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Bringing Sanity to the Rural Economy

Take international leadership in our global economy
by constructing an international family farm system

by George Naylor,
Bondurant, Iowa

Farmland near Chillicothe, Missouri. Photo by Nic Paget-Clarke.
Farmland near Chillicothe, Missouri. Photo by Nic Paget-Clarke.
The following speech was delivered to the U.S. Senate Democratic Policy Hearing, August 9, 1999 in Bondurant, Iowa.

My name is George Naylor and I raise corn and soybeans near Churdan, Iowa, with my wife Peggy and our two little boys. I have been farming since 1976. I am a member of Iowa Farmers Union and the steering committee of the Carroll Regional Chapter of Iowa Citizens for Community Improvement. It is a great honor to express my views to you today about the situation of family farms and the necessity of making fundamental changes in the economic and cultural framework that can bring sanity to our rural economy.

1. ... rather than maintaining the "Freedom to Farm" system of exploiting family farmers

First, I’d like to say that Senator Harkin will always be the hero of anyone who farmed in the 1980’s. I want to thank you Senator for your courage and leadership. If the American people had only understood that you were standing up for a family farm system that served all the people and that would protect our land and water resources, the Harkin-Gephardt bill, or Family Farm Act of 1987, would have been enacted. The problems of wasteful and destructive fencerow-to-fencerow farming, of giant hog factories polluting our streams and water supplies, and of boarded-up small towns would not be our problems today.

Unfortunately, these are our problems today. They can also be described in many personal stories of anguish by many family farmers and rural residents. Our school district had to close its elementary facility in Paton last year because of declining enrollment. I understand the bankers of my county have made an effort to inform teachers that they must be sensitive to student’s plight who may not have the $20 for a special field trip or science project. Increased demand for guaranteed government loans indicates that many farmers are facing very unpleasant choices.

Now look at these newspaper headlines: "Pathogens found near hog lots," and "How low can prices go?" The public is painfully aware of our problems and is looking for ways to correct our deadly course. Now is the time to take international leadership in our global economy by constructing an international family farm system rather than maintaining the "Freedom to Farm" system of exploiting family farmers at home and internationally.

2. How low can prices go?

How low can prices go? No one knows for sure under the 1996 farm bill know as "Freedom to Farm." I remember my father telling how he hauled corn to the Adaza elevator in 1933. He asked the manager, "What are you paying for corn?" The manager replied, "Yesterday we were paying 10 cents per bushel, but today we’re not buying." It was just such market conditions that we may face this fall that caused much human suffering and social unrest in the Great Depression. Have we learned nothing? It was the announcement by the Roosevelt administration of the nonrecourse loan program in the fall of 1933 that brought prices back up to a minimum of 45 cents per bushel and maintained an almost absolute floor under corn prices until 1996 at no cost to the government. During the New Deal this floor was adusted to reflect changes in the cost of farming and family living.

The nonrecourse loans and efforts at supply management have been replaced with the marketing loan and fencerow-to-fencerow farming. Since the marketing loan sets no floor under the market price, only record setting expenditures of billions of federal dollars partially make up for low prices and prevent a total collapse of the farm economy. How low is low? In 1978 when I was a young member of the Iowa Corn Promotion Board and thought that the promises of "more uses and more exports" were valid, which I no longer do, the nonrecourse loan rate was $2.00 per bushel and the market price averaged $2.25 that year. If that loan rate were adjusted for inflation, it would be $4.69 instead of today’s $1.89 and recent market prices of less than $1.50!

More federal dollars are not the answer, either. Marketing loan deficiency payments and flexibility payments don’t effect actual market prices. The resulting low corn and soybean meal prices favor the production of livestock in huge feedlots and confinements, the most environmentally destructive and inhumane forms of animal agriculture. Intensive production is encouraged while extensive production on family farms with sound crop rotations including small grains, hay and pasture is discouraged. Freedom to Farm’s promise of cheap corn and soybean meal has led to the overexpansion of giant hog factories, huge cattle feedlots, and corporate broiler production. Such secondary producers are subsidized at the expense of the primary producers who are responsible for maintaining the productivity of the land and health of rural communities.

When family farmers get out of livestock production, they plow up their hay and pasture to plant more corn and soybeans compounding our problem of overproduction and creating a viscious circle that must be stopped now. If there is one idea you should take from this hearing it is that we need livestock back on the family farm employing young family members and generating real economic development. This will naturally develop by raising market prices of corn and soybean meal and allowing land set-a-sides to be grazed.

3. Under Freedom to Farm, U.S. taxpayers are subsidizing the bottom line and overseas expansion of companies like IBP, Cargill, Tyson Foods, and ConAgra.

Under Freedom to Farm, U.S. taxpayers are subsidizing the bottom line and overseas expansion of companies like IBP, Cargill, Tyson Foods, and ConAgra.. Other exporting countries like Brazil, Argentina, Canada, the EU, and Australia are forced to export grain at a loss and experience farm problems similar to ours. Rather than export cheap grain and destructive methods of confined livestock production we should be exporting the ideals of international cooperation and the family farm system. After all, the other major exporters are modern nations and important allies and trading partners of the U.S.

This approach of supporting prices in the market with the nonrecourse loan, effective supply management, minimal cost to the federal treasury, and international cooperation was spelled out in detail in Senator Harkin’s Family Farm Act of 1987. This grassroots inspired bill should be reintroduced in Congress now! It is supported by the National Family Farm Coalition with thousands of members in 30 states.

Another expression of this approach appears in a resolution from the annual convention of Iowa Citizens for Community Improvement, a statewide organization with over 1300 dues paying members.

4. ‘Market oriented’ farm policies

President Harry Truman advised future presidents to find a one-armed economist. He said all his economists, when giving advice, would say "Well, on the one hand, . . . , but on the other hand, . . ." leaving the President with no clear choice. It seems that every president since Truman took his advice at least when it came to agricultural policy. If you will notice in the Des Moines Register article by George Anthan, dated December 12, 1995, "Fifteen leading economists, including high-ranking agricultural economists of the Eisenhower, Kennedy, Johnson, Nixon, Carter, Reagan, Bush and Clinton administrations, have asked President Clinton to accept a Republican farm policy proposal that phases out subsidies over the next seven years (the Freedom to Farm Bill). The economists issued the request in a letter to Clinton that was announced by the Coalition for a Competitive Food and Agriculture System, a group of 126 agribusiness companies and trade associations that has promoted ‘market oriented’ farm policies, including measures calling for full production of grains and oilseeds." It should be clear now whose interests are being served by Freedom to Farm and that cheap commodities that spell huge profits and expanded markets for IBP, Cargill, the various hog factory companies and the Coalition for a Competitive Food and Agriculture System has been no accident.

Putting a happy face on farm policy that sqeezes family farmers off the land and expands the profits and markets of a few giant corporations who benefit has been the job of conservative politicians and adminstrations of both parties for many years now. It must be everyone’s duty to cast aside the specious reasoning of "more exports," "freedom to farm," "get the government out of agriculture," etc. if we are to have a family farm system, if our streams, lakes, and watersupplies are not to be polluted by giant hog factories, and if future generations are to find rural America a healthful place to live and work. I ask you, "If not a family farm system, WHAT? and if not now, WHEN?" Thank you.

Published in In Motion Magazine - August 29, 1999

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