from Z magazine A Conversation About Our Food System
By Signe Waller with Jim Rose
Earthcraft Farm is a community supported agriculture project (a CSA) in Indiana with 16 certified organic acres dedicated to growing vegetables, fruits, and herbs, and another 67 acres in woodland and pastures. Jim Rose farms this land assisted by interns and urban volunteers from nearby Lafayette and West Lafayette. Surrounded by chemically dependent, so-called "conventional" farms, Earthcraft is a little oasis on which to experiment with how to combine agricultural sustainability and land stewardship, economic viability, and social justice.
The following is a conversation between two leftist farmers exploring the notion that American consumers are getting cheap food and what this means to farmers. Very revealing truths about our food system, the structure of our economy, and the destruction of the environment emerge when you begin unpacking the notion of "cheap food."
SW: We've talked before about the fact that the price of agricultural produce is so low that farmers can't make a living growing food for people. That's very ironic. Something the survival of the whole human race depends on and you can't make a living.
JR: I guess I would say we're victims of the metaphor, "the bottom line." Economists and bankers are deciding how food should be grown. The only thing they're really concerned about is getting the price down.
SW: That fits in very nicely with what is happening in our culture.
JR: Sure enough. Science has produced all kinds of helpful things for the farmer. Technology has produced machinery. But the trouble is all this innovation is very expensive. If you get that unit price lower, then the farmers don't have enough to pay for machinery. How do you solve that? You have them farm a lot more land. That means you have to make the tractors bigger so they can farm more acres reliably. The system pushes you toward megafarms.
SW: There's no way to do a lot of acres without herbicides.
JR: That's right. No way. Remember you asked once about the difference between drilling soybeans in 7 inch rows or doing them in 30 inch rows. Why would you want to do them in these narrow rows? Well, the answer is, because one farmer can do it. He/she tries to drill the plants close enough so that the canopy closes over quickly and shades out the weeds. You can't cultivate seven inch rows from a tractor -- you can't even get the tractor wheels through them. The point is he/she doesn't have time to cultivate twice, as is needed, because s/he's planting so much stuff. So he/she spends the extra money for extra seed and he/she plants the whole field. But of course the soy beans are not going to come up and block out the weeds immediately and so, indeed, it turns out to be very chemical intensive. The chemicals are what make it possible.
SW: I read this in an American Farm Bureau Federation booklet: "Every year, fewer and fewer American farmers and ranchers feed and clothe more people." Those who see agriculture today as a success story point to the fact that the price of food products is so low.
JR: The fact is farmers are losing money right now on vegetables. Virtually everything in the supermarket is there below cost -- to the farmer. South Bay Growers in Florida -- one of the top 100 vegetable growers -- lost $12 million this year and they're pulling out of the vegetable business. They're going to switch their 8,000 acres of lettuce and celery to sugar cane, and lay off 1,300 workers. They're the largest employer in South Bay; the unemployment rate in that area was 22 percent before the layoffs were announced. California growers, also, are going into bankruptcy, or getting bank loans to try to stay afloat. But banks are tightening up their credit lines. They're afraid the growers won't be able to repay. This year, California growers are getting an average of $3-$4 per 24 pack of head lettuce. Their production costs for that same 24 pack are $5- $6. One grower with 15,000 acres of vegetables in California and Arizona commented, "The current pricing structure is slowly bleeding the growers to death." Retailers currently are buying a head of lettuce from the grower for 12 to 15 cents and selling it for 99 cents to $1.19. Farmers are used to some bad markets. Usually, if one commodity spirals downward, others do well enough to even things out. The president of the Western Growers Association, which represents 2,500 growers, packers, and shippers of fresh vegetables, fruits, and nuts is advising farmers to cut production next year, to self-regulate. We'll see.
SW: Incredible. And those are the big growers who are hurting.
JR: Food is cheap because we're not paying the whole cost. We're not paying the price of environmental degradation -- soil erosion and consequent water run-off. Even the Mississippi flooding can be attributed in large measure to the kind of agriculture we have. The water doesn't penetrate the ground any more; it runs off. Other costs are social costs of community. Small towns have largely died in this part of the country.
