Food Policy

"When $6 billion in indemnities from federally subsidized crop insurance programs are added to the direct payments, the government would be responsible for $52.5 billion, or 44%, of farm income in 2020."

A Note on Collective Work

Sylvanaqua Farm

Fighting with Joel Salatin

Time to be Heard

Polital Action Assignment = 30pts

Food System Policy - a VERY brief introduction

As you folks are starting to discover the topic of food systems legislation is wide, deep, and complicated. The purpose of this hour of class is to introduce you to some of the most pertinent issues in food system policy.

Some of the very first big legislative moves in the food sphere in the USA were to ensure food safety and work protections following revelations such as Upton Sinclair's "The Jungle" in 1906. You folks have covered plenty of food safety regulations in your other classes. A couple notable pieces are as follows:

Some Food Safety Regulations

Good Agricultural Practices (GAP) and Good Handling Practices (GHP)

• These are voluntary audits that verify that fruits and vegetables are produced, packed, handled, and stored to minimize risks of microbial food safety hazards. GAP & GHP audits verify adherence to the recommendations made in the U.S. Food and Drug Administration’s Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables (pdf) and industry recognized food safety practices.

The FDA Food Safety Modernization Act (FSMA)

• The FDA Food Safety Modernization Act (FSMA) is transforming the nation’s food safety system by shifting the focus from responding to foodborne illness to preventing it. Congress enacted FSMA in response to dramatic changes in the global food system and in our understanding of foodborne illness and its consequences, including the realization that preventable foodborne illness is both a significant public health problem and a threat to the economic well-being of the food system.

Simply put, Good Agricultural Practices (GAPs) is a voluntary food safety program driven by buyers, whereas FSMA is law. FSMA is meant to be a uniform, minimum requirement for food safety that all produce growers must adhere to. Even if a farm is FSMA compliant, chances are a buyer maintaining higher food safety standards will require farms to have a 3rd Party GAPs certification under one (or more) of the GAPs brands in order to sell to them. For instance, a grower may have one buyer that is requiring Primus GAPs and another buyer requiring USDA GAPs. Buyers strictly define their requirements, so it is best to identify your buyer and know what their standards are before undergoing a GAPs audit.

Home-Based Vendors, Farmstands, and On-Farm Sales - in Indiana

A “Home-Based Vendor” is an individual who: – Has made, grown, or raised a food product at their primary residence, property owned or leased by them – Is selling the food product they made, grew or raised only at a roadside stand or farmers market; poultry, rabbit and eggs may be sold from the farm. A “Roadside Stand” is: – A place, building, or structure along, or near, a road, street, lane, avenue, boulevard, or highway where a HBV sells food product(s) to the public.

Examples of "Potentially Hazardous Foods" not allowed for sale without a certified commercial kitchen

• Use of “reduced oxygen packaging” (ROP) methods

• Canned or hermetically sealed containers of acidified or lowacid foods; produce items in an oxygen sealed container

• Cut melons, raw seed sprouts

• Jerky

• Non-modified garlic-in-oil mixtures

• Cut tomatoes and cut leafy greens – FDA says these products require Time/Temperature Control for Food Safety (TCS) which equals a potentially hazardous food

Examples of HBV products allowed under current Indiana Law - no commercial kitchen needed

• Baked goods – cakes, fruit pies, cookies, brownies, dry noodles

• Candy and confections – caramels, chocolates, fudge, hard candy

• Whole, uncut produce

• Tree nuts and legumes

• Honey, molasses, sorghum, maple syrup

• Jams, jellies, preserves – only high acid fruit in sugar

• *Some rabbit, poultry and in-shell chicken eggs

• Fermented produce “traditionally pickling”... when not in an oxygen sealed container

Examples of common foods that CANNOT be done as an HBV in Indiana

• Pickles, made by acidification or fermentation, cannot be sold by a HBV if the product is sold in an oxygen sealed container

• “Low acid” and “acidified foods” cannot be done by HBV- Examples: Green beans, pickled beets, salsa, etc.

• Shell eggs not from a domestic chicken (duck, quail, turkey)

"Hawkins' Law" - HBV Poultry

• Up to 1000 birds not a FE – Can be sold to the end consumer at a Farmers Market, roadside stand, from the farm

• Over 1000 birds contact Meat and Poultry Division of the Indiana State Board of Animal Health (BOAH)

• 1-20,000 BOAH “limited permit” to sell to RFEs

• All poultry produced and sold at a farmers market or roadside stand must be sold frozen

• All poultry sold on the farm must be sold refrigerated at the point of sale

"Hawkins' Law" - HBV Rabbit - rabbits that are slaughtered and processed on the farm to be sold on the farm, at a farmers market, or at a roadside stand

• Is not a “food establishment”

• Must sell rabbits frozen at a farmers market or roadside stand

• Must sell rabbits refrigerated from the farm at the point of sale and through delivery

• Only to end consumers

LOOPHOLES!!!!

