Addressing the Root Causes of the Farm Crisis
The Farmer Summit Platform
February 2000
Published by the Institute for Agriculture and Trade Policy
Preface
In the Summer of 1998, Visions for Change, a Kellogg - funded project that seeks to engage Land Grant Universities in a vital partnership with stakeholders, created an opportunity for farmers and Land Grant faculty from the three states of Minnesota, South Dakota and North Dakota to explore the current farm crisis. It soon became evident to everyone that the usual analyses of recurring farm crises failed to get at the heart of the problem and that proposed solutions, consequently, failed to address underlying causes.
As a result, Visions for Change created a "Farmer Summit" led by farmers but consisting of both farmers and Land Grant faculty. The Institute for Agriculture and Trade Policy and the Minnesota Institute for Sustainable Agriculture joined the effort in a sponsorship capacity.
The Farmer Summit established three goals: to identify the root causes of recurring farm crises, to develop an alternative vision for agriculture, and to implement that vision in the heartland of American agriculture.
The following platform is the result of our analysis of the root causes of farm crises and our proposals for addressing them. We regard this platform as the beginning of a process, not the end of the subject. We know that we still have much more work to do, but we hope that the platform points out a direction with which farmers can identify. Please note that while we make some recommendations for changes in public policy, the heart of our platform concerns actions that farmers themselves can take, regardless of public policy initiatives.
We invite farmers, consumers, politicians, environmentalists, churches and anyone else interested in shaping a new, resilient, responsive agriculture for the 21st century, to respond to our platform by supporting it, suggesting ways to improve it, and joining efforts to implement it.
Please let us know what you think and what you will do.
ADDRESSING THE ROOT CAUSES OF THE FARM CRISIS:
THE FARMER SUMMIT PLATFORM
There can no longer be any doubt that independent farmers in the upper Midwest and throughout the United States are facing an economic crisis. Political and community-based strategies that ensure adequate income for family-sized farms are critically important to the survival of independent farmers, the surrounding rural communities and the creation of a decentralized and democratic agricultural production system.
The Farmer Summit seeks a more secure, adaptable, permanent and diverse food and farming system exemplified by shared and equitable economic and political power among the different players. We believe that an economically vibrant farm sector is crucial to building strong rural communities. We also hold that food production systems must, first and foremost, meet the needs and address the concerns of consumers, both urban and rural.
The Farmer Summit planning group came together to identify root causes of recurring farm crises and the subsequent threatened demise of independent farmers. Current depressed commodity prices, while fully deserving short-term policy action, are a symptom of a system gone wrong. In this policy platform, we concentrate more on long-term alternatives to a system and way of doing business where farmers garner little economic or political power, workers face low wages and dangerous working conditions, and consumers have very little real choice in the marketplace.
Farmer Summit Platform
The Farmer Summit platform has eight main components. We will first list them, and give a brief explanation of why they are included. Then, in the next section of our paper, we suggest some policy actions that could help advance our platform concepts.
A. Support education and infrastructure aimed at building direct connections between farmers and consumers, between agriculture and society.
While many Americans are aware of food scares and rush-to-market technologies, those with a full understanding of farming and food production are few and far between. We feel that more closely connecting farmers and consumers will have many advantages. For one, communities will become better able to provide for their own food needs. This, in turn, will open local market options for farmers. It can also lead to more informed policies that better support local and regional food systems. In addition, better connections with consumers will allow us to protect and enhance the demand for our products.
B. Support the development of local, regional and national markets for food.
The global marketplace insists on cheap labor, cheap raw materials and externalizing risk. In such a system, farmers become raw materials suppliers of a few specialized commodities. It is especially difficult for farmers to become economically empowered players in a system with these dynamics. We also believe that continuing to increase exports to countries that can't easily afford to import food and are interested in their own food self-sufficiency is a questionable strategy for raising farmer income.
We believe that the farm income problem is not one of insufficient profits in agriculture. Instead, we think the problem is how those profits are distributed. Our history has been one of benefits that should have been ours being taken by input suppliers, food processors, and landlords, all of which have more market power than farmers acting alone. Long-term change will not occur until farmers have developed an economic power base from which they can effectively bargain with other players in the agri-food system. Enhancing farmers' collective bargaining power will increase the farmers' share of the food dollar that is currently being captured by the input, processing, marketing and retail sectors of agribusiness. Organizing among farmers builds political, as well as economic, power that can further strengthen our position as independent family farmers.
