Foodopoly

The Battle Over the Future of Food and Farming in America

Wenonah Hauter

• Publisher: The New Press
• Year: 2015
• ISBN:
  9781595587947
• Topic: Betriebswirtschaft
• Subtopic: Agribusiness

"A meticulously researched tour de force" on politics, big agriculture, and the need to go beyond farmers' markets to find fixes ( Publishers Weekly ). Wenonah Hauter owns an organic family farm that provides healthy vegetables to hundreds of families as part of the Community Supported Agriculture (CSA) movement. Yet, as a leading healthy-food advocate, Hauter believes that the local food movement is not enough to solve America's food crisis and the public health debacle it has created. In Foodopoly, she takes aim at the real culprit: the control of food production by a handful of large corporations—backed by political clout—that prevents farmers from raising healthy crops and limits the choices people can make in the grocery store. Blending history, reporting, and a deep understanding of farming and food production, Foodopoly is a shocking, revealing account of the business behind the meat, vegetables, grains, and milk most Americans eat every day, including some of our favorite and most respected organic and health-conscious brands. Hauter also pulls the curtain back from the little-understood but vital realm of agricultural policy, showing how it has been hijacked by lobbyists, driving out independent farmers and food processors in favor of the likes of Cargill, Tyson, Kraft, and ConAgra. Foodopoly shows how the impacts ripple far and wide, from economic stagnation in rural communities to famines overseas, and argues that solving this crisis will require a complete structural shift—a change that is about politics, not just personal choice.

PART I

Farm and Food Policy Run Amok

The dysfunctional food system that we suffer from today is the result of longstanding farm and food policies that were first proposed by some of the most powerful men in the country shortly after World War II. These men envisioned a future in which most young rural men would supply cheap labor for manufacturing in the industrial North rather than continuing to farm, and in which a small number of large industrialized farms would supply the necessary food. They foresaw a future in which food production would be globalized for economic efficiency and the “free market” would create the cheap inputs necessary for processed food. The visions that these powerful men had in the late 1940s and early 1950s were eventually enshrined in federal farm policy and in global trade agreements.

1

GET THOSE BOYS OFF THE FARM!

Burn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the streets of every city in the country.

—William Jennings Bryan, “Cross of Gold” speech, July 9, 1896

Although most consumers—eaters—view food first and foremost as the sustenance necessary for life, Big Business thinks of our kitchens and stomachs as profit centers. The unwavering determination by the leaders of a handful of powerful multinational corporations to concentrate ownership and control of the food production and delivery systems has created unprecedented consolidation down the entire food chain. Food and agricultural products have been reduced to a form of currency on income statements that cause a rise or fall of quarterly profits. The worth of these products is measured on the return on investment, or as an opportunity for mergers or acquisitions, that drive the strategy of the parent company. Their value is described in a Wall Street–speak of deals, synergies, diversification, and “blockbuster game changers.”

Even hedge funds, those poorly regulated firms that played a role in causing the recent financial crisis, have become some of the largest investors in food companies, farmland, and agricultural products. These firms invest the money of high-wealth individuals and institutions into broad segments of the economy—including food and agriculture. They have speculated in food commodity markets (contributing to price spikes in corn and soybeans) and bought restaurant chains (Dunkin’ Donuts), and are buying up farmland in the United States and the developing world. A private investment company even owns Niman Ranch, the firm that pioneered producing pork more sustainably.¹

Hedge funds have been big proponents of grabbing land—they have bought farmland worldwide—to capitalize on expectations of profitability from the catastrophic impacts of climate change on agriculture. The dramatic increase in the price of land in the U.S. Midwest over the past few years has led the president of the Federal Reserve Bank of Kansas City to warn about the crash that could result from a farmland bubble. The U.S. Senate’s Agriculture Committee warns that “distortions in financial markets” will catch the country by surprise again.

This financialization of food and farming has wreaked havoc on the natural world. The long list of the consequences of industrialized agriculture includes the polluting of lakes, rivers, streams, and marine ecosystems with agrochemicals, excess fertilizer, and animal waste. Nutrient runoff (nitrogen and phosphorus) from row crops and animal factory farms, one of the foremost causes of the conditions that starve waterways and the ocean of oxygen, is creating massive dead areas of the ocean, such as one at the mouth of the Mississippi River the size of the state of New Jersey. Planting and irrigating row crops has caused serious erosion, as irrigation and rainwater wash the topsoil away at the rate of 1.3 billion tons per year. And as soil scientists are fond of saying, “No soil, no life.”

