First, the article is filled with the usual tropes. Modern Ag poisons the environment, people cannot make a living, exploits minorities and migrant labor, etc. Some have merit...most do not. I'll not attempt to cover them all. But I will start with the idea of making a living...
At no point in history has anyone every completely "made a living" in farming. What is implied here is that a household is solely supported by farming. Critics point to the number of farms that have significant off-farm income as proof. Well, did old farms make a living?
Depends on how you define it. The idyllic farm of yore had much unpaid labor, a housewife providing much unpaid home production of goods (canning, weaving, etc.). Today, those goods are purchased and labor is hired. Additionally, this presumes that spouses don't WANT to work...
off farm for their own reasons. So, while I think no one would argue that managing a farm's finances independently of an overall household is difficult, I am not sure this argument has any economic legs to stand on.
The authors of this piece also repeat the usual diatribe about subsidies propping up big agribusinesses. This is one of those stick-it statements that has been debunked but keeps coming back up. Yes, subsidies go to big farms because those farms produce most of the product...
but those farms are not "corporations" in the common vernacular. They are family held-companies for tax purposes. Now, some of my economist colleagues will correctly point out that the subsidies result in lower average commodity prices which DO benefit big agribusiness.
That is true. Lower input costs also mean lower prices at the consumer level...which is hardly a strong argument that subsidies hurt people. Well, the argument slides goalposts, those big agribusinesses do not pass those benefits along to consumers but absorb profits.
That is true only if there is significant market power for those agribusinesses, which is an anti-trust issue, not a USDA issue. And that argument ignores the volumes of research that suggest concentration/market power is a bad thing only if it results in higher overall prices.
I can buy the market power argument. But that is not a reason to dismantle USDA or significantly change its mandate. But let's assume a minute that the critics have significant points and that our food system would benefit from an overhaul. I am not sure they have thought...
about what that means. First, there is economies of geographic specialization. Corn does not grow best everywhere and neither do tomatoes. "Localizing" the food supply would result in HUGE efficiency losses thereby raising food prices to those very people they say are left out.
Second, the cost of physical infrastructure would be huge. Realigning processing, harvesting, storage, distribution...these are not cheap or quick activities. This also requires people. Are people going to move from urban centers to rural areas? And then are those areas rural?
Third, the cost of human capital changes would be huge. You do not just go from being a corn/soybean farm to a multi-product F&V producer along with livestock. The knowledge base is not instantly transferred and could take generations to build.
I know as well as any that the "comparative advantage" of the current system is built in no small part of perverse incentives created by generations of subsidies and government tinkering. But it is EXTREMELY naive for the authors to assume that a new model is built overnight...
...or is more viable or socially beneficial. Picking a SecAg is important...for food, nutrition, and agriculture. But picking one that hopes to radically transform agriculture overnight is probably more dangerous than the status quo.
Oh...and I almost forgot...how many carrot producers do you actually need?? Not many. Another thing the "localizing food" crowd don't seem to understand...price flexibility of demand.
You can follow @CompetitiveAg.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled:

By continuing to use the site, you are consenting to the use of cookies as explained in our Cookie Policy to improve your experience.