guest column: george wuerthner's "on the range"
Questioning Agriculture’s Accounting Practices
By George Wuerthner, 6-11-08
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The US Congress passed a $286 billion farm bill. A significant percentage of that farm bill consists of food stamps and other food assistance for the poor. But the farm bill has plenty of goodies for farmers. For instance, the bill allows producers with an adjusted gross income of $1.5 million annually to obtain subsidies. Furthermore, price supports kick in if commodity prices drop a mere 10 percent over two year averages.
These and other financial and other benefits are showered upon American farmers despite the fact that nation-wide full-time farmers are doing quite well. The average full-time commercial farmer will earn $229,000 this year according to the USDA—many times what the average American earns. In 2007 approximately 1 million farmers received more than $5 billion in direct crop subsidies, with 60 percent of that funding going to the top ten percent of producers. This figure does not include many other subsidies from the Conservation Reserve Program, drought insurance, and numerous other payments that help to booster farm incomes.
Despite the fact that we continue to borrow money at unprecedented rates, there are still limits to the federal treasury and every dollar going to farmers is one less dollar available for some other worthwhile project or sector of society—many in far more desperate need of federal assistance.
How do they do it?
One has to wonder why an industry that really makes up a small proportion of the American public is able to assert such political power. One factor is that farmers are a cultural icon in America. Ever since Thomas Jefferson lionized the yeoman farmer as the ideal citizen, America has put those in agriculture in an exalted position. Farmers and ranchers are perceived to be among the most worthy of Americans, and “family farmers” are always described as “hard working” and “independent (implying that the rest of us don’t work nor are independent). Most people at least believe they would like to live in the “country” and bucolic rural settings are among our most idealized landscapes. Farmers and ranchers are seen as inherently “good” people, grounded in the earth, and being a third or fourth generation rancher and/or farmer is considered a badge of honor.
Beyond the cultural reasons, others support ag subsidies believing we will starve if we do not support farmers. This is another deception perpetuated by the ag industry, based more on hype than truth. Most of the cropland in the country is used to grow forage crops for livestock, not food for direct human consumption. If we were really concerned about feeding ourselves and the rest of the world, we’d eliminate red meat from our diets. A small fraction of America’s farmland is used to grow crops for direct human consumption—most of our good soil produces cattle forage and other livestock feed.
For instance, last year we planted 90 million acres to corn—not the sweet corn you might eat on a summer picnic, but feeder corn to fatten cows, pigs, and chickens. Another 75 million acres went into soybeans—with only 2 percent used for human foods like tofu and soy milk. In fact, since ag subsidies go mainly to producers of corn, soy and other livestock forage crops, most subsides are not really helping to feed the nation, rather they help feed cows.
Finally the last major reason ag enjoys phenomenal support has to do with the public perception of agriculture as the economic backbone of many state economies. Such assertions may be true for states like Iowa and Kansas in the heart of the Mid-West farm belt, but in most states ag is a minor part of the economy. However, since the assertion is repeated ad nauseum by those in agriculture, politicians, even conservation groups, few question this assertion.
Of course, ag does everything it can to foster such a perception. It is not uncommon for any industry to try to inflate its economic value in hopes of gaining more power and taxpayer subsidies.
Who is a farmer?
A good example of this exaggerated economic value of agriculture can be seen in Vermont. In the Green Mountain State everyone from political progressives to fiscal conservatives flatly assert that farming is the backbone of the state’s economy. No one questions such claims. And this exaggerated importance of agriculture is fostered by the US Dept of Agriculture Economic Research Service which lists more than 63,382 Vermonters (15.8 percent) out of 409,000 plus employed state residents as working in “farm or farm related employment.”
