off their loans. Together these policies helped keep overproduction in check and reduced commodity price volatility. This meant farmers could make a living without subsidies.

    The parity programs worked so well that there was real prosperity in rural areas during World War II and that postwar period. This was strikingly different from the post-World War I era when, without supply management, farm prices collapsed. The programs also worked for Main Street by reducing price volatility, and the grain reserve actually made a profit of $13 million over twenty years as the crops were sold on the commodity market.

    Food-Processing and grain industries prefer over-production to parity

    The food-processing and grain industries preferred overproduction because it led to cheap prices for the products they needed.  This fact still motivates their propaganda.

    Agribusiness is the anti-Joseph

    The story of the destruction of parity reminds me of the biblical story of Joseph whom his brothers sold into slavery. Joseph ended up in Egypt where he was given the job of telling Pharaoh the meaning of his dream. Joseph told the pharaoh his dream was a warning that a famine was coming. Egypt prepared for this famine by storing grain. When Joseph’s brothers traveled to Egypt for supplies they were saved by Joseph’s wise policies. Our situation is the reverse of the biblical story. Agribusiness is the anti-Joseph.  Agribusiness fights against food security and sound agricultural policy.

    Who Represents Agribusiness Today?

    Today the representatives of agribusiness include the American Farm Bureau Federation, which works in concert with the U.S. Chamber of Commerce. In the twenties this group worked with members of Congress, ‘the farm bloc’, who feared the Progressive movement. The farm bloc was made up of farm-state legislators who wanted to appear to address the concerns of their constituents without changing the overall economic structure. The 1921 Packers and Stockyards Act passed in spite of their efforts to defeat it but it was poorly designed. Although it did manage to curb excesses through the 70s it has not been seriously enforced since the 80s.

    Can the Effects of Bad Agricultural Policy Be Undone?

    The effects of bad agricultural policy can be undone. But it requires political will. It is possible to remove nitrates from water, for example. The cost-effective way of solving the problem would be to run the drainage pipes into wetlands, plant some permanent pastures, apply less fertilizer and replace much of the corn with other crops. This would be the most effective solution. Unfortunately the government would have to stop subsidizing corn.

    A less effective approach would be to remove nitrates from drinking water. But at this concentration, Des Moines Water Works would need an equipment upgrade costing up to $180 million. And there are 260 cities and towns in Iowa with the same problem. Furthermore, even if they all removed the nutrients from their drinking water it would not help the life of the rivers. Or the ocean. Nitrates traveling from the corn-belt down the Mississippi River have killed ‘a Connecticut-size stretch of the Gulf of Mexico.’

    Hope

    Iowa’s extreme pollution only appeared in the last twenty years. It is getting worse day by day, but we no longer have a coalition that is able to deal with it.  We need a new way of approaching these problems. We need new organizational structures and new ways of thinking. 

    One of the places America went wrong the first time around was in not accepting help from the Native Americans.  We didn’t think we needed help.  Today we know better, and we’re not alone.  People all over the world have suddenly recognized a source of help in their indigenous people.  Who knows what might come of that?  Maybe we’ve been given a second chance. Unfortunately, the fight for indigenous rights faces its own roadblocks. But at least the recognition that indigenous people can offer advice in this matter indicates a change in thinking.

    A 21st century Progressive priority should be agricultural policy and food security.

    1. Wenonah Hauter, Foodopoly: The Battle Over the Future of Food and Farming in America, The New Press, 2015. ↩︎ ↩︎

  • Agribusiness Meets Reality

    Reading Time: 6 minutesI recently said that the words of those who criticize Laudato Si’ have no substance. Now I’ll try to be more specific.  Laudato Si’ is a rebuke of current practices, including agribusiness, but it is not the only warning voice. In this post, agribusiness meets reality.

    The human population will reach 9 billion people by 2050, even if we manage to slow the birthrate. The world has never had this many people before. We have to plan according to the facts we have. I will argue that if our goal is to support the projected number of people, our first priority should be food and water.  But so far, agricultural policies are not moving in that direction.