SW: And it's cheap too because energy costs are low. Cheap fossil fuel enables agriculture to be done on a grand scale, to power up the tractors and produce acre after acre of food. Once the energy is no longer cheap, the food won't be either. Petroleum-based insecticides, herbicides, and fertilizers are essential to producing the cheap food. If we run out of those energy sources...
JR: But those are not going to run out right away. There's lots of natural gas around. That's what they make anhydrous ammonia from. But that's not the point. We're not paying for general soil degradation, for upsetting the balance of biological systems. And that can't go on. There's just about twice as much insect damage now, post-harvest insect damage, than there was in 1945. Six or 7 percent then and 13 percent now. We're losing that battle. The bugs are getting more and more resistant.
SW: How does all this relate to the price of the food?
JR: We're not paying for the undoing of the biological diversity in our soils. That will come home to roost. The soils will eventually become quite sterile. Because the insects and the weeds, as you know, keep adapting to these terrible toxins that we give them. A few of them survive and then suddenly we've got a super-weed or a super-bug. So our corporate chemists keep coming up with some new toxin. It's not just a case of making it stronger. That would be bad enough. But they have to find some other way to invade its life cycle. At some point you will have wiped out just about everything in the biosphere. If we wipe out all the earthworms then we're just about finished on this planet. We need them. Our agriculture is clearly not sustainable. And if it's not sustainable that means somebody will have to pay at some time.
SW: We look at reality as if its composed of isolatable, discrete events. We consider the price of food without considering its causal connections. And so we talk about the food being cheap. Our concepts are all wrong, the way we think of these things, as discrete parts of reality.
JR: You can say we have cheap food. And that's true for a great many people. But why is that the ultimate ethic? Why isn't the ethic that we have a secure food system that feeds everyone highly nutritious food all the time? Just imagine if we could make the claim that nobody ever goes hungry in this country, that everyone has access to all the highly nutritious food they need. When you think in terms of centuries and the rise and fall of civilizations, that's the kind of question you should deal with.
SW: U.S. food is touted as being the most affordable. We spend 10.3 percent of our incomes on food. When the Social Security administration calculated the poverty threshold in the 1960s, a typical family spent about a third of its total budget on food.
JR: The vast majority of people in the world spend at least half their income on food.
SW: Let's look at the connection between food in the raw and value-added products. If I buy the ingredients to make my own cake, it often costs more than buying a prepared cake or a boxed cake that embodies someone else's labor. This seems irrational or illogical from the point of view of economics, but food that is processed, that has value added -- meaning other people have done the work -- frequently costs less than if you bought all the raw ingredients and did it yourself. I suppose it has to do with economy of scale once again. The people who are manufacturing the cake are buying all the ingredients in large enough volume so they're getting it much cheaper than when you go to the store to buy it.
JR: They're getting it at a different point in the distribution system. They're not buying it at retail, that's for sure.
SW: The distribution system is geared to introducing as many middlepeople as possible. The food could be much cheaper if you also organized the distribution differently.
JR: People have accepted as common sense that price or percentage of income spent is the only discussion to have about food. Bottom line metaphor again. McDonalds both exploits and reproduces this mindset with that obnoxious slogan: "More food, less money, period." We're not talking about how many people can not afford food in this country. Take a country like Sweden, everybody can afford food, even though it's far more expensive there than it is here. But everybody can afford it.
SW: Let's address why farmers can't make a living. I came across these extremely revealing figures in the 1993 Statistical Abstract of the United States. They relate to the total consumer expenditure for farm food, the portion farmers receive (which is called the farm value) and the marketing bill portion. Look what's happened in the last decade. Consumers paid $55.5 billion for fruits and vegetables in 1980. Farmers received $11.7 billion, or 21.1 percent of that. The rest, $43.8 billion, went for marketing. Then, in 1991, $108.5 billion was spent on fruits and vegetables (about twice what was spent 10 years earlier). But farmers in 1991 received only 14.6 percent of the total consumer expenditures for those items.
The trend between 1980 and 1991 is for farmers to receive a smaller and smaller percentage of the total consumer expenditure on food. That trend holds for every category of farm food. For meat products, farmers got to keep 37.0 percent of the total of what consumers spent in 1980; by 1991 they received only 27.0 percent of the total outlay for meat. Farmers' share of consumer expenditures for poultry and eggs declined from 1980 to 1991, from 45.9 percent to 35.0 percent. As for dairy products, farmers received 42.3 percent of total expenditures in 1980; their portion declined to 30.5 percent by 1991. Bakery and grain mill products, which gave back to farmers 14.5 percent of consumer outlays in 1980, returned only 7.4 percent in 1991. More and more money is being spent on marketing. Some components of the marketing bill are labor costs, packaging materials, transport, corporate profits, fuel and electricity, advertising, processing, wholesaling.