However, the largest sub category of ag workers—some 44,331 people--are involved in what the USDA euphemistically categorizes as ag retail trade and wholesaling. What is ag retail and wholesaling? That’s the people working in grocery chain stores selling food, microbreweries, and even selling ride-on lawn mowers. In some ag economic studies I’ve read, those working at coffee shops, and restaurants—even bottled water “manufacturing” are counted as ag related workers. Indeed, any one who touches, handles or sells equipment, food, shoes, clothes or other product that can remotely be traced back to ag production are frequently categorized as “farm related workers”. And when people talk about these “ag related” workers, over time t he “related” is shortened to “ag workers.” By such deceptive accounting, ag grossly exaggerates its real economic significance.
A more accurate accounting ag’s true economic importance in Vermont is found at the US Bureau of Economic Analysis. By their estimates all agriculture, forestry, fishing and hunting COMBINED accounted for only 1.6 percent of Vermont’s gross state product and less than 1 percent of all state employment, far below other economic sectors like health care, manufacturing, finance, real estate—to name a few. Indeed, there are far more used car salesmen in Vermont than full time farmers—unfortunately for the car salesmen there is no romance about their occupation, nor an entire Cabinet level post promoting their employment. Yet that hasn’t kept ag proponents from asserting, falsely, that agriculture is the backbone of the Vermont economy.
Of course, given how few farms there are in Vermont, one could suggest that such statistics do not characterize real farming states. However, such deception is not limited to the Green Mountain State. For instance, Montana has the majority of its land area devoted to farming and/or ranching. And if you look up farm and farm-related employment for Montana, you would find that the USDA classifies 18 percent of the state’s workers as agricultural. Thus approximately one in five people in the Big Sky State is considered to work in ag. However, like in Vermont, more than half of those jobs are in ag retail—in other words, the check out clerks employed in the Albertson’s grocery store or the bar tenders at the local micro brew, and only a small percentage, perhaps no more than 1 percent of the state’s citizens are genuinely earning a full-time living farming and/or ranching.
What is a farm?
There are several other ways that agricultural accounting methods are deceptive. First, is the low bar established to qualify as a farm operation. Any business that grosses more than $1000 dollar a year selling “agricultural” products is considered to be a farm.
For instance, I have a friend who is a professor at the University of Vermont. In the spring, he tends a sugar bush to produce maple syrup. If you asked my friend what he does for a living, he’d tell you he’s a professor. But if you were to consult the Dept. of Agriculture, you would find out that my friend is classified as one of Vermont’s 6000 farmers because he grosses more than a $1000 a year in sales—the minimum amount needed to qualify as a farm producer by USDA standards.
Most of the “farmers” in this country are like my friend the professor who depends on a non-farm job to provide for their primary income—in other words farming for most of these people is more of a hobby and/or a source of extra cash rather than a full time occupation. In reality people like my friend, the professor, usually do not benefit from ag subsidies, but those who do, benefit from including them among the “farmer” category to inflate their purported economic value to local and regional economies.
A similar exaggerated view of ag exists in Montana where the USDA lists 27,870 “farms” in the state. Surprisingly, despite all the talk about subdivisions wiping out ag land, there are now more farms in Montana today than in 1987 (24,500 farms) suggesting that the bar for what constitutes a farm is pretty low. Of those 27,870 “farms”, more than 10,000 of them produced less than $2,500 in product. In fact, only 10,000 out of the nearly 28,000 farms produced more than $25,000 in gross sales. And even $25,000 is likely not an economically viable operation. In essence, less than a third of the farm operations in Montana are likely full-time viable economic entities—with the rest more or less hobby operations or supported primarily by off farm employment.
By aggregating the part-time hobby farmer with the much fewer full-time commercial enterprises, the USDA is able to inflate the perceived employment importance of farming/ranching in the local/regional economy.
Dispelling the myth that ag is a major industry may help put ag subsidies in perspective. Most of the money that goes directly to ag industry is directed towards a few major crop commodities like corn, soybeans, rice, and cotton. Indeed, most fruit and vegetable growers get few, if any direct financial support from ag subsidies.
