Sunday, July 14, 2013

What happens when a nation of small family farms becomes a nation of large corporate agri-businesses?

Rep. Tim Walberg (R-MI7) states that, “20% of the farm bill for the past several farm bills has been ‘production agriculture’ and 80% has been ‘welfare food assistance’.”[1]

Those who forget history are doomed to repeat it.” ~ George Santayana

It isn’t just the Republicans in Congress like Tim Walberg that have forgotten history, it is our farming population which was once demographically composed of many low-income, working class people but has become composed of a much smaller number of solid, upper and upper middle class, owners of large family, very large family and very-very-large non-family corporate farms.

Modern Americans don’t understand why food assistance programs for low income families are included in the farm bill. We do not understand because we have forgotten our history.

Farm assistance programs were instituted in 1933 when over 20% of our population worked on farms. [2] Farm assistance was essential support for an industry that employed one person in five.

Our farmers were growing more food than our consumers could afford to purchase and the price of agricultural commodities fell through the floor. A money supply problem was misidentified as an excess production problem and farmers were literally paid to reduce production.

Today, less than 1% are farmers and less than half of them rely on farming as a primary income source.[3]

Farm assistance programs have evolved to meet various needs of farmers and to ensure that farming is profitable. For example, the current farm bill will subsidize between 38% and 80% of the cost of crop insurance premiums costing taxpayers more than $84 billion.[4]

The same farm bill will pay farmers more than $61.5 billion to let land rest between crops and another $58.7 billion in direct payment to provide farmers with a “safety net” and offset risks such as market price fluctuation and low yields due to weather.[5]

In 1938 our first food assistance bill was passed and food stamps came into existence.

Food stamps were money! Recall that the reason prices of agricultural commodities had fallen through the floor had nothing to do with demand for food and everything to do with an insufficient quantity of money available to those who wanted and needed food.

Food assistance programs have always been about making sure that a market exists for farm commodities.

Some readers may see this as a cynical view of human motivation, but I believe that it is a pragmatic view. In fact almost every form of assistance for low-income individuals and households is at its root and core a kind of subsidy for business interests to ensure that business is profitable for a few owners in a marketplace largely populated low-income workers.

As an example, the Affordable Care Act subsidizes health insurance premiums for low and moderate income families. This is not substantially different that the farm bill subsidies for crop insurance. The subsidy itself is not for the low income individual or family or for the farmer; it is for the insurance company that could not sell its insurance profitably without a subsidy.

Food assistance programs for low-income individuals and families are the largest portion of the farm bill and will cost more than $764 billion.[6] Opponents of food assistance are quick to point out that this program would make up 78.5% of the appropriation as passed with bipartisan support by Senate;[7] the entire food assistance programs was stripped out by Republicans in the House.[8]

Food assistance helped 47 million low-income Americans in 2012; other farm assistance helped about 2.2 million farms. In other words, the farm bill spends about $1,600 for each person receiving food assistance and about $94,750 on assistance for each farm.


You never hear Republicans complaining about how farmers should do a better job of managing their farm business so that they can earn a reasonable profit without government subsidies. And, I have never heard a Republicans complain that crop insurance companies should manage their business better so that farmers can afford insurance without subsidies from the government. Isn’t it odd that you never hear about how farmers should budget better for good and bad growing years or how a competitive marketplace for commodities needs no subsidies from the government?

For the most part food assistance recipients don’t choose to be low-income individual and householders, they simply aren’t paid enough by the business owners that employ them or the so-called job creators haven’t created enough jobs to employ them all at a living wage.

And low-income individuals and households are not wasting food assistance either.

According to a recent survey, 25% of Americans spend less that $100 per week on food; a third of them spending less than $50 per week. These are for the most part the low-income individuals and households who receive food assistance and they are getting by on amazingly little food.

The same survey reports that 10% of Americans spend $300 or more per week on food.[9] Let me reemphasize the phrase “or more”; the more an individual or family earns the more they tend to spend. And $300 is six times as much as many low-income earners spend!

A 2009 study indicated that households with incomes of $150,000 and over spent on average almost three times as much on food as households with less than $70,000 incomes.[10] And $70,000 isn’t low-income!

My point is that there is no defense for the position of Republicans like Tim Walberg who call assistance for farmers, companies that insures crops, various programs for commodity pricing or programs that lend to farmers or guarantee farm loans calling them “productive” when they are just “subsidies” or “welfare” for people in the farm business.

Also, it is dishonest to point out that food assistance makes up 78.5% of the farm bill without also pointing out that the average recipient of food assistance only realizes about $1,600 in benefits annually compared to the average benefit per farm which is roughly $94,750.

The farm bill that emerged from the Senate with bipartisan support was a pathetic! It continued to prop up the agribusiness sectors with money for farmers, insurers, market makers and lenders but it pulled the rug right off from under low income individuals and households.

The farm bill that emerged from the House was so socially unjust that it should have brought the people into the streets! What will it take to bring working class people to the point of outrage? How much indignity must America’s low-income individuals and households have to suffer before they are move to action?

We talk about expanding programs like Medicaid or food assistance; we talk about raising the minimum wage; we talk about extending unemployment; we talk about better education for the unemployed or underemployed; but we don’t strike the root or the core of the problem … the money system and the flight of money from the bottom where human labor earns it to the top where a privileged class collects interest by lending us all of the money in circulation while avoiding their duty to pay for labor, materials, technology or taxes.

Working class people should not have to beg for subsidies and the owners should be able to earn their way without subsidies. Ironic that we deny welfare to those who need it most and grant welfare to those who insist that there is no need for it?

[1] WIN 98.5 (Interview), Congressman Walberg answers Stabenow's criticism on House Farm Bill passage, Friday, July 12, 2013, 2:27 PM EDT. See <  >.
[2] Source: Growing A Nation: The Story of American Agriculture, "Historical Timeline — Farmers & the Land", extracted July 14, 2013. See <  >.
[3] Source: U.S. Environmental Protection Agency > Agriculture > Ag 101 > Demographics, extracted July 14, 2013. See < >.
[4] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[5] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[6] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[7] S. 954: Agriculture Reform, Food, and Jobs Act of 2013. See < >.
[8] H.R. 2642: Federal Agriculture Reform and Risk Management Act of 2013. See < >.
[9] Source: Gallup Wellbeing, "Americans Spend $151 a Week on Food; the High-Income, $180", August 2, 2012. See < >.
[10] Source: U.S. Census Bureau, Statistical Abstract of the United States: 2012, "Income, Expenditures, Poverty, and Wealth", page 451, Table 688, "Average Annual Expenditures of All Consumer Units by