The Farm Bill and the Food Supply

Meandering through the grocery store, I start to wonder why so many unhealthy items make up the vast majority of the store.

The bulk of the center isles are filled with highly processed grains, variations of processed corn products and sugar in the form of high-fructose corn syrup. These items are often much cheaper than the per pound price of fresh fruits and vegetables, which seems like a conundrum to me. Even the federal government recommends eating more fresh fruits and vegetables to improve your health. If they are giving that recommendation why are the highly processed grain and high-fructose corn syrup laden foods so cheap?

The answer to that question lies in the farm bill, and to really understand the farm bill some history of the bill is needed.

The first farm bill, which was know as the Agricultural Adjustment Act, was passed in Congress in 1933 as part of Franklin D. Roosevelt’s New Deal. When President Roosevelt took office in 1933, the U.S. was in the heart of the Great Depression.

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During the great depression most people lived in rural areas and were farmers by trade. Crop prices rose dramatically during the early 1900’s due to WWI’s disruption of the agricultural system in Europe. This increase in demand led American farmers to produce more food.

After the war ended and Europe began to produce food again farmers in America produced more food than the population could purchase, and because of this prices became so low that farmers were unable to keep up with their mortgage payments and were losing their farms.

Solving poverty on farms became a national priority. The original farm bill of 1933 paid farmers to not grow food on a percentage of their land. These farm subsidies specifically targeted corn, wheat, cotton and soybeans. Fresh fruits and vegetables were largely unsupported. This policy allowed for market stabilization by reducing the availability of products on the market. The law included a policy where the government would purchase excess grain from farmers that it could later release on the market if weather or other events affected crop yields.

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The bill also included a nutrition program to feed the hungry. This program was the precursor to food stamps.

While, in 1935, the income generated by farms was fifty percent higher than before the bill’s passage in 1932, the means by which the economic improvement was founded had dire consequences for many.

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The government paid farmers millions of dollars to destroy crops and livestock, while at the same time there were many people and livestock starving to death. Farmers were forced to slaughter their livestock due to rising feed prices, and people were starving to death while the federal government was paying farmers to destroy food by soaking it with kerosene.

The bill did help stabilize the market and increase profits for farmers, but the bill disproportionately benefitted large farmers and food producers.

Five years after passing the original farm bill in 1933, it was transformed into more permanent legislation. The farm bill of 1938 continued the legislation of 1933 by continuing to control market growth and purchase of excess grain by the federal government, but it also required the farm bill be updated every five years.

The bill has renewed every five years since 1938.

The Agricultural Adjustment Act allowed the government to buy and store enormous amounts of grain, and dictate planting patterns in the United States. From 1933–1996 the Secretary of Agriculture determined how much land farmers would need to plant in order to get paid subsidies.

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In 1996, Congress decided it was time to let the free market manage grain prices and farm owner incomes. Congress passed the Freedom to Farm Act, which pulled out price support and began to phase out farm subsides.

By 1998 the prices of grain had fallen and Congress backtracked on the change in subsidies and instituted direct payments to farmers. Direct payments are paid to farmers regardless of market conditions. The government bases direct payments on historical yields and acreage and no longer links subsidies to production. Without the production controls, large farmers flourish while still reaping the benefits of direct payments. Along with direct payments crop insurance programs were developed and farmers were required to enroll to maximize their direct payment benefits. The crop insurance programs are heavily subsidized allowing farmers to obtain insurance coverage without the cost of premiums.

Image Source Creative Commons Flickr: Bread Bags Full of Government Cash

While the Freedom to Farm Act was enacted to reduce subsidies to farmers the resulting direct payment and insurance system caused the subsidies to soar. It is estimated that from 1999–2001 farmers received over 20 billion annually in farm subsidies.

The inequity in the farm subsidy system began when sharecroppers and tenant farmers were disproportionately left out of the farm bill of 1933. Inequity continues to exist today. Between 1995 and 2010, 10 percent of farmers who received subsidies took 75% of the total subsidies paid out. Almost 62% of farmers don’t receive subsidies at all. It is only the top 10% of farmers who receive billions in farm subsidies.

As the government preaches increased fruit and vegetable intake, they are at the very same time ensuring the grocery store shelves will be filled with heavily processed and corn syrup packed products. Just a little food for thought for the next time you are meandering down the isles of your local grocery store.

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