Posts tagged with: agriculture

Blog author: kschmiesing
posted by on Wednesday, October 8, 2008

There’s an interesting clip on YouTube of a discussion about the world food situation between, primarily, author Michal Pollan and Monsanto CEO Hugh Grant.

Pollan is a champion of the “slow food” movement, which is, to simplify, associated more generally with trends such as whole foods, farmers markets (“localvores”), organic food production, etc. (The participation of otherwise fiscal and cultural conservatives in what is often presented as a left-leaning movement is a phenomenon that gave rise to the term “crunchy cons.”)

A variety of observations might be made on the exchange, but I’ll focus on one. All the discussants underemphasize the role of free human action in the market. World hunger, they seem to assume, is a problem “we” need to solve, whether that be by research, technological dispersion, food distribution, or changing agricultural practices. Pollan’s suggestion that food production and distribution must be a “public” (i.e., government) enterprise is surely wrongheaded–the worst famines in history been the result of government interference or government failure (war, anarchy), not market failure–but Grant, too, apparently views big agricultural business as playing a kind of orchestrating role in steering food production in the right direction.

By all means, let’s continue research, let’s share knowledge with African farmers, and let’s create partnerships between corporations and non-profit entities. But the task of supplying the world’s food needs in the future will not be accomplished by the management of the economy by CEO’s, NGO directors, or heads of state. It will be accomplished if the market is permitted freely to convey information about supply and demand, if production and distribution are not thwarted by corrupt governments and military strife, and if obstacles to participation in the world market are removed.

Alarums raised about impending food shortages have been proven wrong again and again. They will this time, too, as long as the market’s incentives are not tampered with. The world can feed itself, if it is allowed to do so.

The new farm bill may be one of the most shameless displays of government largesse ever, even more so when you consider who will most benefit from the pork. Citizens Against Government Waste called it “The most farcical farm bill in history.” The Economist dubbed it “Harvest of Disgrace.” The Wall Street Journal opines, “If farm prices stay high, consumers face higher grocery bills and farmers get rich. If farm prices fall, taxpayers kick in the difference and farmers still get rich.” The most pressing concern is that billions of dollars in subsidies will be going to the wealthiest agribusiness corporations in the country.

President Bush vetoed the bill, saying the “Legislation is too expensive and would send too much government money to wealthy farmers.” He wanted a subsidy cap on farms with a gross income of more than $200,000. Senator McCain also urged the President to veto the bill. Despite this warning, many Congressional Republicans joined with Democrats to override the veto. The Wall Street Journal declared:

House Republicans are equally as complicit, despite their claims of having found fiscal religion after 2006. About half of them voted to override a Republican President. GOP leaders refused to whip against the bill, and two of them – Roy Blunt of Missouri and Adam Putnam of Florida – even voted for it. These are the same House Republicans who last week unveiled their new slogan, “The Change You Deserve.”

As food prices soar, it’s plain wrong to transfer large sums of taxpayer money to enrich already wealthy corporate farms. Citizens Against Government Waste also declared of the bill:

It continues to dole out $5.2 billion annually in direct payments to individuals (many of whom are no longer farming) without any regard to prices or income. These direct payments, 60 percent of which go to the wealthiest 10 percent of recipients, were created in 1996 and were supposed to phase out by 2002.

In one of this week’s Acton Commentaries, Ray Nothstine and I juxtapose a static, sedentary dependence on government subsidies with a dynamic, entrepreneurial spirit of innovation.

The impetus for this short piece was an article that originally appeared in the Grand Rapids Press (linked in the commentary). I have two things to say about these stories and then I want to add some further reflections on the world of agricultures subsidies.

First, I found the article’s “hook” to be quite shoddy and lame. The blatant attempt to “shock” the reader into a reaction of disgust that a billionaire like Dick DeVos, yes, “that Dick DeVos,” got a whopping “$6,000 in federal farm subsidies from 2003 to 2005.” That’s roughly $2k a year for three years.

