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Blood in the Butter

Got Farms?

by RICHARD RHAMES

“This, in brief, is the bad news: the food and agriculture policies you’ve inherited — designed to maximize production at all costs and relying on cheap energy to do so — are in shambles, and the need to address the problems they have caused is acute.”

(A letter to the) Farmer in Chief, Michael Pollan, 10/9/08

This week, the Maine legislature’s Agriculture, Conservation and Forestry Committee held a “Public Forum on Milk Pricing Forecasts and the Dairy Stabilization Program.” The present “milk subsidy” system has for several years slowed the collapse of Maine dairy farming. But the program is now “facing extensive cuts,” even as market prices to farmers tumble.

Lewiston Sun Journal reporter Rebekah Metzler notes that milk prices are “set nationally based on world markets.” Maine’s tiered subsidy scheme attempts to guarantee “a certain price for … milk.” Yet even this modest income support is “based on estimates of how much it takes a dairy farmer in Maine to break even, not to make a profit.” It appears that this frayed life-line is now in peril.

Such news items can appear dry and depressing. Media sources tend to prefer up-beat stories about Community Supported Agriculture, the virtues of maginal increases in local food purchasing, and the increasing farm sector penetration by the “officially non-profit sector.” But despite the usual happy-talk, habitual eaters ought to be getting concerned. Though Maine may have bucked the trend officially, the 2007 Census of Agriculture reveals that since the last tally, 16.2 million acres of American farmland has been taken out of production.

As farmers give up the economic battle, nationwide, 2 acres of farmland are lost to “development” every minute. That’s 120 acres an hour, 2,880 acres a day. Worse, American Farmland Trust reports that, “Our food is increasingly in the path of development.” Ag census figures reveal that “86 percent of US fruits and vegetables, and 63 percent of our dairy products are produced in urban-influenced areas.”

There’s no particular mystery about why farmers quit farming — in the Maine dairy sector anyway. The numbers don’t work. As directed by law, the Maine Milk Commission, in concert with the state university’s economists periodically calculate what it costs to produce 100 pounds of milk here. The best kept open secret in the exercise is that the cost-of-production (COP) numbers are restricted to a “short term/ break even” limitation: No return on capital invested, no mortgage payment figured in — just feed, fuel, repairs, electricity for the milking machines and the bulk tank, etc.

Orono economist George Criner recited the updated (though still unofficial) Maine dairy COP to me. They are (by farm size): Small, $24.51/hundred, Medium, $21.24/ hundred, Large, $20.23. Again, these numbers just barely keep the barn lights on. They don’t pay for the barn.

Currently, Class I (milk for bottling) is bringing $14.99, and Class II (for processing) $10.33. At these prices, a small dairy operation is losing at least $9.52 on every “hundred weight” produced, while a larger outfit may lose “only” $5.24. Projections for 2009 forecast Class I prices wandering around between $13 and $17. In the comparative boom time of 2008, market prices briefly darted to a monthly high of $24.22 before settling back into the teens and low twenties.

This beggaring of family farm agriculture has been going on for decades, and maybe for that reason it’s seen as quite unremarkable. Moreover, it’s often assumed that it’s always been this way.

But in November ‘08, Jay Greathouse, Director of the Willie Nelson Peace Research Institute published an heretical essay suggesting that it wasn’t WWII but something called “parity pricing” of agricultural commodities that actually pulled the USA out of the Great Depression. He argued that a return to such policies might yet avert another looming depression and that, “Supporting family farms can put the US back on a secure economic foundation.”

I was intrigued and this week, posed a number of questions to Mr. Greathouse. His responses follow:

RR) You say that American agricultural policy is "killing the goose that lays the golden egg." Please explain.

JG) Once upon a time everyone had to hunt and gather to feed themselves. This went on for a very long time until some people figured out how to produce more food than they themselves consumed. It was only this increased human food productivity that enabled civilization, literally “citizens” who “lived in cities” to even exist.

Civilization’s most fundamental challenge from its very beginning involved feeding its citizens. Of all the wonderful things civilization has accomplished cities have not yet been able to self-sufficiently feed their inhabitants.

Indeed, civilization would not be possible without people first developing the ability to produce more food than they themselves consumed. Call these people the first family farmers if you will. Civilization is built upon family farms. The dark side of all of this seems to be that civilization then followed the path to most efficiently and inexpensively separate the producers from their produce, … through industrialization and financialization, becoming a predator upon family farms. The explosive growth of financialized and industrialized civilization during the last 200 years proved devastating to family farms. The very foundation of civilization has become vastly eroded, especially here in the USA, over a startlingly brief period of time.

RR) You’ve written about the country’s moving from "parity pricing" of farm products to "export-oriented pricing" decades ago. What is parity pricing? What was its effect on farmers and eaters? How has "export-oriented pricing" led to factory farms?

JG) Parity pricing is a simple guarantee to farmers that their costs will be covered. Parity pricing basically insures that the most productive segment of society stays employed. This in turn nourishes the economy literally from the soil up with family farm spending power while providing the raw materials needed by manufacturing which then opens up another whole round of productive opportunities at that level. But empowering farmers is the last thing industrialists and financiers want. Export-oriented pricing is a euphemism for an institutional agenda designed to depopulate farming communities and drive the displaced population into cities as cheap factory labor and perpetually indebted consumers. Driving down the price of agricultural products serves the means and ends of industry and finance. The factory farms can only (profit from) exported-oriented pricing by using cheap energy and then (reaping) greater corporate rewards ..(through) increased industrialization and financialization.

To be continued….

RICHARD RHAMES is a dirt-farmer in Biddeford, Maine (just north of the Kennebunkport town line). He can be reached at: rrhames@xpressamerica.net