Because ag is believed to be an economically important sector of local and regional economies, it enjoys special exemption from many environmental laws and standards. For instance, in Vermont, the state’s endangered species act does not apply to farmers and though it is the most important source of water pollution in the state, it is exempt from water pollution laws. Similar exemptions exist in most states. It’s time to rein in ag and look at it clearly. We need to feed ourselves, but we don’t need to line the pockets of ag producers. We shouldn’t think that just because someone grows something they automatically deserve special treatment or support.
For many who are considered farmers/ranchers, lifestyle is the real reason they continue to work (and/or abuse) the land. But should we subsidizing a lifestyle choice and more often than not, an ecologically destructive “deathstyle”?
George Wuerthner is an ecologist and writer. He is a descendant of a reformed farmer and proud to be a second generation non-farm worker.
[End of article]The $250,000 figure you state as income appears to be "sales," which does not take in account expenses.
Are you asserting we should do away with local agriculture, except in the Midwest?
It's a complicated issue to state the obvious. Montana's Dem senator, Max Baucus, has played a prominent role in protecting Ag subsidies. See: http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=/20080611/NEWS01/806110310
The amount of land placed into subsidized CRP and out of production also plays a part.
George,
I do agree with you on much of the subsidy issue and think the world should run on the free market system but unfortunately the world markets won't let the US farmer operate on the same playing field.
One thing is the American people have the best and cheapest food supply in the whole world and you and all US consumers pay less for food than all of the other people on the planet.
Your story is chocked full of other fallacies such as your saying that agriculture plays only a minor role in the total economy and that it doesn't do much for the overall labor force. What a crock! Also that we shouldn't eat red meat. Get real George.
I don't know what you and your other radical extremist buddies are going to eat when you run all of the farmers and ranchers out of business.
You and your followers should be thankful for what the farmers and ranchers of the US provide. One thing that is changing is the price of food is going up fast, due mainly to our government's failed energy policies and to the rapildy expanding world market and competition for the resources, namely oil.
THANK YOU, Tom Klumker, for your comments ... and most particularly for pointing out the FACT that this "... story is chocked full of ... fallacies ..." which is the understatement of the year.
George, you even "misstated" in the very first sentence when you inaccurately stated "The US Congress passed a $286 billion farm bill." (see below)
Anyone who actually wants to base their opinion on the FACTS about the "Food, Conservation and Energy Act of 2008" ~ AKA the 2008 farm bill ~ can access that information in its entirety at:
http://www.factcheck.org/askfactcheck/in_the_farm_bill_how_much_money.html
Included there you will NOTE:
"The lion's share of the bill's $307 billion cost ($209 billion) will go for nutrition assistance .... such as what has been known as the food stamp program but will be renamed the Supplemental Nutrition Assistance Program, or SNAP. (Makes one wonder why it's called the "farm bill".)"
Believe who you will
And think what you must
But opening arguments
Fall into dust
When FACTS are misstated
For purpose intended
To boggle your mind
When the TRUTH must be mended.
Opinions are free
For the likes of us ALL.
Suggest you base yours
On the FACTS as they fall.
... or so it seems to me ...
I've a good friend, one of the "poor" farmers from Illinois. Quit growing beans, moved to wheat & corn. With "our" help, he has a winter home in FL & a fishing cabin in MN..."life is good!"
Comment By Rose Mary, 6-11-08jwscotch, I'd sure not wish to question a single word you've said or anything you have implied about the financial condition of your "good friend".
You do know the price of wheat and corn has skyrocketed this year, right?
However, since you are stating that your friend's assets have all been obtained "With 'our' help ..." which certainly implies your friend's success has been obtained as a direct result of subsidies/benefits provided by some provision contained within the farm bill (which is the main topic of this article), perhaps you would share that which/what-kind-of and how-much information with us in detail.
I assume your friend has shared those details with you or you would not make such a statement regarding his finances.
So you surely must know that your friend did not acquire his "... winter home in FL & a fishing cabin in MN ..." through other investments or an inheritance or by some other means ... right? Otherwise why would you make the statement that his "life is good!" because of "our" help?