The relentless drive for profit by agribusiness has had long-lasting and negative effects on all aspects of society. Public health has been sacrificed on a diet of heavily advertised processed foods that are high in calories and low in nutrients, resulting in consumers who are overweight and poorly nourished. Obesity affects 35 percent of adults and 17 percent of children in the United States, and causes a range of health problems from heart disease to diabetes. And while many Americans are overfed and dieting, one in six Americans frequently goes hungry.

No segment of society has been more affected by agribusiness and its allies in government over the past sixty years than farmers. After World War II, farmers became the target of subtle but ruthless policies aimed at reducing their numbers, thereby creating a large and cheap labor pool. In more recent times, federal policy has been focused on reducing the number of farms as labor has been replaced by capital and technology. In 1935, 54 percent of the population lived on 6.8 million farms; between 1950 and 1970, farm populations declined by more than one-half. Today under a million farms produce the bulk of the food produced in the United States, and farmers are less than 1 percent of the nation’s population.

The struggle to eke out a living has intensified each decade since 1950, because farmers have been locked into a system of low crop prices, borrowed capital, large debt, high land prices, and a weak safety net. Unchecked corporate mergers and acquisitions have increased the economic pressure, since fewer firms are competing to sell the seeds, equipment, and supplies that farmers use every day. At the same time, they have few choices where to sell their products. A handful of agribusiness and food industry multinational corporations stand between the farmers who produce the food and the more than 300 million people who consume it in the United States.

Consolidation at the top of the food chain has affected every segment below, including farming. Large-scale industrial operations comprising only 12 percent of U.S. farms make up 88 percent of the value of farm production. Family farming stands on the edge of extinction; most small and medium-size farms are dependent on off-farm income for survival. Although crop prices have been higher since 2008, the increased income has been gobbled up by higher costs for seeds, chemicals, fertilizers, fuel, and feed.²

The loss of farms has caused a rural bloodletting, leaving rural towns and counties forlorn, boarded-up, and in some cases completely gone. A Los Angeles Times analysis of census data from fourteen hundred rural counties in the U.S. heartland, the region between the Mississippi River and the Rocky Mountains, found that rural areas are sparsely populated and continuing to lose people.³ When farms go out of business, the local businesses that depend on them also disappear: the implement dealers and farm supply companies and all of the stores and service providers. Hard times also mean that rural youth disappear to urban areas in search of jobs—even those who would prefer to farm and live a rural lifestyle.

Farmers have fought back against the rural exodus that has stretched over more than a century. Activists have long been engaged in a struggle with banks, railroads, and business interests over their inequitable position within the economic system. The nineteenth and twentieth centuries were marked by populist uprisings against the unfair economic policies that threatened farm family livelihoods. They banded together to form organizations: as part of the Grange, the Farm Alliance, and the National Farmers Union, they organized, ran candidates, and joined with progressive allies in labor and social justice movements. Most of this story has been erased from public consciousness, especially the history of the post–World War II farm movement. Farmers were still a large and vital political force that had to be reckoned with in the 1950s. And they were willing to take militant action to protect their families and communities.

The National Farmers Organization (NFO) organized in 1955 to protest a move to reduce crop prices that was being perpetrated by President Eisenhower’s secretary of agriculture, Ezra Benson. Benson was set on destroying the New Deal program for agriculture—measures that had been designed to ensure fair farm prices. The large and powerful grain-trading, food-processing, banking, and industrial giants had been conspiring to cut the cost of grains and to drastically reduce the number of farm families. Farmers were considered “excess labor” by the captains of industry—workers who should be shifted into factories, while large, highly capitalized farms produced all the foods needed for domestic consumption and for the global trade they envisioned.

In 1942, several businessmen and an advertising executive had created an organization that was to have a powerful role in shaping the post–World War II economy and society—an influence that continues to this day. They aimed to make the Committee for Economic Development (CED) a place where leaders of business could hammer out their differences on economic policy, and then use the new technique of public relations to promote their agreed-upon agenda. Among the founders were Paul Hoffman, president of Studebaker; William Benton, the inventor of modern consumer research and polling; and Marion Folsom, an Eastman Kodak executive.

All three eventually were placed in high government positions. Hoffman was appointed by President Truman to administer the Marshall Plan, the large-scale economic aid program designed to rebuild war-torn Europe and to combat communism. Later, as president of the Ford Foundation and administrator of the United Nations Development Programme, he became one of the architects of the “Green Revolution.”

Benton eventually left public relations and was instrumental in organizing the United Nations. He published the Encyclopedia Britannica and became a senator representing Connecticut. Folsom staffed the U.S. House Special Committee on Postwar Economic Policy and Planning. He was instrumental in developing the first tax law revision since 1874 as Eisenhower’s undersecretary of the Treasury Department in 1953 and was later appointed by Eisenhower as secretary of health, education, and welfare.

