By John Stencel
As we say goodbye to 2003 and usher in 2004, it is a good time to reflect on past blessings and look to the future.
Rural Americans truly have much for which to be thankful. The open prairie makes the spirit soar. Raising livestock and crops enables one to ponder the master design of the Creator.
The kinship and dependability of neighbors console one’s soul and are the envy of many an urbanite.
Yet, all is not well in rural America. Farm prices for many commodities have fallen below the cost of production. Rural America is economically and technologically behind the rest of the country. The risk of extinction is real for some U.S. rural towns and communities, especially those located in the Great Plains.
Ironically, inequity between rural and urban communities and concern about the survival of the farmer were among the top priorities plaguing policy makers a century ago. In the early Twentieth Century, roughly 40 percent of Americans were farmers or ranchers. Politicians wanted to keep farmers happy so they would stay on the land and produce enough to fulfill the needs of a growing nation.
During the first half of the Twentieth Century, lawmakers guarded against monopolization of agricultural markets by passing anti-trust laws and giving farmer-owned cooperatives some legal advantages. The wool incentive was enacted to encourage wool production needed for military clothing and blankets. Supply management and minimum prices were introduced, and laws were passed to prevent commodity buyers from taking advantage of producers. Establishment of the National Rural Electric Cooperative Association brought electricity to rural communities.
While today’s farmers and ranchers find themselves in similar circumstances, in that American prosperity seems to have left them behind, the difference is that today’s politicians, for the most part, are unconcerned with rural economic depression. Even those purporting to represent U.S. production agriculture seem oblivious to the problem.
U.S. Department of Agriculture Secretary Ann Veneman recently announced her economists’ prediction that 2004 farm incomes are expected to rise. And, what was the reason for her optimism? Increased exports would do the trick, she stated. Perhaps we need to clue in the secretary that various trade agreements over the last decade have resulted in a steady decline in the agricultural trade surplus. Even if the secretary is right, and exports of U.S. agricultural products do increase, historically, such increases have NOT resulted in higher commodity prices for producers.
Americans take for granted the abundance of wholesome food in the United States. And, there has been no reason for them not to expect the availability of cheap, always-available food. However, unless there is a major change in the structure of our food production, processing and marketing systems, I can foresee a day when there is a shortage of food. At some point, the need to provide financially will outweigh all the wonderful intangible benefits of farming.
The only way I see us avoiding a disastrous food shortage or having to rely on imported foods is enactment of policies to make farming and ranching financially beneficial.
A good start toward this goal would be funding of mandatory country-of-origin labeling as passed in the 2002 farm bill. Food processors are using their clout to keep the U.S. House from funding an initiative that is overwhelmingly favored by consumers and farmers, alike.
Secondly, farmers need to receive a price for their commodities that enables them to make (gasp) a profit. And, to do this there must be some degree of supply management. In other industries, when prices fall, production falls to reduce losses, which eventually ends up in greater demand. In production agriculture, the opposite usually happens. When farm prices fall, farmers increase production to make up for the losses, which exacerbates the problem of low prices. Unlike factories producing widgets, farmers cannot re-tool and begin producing chickens when they learn that wheat prices are going to drop.
Another major factor in the producers’ difficulty making a profit is world trade agreements. The U.S. farmer once had to compete with the farmer down the road. Today he or she must compete with his or her neighbor, as well as with a producer from a developing country whose labor, environmental and copyright laws are non-existent or much less stringent that the U.S. producer’s requirements.
These and many other agricultural support programs and policies would cost the U.S. taxpayer little or nothing. Yet, the opportunity for prosperity for the American farmer and rancher would yield tremendous security for all U.S. citizens.