IMWTK ~ thanks!
I didn't become a school teacher after college, because I could not support a wife and kid on $3000 a year. Little did I know, nor did anyone, that the teachers from my age group would retire making more per MONTH than their annual wage for their first year. Those people have cottages in the mountains and winter casitas in Yuma. They made all that money working for government. Why shouldn't farmers?
Vermont is a poor example to chide the farm bill. The Socialist Pary Senator Bernie Sanders and the ultra liberal Democrat Leahy are both Vermont Senators who defend the dairy industry like Shiites defending Basra.
The real issue is MegaAg, the likes of privately held and very secretive Cargill, and ArcherDanielsMidland, and those kinds of companies. I had a grandfather who quit the General Land Office in Rapid City a hundred years ago because South Dakota and Nebraska Senators were acquiring homesteads under false pretenses, and then selling them at arm's length (wink wink) to both Amour and Swift meat companies. Binger Hermman sent him packing after he produced his files, which Hermman burned in a Dept of Interior Hdqs. waste basket. MegaAg has owned the Senate for a century. Nothing new there.
I run a little specialized farm. I am the manager. No Federal aid for us. Mostly the Feds are a hindrance because getting pesticides approved for minor crops is not usually worth it for chemical firms, and they won't go through the FDA and EPA hoops to qualify their products for minor crops. There is, however, no end of the products registered for the cereal grains, corn, soybeans, nursery crops, livestock. So each year we face the fact we have fewer fungicides, weed killer options, insecticides, because we are not Iowa corn farmers or Kansas wheat farmers.
So, to be painted with your big brush, George, is not appreciated. On the other hand, the University Ag extension service has been a great help over the years. So that gets its funds cut. Government, faced with a binary decision, will make the wrong one more than 50% of the time. Most likely that is because Congress is making their decisions for them, in their so learned manner. Minor crops have minor money to buy Farm Bill amendments and votes. We get what we can pay for, and that is little or nothing. In a brothel, we wouldn't get by the front door, let alone be able to buy time with the most disgusting nag in the string. That is my analogy for our chances in Congress with the Farm Bill each year. If we are lucky, some wet-behind-the-ears 22 year old intern will allow us 15 minutes to speak to him/her/other in the office of the subcommittee for Equal Farm Opportunities in Rural America, or some such function. All we ask is not to be harmed by the Farm Bill. Mostly we are.
This I can say with all the authority of old age and the wisdom of having my ass kicked by Congressional Genius way too many times. The Farm Industry, the "family farm", the less than Cargill kind and size farm, is a year or less from absolute total economic disaster. If they made money last year, and they make money this year, after paying taxes, they had better bank every cent because they are going to need them if they have a snowball's chance in hell of surviving. All that is needed is rain in the drought areas, and the world will be awash, once again, in grain, and the price of wheat will drop back to $5 a bushel, and that will not even come close to paying the bills for fuel, fertilizers, pesticides, labor, taxes, and machinery. Not even close. All the input costs have risen, and some fertilizer is three times the money it was two years ago. Putting $4 diesel in 300hp tractors will cost hundreds of dollars per day. There will be a grain shortage in the US, because biofuels and food can't pay the price of domestic costs in a time of average world food production. The next bubble to burst, and it will, sooner than you will ever think, is Agriculture. DotCom/high tech, then real estate, now banking and finance, next is agriculture. Manufacturing has been bleeding for two decades, and is well placed to survive because it is but a shadow of its former self. The Rust Belt, the demolition of the industrial heartland, has happened. The Ag collapse will be as great, and as destructive.