The study of both natural systems and human institutions has taught us that diversity is essential to the resilience of any system. Similarly, research evidence shows that diversification in agricultural production systems and markets potentially provides security during times of weather, insect, and disease problems. Low prices for one crop might also be offset by higher prices for another in diversified systems. In addition, biodiversity resulting from diversification has clear benefits for wildlife, the environment, and the stability of the rural ecosystem.
The diversification of farms requires that we diversify the food system. Farmers cannot diversify their farms unless the food system allows for a greater diversity of crops and livestock. Such diverse systems, correctly designed, have the potential to protect and restore natural ecosystems so that farmers can pass their land on to future generations in an enriched condition.
Access to competitive markets on the input and selling sides of farming is key to both the economic viability of independent farms and maintaining a decentralized food production system. With each passing day, these competitive markets are increasingly threatened by mega-mergers throughout the agricultural economy.
When public money is involved, the public has a right to expect that research it has funded will serve the public interest. In particular, land grant universities are publicly-funded research and educational institutions aimed at research, teaching and public service for communities across states, the nation and around the world. These institutions must be allowed sufficient public funding so that public, and not corporate, interests will set their agendas.
We believe that the principal cause of our price problems is oversupply. Before Freedom to Farm took effect, we tried to control supply with domestic land retirement policies. Even if we went back to such policies, they would not work. We are in a global marketplace, and only global supply management can be effective. We also believe that effective global supply control will not necessarily increase world hunger. Rather, global hunger arises from poor access to food, not short supplies; hunger programs should therefore address food distribution issues.
From our perspective as independent farmers, it is important to increase the income for agricultural workers. Why? These low wages are primarily paid by agribusiness, not independent farmers. As such, agribusiness is subsidized in an indirect way and becomes even more powerful. Independent farmers, on the other hand, lose economic power through our efforts to be paid a livable and decent income. The solution is not for us to compete with low paid labor by working for less. Rather, we must work so that all who make their living in agriculture can make enough to contribute to the well-being of rural America.
Policy Actions That Can Advance Our Platform
There are many ways that we can take action to advance our platform concepts. In this section of our paper, we list those that seem to have greatest promise for promoting each of the eight platform concepts.
A. Support education and infrastructure aimed at building direct connections between farmers and consumers, between agriculture and society.
Support farmer retooling initiatives, where farmers are provided financial support to explore new markets, innovate with different crops and production systems, and develop direct marketing relationships.
Educate consumers about the social and economic trends occurring in the food system.
Farmers must do a better job of listening to the wants and needs of consumers and produce those products most in demand. For example, farmers should view consumer resistance to certain production technologies as a marketing opportunity, not as a threat to production technologies.
We must recognize that farmers produce more than commodities; they also provide social and environmental benefits that we all enjoy. Programs should be developed to compensate farmers for preserving and enhancing our rural economies and natural resource base. Such programs are sometimes called "multifunctional agriculture" programs.
B. Support the development of local, regional and national markets for food.
Work on both state and federal levels to encourage public institutions (schools, government, military) to procure food and agricultural products produced in the state, region and country. Appropriate state money for the staff and infrastructure that would allow this to happen.
Label agricultural products with their country-of-origin and develop a marketing campaign to support local foods and non-local food purchased using "fair trade" principles.
Farmers should join together to develop quality, branded regional products that are marketed to retailers. A consumer campaign should be organized to pressure retailers to support local communities through their purchase of regional food.
C. Support collective action by independent farmers that bolsters farmers' bargaining power.
Utilize the provisions of the Capper-Volstead Act (1922) to form farmer-owned marketing agencies to control price on the sell side.
Farmers should organize to manage input costs, and stage collective actions against input sellers that are earning a high profit at the expense of farmer income.
Develop a true farmer union, where check-off fees would be used to finance strike funds and union operations.
Enforce the Agricultural Fair Practices Act (1967), thereby preventing corporations from interfering in the formation of collective marketing associations among farmers.
D. Diversify agricultural production and improve land stewardship on individual farms and throughout the system.
Search for production systems that help farmers minimize costs and reduce inputs.
Encourage diversified cropping and livestock systems.
Link farmers with diverse markets.
Support land stewardship initiatives.
Compensate farmers for improving soil and water quality on their farms.
Develop initiatives that create a more diverse system.
E. Restore competitive markets by regulating economic concentration and the dominance of corporate control in agriculture.
