"The Food from Family Farms Act"
Review of Federal Farm Policy
by George Naylor,
My name is George Naylor. I am a family farmer from Churdan, Iowa and a member of the Iowa Citizens for Community Improvement (Iowa CCI). I am pleased to be here today representing the National Family Farm Coalition (NFFC). I have been farming for over 25 years and raise corn and soybeans on 560 acres in Iowa.
We believe that if American voters were asked who should raise their food: family farmers or factory farmers, they would clearly vote for family farmers. If they were asked who they trusted to take care of our air, water, biodiversity, and beautiful countryside, and who they trusted to produce safe, high quality, healthful food, they would say family farmers. Also, without question, there are more family farmers in your districts than factory farmers -- family farmers are voters, too. The National Family Farm Coalition concludes, therefore, that if democracy is to mean anything in this great republic, Congress must legislate a system that supports a future for family farms and assures that the nation's food is produced on family farms, not factory farms. We ask you today to end the madness of the so-called Freedom to Farm Act and support provisions of a new farm bill we call "The Food from Family Farms Act."
Some people, even some farmers, believe it is too late to change the sickening trend toward factory farms and the increasing corporate control of our food supply. The National Family Farm Coalition believes now is the time to change the direction of our failed farm policy. We need to have food and farm policies that encourage young people to stay on the land or return to the land. Every year our communities send young farm people to agricultural colleges with their secret hope that they might return some day to become family farmers. Many farm families own land and rent land that could be turned over to this next generation except for one thing: farm prices are too low to make a living. There is no sense in letting this situation, along with our crumbling small towns and polluted landscape, get any worse. Let's join together to make the year 2000 the beginning of the end of factory farming and the beginning of a hopeful future for family farmers, the consuming public, and our forsaken countryside.
Let me make one thing clear. If we are to have a family farm system in this country, it is farm commodity prices that need raising, not more direct government payments--a record $32.3 billion this fiscal year. If farm prices were raised so that the corporations that make record profits from buying these cheap commodities were paying a fair price in the first place, then the $32.3 billion could be spent on many other important national needs. We spend only a little over $4 billion on Head Start for instance. We could also make conservation grants and low interest loans to young people returning to the land to farm in sustainable, earth-friendly ways.
Before we address the issue of how we can raise farm prices, first we must deal with some myths. It's been over twenty years now since I served on the first Iowa Corn Promotion Board. The Farm Bureau and the commodity groups said if we just increased exports and developed new uses for our corn wed get higher prices. Well, it hasn't worked yet, and believe me it won't work ever. If there were an incredible increase in demand, agribusiness would lobby for more land brought back into production out of the Conservation Reserve Program (CRP) and an increase in imports. If that time ever came, we would be destroying our land and polluting our water even worse than we are today. If the stark contrast of $2.00 per gallon gasoline versus $1.50 per bushel corn doesn't tell us something, I don't know what will. The OPEC nations and the handful of giant oil companies make giant profits. The handful of giant agribusinesses turn our $1.50 corn into feed for their factory farm livestock all over the world while the next bumper crop under Freedom to Farm projects even lower prices and consequently lower livestock prices. Dairy farmers' prices have plummeted to record lows while the dairy processors and food companies reap record profits.
Despite the promise of increased exports, research by the American Corn Growers Association (ACGA) (www.acga.org), one of our member groups, and the Agricultural Policy Analysis Center at the University of Tennessee(http://apacweb.ag.utk.edu/) has shown that increased export volume has not resulted from lower and lower grain price policy. Exporting grain at less than the cost of production provides no benefit to our nation's economy. Likewise, ACGA research has shown that consumers don't even benefit from cheap farm products. Retail food prices have increased 235% since 1975-79 while farm gate prices have remained nearly steady or declined. Todays cheap grain prices and multi-billion dollar government expenditures only benefit the burgeoning profits and vertical integration schemes of the agribusiness giants.
The second Freedom to Farm myth is that farmers can adjust their production in response to prices. While a few farmers may be able to shift acres from one commodity to another, low prices will not result in cutbacks in aggregate production. In fact, farmers facing lower prices have only one option to maintain their standard of living, pay their bills and service their debt-- produce more if possible. In the field of development economics this phenomenon is known as the "poverty-resource degradation cycle." What has occurred in our country is that cheap corn and soybean meal have encouraged production of chicken, pork, beef, and dairy on factory farms. Family farmers who were raising livestock in a less intensive, more environmentally sound, manner have quit raising livestock and plowed up their pasture and hay to plant more corn and soybeans! This vicious circle must be stopped. U.S. farmers have increased soybean acres nearly 20%, or 12 million acres, since the passage of Freedom to Farm.
