The Ongoing Debate of Rural Vs. Urban

Large agricultural firms have enough influence in the food industry to squeeze out smaller farmers by not offering fair prices for their products.

Over the past few weeks, as we’ve been preparing for our Sowing the Seeds events, some interesting discussions have been brewing about city mice vs. country mice and how they relate to agricultural subsidies. We think this issue will be a hot topic in the months to come and understanding it is critical to the success of the next Farm Bill, so we wanted to add our two cents to the discussion, as well.

It began with Washington Post writer Ezra Klein’s blog post, “Why We Still Need Cities,” which included a brash comment about subsidies. U.S. Secretary of Agriculture Tom Vilsack wasn’t happy with Klein’s comments about rural life, so he requested a chance to respond. A second post followed in the form of a Klein interview with Vilsack where the Ag chief defends the culture of rural life and its denizens’ contributions to the nation. Our thoughts on their exchange? Klein: wrong; Vilsack: wrong. They both seemed to talk around the real issue. Monica Potts from American Prospect and Grist’s Tom Philpott both have a similar opinion.

There is much to learn from these exchanges. In fact, one of the key factors that would lead to an improved foodscape for consumers in the future lies in identifying the elephant in the farmhouse: who really benefits from farm programs and payments.

The basic premise behind farm programs that provide subsidies to farmers growing crops like corn, soybeans, wheat and rice is trying to protect farmers from a volatile market. While they still serve in that function, the faces of the recipients who actually benefit from this government funding have changed dramatically from small and medium sized farmers to big agribusiness companies. Why? Because the buyers of these crops, the grain traders, food processors and meat companies who use the corn and soybeans, get to pay farmers low prices for the crops while the government payments to farmers help make up the difference.

Using taxpayer money to make up some of the income lost by farmers who grow commodities that get sold cheap doesn’t really benefit most farmers, as studies of farm income reveal. But as various agricultural markets have become more concentrated in the control of just a few key players, their influence has led to farm policy that makes more sense for them than farmers or consumers.

Because of the tremendous amount of influence these firms have in the food industry, they often squeeze out smaller farmers by not offering fair prices for their products. Because of the lack of competition, these growers have little opportunity to sell their products to other buyers at better prices, so they are forced to compete with factory farms and sell to mega-processors for less.  Across the food chain, every step suffers from this concentration:

Market Control by Top Four Firms:

Fluid Milk: 46%
Grocery Retailers: 48%
Poultry Processors: 58%
Pork Packers: 66%
Beef Packers: 83%

So instead of overly simplistic proposals like ending all government farm programs, we need to make sure the next Farm Bill establishes farm programs that make sense.  A good start would be enforcing fair market rules in each sector of the food industry, which would ensure that smaller and medium sized farmers get a fair market price for the food they grow, instead of being forced to sell for much less.

As we always say, better food starts with a better Farm Bill. If we’re going to be successful in our mission to make healthy food accessible to everyone, we need to make positive changes to the legislation that governs the food system.

-Rich Bindell