Agribusiness versus Joseph in Egypt

One of the reasons I supported Bernie Sanders for president was his support of family farms against the abuses of agribusiness. He mentioned agribusiness again in a recent speech about health care in Iowa so I thought it would be a good time to discuss an article in the February 2016 issue of Harper’s entitled The Trouble With Iowa”. (Richard Manning, The Trouble with Iowa: Corn, corruption, and the presidential caucuses. Harpers, Feb. 2016) The article ends with these words:

The standoff that results from all of this plays out across our continent. Those endeavors that produce food and energy need scale and landscape and are of necessity rural and are of necessity unspeakably destructive. The industries involved must be free to operate on their own terms in the landscape in the nation’s midsection, where the states are red and square. As Stowe Says, all they have to do is to protect the status quo. To do that, they don’t need to play to checkmate; stalemate and gridlock are success enough. Iowa’s caucuses, and for that matter the whole presidential ritual, will do nothing to change this.

The man quoted in this paragraph is William Stowe, head of the Des Moines Water Works. Mr. Stowe has received death threats from the people he’s trying to serve and not because of a decrease in water quality. People are upset with him because Stowe’s department has sued county operators of drainage districts over the fertilizer and hog manure they’ve been dumping into Iowa’s waterways and drinking water.

This is just the tip of the iceberg in Iowa. Rolled up in that iceberg are other key issues of the 2016 election such as immigration, health care and obesity, poverty and income inequality, and the entrenchment of a corporate oligarchy. In other words, Iowa is a pint-sized version of the United States. And like the rest of the United States its pollution makes its other problems look like a cakewalk.

The author of this article was not lamenting the difficulty of getting a candidate elected. He was talking about how difficult it is to keep promises once a candidate takes office. One of Obama’s campaign promises was the reform of industrial agriculture, which is why he appointed Tom Vilsack as Agriculture Secretary. But even though Vilsack had been governor of Iowa and a supporter of reform, his appointment did not have the hoped-for effect.

Tyson responded to his efforts by joining with Smithfield and other meat producers to mount a multimillion-dollar lobbying campaign, complete with astroturf opposition and congressional arm-twisting. Big Ag outplayed Vilsack at nearly every turn, and he quickly backpedaled on the new rules. Finally, Congress killed the reform effort late in 2011. Two years later, with the fundamentals of its business plan intact, Smithfield sold itself to the Shuanghui Group, a Chinese company. What Smithfiel sold to the Chinese was less its pork production than its control of Iowa’s politics and its landscape. The irony of some of the world’s last remaining Communists taking over from Iowa’s swine capitalists is outdone only by Donald Trump, who spends whatever time he isn’t using to bash immigrants bashing the Chinese. He offers no hint of course, about how he might best the Shuanghui Group, which, through finely honed contracts, now controls the landscape of all that beautiful corn in the Midwest.

So what exactly is this business plan passed on to the Chinese by Smithfield? It is modern-day serfdom. Iowans say their state has been chickenized. Richard Manning thinks it’s more accurate to say it has been Tysonized. Tyson describes the process as vertical integration. Thanks to its efforts over the last 30 years the company owns every step of the process, from producing and delivering feed and hatchlings to slaughter, processing and distribution. During that time, Tyson has even managed to redesign the chicken by genetically selecting for animals that will eat high-energy corn and soy while crammed in windowless, climate-controlled factories.

The process depended on a networked system of growers and farmers, who became contractors. The network was organized as a tournament. Tyson delivered hatchlings, formulated and supplied the feed and antibiotics, and took away the birds when they were ready for slaughter…Growers in a given region were lumped in a pool and paid on the basis of a competitive scheme that ranked them according to the pounds of chicken produced per pound of feed. Everything was tightly monitored by a flow of data that measured corn and soy in, McNuggets out. A productivity gain of a few percentage points meant the difference between bankruptcy and a paycheck for many growers.

What a feat! Tyson not only reformulated chickens, it domesticated farmers. So naturally the pork processors wanted to get in on the deal. A large part of the pollution in Iowa comes from the manure produced by these operations. It is not regulated because unlike factory waste, farm waste is not considered pollution. Never mind that twenty-one million Hogs produce the waste of about 45 million people. (Iowa has a population of just 3 million.) The chickens likewise produce more manure than all the people in the state and almost none of it passes through a sewage treatment plant or septic tank before going into the public waterways and drinking water.