Though total consumer expenditures for farm food increased in the 1980s, the increase has benifited middlemen at the expense of the farmer. Between 1980 and 1991 the overall farm value -- what farmers received for growing the food that people bought -- decreased from 30.9 percent to 21.9 percent. So even though farmers were receiving more money in 1991 than in 1980 -- which shouldn't be surprising since they produced more and more was sold -- their increase in revenue was under 24 percent, while the increase in marketing costs was 97 percent.
JR: I'm rereading Plagues and Peoples by William McNeill. He makes a distinction between microparasites (like viruses and body pathogens) and macroparasites. Macroparasites can be anything from saber-toothed tigers to marauding Visigoths to oppressive governments overtaxing those who produce the real wealth of society. Farmers, when you think of it, are particularly vulnerable to a whole range of predators. Typically, they have a pastoral, non-military way of life, one that revolves around creation, not destruction. It's possible to see so-called market mechanisms as just another in a long line of macroparasites. The results are the same. Consider that farmers are not the ones setting the prices for the goods they produce. The commodity market sets them. No farmer would set a price for lettuce less than what it cost to produce.
Farmers today are operating at the edge all the time. They have computer models about whether it's worthwhile to add some more acreage, to buy the bigger tractor. We're talking about gaining minuscule amounts of money per acre. Well, it's clear from this that anyone who tries to farm on a small scale and grow the same kinds of commodities is obviously doomed to failure. With our 83 acre farm, even if we could plant it all to corn, we'd only make $100 an acre on it, $8,300.
SW: A University of Nebraska study showed a typical farm family needed 97 acres of corn in 1975 to meet its living expenses of $16,000. By 1991, the same family needed 1,327 acres of corn to meet its living expenses. In 1975, a family could meet its expenses by farming a 461 acre wheat farm. In 1991, the same family needed 3,317 acres of wheat to meet its expenses.
JR: If you geared up to do your 100 acres of corn in 1975, you've already gone under if you stopped there. You're out of business today. The economics of it passed you by. And your kids are in the city looking for work.
SW: The farm population keeps declining -- from 6,051,000 in 1980 to 4,632,000 in 1991, that is, from 2.8 percent of the resident population to 1.9 percent. Let's get back to the question of costs. How and when do we start paying the true costs of food?
JR: As soon as there's an ecological disaster that everybody recognizes as being the consequence of our agricultural system. The EPA designates American agriculture as the largest non-point source of toxic substances. Agriculture is everywhere, so it's non-point, it's running off from fields. They've cleaned up a lot of the point sources. But nobody's doing very much about agricultural pollution. There are sane alternatives to all these chemicals. But all of them require a lot more people. If you've got more people, it means they've got to be paid of course. They've got to make a living. So food prices really have to rise. The only alternative is to get more people back on the land and do sane things in cooperation with the biosphere.
SW: Dana Jackson, associate director of the Minnesota Land Stewardship Project, spoke at an Ohio Ecological Food and Farm Association conference early this year and had a number of very creative proposals for enlisting consumers into a sustainable agriculture network. She proposed a campaign to get the external costs of food production into the open by having environmental and social impact labeling on all food products. On an expanded label, Jackson would have products rated from one to ten for both their social and their environmental impacts. She would list all the chemical pesticides used in growing the product and anything having to do with genetic engineering. This would make us recognize all the real costs and attach them to the causes of those costs. This is surely a lot better than disguising the tab in the taxes that everyone pays. She would call this the "Whole Truth in Labeling Act."
JR: We already have paid heavily to subsidize conventional agriculture. For example, we subsidize, as taxpayers, food grown in the Central Valley in California. It's a desert and the United States Government has provided water to farmers there at way below cost.
SW: So, megafarms, with their chemically-oriented agriculture, are being subsidized by U.S. taxpayers.
