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A Tale of Three Countries: Are Farm Subsidies Necessary?

Imagine if Tom Vilsack (whose Wikipedia biography does not list any experience whatsoever with farming or farmers prior to his appointment as the United States Secretary of Agriculture) emerged from his offices to find a cow tethered on the street outside and protestors informing him that it was his task to milk her. This was exactly what happened in Norway during 2012 protests to changes in agricultural subsidies for Norwegian farmers. (1) The cow outside the council buildings sent the message that farmers and their unique sets of skills are vital to the health of our communities and food systems and are undervalued and underestimated in their complexity and import by citizens and politicians with little understanding of what farmers do.

Norwegian agricultural policy is interesting to consider because they have taken such a drastically different path from our own here in the USA. Historically, Norway has fought hard to preserve small farms, while America has focused on maximizing production, at any cost. In a 2003 report from the Norwegian Agricultural Economics Research Institute, Knut Hei writes,

Norwegian agricultural policy emphasizes decentralisation and a varied farm structure. This is seen as being important for both food security and food safety. Agriculture is assigned a vital role in the maintenance of viable rural communities and a scattered settlement pattern. The natural resources must be sustainably managed in order to secure the biological basis of agricultural production and the environmental qualities of the cultural landscape. In the formulation of farm policies, there has been, and still is consensus regarding the importance of maintaining small farms. (2)

Norway has put their money where their mouth is (pun intended!) by subsidizing small farmers, by banning imports of certain farm productions, and by imposing high tariffs on imports of other crops, allowing local farmers to remain competitive with imported goods. These tactics encourage consumers to buy from their local farmers.

Norway’s support of small farms has, until recently, been very successful. A 2007 report by the European Commission tells us that in Norway 60% of farms are less than 50 acres and only 6% are more than 125 acres. (3) I recently received an email from Kristin Borresen from Geno Global, a farmer cooperative and breeding organization for the Norwegian Red dairy cow. She writes of Norway,

Average herd size is 23 (mainly family farms) and 35% of cows are milked by robot. — Kristin Borresen

This would imply that 65% of cows in Norway are still milked by hand! Contrast this to the United States:

When looking back at the last 20 years, average herd size has gone up 142 percent, from 74 to 179 cows nationally. (4)

Recently, Norwegian politics are evolving into policies that farmers perceive as a threat to their way of life due to significant cuts in the farm subsidies available to small farmers. Large organized protests have erupted in the capital city and outside of council halls all over the country. This past May Norwegian farmers took to the streets of Oslo with their tractors, blocking traffic and in some cases pulling manure spreaders behind them. One Norwegian-American publication explains,

Marit Epletveit runs a small farm with 30 cows outside Ålgård…(she joined) the protests because the government’s agricultural settlement offer will force her to either expand, or close down. "If we invest, we will have problems keeping the fields in good condition," she said. "In addition it will impact on the cows’ quality of life." (5)

Luckily for Norwegian farmers, significant cuts in Norway’s farm subsidies have been avoided thanks to Norway’s two powerful farming unions, which represent small farmers and have significant clout in parliament.

By comparison, the largest lobby groups in the United States are representatives of large agribusiness, not family farms. Peggy Lowe reports for Colorado Public Radio that,

At least 600 companies spent roughly a half billion dollars in total lobbying during the two years the Farm Bill was moving on Capitol Hill, with big spenders ranging from Fortune 500 leaders in banking, trade, transportation and energy… Energy companies Exxon and DuPont also spent in the tens of millions and promoted ethanol and biofuels…. ag giant Monsanto, the world’s largest seed company, spent more nearly [sic] $10 million lobbying… (6)

In the United States, there is also the question of who is getting the subsidies. The Environmental Working Group tracked where $292.5 billion went between 1995 and 2012 and found that ten percent of farms collected seventy-five percent of all subsidies. The New York Times reported in 2013 that,

The federal government paid $11.3 million in taxpayer-funded farm subsidies from 1995 to 2012 to 50 billionaires or businesses in which they have some form of ownership. (7)

Perhaps this information can partially explain the disturbing trends in American agriculture away from small, diverse farms. An August 2013 report from the USDA states,

Large farms now dominate crop production in the United States. Although most cropland was operated by farms with less than 600 crop acres in the early 1980s, today most cropland is on farms with at least 1,100 acres, and many farms are 5 and 10 times that size. (8)

The 2007 report on the Structure and Finance of U.S. Farms states,

Large-scale… farms account for 10 percent of U.S farms, but 75 percent of the value of production. (9)

Just a few years later, the 2010 edition states,

Large-scale farms made up only 12% of U.S. farms…but accounted for 84% of the value of US production." (10)

In only three years, large farms gained 2% of total farms and 9% of total farm profit! These numbers hint that small farmers are unable to make a living through farming. Can we take a page from Norway’s book and allocate subsidies for small farmers?