The 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. (Foodopoly, page 11. cited below)

It is possible to remove nitrates from water. However at this concentration Des Moines Water Works would need an equipment upgrade costing up to $180 million. And there are 260 cities and towns in Iowa with the same problem. And even if they all removed the nutrients from their drinking water it would not help the life of the rivers. Or the ocean. Nitrates traveling from the corn-belt down the Mississippi River have killed ‘a Connecticut-size stretch of the Gulf of Mexico.”

The cost-effective way of solving the problem would be to run the drainage pipes into wetlands, plant some permanent pastures, apply less fertilizer and replace much of the corn with other crops. Unfortunately the government would have to stop subsidizing the growing of corn and those who receive subsidies won’t allow it.

Meanwhile a diet of corn products and products from soybeans, a companion plant of corn, is changing America’s diet. Eighty-five percent of America’s farmable cropland is planted in corn, soybeans, wheat and hay. In Iowa, 23 million of 24 million acres is planted in corn and soybeans. This translates into higher consumption of high-fructose corn syrup as well as products containing soybean oil. From 1909 to 1999 the consumption of soybean oil increased a thousand fold. Linoleic acid found in soybean oil is a culprit in the obesity epidemic, and since livestock feed contains soybeans it is even found in the chicken and pork we eat. It may even be responsible for decreased brain development in the population since it supplants omega-3s in our diets.

The plight of the family farm raises fundamental questions about what kind of society we want to have. Back in 2014  I imagined a new kind of community centered around family farms. I said that one of the things this community would have to do is develop its own candidates for public office. Sadly, that wasn’t a new idea. That’s exactly what farm communities used to do. We’ve actually been moving away from that ideal. Now agribusiness’s gains of the last twenty years have made the rivers run so thick with animal waste and synthetic fertilizer everything the river touches dies.

This is all relevant to the election of 2016.  Farmers have been the vanguard of populism since the Civil War, fighting abuses by railroads, banks, grain merchants, and food processors, and government allies of agribusiness. And we can’t forget the speculators. Hedge funds, one of the main culprits behind the recent financial crisis, have become some of the largest investors in food companies, farmland, and agricultural products. Their speculation in food commodity markets has also contributed to price spikes in corn and soybeans. Hedge funds have been big proponents of grabbing land worldwide in order to capitalize on expectations of profitability from climate change on agriculture. (Foodopoly, Page 11)

These financial interests have worked together to decrease the number of family farms because farming communities are the biggest obstacles to their oligarchic pretensions. Farmers led the populist uprisings of the nineteenth and twentieth centuries when unfair economic policies threatened farm family livelihoods. Family farmers banded together to form organizations like the Grange, the Farm Alliance, and the National Farmers Union. They ran candidates and joined with progressive allies in labor and social justice movements.

If you’re wondering why you haven’t heard about this it’s because it’s been erased from history–especially the post-World War II part. (Foodopoly, page 13) In 1955, in response to Ezra Benson’s move to reduce crop prices, farmers formed The National Farmers Organization (NFO). Benson, who was simultaneously a Mormon apostle and President Eisenhower’s secretary of agriculture, was determined to destroy the New Deal program for agriculture that ensured fair farm prices. As a representative of the ‘captains of industry’, he saw farmers as excess labor. This cabal organized the Committee for Economic Development (CED) in 1942. (Foodopoly, page 13) However it wasn’t until the early 1960s that it released its report stating its intentions for this so-called excess labor. The corporate solution was to get farm boys off the farm and into vocational training for industrial skills, and relocated to where their labor was needed. So by the time of the August 1962 NFO convention in Des Moines, Iowa farmers were fighting mad.

At this time the CED was headed by representatives of Ford Motor Company and Sears, so the NFO organized catalogue marches in seven cities where protesters dumped Sears catalogs in front of their stores and drove Ford cars and trucks in circles around Ford establishments in several cities. Not long afterward both companies disavowed the report and the U.S. Senate and House agriculture committees held hearings to discredit the ‘solution’ pedaled by the CED. (Foodopoly, page 15) But unfortunately the enemies of the people have plenty of time and resources, and they never quit.

During the CED’s 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.’

In 1962 Kennedy was influenced to support a massive tax cut by a CED report that called for ‘a prompt, substantial and permanent reduction’. The CED 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.

