Postponing Justice (by Jim Wallis)
Tuesday marked the beginning of what is likely to be a long and controversial Senate debate on the 2007 Farm Bill. People of faith around the country are waking up to realize how critical this legislation is to our goals of ending hunger and poverty in America and abroad. Unfortunately, Congress has yet to show the leadership to make this goal a reality.
The Farm Bill is a vast piece of legislation - authorizing everything from food stamps to conservation programs, from rural development to our infamous farm subsidy program. This summer the House of Representatives passed its version of the Farm Bill, with little reform to the commodity title that governs farm subsidies. Now it is the Senate's turn, and the bill they are starting with has every indication of ignoring the reform agenda yet again.
Today, I stood with African and U.S. religious leaders at a press conference to call on our senators to be true to their commitments to fighting poverty in Africa by cutting unfair and outdated subsidies in the Farm Bill. The following are my remarks from the event:
An evangelical always has a text so I'll begin with a text this morning. Proverbs 13:23: "A poor person's field may produce abundant food, but injustice sweeps it away."
The question this morning for members of the U.S. Senate is simply this: How long will you postpone justice?
Is there anybody on this hill, in this town, who believes that continuing outdated, outmoded, but enormous subsidies to the world's biggest and richest farmers at the expense of the world's smallest and poorest farmers is fair, is just, or creates global stability? I don't think so. I haven't heard that.
Unfortunately, poor cotton farmers in West Africa don't vote in races for the U.S. Congress. They don't contribute to senatorial campaigns. They have no lobbyists on Capitol Hill except for us - today. They're just too busy trying to make a living to support their families and allow their countries to earn their way out of poverty.
But they have a huge obstacle; they have a huge competitor to their efforts. Their competitor is the U.S. government; their obstacle is the U.S. government.
Everyone knows these inequitable subsidies must end. Everyone knows that by continuing them we put a gigantic obstacle in the way of the sustainable development we say we support - and then block. Everyone knows that these subsidies make a mockery of our rhetoric about caring for what happens to Africa. Everyone knows we are postponing justice again.
Seventy five percent of the world's poorest people support themselves by farming, and we stop them from doing that. Gordon Brown, the British prime minister, has said eloquently and clearly, "a world where a billion people live in extreme poverty is neither just nor secure."
We need to make the reforms in the commodities in the farm bill - now. To not do so is to be guilty of moral shortsightedness and political blindness to the real path for global security. But that moral shortsightedness and political blindness is likely to happen again on the floor of the U.S. Senate unless some senators open their eyes, develop new vision, and find the courage to lead.
The religious community is asking them to do just that.
TAKE ACTION: The Farm Bill debate is typically dominated by big agribusiness and a handful of congressional leaders from farm states. But we can make a difference – Sojourners is asking our supporters to call their senators in support of reforming the commodity title – click here to make your call.
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Comments
Jim is right, crop subsidies in America have an adverse effect on farmers in the poorer nations and this is a moral issue.
America can't afford corporate welfare anymore.
Neither can the planet.
There are new factors affecting price stability in the agriculture sector.
More and more cropland is being devoted to the production of feedstock for biofuels.
This has had the effect of pushing prices for corn, soybeans and the value of productive farmland upwards.
The current price for soybeans has moved above $10 a bushel - uncharted territory.
At the same time, fuel prices are rising rapidly, driving up the cost of producing crops.
American agriculture is the most fuel intensive in the world.
These factors create an urgent need for rethinking America's agriculture policy, not just for moral considerations but also for the economic health of the agriculture sector.
Posted by: justintime | November 7, 2007 10:39 AM
Justintime,
Could you explain what the solution is ?
We want corn to substitute for oil products , but this causes the price of corn to go up .
I am not following here what the solution is ?
Posted by: Mick Sheldon | November 7, 2007 11:02 AM
Mick,
Subsidizing crop prices in America, originally intended to help the small farm in America to survive, has in recent years evolved into a form of corporate welfare, benefiting corporate agribusiness. The small farm is history.
As Jim points out, subsidizing crop prices in America allows the export of American farm products into developing nations, where farmers cannot compete with the subsidized American products, seriously damaging these local economies.
The solution to this problem is simply to eliminate crop subsidies, saving tax dollars and at the same time, benefiting farmers in developing nations and their local economies.
I think this solution is supported both by the free marketeers (Kevin S. and Wolverine) and us progressives.
Now that biofuels are gaining acceptance together with the escalating cost of oil, subsidizing crop prices makes even less sense.
biofuels = ethanol + biodiesel
corn = ethanol
soybeans = biodiesel
Recently, due to misguided free market ideology, the American dollar has lost about 1/3 of its former value relative to other world currencies.
This factor in itself, will allow American farm products to be competitive on world markets, even without price subsidies.
All of these factors point to the necessity of rethinking American farm policy from the ground up.
