Comment on the role of government policies in shaping corn production in the United States today; who are the winners and losers? What could/should be done at a governmental level to improve our food system? What global ramifications might this have?
Although very few people realize it, the government plays a very impressive role in controlling the economy of corn. Without government involvement in the corn industry we might be paying twice as much for our corn. Chemical companies and a host of other companies reliant on corn production might no longer exist were it not for the government. Starting mainly in the 1970s but as early as the 50s the government developed a set of polices to keep corn prices as low as possible. Previously they had made it their mission to keep prices stable, but with mounting outside pressure and soaring prices they switched instead to policy aimed at bringing down prices as low as possible. The government paid farmers a certain amount for every bushel of corn they produced. This new subsidization combined with the slew of new technology to increase yields encouraged farmers to grow more and more corn. This in turn sparked a vicious positive feedback loop. More corn meant lower prices, and as prices got lower farmers planted more and more to try and remain afloat. To make matters worse, over the decades as prices have spiraled lower and lower, the government has cut the amount that it pays to each farmer. This policy is devastating for corn farmers across the country, each year hundreds of farmers declare bankruptcy. So why does the government let this go on? Because on the other side large companies and millions of Americans are basking in the low prices. As farmers plant more and more corn, fertilizer companies, seed companies, and pesticide companies end up selling more product. It also means that the consumer can by corn, and just about any other processed food at unbelievably low prices.
ReplyDeleteI think that the solution to the problem we have with corn is for the government to cease to have any role in the corn industry. If the subsidization from the government stopped people would stop planting corn. People would diversify to other crops. Additionally, large farms wouldn’t be as profitable, and the switch in policy might result in a shift to smaller more local farms. Pollan makes the valid point that food doesn’t follow traditional economics because the demand is always fixed, however, I still think that an absence of government control would solve the problem. Ending subsides would be able to eliminate the driving factor in this corn feedback loop. It wouldn’t solve the problem entirely, but it would do a great deal to de-skew the current corn economy. If the government were willing to take a much bolder step, I would say that the best thing it could do would be to ban GMOs and ban fertilizer. This would help to decrease yields, and in turn raise prices. Additionally, such a change would do wonders for the environment. Without fertilizers our oceans might begin to recover, our water usage would go down, and our fossil fuel usage would decrease. Although such an action would indeed by very drastic, it would not only stabilize the corn industry, it would also save the environment.
As Pollen emphasized in his book the government is currently very involved in the production of corn and in turn is affecting all the parties who are involved in the corn industry, which at this point is pretty much everyone. The government is currently rewarding the over production of corn by paying farmers a set price per bushel, so the more they produce the more they receive, even when the true price set by the economy and demand levels would be zero. This is a partial short term solution/patch while also being very detrimental to the whole United States. This helps farmers in the short term because instead of receiving nothing for their work they receive a small amount, but unfortunately it also means that farmers are unable to feel the true impact of the economy and therefore they continue to over produce instead of investing in a different or more sustainable crop. Also this encourages farmers to increase production in anyway possible, which is very dangerous for the environment because of excessive water use, pesticides and fertilizers. Not only are farmers and the environment endangered because of the current corn system, but also the everyday buyer is a loser in this whole mess because even though in the short term they may profit from cheaper food prices, in the long term it is their health, environment, and economy at risk. While the list of who looses out in this whole situation is long, the list of true winners is short, and is limited to big business and as JCP said the producers of fertilizers and pesticides.
ReplyDeleteWhile I do agree with JCP’s sentiments I would disagree that the best thing that could be done to improve this situation would be to completely remove the government from the corn industry. Instead I believe that because of how intertwined corn and our government is they can’t ever be successfully separated and we should use this to our advantage. What I mean is that I think that we should use the government power now being delegated to pay for the corn industry to instead push corn farmers toward a better more sustainable crop. I know that this would potentially have negative global ramifications, such as affects because of decreased export, but I also hope that it would have positive effects as well. For example a switch to better crops would help other countries because their local farmers would no longer be undercut by our imported corn prices. As well I hope that a positive shift would set a good environmental example, and overall encourage other countries to become more sustainable as well.
What both of you are getting at is that we currently don't pay the "true" price of corn, since it's so heavily subsidized by the government. If, as Julian suggests, the government were to pull out of the farm business, fewer farmers would be able to continue to grow corn, the supply would drop, and the cost would go up. It would no longer make economic sense to feed corn to livestock and fish, so meat would be produced differently, and the price would go up.
ReplyDeleteThis would have positive environmental impacts. After an initial shock, people would make different food purchasing choices, and strike a new equilibrium. The money now being paid to farmers in subsidies could go into helping those in lower socioeconomic groups purchase higher cost food.
This all sounds pretty reasonable, but would NEVER fly politically. How come? Do you see the irony in these days of "Tea Parties" advocating for a more restricted role of government?
