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Yes, it supports efficient U.S. corporate farms
The Farm Bill that comes before the U.S. Congress every five years (the 2007 version was passed recently) has an enormous impact on nutrition in the United States, as well as, via food exports, elsewhere in the world. Skeptics question whether the net effect of the Bill is positive because it is so focused on corn, soy, wheat, rice, and cotton, whose production is controlled by a small number of giant, and very profitable, firms.
But whatever their faults—and these are myriad—the big farmers of America do know their large-scale monoculture. The bounty from industrial farming in the form of food aid flows to food-deficit parts of the world. American corn flour and dried milk powder help fend off starvation in distressed, drought-hit, and war-torn nations. In India, too, there were dark days when the country was unable to feed itself; people had to await ships bringing PL-480 food aid, begging-bowls in hand.
American production prowess is clear, although the consequences for the recipients of food aid, and for free trade, and for the environment, are more opaque. It is a backhanded compliment to the importance of the U.S. farmer that the recent rise in food prices is being blamed on the diversion of American corn towards the production of ethanol. As much as 30 percent of the increase in food prices has been attributed to the U.S. bio-fuel program.
America’s major producers are an oligopoly with strong market concentration: for instance, four beef-packers control 84 percent of the market. Vertically integrated giants such as Archer Daniels Midland, Monsanto, Cargill, Tyson, and ConAgra control all aspects of production. They can afford the best new technologies and most efficient forms of production, not to mention the lobbying required to keep subsidies going.
A case can be made for extending the ambit of the Farm Bill. Fruits and vegetables are not included under the subsidy program, and therefore they cost more. Given the current net cost of production (after subsidies), it is more economically efficient for producers to create packaged foods (unhealthy) rather than fresh fruits and vegetables (healthy). Lack of veggies affects U.S. schoolchildren: fortunately, the 2007 Bill has specifically set aside funds to include them in school-lunch programs.
Most of the $307 billion in the latest Bill does go into nutrition programs for U.S. citizens, such as food stamps, but it is the subsidies (some $20 billion) for the big crops that attract criticism. Indeed, this Bill does have a number of positive features, such as support for research into cellulosic (ie. grass and waste-wood) ethanol, support for organic farmers and farmers’ markets, school lunches, etc. It is not perfect, but neither is it so monstrous as opponents make it out to be.
Rajeev Srinivasan wrote this opinion from Bangalore, India.
No, it hurts small farmers and creates bad diets
The 2007 Farm Bill, a continuation of previous agricultural policy bills, has attracted widespread criticism. The harshest critics called it nothing but “corporate welfare,” and for good reason. The subsidy programs benefit only a few wealthy farmers, with 10 percent of the beneficiaries getting over 70 percent of the subsidies.
The subsidies are available for “commodity crops” such as corn, wheat, soybean, and oilseeds. Because these are cheap, food companies use them extensively to make processed foods that have little nutritional value and unhealthy ingredients such as high-fructose corn syrup and hydrogenated oils. High-fructose corn syrup is linked to various health problems, including diabetes, but it is found in almost every processed food product in the United States.
Fruits and vegetables are considered “specialty crops” and are not similarly subsidized, making them more expensive. Meanwhile, packaged food is getting cheaper. This leads consumers, especially the poor, to consume processed food, making them overweight and undernourished. It is true that the Bill has allocations to provide food stamps for the poor. But given the current situation, the food stamps are likely to be spent on more processed food.
The Farm Bill is also an indirect subsidy to factory farms that are able to buy animal feed at a low price. It has become cheaper for factory farms to purchase feed for the thousands of animals crammed together than to raise livestock in grass pastures. This has ramifications such as environmental pollution and antibiotic resistance.
While U.S. food aid is a relief to many poor countries, the rules governing it must be questioned. Why should all food aid be bought from U.S. farmers and transported on U.S. ships, instead of being bought closer to the destination, where it might be cheaper and would arrive quicker? Does it really help poverty stricken nations if the U.S. buys surplus grain from U.S. mega-farms and ships it to those nations, instead of buying and aiding in the distribution of what their small farmers produce? This creates long-term dependency.
Due to subsidies, America sells crops in the international market below their cost of production (viz. “dumping”), thus depressing global prices. The World Trade Organization agreement that led to reduced import tariffs on agricultural commodities makes matters worse. In many developing nations, agricultural prices declined, and farmers were unable to sustain farming or to repay debts. The result: suicides. In 2006 alone, over 1500 farmers committed suicide in Maharashtra.
If the subsidies are removed, U.S. mega-farms will no longer be able to sell crops much below cost. This will improve not only the health of people in the U.S., but also the lives of farmers in other countries.
Lekshmi Nair has been with GE Healthcare in Milwaukee, Wisconsin.