Posted by: justintime | November 7, 2007 12:13 PM
Great post and comments. The Grassley-Dorgan Amendment is an important step toward reducing our commodity payments to large farms. Mick asked what the solution is while justintime suggested that we eliminate subsidies all together. I fully agree, but I don't think that is politically possible. The farm lobby is way to powerful, so we need to consider ways to phase out the program by offering viable solutions to support our farmers. There are numerous proposals out there. The Tobacco industry no longer receive government subsidies under the farm bill. They were bought out for 10 years and during that time had to figure out ways to sustain the industry without subsidies. A buy-out is one option, but I doubt that it'd receive a groundswell of support considering our current pay-go situation.
Posted by: Holly | November 7, 2007 2:08 PM
All of these factors point to the necessity of rethinking American farm policy from the ground up.
Posted by: justintime
Thanks . I think I need to read about this , it was off my radar .
Posted by: Mick | November 7, 2007 2:57 PM
let's see.....if corn prices go up, if soybean prices go up....do farmers get more for their crops? all over the world??? you betta think about your priorities. want alternative energy or not? want higher prices for commodities or not??
say what with mick...what is solution. lower farm commodity prices?? no ethanol?
typical jim wallis,, no thought whining. no solutions, no thought, just complaining. even if we stop subsidies will commodity prices benefit the poor, jim. hello. nice that you can stand with other religious professionals though and talk, talk, talk, talk.
Posted by: jerry | November 7, 2007 5:27 PM
Subsidies make it harder for markets to get prices right. They also mis allocate resources. Economics was born when Adam Smith demonstrated the foolishness of Corn Laws subsidies in Britain.
We should get rid of all subsidies for multiple reasons:
1. The already mentioned confusion created in the price system.
2. It awards some individuals money coercively taken from someone else.
There's a problem though.
Today's farmer bought his farm 5 years ago and had to pay the expected future earnings of that farm to the previous owner. Those expected earnings included future subsidies.
The fellow who bought the farm before the subsidy was introduced experienced a windfall. The fellow from whom the subsidy is taken will suffer a massive loss.
What will be required is a buyout. Current farmers will have to be awarded a one-time massive subsidy equal to the expected future subsidies discounted over time. After this the value of the farm will decrease immediately to reflect actual productivity. Many farmers will retire. Others will just shut down, because the actual productivity was less profitable than the subsidized productivity. Production overall will diminish.
The most likely to be hurt by this are the farmers who are barely making it right now, and the immigrants who work on the barely profitable farms.
The lesson to be learned is that it is much much easier to put a subsidy in place than to get rid of it. Though only a few enjoy the benefits at the outset, many are hurt when it is done away with. The many are forced to contribute to the few in the beginning, suffering a small, almost undetectable loss, but the gain at the end is likewise small and undetectable when distributed among the many. This is what makes subsidy repeal politically impossible.
Nathanael Snow
Posted by: jurisnaturalist | November 7, 2007 5:56 PM
The relationship between subsidizing crops for biofuels and impoverished countries is this: when you subsidize corn for biofuels then the countries that want to buy and sell corn for food cannot afford to do so. Corn is the mainstay of many cultures' diets. While megafarms, with subsidies, do well in selling corn for biofuels, others starve.
Posted by: bren | November 7, 2007 5:57 PM
Just to interject something , were not subsideries also to help take care of the land ?
I was listening to a PBS discussion about the price of corn and why so many farmers were choosing to grow it year after year . One person stated it was bad for the envirnoment because corn took more insecticides then other crops , also planting the same crops year after year was damaging the nutirents in the soil for the future .
Was an interesting PBS program , of course I quickly went back to right wing propaganda after it was over .
Posted by: Mick Sheldon | November 7, 2007 7:46 PM
juris, I knew we would agree on subsidies and yet we're as far apart as you can get on the left/right continuum.
I can't agree with your free market logic however.
Free market logic has been grossly misapplied by economic consultants around the world over the recent decades since Reagan.
America's current precarious economy is a result of dogmatic free market ideology, otherwise known as 'neoliberalism' in economic jargon
For an accurate account of the disastrous consequences of imposing free market ideology on developing nations, read 'The Shock Doctrine - The Rise of Disaster Capitalism' by Naomi Klein.
David Harvey provides a shorter, non-technical account of the failure of free market ideology in the real world with his book A Breif History of Neoliberalism'
I would be interested in your thoughts on these recent books.
Posted by: justintime | November 7, 2007 8:07 PM
Mick Sheldon, 'Just to interject something , were not subsideries also to help take care of the land ?'
Yes, there are 'incentives' for rotating crops, measures to control soil erosion and for allowing farmland to lie fallow.
I think these are sensible incentives for stewardship of productive farmland and I wouldn't advocate removing them.
You should stay away from right wing propaganda entirely, Mick.
Right wing propaganda is toxic to the brain.
It stunts the growth of intellectual power for critical thinking.
Posted by: justintime | November 7, 2007 8:21 PM
justintime,
I tried very hard to stay away from ideology in my last post. I just gave economic analysis. I had to summarize some things.
Perhaps you could summarize the arguments in the books you mentioned. I'm really quite busy indoctrinating myself with Rawlsian and Dworkian egalitarianism right now, so I can pass a test.
If you noticed an actual flaw in my argument, I'd also appreciate it if you could point it out to me.