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ReplyDeleteI recently read that 71 percent of farm subsidies go to the top 10 percent of beneficiaries, usually big wealthy farm. These farms are usually geared to produce as big an output of crops as they can, use the most questionable practices in growing the crops and tend to be the farms relying on large monocultures, especially and particularly corn. The corporations in charge of these large scale operations provide a huge lobby which creates the situation where the government and the corporations are inseparable from each other, which have given away millions of dollars in campaign contributions. Small farmers not only around the world suffer from agricultural subsidies but especially in America. We talked about earlier how Monsanto is threatening smaller farmers and often immorally taking legal action against them for having their crop altered inadvertently by genetic material carried through the wind. Small farmers in America who may want to use sustainable practices in growing healthy foods may be blocked because of the giant conglomerates backed up by the government. This large complex of greed motivated corporations like Monsanto, that primarily grow corn, tied in with the government and receives most of its subsidies, in my opinion, has been a source of suffering for Americans as it has been helping to deteriorate the environment with all the problems associated with monocultures, marginalizes smaller scale farmers, prevents consumers especially the poor ones from easily gaining access to healthier food choices as said by Julian and Zoe earlier, and causing an increasing rise in health problems by providing ingredients based on corn. In studies last year, high fructose corn syrup was proven to contain mercury. These problems can all be tied in with the system which allows this all to persist, the money hungry corporate corn producers working with the government through subsidies which is reciprocated by belligerent lobbying.
ReplyDeleteI think that the U.S.’s system of corn subsidies has gotten completely out of control. Like Julian, Zoe, and Kevin all said, the governments subsidies has served to drive down the price of corn, handcuff the farmers, and helped larger companies make enormous amounts of money. Here are some numbers that should be considered: An article I recently read (http://www.grist.org/article/2010-03-25-corn-ethanol-meat-hfcs/) states that from 1997-2005, corn subsidies saved chicken producers $11.3 billion, pork processors $8.5 billion, beef packers $4.5 billion, and producers of high fructose corn syrup $2.2 billion. Yes the corn may be essential to feeding many people in a very economically efficient fashion, but the high-fructose corn syrup filled foods that come out of this industry are also very unhealthy. The same article claims that the average American gets 10% of their calories from high-fructose corn syrup. Despite the fact that this practice is environmentally unsafe, and economically bad for farmers across the state, those who benefit from it likely have VERY strong lobbying power in Washington and will keep the system alive for a long time. While Julian’s proposal sounds good in theory, I do not have faith that Washington would do anything to change the system we have in place. I think that the best thing we can do is avoid foods that support the corn system, but these days, that seems nearly impossible, as corn is really in everything.
ReplyDeleteWithout current agricultural policy, corn would not be the huge monoculture that it is. The government has in essence built up the corn industry, or at least allowed for it to happen. Current agricultural policy around corn makes no sense in terms of the laws of supply and demand. Since the Nixon administration, the government and its policies have supported corn but have ignored farmers. Overproduction of corn (which is somewhat expected) only further drives down prices. Current farm practices (the use of certain types of seed, pesticides, machinery, etc) have driven farmers into debt. Corn is largely subsidized by the government, but the benefit goes to the corn and to corn production, not to the farmer. To quote Pollan, "Corn, already the recipient of a biological subsidy in the form of synthetic nitrogen, would now receive an economic subsidy too, ensuring its triumph over the land and the food system.
ReplyDeleteGovernment policy has to do a lot with lobbing power. In terms of agriculture, there are many large companies that hold interest in the subsidizing of corn. Those large companies (such as Monsanto) do not care about the farmer, they care about the farmer planting their seed on their land. They care about the large monocultures that the farmers are forced to plant. Ranching companies hold interest in that they want inexpensive feed for their animals. Companies that use corn for other things have their interests as well. At the end of the day there is more lobbying power (and money) behind these types of interests versus the interests of the farmers. To change their influence, we would need to overhaul the way agriculture is dealt with in our society meaning the end of the monoculture. We need to go back to the types of farming on which a farmer could themselves survive and also make a small profit. As much as this goal is a reach, our society as a whole would profit. Globally, these implication would most likely also mean the end of the monoculture or the monoculture would grow exponentially in developing countries because of their rejection in developed countries. This can be seen in GM crops already in that developed societies growingly have an aversion to GM foods, thus they are being exported to societies that have not developed that aversion. With education about agriculture practices and the cooperation of nations, we might just be able to develop more sustainable, better farming practices that would end the power of monocultures and the associated corporations.
The government's involvement in corn production is, for lack of a better word, unavoidable. For small farmers, the idea of paying a fixed price for a certain amount of corn may seem ideal but is, in reality, merely shielding them from the true ups and downs of the economy. This, in turn, has a great effect on overproduction - because these farmers are essentially living in a different economy than are their customers, their sense of demand is skewed and, generally speaking, much higher than the actual demand. This will hurt farmers in the end, when they end up with an excess of corn with customers who are unable to pay the prices necessary to keep business together. There is a flaw in my logic here, I realize - because corn is such a huge staple in our diets, we probably won't run out of demand anytime soon. But the lack of measure for demand is definitely something to think about. Thus I would say that the government is the only winner here, while small farmers are, in the end, losers right alongside buyers who are suffering in the economy.
ReplyDeleteAs a few people have already noted, I don't think that detaching the government entirely is really the answer here. While I do get easily frustrated with our federal powers, I think it is relevant to think about what this industry would be like without such a large part of its existence. Suddenly pulling out government subsidies would be like pulling a rug out from under a table - a really really big table that has been sitting on that rug forever - and I think that, at this point, the corn industry has functioned with government involvement for too long to be able to survive without it entirely. Instead, I agree with Alex - avoiding corn in moderation seems a bit more reasonable. Maybe not realistic yet, but better than tearing the system completely apart.