In the early 1960s the very influential CED, at that time a think tank headed by men representing Ford Motor Company and Sears, had released a report declaring that there were too many farmers. The corporate solution: get farm boys off the farm and into vocational training for industrial skills and relocated to where their labor was needed.⁴

So, in August 1962, when twenty thousand farmers convened for the annual NFO convention in Des Moines, Iowa, they were fighting mad. The CED report had only added insult to injury. Agribusiness, the food-processing industry, and the nation’s banks had been lining up over the previous decade to depress farm prices.

The release of the CED’s screed against farmers during the summer of 1962 stirred the NFO to organize “catalog marches” in seven cities, where protesters dumped Sears catalogs in front of their stores. Long caravans of Ford cars and trucks drove in circles around Ford establishments in several cities. Shortly thereafter, both companies disavowed the report, and hearings were held in the U.S. Senate and House agriculture committees to discredit the proposed solution to the so-called farm problem that the CED had been peddling.

The CED, operating in a quasi-public sphere, represented the most powerful economic interests in the nation. Its members called “for action by government working with the free market, not against it.” ⁵ During its first fifteen years of existence, thirty-eight of its trustees held public office and two served as presidents of the Federal Reserve Bank. The organization maintained strong relationships with the Truman, Eisenhower, and Kennedy administrations, helping to direct government research dollars as well as to provide funding for academic research. The strong ties to academia resulted in policy prescriptions shrouded in sophisticated economic rhetoric and focused on weakening the reform-liberalism of the New Deal. They couched their proclamations on shrinking the farm population as moving “labor and capital where they will be most productive.”⁶

A demonstration of the group’s power took place in 1962, when a conflicted President Kennedy was debating with his staff the merits of a massive tax cut. Kennedy was influenced to support the tax cut by a CED report that called for “a prompt, substantial and permanent reduction” that the White House legislative liaison’s office distributed to members of Congress.⁷ The CED then helped organize the Business Committee for Tax Reduction, endorsed by Kennedy, which actively lobbied Congress, eventually resulting in the passage of legislation in 1964 cutting individual tax rates by 20 percent across the board and reducing corporate tax rates.

CED members viewed the organization as a merchant of ideas. Its leadership had strong media connections that enabled it to publicize and popularize policy recommendations with elected officials and the public. Its information committee included members of several advertising agencies, the editors of the Atlanta Constitution and Look, the publisher of the Washington Post, the head of the Book-of-the-Month Club, the board chairman of Curtis Publishing, and the presidents of Time-Life and the Columbia Broadcasting System (CBS). When the CED spoke, its propagandists wrote: a 1958 pamphlet, “Defense Against Inflation,” was discussed in 354 papers and magazines, reaching 31 million people.

Immediately after its formation, the CED began mapping a postwar program to expand chemical-intensive agriculture and to grant industrial and financial interests more control over it. It worked to create a postwar economy built on massive and profitable industrial growth in the North, which would require an enormous pool of cheap labor. Their first report on agriculture was published in 1945, at a time when farmers were doing very well by feeding a war-ravaged world. Farmers flourished even with higher postwar production costs due to New Deal farm measures that ensured that farm income would keep up with the cost of farming—an important policy known as parity. The CED opposed continuation of these programs, which had been created by the Agricultural Adjustment Act of 1933 to help farmers receive prices for their products that were on par with the rest of the economy—much like a livable wage.

Among the programs created by the legislation to achieve parity were acreage reduction and land set-asides, which were both focused on reducing the bane of agriculture: overproduction. The Commodity Credit Corporation (CCC) established a price floor by making loans to farmers when the food processors or grain corporations refused to pay farmers a price that covered the cost of production. Farmers pledged their crops to the government as collateral against the loans, effectively ensuring that they were paid a fair price. The loan rate, set by the CCC and based on parity, acted as a price floor, because a farmer could sell to a national grain reserve that was established as a last-resort market.

The grain reserve was filled when crops were abundant and prices were low; grain was released when crops were scarce. In this way the reserve prevented crop prices from skyrocketing during times of drought or low production. Since this policy stopped products from reaching the market if the price was not fair, prices inevitably returned to a normal level, and farmers could pay off their loans. Together these policies helped keep overproduction in check and reduced commodity price volatility. This meant farmers could make a living without subsidies.

The parity programs worked so well that there was real prosperity in rural areas during World War II and that postwar period. This was strikingly different from the post–World War I era when, without supply management, farm prices collapsed. The programs also worked for Main Street by reducing price volatility, and the grain reserve actually made a profit of $13 million over twenty years as the crops were sold on the commodity market. ...