Paying Farmers Fairly Could Curb Climate Change and Hunger
During a recent campaign stump through the Midwest, Bernie Sanders walked the fields in Iowa, posed on a tractor, and galvanized the rural crowd with a word not spoken by a presidential candidate in many decades: parity.
Though foreign to most of the voting public, parity is at the core of agriculture’s potential to address the farm, food, and climate crises.
Parity is the notion that family farmers should be paid a fair price for their product—one that covers their costs and provides them with a decent livelihood. According to the National Agricultural Statistics Service, “The idea of parity stemmed from a continuous search for a concrete measure of economic justice for the farmer.”
Farmers had parity in 1914, just before the United States entered World War I. It was the “Golden Age” of U.S. agriculture, when a bushel of corn bought five gallons of gasoline. (No one suspected that seven years later it would take two bushels just to buy one gallon.) At the beginning of the war, U.S. farmers profited as Europeans relied more and more on food from the United States. But when German U-boats sank U.S. supply ships going to Europe, the United States entered the “War to End All Wars.” High wartime grain prices, plentiful credit, and new Ford tractors led to an agricultural boom. Land values rose dramatically. Farmers took out second, third, and fourth mortgages and bought more land. Financing flowed, and land speculation was rampant. Fortunes were made on Wall Street and in the North American heartland.
Then the war ended.
After the Armistice of 1918, European farmers began growing food again, leading to a global oversupply and a crash in international grain and cotton prices. Capital investment abandoned agriculture, bursting the speculative land bubble. Overextended on their loans, with crop prices now hopelessly below the costs of production, farmers began going broke at the height of the “Roaring Twenties,” when Wall Street was getting rich.
The boom-bust cycle of the “Agricultural Depression” turned out to be a prelude to the 1929 stock market crash and the Great Depression.
Trying desperately to farm their way out of debt, farmers produced even more food, which only drove prices further downward. But no matter how much cheap food they produced, the unemployed millions (up to 1 worker in 4 by 1932) still could not afford to buy it. Long breadlines of hungry, destitute people wound through the nation’s cities even as grain rotted in silos across country. The U.S. had “breadlines knee-deep in wheat.”
President Franklin Delano Roosevelt implemented the New Deal. He began with the Agricultural Adjustment Act. The act returned to parity prices that gave farmers the same purchasing power they had before the First World War. According to Iowa farm leader George Naylor:
“New Deal farm programs involved conservation-supply management to avoid wasteful, polluting over-production; a price support that actually set a floor under the market prices rather than sending out government payments; grain reserves to avoid food shortages and food price spikes; and a quota system that was fair to all farmers and changed the incentives of production. ‘Parity’ was the name associated with these programs because it meant the farmer would be treated with economic equality and prices would be adjusted for inflation to remove the destructive cost-price squeeze and the need for farmers to over-produce their way out of poverty and debt. It was understood that the farmer’s individual ‘freedom’ to do whatever he or she wished with the land would be tempered for the good of all farmers and society. A social contract was established.”
Parity’s importance today
Why is parity important today? Because without parity it is impossible to control overproduction—one of the main drivers of agricultural GHG emissions, agricultural pollution, food waste, family farm bankruptcies, and yes, hunger, malnutrition, and diet-related disease.
We are taught by agro-industry that the cause of hunger and malnutrition is food scarcity. The solution is always the same: double food production with their new technologies. But the world has been producing 1 ½ times more than enough food for everyone for a half-century. People go hungry—and suffer from diet-related diseases—because they are poor and can’t afford good food, not because there isn’t enough of it.
So why do we hear the same mantra about doubling food production over and over? Because the best way to sell more agricultural inputs is to ramp up production. This leads to overproduction—the best way to keep basic grain prices low for cheap, processed food and cheap feed for polluting concentrated animal feeding operations, known as CAFOs. Because low prices paid to farmers don’t cover their costs of production, they have to produce more and more, just to try to stay in business. Farmers overproduce to survive. Taxpayers have to come along behind industry to subsidize farmers just to hold the system together. But farm subsidies aren’t driving overproduction: low prices drive overproduction (which drive prices lower, repeating the cycle).
Parity policies would stop the low-price/overproduction cycle that wastes resources, pollutes the environment, and sends farmers into debt. They would also save taxpayers the money spent on farm subsidies. Dairy farmer Jim Goodman, board president of the National Family Farmer Coalition, asserts:
“We need to think about the parity model and getting farmers a fair wage for what they produce. If farmers got paid a fair price, they wouldn’t need to continuously overproduce just to make more profit per unit of production, because they’d be getting a fair wage for whatever they did produce. We’d eliminate a lot of the surplus we have in dairy, beef, and commodity crops, and we could grow a lot less, and we wouldn’t need to be looking for alternative uses for the things we grow and trying to get people to eat more meat and more dairy products. People could make the choice to have a healthier diet that is grown locally, and we wouldn’t be flooding the world market with really cheap commodities that are breaking farmers who are just trying to stay in business.”
Of course, then agro-industry would not be able to sell so many farm inputs and the food and feed processors would have to pay farmers more. The CAFOs would not get cheap feed (which would go a long way to putting this dirty industry out of business).
Eighty years ago, when we were an agrarian nation, parity was a powerful concept for social and environmental justice. We no longer are an agrarian society, but agriculture—and family farmers—are still central to our economy, and parity is still essential for a just, transformative food system.
This article was originally published by the Institute for Food and Development Policy, Inc./Food First. It has been published here with permission.
Eric Holt-Gimenez is an agroecologist, researcher, lecturer, and author. He is the director emeritus of Food First, aka the Institute for Food and Development Policy, having served as executive director since 2006.
Heidi Kleiner wrote this article for Institute for Food and Development Policy, Inc./Food First.