    Arable land is decreasing

    Currently, we don’t have enough farm land to feed 9 billion people. It is estimated that we need to increase agricultural land by 65-85 million hectares over the next decade. At 160-210 million acres, this is equivalent to approximately 50% of all U.S. cropland. It may not seem like much compared to the total area being farmed globally, (1,410 million hectares) but arable land is decreasing. We are losing 10-12 million hectares each year to urbanization and desertification. Much of this loss is due to agricultural policies.

    Agribusiness as Economic Warfare

    The United States is operating on an agribusiness model for agriculture. How did this happen? After World War II, Secretary of Agriculture and Mormon apostle, Ezra Benson, wanted to drive young men off of farms and into low-paying industrial jobs in the North. His plan was for the business of agriculture to be carried out by a few big players. In other words, policy-makers used agribusiness as economic warfare. To accomplish these changes, Benson’s faction tore down FDR’s New Deal protections for farmers. One result of their efforts was the disappearance of parity, which assured farmers a living wage.

    What is Parity?

    Under the policy of parity, the U.S. government bought excess crops for a fair price and waited for a shortage, or higher prices. Then the government would sell the excess. This provided a living wage to farmers and also resulted in a profit for the taxpayer. Today, instead of parity we have subsidies, courtesy of the taxpayer. We also have shortages.[mfn]Hauter, Wenonah, Foodopoly: The Battle Over the Future of Food and Farming in America, The New Press, 2012.[/mfn]

    According to AEW Capital Management, from 1975 to 2005 major agricultural commodity prices were stable, based on the marginal cost of production. In the event of a poor crop in a particular commodity, buffer inventories could meet demand. In that event a year or two of average crops would replenish inventories. This changed in 2005.

    “In the face of rapid demand growth, global stocks of key crops have been depleted to the point where there is no longer any practical buffer. Globally, stocks of coarse grains and oilseeds have been at historically low levels for the past five to six years. After 2005, if there was a poor crop (or even just an average one), someone somewhere in the world simply did not obtain that commodity. In short, in order to balance supply and demand, demand has to be rationed, and the only way this occurs is through pricing.”

    Seeking Alpha

    The effects of harmful policies on U.S. farmers are now being felt by farmers around the world. This is a problem for many reasons. Small farms improve the land and protect the ecosystem. Agribusiness, on the other hand, depletes the land. And by establishing monocultures it invites new types of pests and diseases. It also destroys the jobs associated with small farms. Finally, agribusiness can be a violent business.

    IMF, World Bank, and Other Culprits in Ukraine

    The fight over agricultural land is acknowledged as a major motivation for the conflict in Ukraine. And the culprits aren’t limited to U.S. companies. Germany is in on it. So is Finland and China. And their questionable activities are promoted by the World Bank and the IMF. But there are those who argue that it’s the other way around; the conflict caused the dispute over farmland. A Reuter’s article implies that military turmoil dictates that governments open farmland to foreign investment:

    “Ukraine, known as Europe’s bread basket, has the eighth largest agricultural area in use globally and is the world’s third largest exporter of corn and sixth largest grain grower, potentially making it a prime target for foreign investment.

    “But the government has been wary of allowing foreign land sales, fearing rural unrest, and the value of its 32 million hectares (79 million acres) of farmland has been limited by its division into small plots with relatively low productivity.

    “However economic turmoil emanating from the conflict between pro-Russia rebels and government forces in the east has intensified the need for change, said Heinz Strubenhoff, agribusiness investment manager for the World Bank’s International Finance Corporation in Ukraine.

    “Opening the farm sector, a key driver of the economy, to outside investors has long been backed by the World Bank and International Monetary Fund (IMF), and Strubenhoff believes changes will now happen sooner rather than later.

    “’It’s time to think about privatization. They need to prepare everything to allow for farm land sales (to foreign and domestic investors) in three to four years,’ Strubenhoff told the Thomson Reuters Foundation.

    “Currently, farm land cannot be bought or sold in Ukraine, but companies can sign onto long-term leases with small holders.”