I am pretty sensitive to this ag deal, right now, because our minor crop is selling for less this year, and our costs are up a third, and we hand pick with casual labor. Casual labor is not school kids out for the summer as it was when I was a tad. No, that was too hard on children, and the bleeding hearts and the liberals all hepped about farm subsidies made it so kids can't work, and heaven knows, white people won't pick crops, nor will black people. That leaves us with Asians, many former boat people, and Mexicans and Central Americans, most of whom do not have legal papers. It means that a hundred people are in your fields at day light, picking, and you are trying to make sure they have I-9s, and their documents, including the punch cards that show their pounds picked. We don't recruit. Our labor is returnees from past years who were treated fairly, paid a fair price. They are here to work, and you have a hard time keeping the number of people down to manageable. Not all who want to pick may. And it hurts to turn people away. We do have some people who come every year, including one family of 7, the youngest 13, who manage to collectively make $25,000 or more each year in 8 weeks. That is about $70 per person, 7 days a week, for two months. It puts two of the kids through community college, and must make their life bearable. My owner buys their gas to make sure they come each day. One crisp $20 bill each day they show up. The government, the Farm Bill, none help us or them in any way.
This year we have more ICE enforcement, more Border Patrol, and probably fewer pickers. The one thing I can ensure is that there will not be one Euro-American or Afro-American show up to work. It is beneath them. So again, it will be all Latinos and Chinitos. And we have one contractor from some village south of the border who comes at peak picking time, and his people don't speak Spanish, so we put them in a field by themselves. We start at 6 in the morning and quit at 1 in the afternoon. Many leave an hour or so early, to get to their regular jobs. They are working, making money, and the porch sitters get all the benefits of the Farm Bill. They very people who get welfare for not working, get some of it from the Farm Bill. While the hard workers get the crop into the cold storage building.
So, George, I have a different view of the Farm Bill. It rewards sloth, illiteracy, criminality, laziness, false pride, and the people who work hard pay for most of it. Even the farmers that make millions pay huge taxes to support the very same Farm Bill. And they pay Congress to be taken care of. The pickers, and the small minor crops farmers get nothing. They, too, pay taxes on every dollar they make, in payroll tax deductions for social welfare, medicaid, social security, as well as income taxes.
By the way, we are Good Ag Practices certified, GAP, so field sanitation, irrigation water cleanliness, hand washing, clean toilets, specified eating areas, all are addressed to keep the fruit clean for consumers. That, too, is not addressed in the Farm Bill.
Bearbait:
Your comments are interesting and insightful. I totally agree with you about Sanders and Leahy. They are part of Vermont's cow cult.
If you read my comment carefully I think you'll see that I generally agree with your perspective. When talking about farm subsidies, I am mostly talking about the big Ag producers who are growing corn, cotton, and a few other crops, particularly those growing grain crops for livestock feed.
Most of the small farms, particularly those growing food for local markets and/or growing veggies, fruit, etc. get little or nothing in the way of direct subsidies.
I believe subsidies distort the system, creating incentives to grow large monocultures of certain crops that we don't need in huge amounts that use a lot of chemicals, and so forth.
I think the future of Ag is in small farms, growing a diversity of crops, close to communities, producing food for direct human consumption.
I also suspect we'll be seeing more food grown by people themselves as well.
I was struck by a friend of mine in grad school who grew up in Russia. Each summer his family took a train to a village 150 miles from Moscow where they had a small cottage. The entire yard was used to grow food--no lawn in that village. My friend's family would stay there all summer, while his Dad remained in the big city working. They grew much of the stables they consumed during the rest of the yard on a tiny patch of ground.
Another friend living in San Francisco had put in raised bed gardens in his small yard and produced a huge amount of fresh greens, etc.
Even the Salt Lake City Public Library has a big garden on its roof, growing vegetables as well as flowers.
So I've seen the potential of people producing their own food--even in the cities.
I read somewhere that there are 30 million acres of lawn in America. Don't know if its accurate, but I wouldn't doubt it given all the lawns in suburbia. And we grow in the US all our vegetable crops, fruits, etc. on less than 5 million acres. That suggests that if we really wanted to feed ourselves, we could do a lot with our lawns, vacant lots, rooftops, and so forth.
I suspect in the future we'll see more people tearing up their lawns and growing food instead of Kentucky bluegrass.