Rev. John L. McCullough
Photo: T.Abraham/CWS |
From the Executive Director's Desk...
Sowing Justice: Part 2
July 2007
By Rev. John L. McCullough, Executive Director and CEO, Church World
Service
The House Agriculture Committee is expected to put its final stamp on the 2007 Farm Bill the week of July 16, and the Senate is expected to do so sometime thereafter. Politicians from both parties are going to have to be persuaded to find the courage to address the powers and principalities behind our current agribusiness system and bring about some measure of justice for family farmers and rural communities in the U.S. and developing countries.
Biblical Reflection
“…I came that they may have life, and have it abundantly.”
John 10:10
In God's economy, human beings are called into right relationships with each other and with all creation -- to embrace social justice and ecological sustainability.
Certainly food – its production and enjoyment – is a fundamental place to bring alive this vision. The Farm Bill offers an opportunity to address a myriad of justice issues. As Christians concerned about the welfare of the global family, we are called to create a just food system that works for poor farmers in developing nations as well as for struggling farmers here at home.
A key piece of the policy puzzle is dumping – when commodities are exported to other countries and sold below the cost of production. This makes it extremely difficult for small-holder farmers in developing countries to stay afloat, since they cannot compete when commodity prices are kept artificially low.
If Congress would tackle low crop prices and replace the system of dependence on subsidies and overproduction in the U.S., we could craft a “win-win” solution that would boost U.S. family farmers' income and help struggling small-holder farmers stay in business in developing countries.
They myth of the free market
A few companies tend to dictate grain prices on global markets and to local farmers in the U.S. Over the years many family farmers have been forced to accept whatever price they are offered in the U.S. and globally. One example of this concentrated market power reported in a 2003 FAO study, is that three companies carry out 82 percent of U.S. corn exporting.
In recent years, U.S. farmers have sold their grains for a price below the cost of production while the fruits of their labor are converted to meat, milk, and other food items for which they gain very little revenue. S ince 1984, the real price of food overall has been constant, while the price farmers received fell by 38 percent. This is not a picture of vitality and viability for small producers or of our nation's ability to ensure a sufficient, affordable food supply for its citizens.
The need for a rational price
Advocates for family farmers in the U.S. tell me that we can begin to address the inequities and boost the viability of small family producers by ensuring that they receive a fair price for their product that reflects the cost of production.
Under current farm policy, subsidies kick in when prices dip below the cost of production. They are meant to stabilize farmers' incomes when prices are low. But with huge investments in land, equipment and inputs, most farmers cannot make a rapid switch from one planting commodity to another. As a result many try to make up for low prices by selling more, which leads to even lower prices.
Small-holder farmers in developing countries generally don't have access to subsidies (because their country does not have the resources or has been forced to eliminate subsidies through loan conditions from the International Monetary Fund or the World Bank). Consequently, these farmers can be priced out of their home market.
Currently, however, the debate is taking place at a time when prices are high because corn is in high demand as it is being used to make ethanol. Wheat prices have followed suit. This means that key subsidies triggered by low prices will go unused. Many in Congress have their eyes on cutting support programs and using the savings on other programs.
Nevertheless, there is danger in basing a farm support system on the belief that high prices are here to stay. In the past, cutting farm programs at a time of high prices has left U.S. farmers out to dry when disasters or market fluctuations caused a dip in prices.
Ensuring farmers a fair price for their products would better serve U.S. family farmers, eliminate the need for the existing subsidy system, diminish overproduction and help developing countries sustain rural communities and feed themselves.
Possible policy tools
Advocates for family farmers have made various proposals for ensuring a fair price for U.S. farmers and eliminating overseas dumping. They deserve careful consideration by Congress and the Administration. We need a new national dialogue on farm policy, not just minor changes to a broken system.
For example, Congress could look at stronger antitrust enforcement and improved transparency in the food and agriculture industry to challenge corporate control of strategic grains. Rigorous enforcement of stronger anti-trust laws would mean that agribusiness buyers could not exert undue influence on prices.
Creating a new version of our historical commodity reserve program also deserves consideration. The lack of a strategic grain reserve has become a concern, as the U.S. Department of Agriculture is predicting the lowest level of world grain stocks on record since 1947. Such reserves would ensure that grain is available not only for U.S. needs, but to respond to overseas disasters and droughts with U.S. food aid.
Congress should also explore robustly funding conservation programs that encourage farmers to use sustainable practices including letting the land rest from overproduction.
These kinds of measures have the added potential of reducing the negative impacts of U.S. agriculture policy on our brother and sister farmers in developing countries. As a nation, it is time to look beyond band-aid approaches and to embrace systemic reform. Ensuring that farmers receive a fair and adequate price must be the heart and soul of our farm policy.
Congress would do well to address itself to finding the best ways to meet the needs of farmers and rural communities in the U.S. and around the world, while reducing the dependence on taxpayer-financed subsidy payments. I believe that win-win solutions are possible. We just need to be a bit more forward-looking.
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