Or perhaps we should follow New Zealand’s example: New Zealand eliminated all farming subsidies in 1984. Most farms in New Zealand survived the shift and are thriving economically; only 1% of farms were lost to forced sales in the years after the subsidies ended. (11) Doug Bandow from the Cato Institute cites New Zealand as support for eliminating all subsidies for farmers in the United States. (12) Yet those who take this stance may want to consider the very different market strategies of the two countries. The United States exports only 23% of total raw farm products, (13) while in New Zealand almost everything is exported; farming generates 70% of New Zealand’s merchandise export earnings. (14)

There is also this sad observation that my fiance David and I discovered during our 6 months of traveling in New Zealand last winter: New Zealand, overwhelmingly a farming nation, does not eat and perhaps cannot afford its own food. On the South Island we moved through the landscape surrounded by sheep and sometimes could not find lamb in the local markets. On the North Island oranges and kiwis abounded and the only fruit in the stores was damaged, bruised, or otherwise unfit for export to European, Japanese, and Chinese markets.

My experience living and working in Kiwi households was that many citizens based their diets around processed foods: cans of speghetti o’s for breakfast, wonderbread and bolognese for lunch, and microwave dinners. Essentially, they were eating foods imported from countries like the U.S. and the U.K. that subsidize staples like grain to make them cheap for consumers instead of the beautiful food produced in their own backyards. Of course this was not the case everywhere and one lovely family I stayed with for a couple of months grew a large garden and kept cows in order to supply most of their own food. But unfortunately this family was by far in the minority.

How involved should government be in farms? Should government offer subsidies and if so, to whom? Could we protect American farmers from foreign competition with import bans or tariffs alone? Is it fair for wealthy countries to subsidize their farmers and thus undermine the ability of farmers in poorer countries to get a fair price for their unsubsidized products? And if there are no subsidies, will consumers in the United States or Norway be willing to pay the true cost of local food sustainably raised on small farms or will they follow the example of New Zealand and resort to a cheaper, heavily processed diet? These are questions we must each ask, and answer, for ourselves.

And in the meantime, let’s tie a cow heavy with milk outside of Tom Vilsack’s office just to see if he or anyone else in the White House has the skill set to milk her!

Further Reading:

References:

  1. https://nvdatabase.swarthmore.edu/content/norwegian-farmers-stage-bread-blockade-higher-government-subsidies-2012
  2. ageconsearch.umn.edu/bitstream/24386/1/cp03he01.pdf
  3. https://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Farm_structure_in_Norway
  4. https://www.hoards.com/blog_fewer-dairy-farms-left-business
  5. https://www.newsinenglish.no/2014/05/20/oslo-overrun-by-tractors/
  6. https://www.kunc.org/post/lobbyists-all-kinds-flock-farm-bill
  7. https://farm.ewg.org/region.php?fips=41000
  8. https://www.ers.usda.gov/media/1156726/err152.pdf
  9. https://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib24.aspx
  10. https://www.ers.usda.gov/publications/eib-economic-information-bulletin/eib66.aspx#.U-lcRnBJUb0
  11. https://www.huffingtonpost.com/mark-ross/farm-subsidies-new-zealand_b_1680259.html
  12. https://www.huffingtonpost.com/doug-bandow/federal-log-rolling-and-a_b_3530920.html
  13. https://www.fb.org/index.php?fuseaction=newsroom.fastfacts
  14. https://www.mpi.govt.nz/agriculture

3 Comments

  1. This is a topic that should be looked at and agitated and turned into action asap. I’ve written many times (see some of the articles in the ‘further reading’ section above) on the need to implement ‘get smaller, or get out’ policies – the opposite of the US ‘get big or get out’ policies that have killed the family farm ever since the 70s.

    In regards to New Zealand, read about Fonterra, a huge (and hugely destructive) farming cooperative within this article:

    https://www.permaculturenews.org/2012/07/10/letters-from-new-zealand-koanga-sows-seeds-of-change/

    New Zealand hasn’t encouraged small scale, which results in the ‘conventional’ export-oriented thrust towards all things large scale, and detrimental to both people and place. It’s profits before anything else.

    There are a raft of reasons why we need to transition as quickly and seamlessly as possible to small-scale diverse systems – for base soil biology reasons, to hydrology, to peak oil, climate, social and economic reasons, food sovereignty and security, etc. Beginning a staged reversal of the ‘get big or get out’ agricultural policies that Earl Butz bequeathed us with would see a reincentivisation that would help us move towards a more sustainable, and equitable (and thus more peaceful), less atomised and more cooperative world – where consumerism and all its social woes starts to move to the periphery, and where people are growing in practical skills, health (of body and mind), and where unemployment disappears. There’s so much to do, and so many people available who could be trained up to do it, but with all the land and resources tied up in the hands of a few massively mismanaged farms, there’s little opportunity to get started.

    Also, if all education worldwide included holistic soil science, I’m convinced that the resulting politicians would not make such stupid policy decisions, and would instead work for the common good.

  2. One of the best articles I have seen recently on this subject and equally relevant to Britain – substitute Michael Gove for Tom Vilsack

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