Can anyone here argue that abundant crops should dictate disastrously low farm prices and the loss of efficient family farmers and rural communities? The theories behind the passage of Freedom to farm were clearly false. If the $2 per bushel non recourse loan rate in 1978 (the price floor), the year I served on the Iowa Corn Promotion Board, were adjusted for inflation, corn would be over $4.75 per bushel today. Instead, Freedom to Farm has completely eliminated the floor under farm commodities and necessitated multi-billion dollar government payments to simply keep the farm economy from collapsing. We can no longer base farm policy on false promises that only increase corporate profits, benefit the vertical integration of factory farms, and spell doom for family farmers and the environment. The inefficiencies of corporate agribusiness must be exposed.
Just like the "Roaring 20's" did not prevent a severe farm depression, then neither has the exuberant 90's lifted the modern farm economy out of depression. In fact, the recent announcements of increased corn and soy bean acreage along with welcomed rains have sent prices plummeting with no one able to speculate how low prices may go. This is because of the "marketing loan" feature of Freedom to Farm, which replaced non recourse loans which set a floor under prices from the time they were established in the first farm program in the fall of 1933. With the marketing loan farmers can pay back the loan at the "Posted County Price" and dump their crop on the market no matter how low prices go.
The National Family Farm Coalition looks to the lessons of history and the earlier success of farm programs that were crafted from the demands of earlier generations of farmers to fashion the features of our "The Food from Family Farms Act." First, there must be a price floor established under the basic storable commodities through the use of the non recourse loan. Since many of these commodities are feedstuffs for livestock, they indirectly establish a floor under livestock prices. A two-tier dairy supply management program would be established for dairy production with the price set more closely to the cost of production. When commodity prices more nearly reflect the true cost of production, we can expect a return of livestock production to family farms. The loan levels will be set to reflect a more prosperous time a s in the 1970's and be adjusted for inflation and changes in productivity. The non recourse loan results in the buyers of grain paying a fair price relieving the taxpayer of their role of supporting farm income with huge government payments. For those farmers receiving a government payment, most receive only a fraction of their losses. It is not economically sustainable for either the farmer or the taxpayer.
Secondly, if we are blessed with a bumper crop, surplus production should not be dumped to depress markets. Grain under loan can be placed in a Farmer Owned Reserve (FOR) with commercial storage rates paid to the farmer in advance. These stocks can be brought back on the market only at 125% of the loan rate and will provide food security for the nation and prevent natural disasters from driving prices so high as to undermine our reliability in export markets. The cost of storing these food security reserves in the FOR is minor compared to recent Freedom to Farm payments. An international grain reserve should be established to address food security needs on a global level.
Proposals, like the "Flexible Fallow Program" that attempt to raise prices by cutting production without providing for reserves or clearly stated price floors will create unbearable uncertainty and insecurity for the nation.
Thirdly, all-out, fence row-to-fence row production must be avoided if technology and mother nature gives us more than enough production at established loan rates. Short term inventory management and planting flexibility can be maintained within a Tillable Crop Acreage base that allows land to be seeded down for conservation and avoidance of wasteful over production.
Finally, we believe that a farm program like the Food from Family Farms Act with a clearly stated goal of fair prices for farmers will eliminate the need for ineffective and costly crop insurance programs. This nation need sits family farmers and can easily afford a straight forward disaster payment program when the natural disasters devastate the countryside.
In mid-March, I joined thousands of farmers from across the country at the Rally for Rural America here in D.C. I came with my family to urge immediate action in response to the deepening crisis affecting our farms and our rural communities.
In conclusion, I'm here today speaking as a farmer and a representative of Iowa CCI and more than 35 other farm and rural organizations that are part of the National Family Farm Coalition.
We are unanimous in our opposition to current farm policy and the need to replace Freedom to Farm with a farm program that ensures farmers a fair price from the market.
There is no reason - except corporate greed - that the American taxpayer should be forced to pay 30 billion dollars a year to prevent a total collapse of the farm economy. While agribusiness giants declare record profits, while factory farms feed their animals grain that costs them less to buy than it costs me or anyone to produce, while taxpayers ask why each year tens of billions of our tax dollars are pumped into the farm economy, while family farmers continue to struggle to stay in business while producing the nation's food and protecting our environment. While all of these things are happening, America's farmers and other citizens are getting more and more vocal about what we need.
We need Congress to enact the Food from Family Farms Act now.
On behalf of family farmers who are struggling to stay on their farms and in their communities, I appreciate this opportunity to present these concerns to you today. I am more than happy to answer any questions.
|Published in In Motion Magazine - August 3, 2000
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