Posted by Dave on April 29, 2010
By Susan Schneider
As was reported today by Keith Good in his online Farm Policy report, Senators Saxby Chambliss (R-Georgia, Ranking Minority member of the Senate Agriculture Committee), John McCain (R-Arizona) and Pat Roberts (R-Kansas) recently sent a letter to Secretary of Agriculture Tom Vilsack challenging the USDA’s “Know Your Farmer, Know Your Food” program. While the letter requests information, its assault on the program is clear. The letter notes that "[w]hile the concept of educating consumers about production agriculture is a worthwhile endeavor, we have serious misgivings about the direction of the Know Your Farmers program.” The Senators complain that the program does not direct funding to "conventional farmers" but instead is "aimed at small, hobbyist and organic producers whose customers generally consist of affluent patrons at urban farmers markets.”
The letter further states that:
American families and rural farmers are hurting in today's economy, and its unclear to us how propping up the urban locavore markets addresses their needs. Given our nation's crippling budgetary crisis, we also believe the federal government cannot afford to spend precious Rural Development funds on feel-good measures which are completely detached from the realities of production agriculture.
The letter challenges USDA's efforts to match "a small segment of specialty crop producers" to urban consumers as a "questionable use of Rural Development programs authorized under the 2008 Farm Bill." The Senators request citation to Congressional authority for the program and an itemized breakdown of all expenditures.
Clearly, there is serious rural poverty, and rural development funds should be available to assist. However, there are three serious problems with the approach taken in the Senators' letter and specifically with its urban vs. rural and farmer vs. farmer tone. Regardless of the emphasis of the Know Your Farmer program, conventional agriculture is not in a good position to complain. First, conventional agriculture continues to receive very generous support from the government, as it has for decades. Second, since 1996, farm households have consistently had higher median incomes and wealth as compared to overall households. And, third, support to conventional agriculture often does not translate into help for the overall rural economy.
Sustained Federal Support for Conventional Agriculture
According to the USDA Economic Research Service, Farm and Commodity Policy: Government Payments and the Farm Sector Briefing Room, government program payments averaged $16.9 billion per year over 1999-2009. Direct government payments are forecast to shrink slightly to about $12.4 billion in calendar year 2010. This is direct support provided to conventional production agriculture. Admittedly the farm programs have been criticized for sometimes directing money to affluent urbanites, but perhaps that is an issue that the Senators could explore as an alternative approach in their quest for additional support for rural development.
Farm Household Income and Support Exceeds Overall Averages
"In every year since 1996, average income for farm households has exceeded the average U.S. household income by 5 to 17 percent." Economic Well Being of Farm Households, USDA, ERS, Economic Brief No. 7 (Mar. 2006). And, this from the USDA ERS Briefing Room, Farm Income and Costs: 2010 Farm Sector Income Forecast:
Net Farm Income Forecast Up Nearly 12 Percent in 2010
Net farm income is forecast to be $63 billion in 2010, up $6.7 billion (11.8 percent) from 2009. The 2010 forecast is $1.4 billion below the average of $64.5 billion in net farm income earned in the previous 10 years. Still, the $63 billion forecast for 2010 remains the fifth largest amount of income earned in U.S. farming. The top five earnings years have occurred since 2003, attesting to the profitability of farming this decade. Farm income exceeded $80 billion in 2004 and 2008 and topped $70 billion in 2005 and 2007.
ERS indicates that in 2009, average family farm household income is forecast to be $76,258; in 2010 it is expected to be up by 5.9 percent to $80,766.
Support to Conventional Agriculture May Not Translate into Help for Rural Economies
To the extent that federal farm programs support the structural changes that have occurred in agriculture, there is a persuasive argument that they have contributed to greater consolidation. Indeed, as the production of program commodities by conventional agriculture has shifted to larger farms, commodity payments have shifted as well, supporting the trend. In 2003, farms with $500,000 or more in production received 32% of all payments.
Growing Farm Size and the Distribution of Farm Payments
USDA, ERS, Economic Brief No. 6 (Mar. 2006). "The largest 12.4 percent of farms in terms of gross receipts received 62.4 percent of all government payments in 2008." USDA Economic Research Service, Farm and Commodity Policy: Government Payments and the Farm Sector Briefing Room.
Farm consolidation has hurt many rural communities as the number of farmers declines and as regional urban centers better serve the needs of the large operations.
Given the political divide in Washington, and in particular in the Senate the letter from Senators Chambliss, McCain, and Roberts could be seen as a partisan attack. Given the financial realities of USDA spending, it does not make much sense as objective analysis. And, perhaps more damaging, it serves to raise the barriers that exist in our society - the divide between different types of farmers, between farmers and consumers, and between rural and urban.
Know Your Farmer, Know Your Food seeks to break down these barriers "by better connecting consumers with local producers." According to the program website,
It is also the start of a national conversation about the importance of understanding where your food comes from and how it gets to your plate. Today, there is too much distance between the average American and their farmer and we are marshaling resources from across USDA to help create the link between local production and local consumption.
I, for one, support that goal. I look forward to the USDA's report on its activities under the program.
Originally posted on Agricultural Law.