Unsurprisingly, DeVos’ spokesperson didn’t know anything about it. It’s ludicrous to think that a guy with as much on his plate as Dick DeVos would have any time for what is essentially pocket change for a billionaire. Does the fact that DeVos got a subsidy even though he campaigned on eliminating government waste make him a hypocrite?

Judge for yourself, but I think these payments say more about the government’s inefficiency and waste than they do about DeVos’ integrity. People of all income brackets pay tax professionals to maximize their returns. For the very wealthy, it’s simply a process that’s on a bigger scale, that’s much more thorough, and with many more loopholes than when you or I go to H&R Block. The more diversified your holdings, the more likely there are a plethora of tax breaks for you to exploit. The breathless lede to this story was simply off-putting to me, especially given the rather clear political undertones of the insinuations.

“Simplify, man.”

What’s the real lesson? As a recycling hippie once told The Simpsons‘ Principal Skinner in a quite different context, “Simplify, man.” Simplify the tax code and eliminate all these special interest loopholes.

But the complaint about the story’s hook is really a minor quibble compared to my second point. In a companion piece, Lisa Rose Starner, executive director at Blandford Nature Center and Mixed Greens says that farm subsidies are essentially about “social justice.” That’s right, subsidies are about social justice. They’re about the social injustice of subsidizing a product so that people from poorer nations around the world, who would like to do more than simply engage in subsistence farming, can’t compete in a global marketplace because prices are artificially deflated. So, our subsidies are feeding the rich at the expense of the poor in more ways than one.

Of course, the pat response is that other nations are subsidizing too, so our subsidies are just leveling the playing field. To be sure, the world of agricultural business is a complex one, as many of the commenters on our piece point out. Direct farm subsidies are just one thin slice of the government’s intervention into agriculture. Perhaps they’re the most obvious, but they may also not be the most insidious. As one astute reader wrote to me, “The web of market interference in ag is broad and complex.”

Simplify, man.

Update: The Detroit News ran a version of the original piece here.

Blog author: jballor
posted by on Tuesday, August 14, 2007

To hear the NYT tell it (and Sojourners, for that matter), the family farm is facing severe threats. With no small degree of dramatic flourish, the NYT editorial linked above concludes:

For the past 75 years, America’s system of farm subsidies has unfortunately driven farming toward such concentration, and there’s no sign that the next farm bill will change that. The difference this time is that American farming is poised on the brink of true industrialization, creating a landscape driven by energy production and what is now called “biorefining.” What we may be witnessing is the beginning of the tragic moment in which the ownership of America’s farmland passes from the farmer to the industrial giants of energy and agricultural production.

If federal subsidies for corporate agribusiness is a threat to the family farm, then so is extensive FDA regulation of homegrown products and the morass of complex zoning regulations, telling people what they can sell, when they can sell, it and where they can sell it.

As my colleague Kevin Schmiesing wonders within a similar context, is the problem that the government just doesn’t quite have the right approach nailed down yet, or that the unintended consequences of government intervention into the market (in various ways) inevitably will screw things up (because, perhaps, special interests, whether corporate or individual, will always have an undue influence in the formation of policy)?

Kris Mauren (far right) and African guests get ready to visit GFS.

Acton University is now well underway, and on Wednesday a group of seven African attendees joined Kris Mauren on a visit to Gordon Food Service’s Grand Rapids headquarters for an up-close look at ethical capitalism. Mauren called it a great opportunity for people from countries with barren and corrupt markets to see an efficient, principled business for themselves. “The management of GFS also has a strong concern for philanthropy and international missions,” he said. “So it’s a great model of the capitalist ideal to hold up for these folks, who are used to a much more hostile economic climate.”

The group met with Gordon Food Service management for a luncheon, then toured the company’s office and factory area. Harry Ayile, formerly from Ghana and now residing in Norway, was completely blown away by what he observed. “It was like … wow,” Ayile commented with a smile. He was struck by the dedication shown by the company’s workers. “At every level, the workers are extremely well-organized, focused, and committed to doing their jobs excellently,” he said.

