Branstad & Grassley: Bad for Iowa's Economy

The farm policies of Branstad and Grassley have hurt our states' economy. They've been bad for wealth creation and jobs creation.  They've been antibusiness and antifarmer. They have not been up to responding to major crises, like the 1980s farm crisis.
 Branstad, for example, argued that there was no farm crisis.  The headline in The Gazette Cedar Rapids, July 10, 1984 “Branstad says Reagan right:  Farmers well off.” 
 Grassley was a major supporter of the Republican Welfare State, corporate welfare, that is. The Reagan farm bill he supported increased farm subsidies, but lowered market prices even more. We exported more, but at a greater loss per bushel (and less total export value).
The farm policies of Branstad and Grassley have hurt our states' economy. They've been bad for wealth creation and jobs creation.  They've been antibusiness and anti farmer. They have not been up to responding to major crises, like the 1980s farm crisis.
 Branstad, for example, argued that there was no farm crisis.  The headline in The Gazette Cedar Rapids, July 10, 1984 “Branstad says Reagan right:  Farmers well off.” 
 Grassley was a major supporter of the Republican Welfare State, corporate welfare, that is. The Reagan farm bill he supported increased farm subsidies, but lowered market prices even more. We exported more, but at a greater loss per bushel (and less total export value).
Economic Impacts 
In contrast to Branstad's spin against Iowa's farmers, we now clearly know that return on equity for 1981-1986 was below zero, every year! (“Table 805. Balance Sheet of the Farming Sector: 1970 to 2005.”)
Likewise, the Reagan farm bill and subsequent bills Grassley supported were disastrous for our farm economy.  Using national figures for full costs, USDA-ERS data show farmers losing money every year 1981-2006 for the sum of corn, soybeans, wheat, cotton, rice, barley, grain sorghum, and oats (except 1996, a good corn year).  So if you multiply these crop nets/acre by acres planted, you get nearly $300 billion below zero, all to secretly subsidize the big corporations (exporters, processors, food and feed mills, ethanol) with below cost grain. Meanwhile America as a whole lost money on farm exports. That includes the era of the Republican Freedom to Farm era.  
 Note that these are not the compensatory farm subsidies that are widely covered.  Farmers are blamed for them.  These are hidden, off books, benefits, and much larger.  Meanwhile, we dominated export markets and effectively set world prices, as Daryll E. Ray at APAC has shown, so the world impact is enormous. World market prices were lowered causing widespread poverty, and the multinationals benefited hugely all around the world.  The US had to lose money on it's own farm exports to cause this!
 A while back University of Missouri economist John Ikerd summed up research on corporate farming, especially hog factories.  Regarding 59 CAFO studies,  he wrote:
“Virtually every study done on the subject in the past 20 years has confirmed the inevitable negative community impacts of CAFOs. Research consistently shows that the social and economic quality of life is better in communities characterized by small, diversified family farms.”
CAFOs vs Rural Communities.
 
This damage to our farm business and our economy was rewarded.  Iowa CCI researched Branstad's contributions and gave him a “check” for $42,000, which he had received from hog factory interests around the time of the hog factory bill, H.F. 519.
 
Elsewhere Ikerd countered arguments that building hog factories creates jobs, finding that for every hog factory job created, several independent farmers were lost.
(The Economic Impacts of Increased Contract Swine Production in Missouri:  Another Viewpoint, 
 
Solution: A True Democratic Farm Bill
 
We must bring back a true Democratic Farm Bill.  We need the Harkin-Gephardt Farm Bill of the 1980s and 1990s, the Food from Family Farms Act of the National Family Farms Coalition.  These bills are based upon the Democratic tradition from the New Deal and Henry Wallace.  
 
Those traditional farm bills, and these newer ones, were not expensive subsidy bills. In place of subsidies they featured price floors and supply management, like other businesses.  
 
Farmers need that because farm commodities lack price responsiveness on both supply and demand sides.  Farmers can't manage supply individually.  When prices are low they can't have an impact by not planting the back 40.  It requires government assistance.  Likewise, consumers don't eat 4, 5, 6 meals when farm prices are low.  As Stewart Smith has shown, farmers get only about 8% of the food dollar anyway, and much less for grain products like cereal and bread.
 
These Democratic farm bills also featured strategic grain reserves, and price ceilings to trigger the release of reserves during occasional price spikes, such as the 1970s and 2007-8.  These protect consumers and the world's hungry.
 
For hunger, however, a huge long term solution is to raise farm prices to fair trade, living wage levels.  Least Developed Countries are 70% rural, dependent upon a farm economy and farm prices.
 
Now with the economic crisis we must also remember that the New Deal Farm Programs were strengthened through the Steagall Amendment of 1941, which guaranteed living wage or parity prices.  The Steagall Amendment was an economic stimulus, but not one of government spending or give aways to the rich.  It was passed through the banking committees.  It took some start up money for a revolving loan fund, but farmers paid for it with interest on price floor loans.  In the end, the program worked, and the government made money on the program, $13,000,000 to the red.  We started at the grassroots of the economy, directing the economy to pay fair prices to farmers, the grassroots where the wealth multipliers and jobs multipliers are the strongest. 
 
The Republicans, with their corporate welfare and antibusiness policies, have failed miserably in overseeing our economy. Our Democratic leaders must not be intimidated by these failed policies.  They must boldly lead us, with real Democratic principles and programs, toward fair trade, living wages, and powerful, grassroots wealth and jobs multiplying stimulus packages.
 
For further reading 
 
Find sorted links to articles (from various progressive organizations and academics) supporting this diary at: Farm Bill Primer. 
  • Here's more of my work

    Here’s my Farm Bill Primer, showing who’s been on board. https://zcomm.org/zblogs/farm-justice-primer-a-farm-bill-primer/ Here are videos from history and what’s been going on with the farm bill recently. https://www.youtube.com/playlist?list=PLA1E706EFA90D1767

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