• Herd Share (Fry Farms)

• Pet Milk

• Others

A Few Notes on Farm Labor:

The H-2A temporary agricultural program

• allows agricultural employers who anticipate a shortage of domestic workers to bring nonimmigrant foreign workers to the U.S. to perform agricultural labor or services of a temporary or seasonal nature. Employment is of a seasonal nature where it is tied to a certain time of year by an event or pattern, such as a short annual growing cycle, and requires labor levels above what is necessary for ongoing operations.

Other "more permanent" visa programs that may be used in agriculture - mainly dairy:

• J-1 VISA

the J-1 visa is not an ideal system, for many reasons. The most important reason is that the J-1 visa is designed for learning for one year, and then going home. Just as a dairy farmer feels that his trainee employee is really understanding things, the trainee must head back to his own country.

• TN VISA

allows for Mexican workers to come into the USA. This is a good option, but is only for Mexico (or Canada). (Global Cow is starting to work with this visa, and establishing connections with the right universities that provide the right documentation to apply for the TN visa.)

• H-1B VISA

This does allow for an American employer to hire a person with a specific skill set, training and knowledge, provided the employer can’t find that person in the USA. It also allows for the employee to bring their family, and to stay on for the year. The H-1B visa holder may even eventually apply for a green card.

But there is a cap on the H-1B, a limit to the amount of people who can come in. Typically, this visa candidate holds a PhD or masters’ degree, at least a bachelors’, and the job needs to require this education. Most dairy farm work requires experience and “cow knowledge”. This is not something that is necessarily learned in a college program. It is not a surprise that it’s difficult to have this visa approved for most dairy farm jobs.

For our purposes here we will focus on the development of the US commodity market and government prices supports for commodities. Additionally we will look at entitlement programs providing food aid to the American people. Throughout please notice that America has an overproduction problem that leaves our ag sector open to market collapse. We first approached this by taking acreage out of production to prevent surplus. We then moved to direct goverment purchase of surplus through the food bank system and international food aid as well as indirect price supports through corn ethanol subsidies, etc. as well as the support of the massive corn syrup industry. The US ag sector has become dangerously dependent on foreign markets to absorb overproduction as seen by the need for direct farmer payments during the Trump administration's trade war with China.

U.S. federal policies have a long history of influencing agricultural markets—the prices farmers receive for their crops, for example, and the quantities of crops they grow. The first of such policies was the Agricultural Adjustment Act (AAA) of 1933, when U.S. farmers were producing far more goods than they could profitably sell. This was a problem of agricultural surpluses: as the supply of agricultural goods exceeded demand, the prices farmers received for selling those goods dropped. To make a living on deflated prices, farmers responded by producing even more goods, feeding a vicious cycle that further increased surpluses and lowered prices. The AAA aimed to support struggling farmers by incentivizing them to produce less—leaving some of their cropland fallow (uncultivated), for example, or even plowing under planted crops. The AAA later allowed the federal government to purchase surplus meat, dairy, and grain from farmers and distribute it to the unemployed and hungry - this later became the foundation of the goverment-subsidized food bank model currently implemented by the TEFAP and CSFP programs. Later versions of the AAA set minimum prices for major crops, such as wheat, to prevent prices from dropping too low. These and other policies helped reduce surpluses, stabilize prices, and support farmers through difficult times. A crucial idea here is that the US used to support agriculture by paying farmers to leave some of their ground fallow. This not only stabilized prices but also preserved fertility by letting land lay fallow.

Supply control would continue to be used to decrease overproduction, leading to over 50,000,000 acres (200,000 km²) to be set aside during times of low commodity prices (1955–1973, 1984–1995). The practice was eventually ended by the Federal Agriculture Improvement and Reform Act of 1996. Although the federal government withdrew its involvement in controlling production and stabilizing prices in 1996, many of the ideas pioneered in the AAA live on in what became known as the U.S. Farm Bill. Beginning with the administration of Secretary of Agriculture Henry A. Wallace, the United States had generally moved to curb overproduction. However, in the early 1970s, under Secretary of Agriculture Earl Butz, farmers were encouraged to "get big or get out" and to plant "hedgerow to hedgerow". Over the course of the 20th century, farms have consolidated into larger, more capital-intensive operations and subsidy policy under Butz encouraged these large farms at the expense of small and medium-sized family farms. As the agribusiness lobby grows to near $60 million per year, the interests of agricultural corporations remain highly represented. In recent years, farm subsidies have remained high even in times of record farm profits. As a side note - if you would like to read about Butz's extrememly racist comments that got him kicked out of the government (and over to Purdue University) - read about that here.

