What Is Supply Management and How Can It Save Our Food System?

Published Oct 17, 2023

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Food System

Big Ag is driving our food system further into chaos. Here’s how supply management policies will help us take back the reins.

Big Ag is driving our food system further into chaos. Here’s how supply management policies will help us take back the reins.

Thanks to Big Ag, our food system has been in crisis for years. We’re seeing hollowed-out rural communities, ruined environments, and a handful of ultra-rich corporations profiting from the mess they’ve made.

While Big Ag makes record profits, families have seen grocery store prices skyrocket. Meanwhile, median farmer income has been negative for 24 of the last 25 years.

So far, our leaders have not made the changes we need to repair our food system. But luckily, we can look back to the history books for guidance. The biggest takeaway? We need supply management policies that put farmers and families over corporations.

Why We Need Supply Management Policies

For decades, Big Ag has pushed policy that allows it to profit from overproduction that can drive the prices that farmers receive into the ground.

Overproduction has long been a problem for farmers. A huge harvest can plummet prices for commodity crops like corn, soy, and wheat.

But already-low prices mean farmers can’t predict the price they’ll receive for their crop as they plant at the start of the season. This means that planting more is always the best strategy for any individual farmer.

Such cheap prices mean that farmers struggle to break even, let alone turn a profit. But this is exactly what Big Ag has always wanted.

Corporations can buy commodities at prices below the cost of producing them, and then use them to make lucrative ethanol fuel and food additives. “Cheap” grains are a boon particularly for factory farms, as they’re used to create large volumes of cheap feed.

Back in the early 1900s, corporate greed and overproduction drove two major crises: the Great Depression and the Dust Bowl. These devastated the farm economy and prairie lands across the country. 

They came from a treadmill of overproduction that wreaked havoc on farmers’ livelihoods and lands. Farmers kept moving forward with bigger and bigger harvests, but their incomes stayed the same — or they actually fell.

At the same time, overproduction made the land less healthy and less able to support crops. This drove farmers to grow even more to make up the difference.

Back then, the Farm Bill and other New Deal policies addressed the Dust Bowl and the overproduction treadmill by managing the supply of corn, wheat, and soy. These supply management policies helped keep prices even, boosted farm income, and conserved the environment. 

Big Ag Brings Back the Treadmill

The New Deal era provides a lot of lessons we can learn from now. Lawmakers are negotiating the 2023 Farm Bill amid droughts, superstorms, and megafloods that are similarly devastating as the Dust Bowl. However, a lot has changed since supply management’s heyday — in great part thanks to Big Ag’s influence.

Big Ag has always fought supply management farm policy. Then, in the 1950s, it got a major boost from the Eisenhower administration. Officials explicitly encouraged farmers to produce more; to “get big or get out” and “plant fencerow to fencerow.” 

During this time, Big Ag’s growing economic and political power allowed it to push the policies it wanted. With its allies in office, Big Ag chipped away at regulations and supply management policies for decades. This got farmers stuck on the same overproduction treadmill of the early 1900s. 

History is repeating itself. Even though we are now growing more commodity crops than ever, farmer income remains stagnant. Commodity prices are falling, while the prices for what farmers need to farm, like fertilizer and equipment, are growing. 

To make matters worse, this system incentivizes farming practices, like using too much fertilizer, that destroy the land and worsen the climate crisis.

Now, Big Ag is driving and thriving off the same system that is causing the collapse of rural America and our environment. They have manufactured another farm, environmental, and economic crisis. 

The Solution: Bring Back Supply Management

To start addressing this crisis, we need to revive supply management. The old supply management policies were far from perfect. For example, discrimination at the USDA kept a lot of Black farmers from seeing the benefits of these programs.

However, the programs themselves saved farms and helped stabilize prices. We need to bring them back with improvements that can help all farmers. That means focusing on five policy areas:

1. Grain reserves

In big harvest years, the government can buy grain from farmers to stop prices from plummeting. Then it can store that grain in reserves, so it can release some of it during times of scarcity. This lowers prices and keeps grains affordable.

With climate chaos and an unpredictable economic environment, grain reserves would help ensure that food stays affordable and accessible in times of crisis.

2. Price floors for parity 

Price floors set a minimum price for how much the government will pay farmers for their crops, protecting farmers from Big Ag-imposed cheap prices. A farmer wouldn’t have to settle for the measly prices proposed by Ag giants if the government offered them a higher one.

Price floors also go hand-in-hand with grain reserves, as the government would store the grain it bought in public facilities, or pay farmers to store it on farms. Price floors could also set parity prices: prices that ensure farmers can pay for the costs of farming and earn a livable income.

3. Real conservation program set-asides

Conservation and set-aside programs pay farmers to stop growing if supply is getting too big or prices are getting too low. They can also pay farmers to invest in soil and water protections, grow non-commodity crops, or take on other sustainable practices.

We already have conservation programs in the Farm Bill, like the Conservation Reserve Program. This program pays farmers not to plant on vulnerable land and to grow more sustainable plants. 

However, conservation programs need improvements. Right now, they’re more likely to boost Big Ag and climate scams over actually green practices and small- and medium-sized family farms. 

4. Trade policy

International trade has a huge effect on prices and supply. One of the reasons commodity prices have dropped so low is that they’re traded on the world stage.

Multinational corporations import farm products into the U.S. to drive down the prices for farmers here. They also offload our “excess” supply on other countries, which has the same effect. 

This is also called “aid dumping.” By flooding cheap grains into other countries under the guise of “helping” them, we crowd out and destroy local markets. We’re also making other countries dependent on the U.S.

Meanwhile, at home, farmers stay stuck on the overproduction treadmill to stay afloat amid low prices driven by the export market.

5. Antitrust enforcement

Corporate consolidation is a main driver of all of these problems. For example, just four corporations control 85% of our meat. The four largest corn seed companies have the same market dominance.

The shrinking number of growing megacorporations has amassed huge political and economic power. This power has allowed them to push for policies like the end of supply management.

We have laws that are supposed to rein them in, but over the past few years, enforcement has fallen. Better antitrust enforcement will not only lessen Big Ag’s power — it also creates an overall fairer market, where policies work better and farmers can thrive.

A Return to Supply Management Will Help Restore Our Food System

To have a healthy environment and food system, we need a healthy economic environment. That’s one in which farmers can make a good living growing affordable, sustainable food, instead of one in which Big Ag profits from pushing harmful practices.

A strong, broad movement of farmers and environmentalists is working to improve the supply management policies of the past and bring them into the future. But fighting for them hasn’t been easy.

Big Ag has had a stranglehold on our food system for decades. That’s why Food & Water Watch is joining with allies to build the people power we need.

This year, we have a twice-in-a-decade opportunity to push for supply management. Right now, Congress is negotiating the 2023 Farm Bill, which funds a variety of agriculture policies and programs. 

To create a fair food system for farmers and families, we need to bring back supply management and end corporate control of our food system. 

Help us fight for a food system that supports families and farmers, not Big Ag. Tell your members of Congress to support a fair Farm Bill for all!

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