Ayile was astonished at how the “energetic” GFS employees took pains to avoid mistakes in the orders they were filling. “The business has a good system of checks and balances, and most of the employees have been there for fifteen years or more,” he said. “They take true satisfaction in their work.”

Comparing Gordon Food Service’s methods to the way business is done in Africa and even in Europe, Ayile said his visit couldn’t have been more of an eye-opener. “Before I came to Acton, I thought all people who did business were evil,” he said.

Ayile recalled one food-production company in Ghana that deliberately had been selling expired grain infested with maggots. “They would just sift out the maggots, package the grain, and sell it at full price,” he said. “Finally one employee caught on to what was happening and was able to produce evidence and pictures, but it went on for awhile.” Ayile called the incident typical of business practices in much of Africa, which lacks the institutional support necessary for free enterprise to flourish. When the rule of law is unreliable, incentives for greedy and corrupt behavior often outweigh the benefits of integrity. He added that many businesses “show very little respect for the consumer, as opposed to the way American businesses like Gordon Food Service care about their customers.”

Ayile and others from the group — which included visitors from the Congo, Kenya, and other African countries — all said they were very impressed with the way GFS invested in its employees and how these employees, in turn, were invested in the success of the company. Although Africa has a long way to go, Ayile said his visit was inspiring and gave him hope for the future of Ghana and other developing countries in Africa.

Blog author: jballor
posted by on Wednesday, January 10, 2007

On last week’s Huffington Post blog, Dr. Julianne Malveaux decries the practices of milk “charlatans,” who she claims, “combine the concern about pesticides and additives with their own desire to grab hold of the profits available to those who can distinguish the food they produce from ‘ordinary’ food.”

Malveaux argues that milk producers who identify their products as “hormone-free” are being dishonest and misrepresenting the truth. She says, “Animals produce hormones. Whether milk production is enhanced by rBST, a synthetic version of the bovine hormone cows naturally produced, or not, it is not ‘hormone free’.” Because the “organic” label meets certain Dept. of Agriculture requirements, for Malveaux it means something, while claims of “hormone-free” milk don’t.

The concern for Malveaux is that consumers are being exploited: “The difference comes when a consumer, concerned that her newborn is ingesting too many chemicals, decides to go with the ‘hormone free’ milk at an extra dollar a carton, and gets nothing different than if she’d chosen a carton that does not say ‘hormone free.’ The consumer’s fears are being exploited. She’s reading a label, but not seeing the fine print. Hormone free milk is presented as being ‘better’ or ‘safer’ than milk produced using rBST. But it isn’t!”

Here’s what the cap on a gallon of milk I bought yesterday says:

Is this misleading? I don’t think so. I don’t see claims of “hormone free” milk. The label simply says there aren’t any synthetic hormones added and even points out that “no significant difference” has been shown between the two kinds of milk.

Are consumers not responsible for educating themselves? Shouldn’t they take some more time before deciding to spend $1 more per gallon, and if they want to spend more for peace of mind, shouldn’t they be allowed that freedom?

Malveaux’s piece follows the work of a group called the National Organization for African Americans in Housing (NOAAH), a non-profit advocate for low-income citizens, which last December “called on the U.S. Food & Drug Administration to stop dairy processors from deceptively marketing ‘no rBST’ milk.”

Malveaux and the NOAAH want to protect people from themselves by expanding the role of a nanny government: “Low-income consumers, especially, wanting the best for their kids are pushed into spending money they can ill afford for a product that is exactly the same as a cheaper product. It’s time for the FDA to step in to require dairy processors to do the right thing.”

What exactly is the right thing? Should the FDA require labels like the one above? Or should they ban advertising that states a true fact: there are no hormones added to the cows that made this milk. As it stands, the relevance and importance of that fact is up for the individual consumer to decide. And that’s as it should be.