    The Conflict in Ukraine is a smokescreen for the theft of farmland

    However, the corporate drive for foreign farmland is actually a motivation for conflict rather than an outcome of it. The Oakland Institute  recently reported that German lawmakers are calling the conflict in Ukraine a smokescreen for the seizure of high-quality cropland by foreign firms funded by the World Bank and the European Bank for Reconstruction and Development. Birgit Bock-Luna, who heads the office of Niema Movassat, told RIA Novosti (Sputnik News) that “a group of representatives had officially inquired with the German government on the actions of Germany’s state-run banking group Bankengruppe KfW. [It is believed that] this banking group is behind the seizure of Ukraine’s arable lands, some of the best in Europe.”

    Ukraine has a temporary ban prohibiting the sale of farmlands to foreign entities until January 2016. But German agricultural concerns – AGRARIUS AG, germanagrar CEE GmbH, KTG Agrar SE, Agroton and Alfred C. Toepfer International (ADM) – seize land using leasing schemes and generous loans from German and global money lenders.

    And according to Bock-Luna, the Ukrainian government that came to power in Kiev after the coup has been actively giving away farmland in return for loans from international creditors.

    “The previous Ukrainian administration was opposed to further relaxation of agricultural laws, but this changed after the coup, with the help of the World Bank and the European Bank for Reconstruction and Development,” she added.

    Governments Buy or Lease Farmland in Other Countries

    There is growing interest in farmland in other parts of the world as well. A 2011 Al Jazeera article cites a 2008 report by Grain, an international non-governmental organization working on behalf of small rural food producers. According to Grain, China, Egypt, Japan, South Korea, Saudi Arabia, India, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are all buying or leasing fertile land in other countries where food is not always abundant.

    “Cambodia, which receives aid from the World Food Program, has leased rice fields to Qatar and Kuwait, while Uganda has granted concessions on its wheat and maize fields to Egypt, and interested parties from Saudi Arabia and the United Arab Emirates are making approaches to the Philippines.”

    In addition, some land purchases in Ukraine, Senegal, Nigeria, Russia, Brazil and Paraguay, by banks and financial institutions, are of a speculative nature.

    It is disturbing that instead of a discussion about the implications of these practices for the future, the critics of Laudato Si’ give us warmed-over economic theory. They would like us to believe they merely object to the degree of agricultural change that has been suggested. However, it’s obvious that their goal is to head off change completely.

    Agribusiness Meets Reality in the 2016 Election

    Animal husbandry is another part of the problem. Livestock competes with humans by consuming a large percentage of the crops humans produce. But the global consumption of meat is increasing due to higher standards of living in developing countries. This must be reversed. If everyone ate as much meat as Americans, we would need several earths to support everyone.

    President Obama was trying to decrease livestock farming recently when he suggested that Americans should eat less meat. This is the kind of change we need. However, the Republicans objected to Obama’s suggestion and the Democrats were not as supportive as they should have been. Hilary Clinton is considered the frontrunner in the upcoming presidential election. However, the Clintons have a poor record in the areas that will be the most sensitive in the future: Bill Clinton signed off on NAFTA and the WTO, and currently the relationship between Hilary Clinton and Monsanto is too close for comfort.

    The foreign agribusiness concerns that support the Clinton foundation are even more worrisome, largely because they are displacing African farmers.[mfn]Pearce, Fred, The Land Grabbers:The New Fight Over Who Owns the Earth, Beacon Press, Boston, 2012[/mfn] We can’t afford eight more years of these policies.

    Conclusion

    Agribusiness is so focused on profit it has created a self-serving loop of cheap commodities for processed food and animal feed. The result is that it produces crops overseas for its own use. The corporate model as we know it won’t solve these problems. It is inefficient, destructive, overindulged, irresponsible, disorganized and stupid. Corporate agriculture helps no one but itself.

    This farming model not only destroys jobs, communities and the land, it pollutes water. If the rivers and oceans are further degraded, we won’t be any better off regardless of the additional crops we are able to grow. Furthermore, putting increased acreage into crops will only increase the possibility of environment degradation. Finally, if the livelihood of millions of people disappears through agribusiness technology and automation, they will starve regardless of corporate schemes to increase yield.

    The next 30 years will demonstrate what the human race is made of. So far, the only course of action our business leaders can think of is to take us to war. Apparently their plan is to fight each other to the death for the last scrap of land. We need planning based on the facts and with the aim of finding a civilized way to cope with a serious problem.

    Gresham College: Food Oppression