The 2018 Farm Bill (next one is 2023)

You cannot have a conversation about food system policy without talking about the Farm Bill. In fact some consider it more accurate to call it the "Food Bill" because of the huge percentage dealing with consumer-side issues rather than producer-side issues.

Commodity Programs

Commodity crops are any crops that are traded just like oil for example. Generally they are relatively nonperishable, storable, transportable, and undifferentiated: one corn kernel looks like any other corn kernel. But in our national discussion about food and agriculture policy, “commodity crop” refers to those that are regulated by federal programs under the commodity title of the U.S. Farm Bill. There have been 20 of them, but the major five that take the lion’s share of taxpayer money are cotton, wheat, corn, soybeans, and rice.

Declining prices for several years after the 1996 Farm Bill resulted in expensive emergency support legislation, and the 2002 Farm Bill was enacted to avoid those expenses. The most important change to commodity programs in the 2002 Farm Bill was the introduction of direct payments in lieu of payments to farmers for leaving land fallow. Direct payments compensated producers according to rates set in the bill and based on individual producer’s historic acreage and yields. In the 2008 Farm Bill, target prices and loan rates were altered, but the framework of the 2002 Farm Bill was generally preserved. Contrary to the 2008 Farm Bill’s preservation of the 2002 Farm Bill framework, the 2014 Farm Bill—the Agricultural Act of 2014—made a sweeping change by ending the era of direct payments and launching the PLC and ARC programs. These programs persist in the newest farm bill, the Agriculture Improvement Act of 2018.

The PLC, ARC, and MAL programs that comprise primary, modern farm commodity support are administered by the United States Department of Agriculture (USDA). Most financial transactions are handled through the Commodity Credit Corporation (CCC), a federally owned and operated corporation within the USDA. While commodity programs were originally authorized by the Agricultural Adjustment Act of 1938, the Agricultural Act of 1949, and the Commodity Credit Corporation Charter Act of 1948, these statutes are modified by the farm bills, which generally guide commodity programs for six years. If existing legislation expires, the law reverts back to the early statutes. For further text, history, analysis, and background information on past and present United States Farm Bills, please visit our United States Farm Bills page. Excellent details on PLC, ARC, and MAL programs as well as others can be found here.

There are many problems with this system, because subsidies are inherently market-distorting.

1) Because direct payments are tied to the land and not to production, they are often bid into land values, to the benefit of landowner, who are often absentee city dwellers, not farmers. High land prices are the primary reason it is so difficult for beginning farmers to get started.

2) They incentivize farmers to grow subsidized crops to the exclusion of non-subsidized crops, such as pasture, hay, vegetables, fruit, and nuts. That is why the Midwestern landscape is dominated by corn and soybeans, making it vulnerable to soil erosion, water contamination, and the pest problems that result from lack of diversity. Because payments are tied to volume, farmers overproduce, seeking top yields by over-application of fertilizer, pesticides, and tillage.

3) Overproduction keeps prices low for commodity traders and food processors, who are their real beneficiaries. For example, subsidies result in below-production-cost prices for feed grains, which gives confinement animal factories an advantage over more environmentally sound grass-based animal production systems. Subsidies also make products derived from corn, soybeans, and wheat exceedingly cheap, leading to their overuse in our food system, in things such as corn syrup and cooking oil, which may be a contributing factor to our obesity epidemic. Cheap commodity crops are also dumped on the world market as food aid. Although famine relief sounds altruistic, in reality, unless carefully administered, it undercuts farmers in the recipient countries, fostering continued dependency on food aid.

4) By practically guaranteeing a profit—or at least making agriculture less risky, subsidies make agriculture attractive to investors, who drive up land prices, as well as the prices of agricultural inputs. Thus subsidies do not really help family farmers, who are still being squeezed between their suppliers and their buyers and who are still being driven out of business, to be replaced by industrial agriculture interests, which care little for the land or the people who work it.

5) The system is costly to taxpayers, who pay directly for the subsidies, and indirectly for cleaning up the harm done, both to the agricultural landscape, such as soil erosion and water contamination, and to our people’s health, such as in diabetes and heart disease.

These and other issues are further discussed here. There is continuing tension with Canada over US dairy since Canadian dairies use supply management and the US still wants to export more dairy to Canada to deal with US surplus production.