JR: That's right. The Army Corps of Engineers built the irrigation system and many of the dams out there were built by, and are maintained by, the Bureau of Reclamation. These government subsidies were meant for family farmers -- for small farmers -- and to be eligible farms must have reasonably small acreage. As always happens, some people go under and others end up with huge acreage. So they give some to the kids, to the butler -- they arrange it so that these are, in name only, all small holdings. Everybody knows it's a lie and that multimillionaires are hauling in huge subsidies from the U.S. government.
Another subsidy is the interstate system. It was built largely to haul agricultural products around the country. That's how we get lettuce from the San Joaqun Valley to New York City, even when it's perfectly possible to grow beautiful lettuce in upstate New York, and in New Jersey where it always used to be grown. When the Bureau of Reclamation started that irrigation project in the west, New Jersey farmers got all up in arms and said why should we support the destruction of our livelihood. We're paying taxes to support this thing. It's just all out of kilter. That's one of the reasons small farmers can't compete. Industrial-style megafarms are being heavily subsidized and we're not. They didn't pave the road down to my farm, right? But they paved a road all the way from the San Joaqun Valley to New York City with no traffic lights on it so that a guy can drive it in two days and end up with some halfway decent lettuce. Disaster relief is another program that only kicks in significantly if you've got some really large acreage. The low amounts per acre don't help bail out farmers with several acres or a couple ofhundred acres. But if you have thousands of acres, it amounts to enough to maybe help you make some payments, buy new seed, or whatever.
SW: Short of waiting for the great toxic run-off to happen and wake everybody up, how can we get people to be willing to pay some of those hidden costs in the price of food? And to demand that agriculture be done in a benign and ecologically sound manner, without incurring costs to future generations?
JR: I've read the results of polls that show people would pay more if they could get a steady supply of organically grown food. At least, that's what they told the pollsters and I think they feel that way. People are nervous. At least once a month there's something in the paper about some agricultural chemical thought to be or shown to be unsafe. People would rather not have the chemicals used. I think the main problem lies in the power alignment behind the existing system.
For example, when they came out with the SARE (Sustainable Agriculture Research and Education) program, the Department of Agriculture actually sent out some guidelines to extension agents to stop kicking these organic people and pay attention to sustainable agriculture, incorporate it into the advice you give to farmers and so on. One extension agent's response was: we are not going to even consider anything that reduces production. If it does not increase production, we will not advise a farmer to use it. We will not even tell them about it. That's an absolute in our agricultural system -- increased productivity. Half the population, or some very large portion of it, is not eating properly right now. And there's lots of food around. It's not a question of availability, it's a question of political will, whether we feed people or not, whether that's the value that we hold. If we wanted people to eat, we could see to it that they eat even if food cost twice as much. And it won't be difficult. It's not hard.
SW: It can't be hard. If I can be growing food the last three years and I never grew food before.
JR: There are lots and lots of people who'd like to do this. If it were a reasonable life. And it could be. It's like anything else, you'd have to get some expertise at it.
SW: It seems we come back to the point we started from, which is the economics that's driving this whole system.
JR: That's what's wrong with economists running the show. A good example of bias in government policy is the support that's available for capital intensive agriculture, no matter what the consequences for the environment, but not available for labor that employs methods much better for the environment. If you choose to raise hogs with automation, build a confinement structure, and buy a lot of heavy equipment, you can deduct your capital investment, the depreciation of equipment, and so on, from your taxes. But do the ecological thing and let the hogs stay in the field -- that's best for the hogs and also wonderful for the field fertility -- and there are no government tax breaks or incentives.
And another thing that just occurs to me -- when we talked earlier about farmers hurting because farm food is being sold below the cost of production.
SW: Yes?
JR: Well, when markets are flooded with products that retail below the cost of production, and when those markets are supplied by foreign companies, we call it dumping. We're practically ready to go to war with Japan when we accuse them of dumping products like microchips and other things on the American market. But that's exactly what American agribusiness is doing internally -- to all us small farmers, and more recently, even to bigger farmers. The food is being dumped, sold below the cost of production.
Signe Waller is a farmer and freelance writer in Carroll County, Indiana. She and Jim Rose operate Earthcraft Farm, a Community Supported Agriculture project. They invite all to jump into this conversation at: RR4, Box 263 Delphi, IN 46923; (317) 268-2669, through Compuserve, 73250,675, or through LBBS.
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