Corporate farming laws typically restrict non-farm corporations from complete vertical integration through prohibiting the purchase of land. Corporations, however, are gaining control through the ownership of inputs, seeds, crops, animals and management decisions. These actions must also be strictly regulated in corporate farming laws.
Vigorously enforce existing anti-trust laws to curb corporate power in agriculture.
Enforce full price disclosure and prohibit price discrimination against smaller farmers. For example, mandatory price reporting by large meat packers (those that control over 5% of the market) would capture prices currently not being reported.
Monitor the contracts being used between agribusinesses and farmers and agribusinesses and workers for fairness and liability. Conduct widespread media aimed at farmers and workers about details of contracts; provide advice to farmers and workers regarding contracts.
Recent court actions against the tobacco industry have placed blame on those who sell hazardous products, not those who use them. A similar principle should apply to environmental questions surrounding agricultural production technologies. Those who profit by developing and promoting these technologies, not those who use them based on best available information, should pay for damages and bear the brunt of bad publicity resulting from their use.
Revise the federal tax to ensure that agribusiness corporations share profits with producers.
Declare a moratorium on all agribusiness mergers over a certain size. The moratorium should remain in effect until Congress passes laws that effectively address agricultural business concentration.
F. Support agricultural research and education grounded in the knowledge and questions of farmers, rural communities, agricultural workers, and environmentalists.
The primary, direct beneficiary of public agricultural research is society as a whole or specific populations or entities unable to carry out research on their own behalf. Information and technologies resulting from research should therefore be made freely available and reside in the public domain.
Land grant institutions should become more engaged partners with community members in asking questions and seeking answers to moral, economic and social problems.
Tenure and promotion policies and definitions of scholarly work should be modified so as to encourage University faculty and staff to work directly with community members.
Scholarly work must be tested in extensive community review, as well as by peers.
Land grant institutions must become leaders in designing effective policies relating to multifunctional agriculture.
G. Manage supply at the national and global levels to avoid overproduction and subsequent low prices.
We must authorize the purchase of surplus U.S. commodities by the Commodity Credit Corporation for humanitarian aid and industrial uses, and approach the governments of other wealthy countries about taking similar actions so as to avoid unacceptable volatility in world market prices. We must explore legislative issues to identify and correct legal obstacles that prevent farmers from working together to control production.
Countries must dedicate themselves to limiting production in agreement with other producing areas of the world because we cannot control supply management by ourselves. We must therefore work together with other countries to address and monitor production and profitability in order to adjust and direct food supply to the world.
We must encourage the critical examination of public support for new technologies that increase yields and production costs for farmers. Increasing yields has led to oversupply and low prices.
The United States should work together with other countries to develop a World Food Bank of stored grain to prepare for global weather-related production disasters.
H. Ensure agricultural workers a livable income and a safe, healthy workplace.
Support unionization efforts of farm workers and food processing workers.
Provide protections for agricultural workers as afforded other workers under the National Labor Relations Board.
Enforce existing health and safety regulations as set by the Occupational Safety and Health Act and the Worker Protection Standard.
Establish a high-level study group to examine the H2A guest agricultural worker program.
Link farm workers directly with organic farmers and farmers reducing chemical usage to build ongoing working relationships with farmers that rely on hand labor.
Initiate a media campaign linking farmers and farm workers. Both are players in the same system and should be joined in a common cause.
Conclusion
While critically important in the short term, current emergency bailout programs do not address the root causes of farm crises. Instead, such programs only postpone the eventual outcomes of a broken system. The Farmer Summit realizes that we need to act fast to ensure the survivability of remaining independent family farmers. We therefore support some short-term policies. In doing so, however, we must not lose sight of our primary purpose, that of identifying and promoting policies that create lasting solutions.
To learn more about our platform, please contact:
Sheila Ehrich
Farmer
41727 30th Street
Elmore , MN 56027
(tel.): 507-943-3505
slehrich@bevcomm.net
Carmen Fernholz
Farmer
RR 2 Box 9A
Madison, MN 56256
(tel.) 320-598-3010
(fax) 320-598-7347
fernholz@frontiernet.net
Fred Kirschenmann
Farmer
RR 1 Box 73
Windsor, ND 58424
(tel.)701-763-6287
(fax) 701-486-3580
farmvo@daktel.com
Kathryn Clements Gilje
Project Coordinator
26770 Lamb Avenue
Kenyon, MN 55946
(tel.) 507 789-6558 or 612 870-3422
(fax) 612 870-4846
kgilje@iatp.org