Crop Insurance Subsidies

Crop insurance is purchased by agricultural producers, and subsidized by the federal government, to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities. The two general categories of crop insurance are called crop-yield insurance and crop-revenue insurance. On average, the federal government subsidizes 62 percent of the premium. In 2019, crop insurance policies covered almost 380 million acres. Major crops are insurable in most counties where they are grown, and approximately 90% of U.S. crop acreage is insured under the federal crop insurance program. Four crops—corn, cotton, soybeans, and wheat— typically account for more than 70% of total enrolled acres. For these major crops, a large share of plantings is covered by crop insurance.

The farm bill’s recent shift to crop insurance could actually exacerbate environmental problems: The government backstop encourages farmers to engage in riskier behavior (locating in floodplains, etc.) and discourages them from engaging in practices—such as planting cover crops like rye or clover, which anchor soil and nutrients during the off‐​season, and help stabilize yields through years both dry and wet that would protect them from the very losses they end up needing crop insurance to recoup. This creates a vicious cycle: increased environmental damage increases the taxpayer cost of subsidizing crop insurance (and providing other disaster relief), which leads to more environmental damage and more taxpayer money.

Conservation Programs

CRP is a land conservation program administered by FSA (USDA Farm Service Agency). In exchange for a yearly rental payment, farmers enrolled in the program agree to remove environmentally sensitive land from agricultural production and plant species that will improve environmental health and quality. Contracts for land enrolled in CRP are 10-15 years in length. The long-term goal of the program is to re-establish valuable land cover to help improve water quality, prevent soil erosion, and reduce loss of wildlife habitat.

CREP targets specific State or nationally significant conservation concerns, and federal funds are supplemented with non-federal funds to address those concerns. In exchange for removing environmentally sensitive land from production and establishing permanent resource conserving plant species, farmers and ranchers are paid an annual rental rate along with other federal and non-federal incentives as applicable per each CREP agreement. Participation is voluntary, and the contract period is typically 10-15 years.

While both programs focus on environmentally sensitive land, CREP is a partnership between state governments and the federal government. This partnership is in place to address a high priority conservation concerns. Land cannot be enrolled in CREP if your state does not have a CREP agreement. More detailed information can be found here.

The Environmental Quality Incentives Program (EQIP) provides financial and technical assistance to agricultural producers and non-industrial forest managers to address natural resource concerns and deliver environmental benefits such as improved water and air quality, conserved ground and surface water, increased soil health and reduced soil erosion and sedimentation, improved or created wildlife habitat, and mitigation against drought and increasing weather volatility.

International Food Aid - A Double Edged Sword

Every year, the U.S. government purchases surplus grain from its farmers and distributes it to countries in need. International food aid alleviates hunger, at least in the short term, and can target the most vulnerable populations. Aid programs also support U.S. farmers by reducing surpluses, raising the value of their grain. In areas that receive food aid, however, farmers may see their own prices drop with influxes of donated grain.

In each situation, the pros and cons of sending food aid deserve careful consideration. In some cases, aid programs have been driven not by hunger but by industry pressure to reduce surpluses. In 2001, rice industry representatives successfully lobbied for increases in aid, arguing that “immediate increases in food aid now could mean the difference between survival and financial disaster for US rice mills.”

A better way?

A valid case can be made for subsidizing agriculture, because of its importance to society and because it is an inherently risky enterprise. However, it would make more sense to use subsidies to support agricultural conservation, rather than production; production should rightly be rewarded in the marketplace, whereas conservation is not. Conservation subsidies would pay farmers for activities that benefit society beyond their fence lines. Because conservation practices require care and attention, such subsidies would be harder for large conglomerates to exploit. They can also give a leg up to young and beginning farmers, or help start new community-based local food distribution systems, such as Farm-to-School programs or farmers’ markets.

Please take a serious look into the 50 year farm bill proposal and how it shifts thinking to the scale that we think about good farm management.

Read the links below if you are interested in learning how COVID payments and other factors are leading to a surge in food prices happening NOW

https://www.washingtonpost.com/business/2021/05/29/beef-pork-retail-prices-skyrocket/

https://www.the-daily-record.com/story/news/2021/05/12/soaring-corn-and-soybean-prices-mean-higher-costs-grocery-store/5035192001/

Hopeful Developments for Policy in Sustainable Ag

National Sustainable Ag Coalition

Young Farmers Coalition

Hoosier Young Farmers Coalition

Union of Concerned Scientists

Hoosier Environmental Council

Socially Responsible Agriculture Project

Indiana Small Farms Conference

Food Policy Networks Project

Sustainable Iowa Land Trust

Citizens Climate Lobby

Sunrise Movement

Agroecology Research Action Collective

National Family Farm Coalition

La Via Campesina