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What's Driving U.S. Farm Policies?
By Dan Gunderson
June 10, 1998
Click for audio RealAudio 2.0 14.4

Part of an MPR Mainstreet Radio project on farming issues.
The June 8 - 10, 1998 series includes:
1. What's Driving U.S. Farm Policies?
2. "Freedom to Farm" Legislation Leading to Changes in Farming Practice
3. Regional Farmers Joining Global Economy
4. Secretary of Agriculture Visits Region, Offers Help
5. The Economics of Organic Farming

The United States has a farm policy, as written by Congress every five years. Supporters of the 1995 farm bill say it opens a global marketplace more in tune with supply and demand. Opponents say the 1995 farm bill, called "Freedom to Farm," marked a critical, destructive change in farm policy. But what is the underlying philosophy that shapes Congressional action?

AT ITS HEART, AGRICULTURAL POLICY IS ABOUT MAINTAINING the food supply. In the U.S. the emphasis has long been on keeping that supply cheap for consumers. It's something often lost in the debate over yields and subsidies, and using cyberspace to run the farm.

Jerry Nordick: Whole system down? No maps, no markets. Gotta move the satellite dish one-quarter inch - maybe the satellite's down again.

Jerry Nordick's computer connection to the grain markets isn't working. He says it doesn't much matter, the way prices are. Nordick raises wheat, corn, and soybeans on 1,200 acres near Rothsay. He says the idea of competing on the world market is fine, but it's not realistic because his European counterparts are guaranteed an income so they can afford to sell at lower prices.

Nordicks: How in the hell can I or my neighbor or the U.S. producer compete against that? You can't!

As past president of the Minnesota Wheat Growers, Nordick spent time lobbying on trade agreements and the farm bill. He says U.S. farmers were sold out in trade negotiations in exchange for good deals for American electronic and automotive industries.

Nordick scoffs at those who say open markets make economic sense, and low farm prices benefit consumers by keeping food prices down. He says food packaging costs far more than the raw product in the package.

Nordick: Bottom line economics is you get 72 loaves of bread out of a bushel of wheat, and you could double the price of wheat and it would have very little effect on a loaf of bread. So I think that's all hogwash.

Most American consumers may not draw a relation between the price farmers get and the cost of their grocery bill. In fact, Ronald Knutson says consumers just don't care. Knutson, Director of Ag Economics at Texas A and M University, says that makes it hard for farmers to get support for higher prices. Knutson says Europeans pay more for food because their farmers are heavily subsidized. U.S. consumers don't care if farmers are making a profit as long as food prices stay relatively low.

Knutson: I think most consumers look at the issue as, they don't really care if the wheat comes from Canada or the United States. What they're interested in is the price of the bread.

But farm advocate Bob Bergland says if the current trend continues, consumers will take notice. Bergland says if a few large corporations control agriculture, they'll also control food prices.

Bergland was U.S. Secretary of Agriculture in the Carter administration. He says many countries in Europe and elsewhere have a policy of supporting farmers to ensure a stable food supply. He says the U.S. did have the same policy but has now - with the Freedom to Farm act - made a significant shift, basing agriculture policy on bottom-line economics.

Bergland: The pure market economists who seem to run things today don't care what happens. They're determined they're gonna have a pure market policy without regard to social consequences. You can't develop economic policies in a vacuum. You can't just say it's in everybody's best interest to have a pure market and ignore the losers.

But those who favor current farm policy say there will always be winners and losers, that's economic reality. Minnesota Republican Senator Rod Grams says it may increase the pressure on farmers, but will help those who survive.

Grams: You know you have to be as efficient as you can. Good management in a competitive market. But I think with NAFTA and GATT trade deals we've opened markets for farmers that will drive prices up, not down.

North Dakota Democratic Senator Byron Dorgan says that's fine in theory, but he says in a world market U.S. companies go where the cheapest grain is. That often means buying subsidized foreign grain, which drives U.S. markets down. Dorgan says there may be an underlying philosophy of maintaining an affordable food supply, but he thinks current farm policy is driven by greed.

Dorgan: What is most at work here is the big economic interests are preying on the smaller economic interests, and those who wrote current farm policy say we are no longer in the business of protecting those smaller interests. If a Cargill can farm America from California to Maine, what's the difference? There's a big difference.

A Cargill spokesman says the company has no desire to control markets, and needs farmers and consumers to be successful. Senator Dorgan says there's a fundamental but little-debated question at the heart of farm policy. Does America want to ensure the future of family farms?

Dorgan: This isn't rocket science - the world is hungry, we produce food. Who produces it? Family farmers. Cities are crowded. We have open spaces and good neighbors in rural areas. If we can't put this together and nurture the existence of family farmers, we aren't a very bright country. I think we're better than that. We oughta be able to sit down and come up with a way for family farmers to make a living.

Dorgan admits that debate is unlikely to happen as long as food prices are comparatively cheap.

Farmer Jerry Nordick says Americans have it too good. They don't see the value of a stable food supply because the grocery shelves have always been full.

Nordick: This country has never been hungry before, and maybe the sooner that happens the sooner the wake-up call will come.

Nordick says he doesn't have the answers to farm policy. He only knows if he doesn't make a profit, he'll soon be out of business.