In a capitalist system such as ours, the government’s place is to protect us and buoy us, helping us regain traction when we lose our footing. (Please bear with this post, the sustainable message at the end is clear…) The need for government is accentuated during infrequent and catastrophic events. Ask Californian’s about the need for government help after fire consumed billions in property value and 600,000 acres of land. We derive a great deal of benefit from government when we need it most. Farming is no different.
For decades, farming has benefited from government intervention(cash) when rapid changes in economic conditions disallowed farmers from quickly changing with the times. Farming is illiquid. Most businesses, in times of need, can convert pieces of their business into cash, without losing the business entirely. I.e. Faced with a monthly lease payment, an electronics store might hold a sale to convert unsold inventory into cash. For a farmer, the only option when times become dire, is a sale of land, going out of business, and even that may not always be a valuable option, as farmers’ skill sets aren’t best suited for moving to another job.
For that reason, American farm subsidies grew. Whether it was the collapse of prices as the result of imports, or climbing gas prices cutting into profits during the 70’s, the American government was involved to protect and support farmers. Unfortunately, government was involved for so long, farmers forgot about when it wasn’t. While the rest of the country simply goes out of business or changes their business model, American farmers get paid.
Today in the NYT, Michael Pollan, author of The Omnivore’s Dilemma, wrote about the legislative process of farm subsidies. Much like President Clinton’s fight against welfare and subsequent reform, farm subsidies are hotly debated. With America getting fatter and sustainable issues coming to the forefront in America’s political debate, it’s not a surprise that the Farm Bill, is under scrutiny. A poster child for pork barrel politics, farm subsidies are no longer about tax revenue allocation or free trade, it’s about America’s dietary requirements. Early in this post, I referred to government’s purpose and responsibility to protect us. Corn is America’s staple crop, and has only become more profitable to grow with ethanol’s popularity. Demand is high and supply isn’t going to keep up, thus prices will rise (think high fructose corn syrup and it’s prevalence in everything you eat), yet many corn farmers receive funding. American’s don’t eat enough fruits and vegetables. Why should they? A bottle of water out of a vending machine is always the same price as a Coca-Cola. Why choose water when a Coca-Cola is the same price. For a high schooler the choice is much more obvious. Nutritious options arent’ available because its price is that much greater.
The tired debate about farm subsidies is about to wake up to some very real issues. America’s capitalist roots yield greatest dividends to those who create efficient solutions and great products at cheap prices. When the system fails, government has deep pockets to balance the playing field. In the 1970’s when prices were spiraling higher, the government promoted cheap corn to temper prices of the multitude of products composed of high fructose corn syrup. Now with America fat and farming unsustainable, the government has a real opportunity to foster an era of better farming practices by subsidizing fruits, vegetables, and sustainable practices. It seems like the legislative process may just work out. Middle American senators with committee seats, dominating the debate, are being challenged by all sides of the country. The San Francisco Chronicle has a great article from this Friday. There is hope yet.