They were aided in these efforts by their propaganda arm. The CED’s 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). The CED’s 1958 pamphlet, ‘Defense Against Inflation,’ was discussed in 354 papers and magazines, reaching 31 million people. Everything was done according to plan.  (Foodopoly, page 15)

Immediately after its formation in 1942 the CED began creating 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.

But first they had to do away with those pesky programs created by the Agricultural Adjustment Act of 1933 which were intended to achieve parity for farmers. This is how the Adjustment Act worked:

The act provided for acreage reduction and land set-asides to reduce over-production. In addition, 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.(Foodopoly, page 15)

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 make a profit of $13 million over twenty years as the crops were sold on the commodity market.

But the food-processing and grain industries preferred overproduction because it led to cheap prices for the products they needed–a preference that still motivates their propaganda. And it’s important that they are also motivated by their fear of the political power of farmers.

The story of the destruction of parity reminds me of the biblical story of Joseph whom his brothers sold into slavery. He ended up in Egypt where he was given the job of telling the Pharaoh the meaning of his dream. Joseph told the pharaoh it was a warning that a famine was coming. Egypt prepared for this famine by storing grain. There was indeed a famine and Joseph’s brothers traveled to Egypt when their own supplies ran out, not knowing that they had been saved by their brother’s wise policies. Our situation is the reverse of the biblical story. Agribusiness is the anti-Joseph.

Today the representatives of agribusiness include the American Farm Bureau Federation, which works in concert with the U.S. Chamber of Commerce. In the twenties this group worked with members of Congress, ‘the farm bloc’, who feared the Progressive movement. The farm bloc was made up of farm-state legislators who wanted to appear to address the concerns of their constituents without changing the overall economic structure. The 1921 Packers and Stockyards Act passed in spite of their efforts to defeat it but it was poorly designed. Although it did manage to curb excesses through the 70s it has not been seriously enforced since the 80s.

In 2008 Obama found he was unable to keep his campaign promise to correct this situation and in the Fall of 2011 the Republican-controlled House of Representatives denied funding for enforcing regulations at the Departments of Agriculture and Justice. A similar fate befell the post-World War I effort by populists to abolish futures trading. Commodity speculation continued to plague farmers right up to the 1929 stock market crash.

Today populists face the same powerful forces with a drastically reduced number of family farms and labor unions that are in a state of dysfunction. Our situation is as serious as it gets. For that reason I have serious doubts about pundits who criticized Senator Sanders during the campaign for not satisfying all of their criteria. I can understand if the younger voters lack perspective, but not the so-called experts.

Now at the risk of contradicting everything I’ve said so far, Bernie’s campaign is not your grandmother’s populism. My main piece of evidence is his invitation to Native Americans to take part in the primary. Most of us probably didn’t realize how unusual this was at the time—not for Bernie of course, it was consistent with his civil rights work–but it was at least a contradiction in terms. If I’m not mistaken, the first populist movements carry some responsibility for homestead policies that imposed on tribal lands, railroads on tribal lands, and residential schools that separated native children from their culture. So maybe we’re creating an opening for an entirely new political entity. This is an interesting development and it needs more thought.

The other side of this contradiction—the family farm side—is important for the reasons stated above. We need farmers if we’re going to survive but the environment can’t tolerate the agribusiness approach. Iowa’s extreme pollution only appeared in the last twenty years and it’s getting worse by the day. Family farms and the communities that grow up around them are one solution. On the other hand most of us would make sorry farmers at this point. This also supports my suggestion that something new is needed—new organizational structure, new ways of thinking. However there are principles in our populist past that might help us go forward.

Now I just had a terrible thought. What if the conflicts of the past were the result of a failure to think through problems like this? Now that I’ve learned how difficult this process is I think it’s possible. You think you’re on to something with the populist fight against the oligarchs and suddenly you remember the Native Americans and their struggle to protect our water. Was it like that in the nineteenth century I wonder? Maybe in their struggle against corporate interests people couldn’t see anyone else until they came face-to-face with the original inhabitants of their so-called homestead. Or maybe they were just used by the oligarchs to help clear the way for the railroads. I suppose it’s also possible that they were as pugnacious in their own way as the oligarchs. And maybe all of those things were factors.

I wonder, what might happen if this time we begin with the Native Americans and their unique culture and build from there? I already know what the oligarchs will say about this. Judging from the way they categorize these people, and corral and enslave them, they seem to hate and fear indigenous people most of all. We on the other hand have no obligation to the oligarchs’ agenda. Their ways are not our ways.