To resummarize my earlier statement:
1. A subsidy, by definition, is a grant of money to the producer or consumer of a good that they otherwise would not have had, given the market process.
2. The subsidy, if perpetual, changes the value of the subsidized good.
3. Potential buyers of the good will now have to pay the price plus premium to bid it away from the current owner.
4. The new owner is not really subsidized because they paid for the subsidy.
5. Elimination of the subsidy reduces the value of the good to the current owner - they suffer a loss.
6. If the individual who was granted the subsidy initially remains the owner when the subsidy is lifted, he is a net gainer, for having held a part of a monopoly position under the subsidy.
7. If subsidies are going to be lifted, everyone will sell the farm as soon as they can.
8. If lots of farms are sold the new owners are less likely to be good farmers than the former owners. Production will suffer. Average productivity as measured by inputs to outputs may increase as less productive land is taken out use because it is no longer profitable.
This deduction is called economics, not ideology.
When I get ideological, I claim things about ethics. Then I say things like: "The least of these are the full and exclusive responsibility of the church." That's a moral claim. Analysis of subsidies is possible without making moral statements.
Nathanael Snow
Posted by: jurisnaturalist | November 7, 2007 11:58 PM
I am glad to see that Agrarian socialism is alive and well in the US. “Privatise the profits and socialise the losses”.
One of the problems of subsides in any form is that resources are channelled into areas which otherwise they would not go. The value of the production units ie farm land, goes up. So if subsidies are reduced, and there are losses to the owners who bought into to that industry with the consequent political fall out.
The history of the Australian Dairy industry is a good case in point.
Bit of a catch 22.
Subsidies create distortions in resource use, and ultimately cause costs which will be incurred.
If the farm returns are too low and production slows, unless there is a low cost alternative source, prices will rise to ensure that there is sufficient incentive to produce. Farm land and the value of farm production units will reflect the expected returns.
I do not mind how you spend your internal dollars, but please do not subsidise exports and corrupt world markets. That is exporting unemployment to the rest of the World. Both the US and EU have done this very well.
Gossip going about this side of the planet is that some of the unspoken political incentive for your biofuel industry is to provide a fuel buffer so that the option to attack Iran is more viable. Try oil at 300/barrel. That is based on some comments made by visiting US bush personnel to board members at a company I was working in 6 months ago. Probably achieve just as much by requiring that all private cars and SUV’s run at 35-40 mpg or better, or be taxed off the road.
RE biofuel, there is about 2 times the amount of energy in the stubble – stems of corn, wheat and sugar cane than the grain or sugar. Just how do you simply convert cellulose into liquid fuel is the problem. Much work with modified fungi or similar organisms and in the modifications of the structure of the stems is required. That is much better than converting products which could be used directly as food into fuel. You may then get a net energy output. Much more promise in alga for bio-diesel.
Many Australian farmers would very much like to have this type of support to recoup losses from the drought we are currently suffering.
See http://www.nytimes.com/2007/11/04/opinion/04pollan.html?_r=1&oref=slogin
Posted by: JEH | November 8, 2007 4:57 AM
"An evangelical always has a text . . ."
Following the way of Jesus, a follower will use scripture to prove his or her point.
If the dialogue between progressives and Bible-based Christians (Evangelicals), results in scripture being used to show the truth, then, indeed Progressives may find their way out of the prodigal son position they exist in now and will become valuable members of the Church.
Posted by: Donny | November 8, 2007 8:57 AM
A proof-text can be found in favor of any and all of the thousands of denominations, schisms and cults out there, and they do find them, regardless of how they contradict each other and reality.
That's part of being "faith-based" instead of reality based.
A militaristic, materialistic, hedonistic and self-centered War Jesus cult is no different in its legerdemain of pulling rabbits out of theological hats.
Smoke and mirrors.
Posted by: Anonymous | November 8, 2007 12:24 PM
juris,
I'm with you up until:
'5. Elimination of the subsidy reduces the value of the good to the current owner - they suffer a loss.
6. If the individual who was granted the subsidy initially remains the owner when the subsidy is lifted, he is a net gainer, for having held a part of a monopoly position under the subsidy.
7. If subsidies are going to be lifted, everyone will sell the farm as soon as they can.
8. If lots of farms are sold the new owners are less likely to be good farmers than the former owners. Production will suffer. Average productivity as measured by inputs to outputs may increase as less productive land is taken out use because it is no longer profitable.'
Although I agree with your conclusion that subsidies are not a desirable feature of an efficiently functioning economy, I don't think your argument is grounded in the reality of how agricultural commodities are produced, sold and consumed.
For example, when subsidies are eliminated or reduced, this action is proposed, debated and announced well ahead of planting time for next year's crop. Farmers make their decisions based on the new rules.
There are so many other factors bearing on the decisions farmers have to make that crop subsidies are a minor consideration.
The cost of fuel is a far greater factor than crop subsidies.
It's not likely farms will be sold when crop subsidies have been removed.
If everyone were to sell their farm at the same time, who would buy these farms?
Today most farmland is not owned by the farmer who actually farms it. It's leased or rented from the owner under crop sharing agreements (2/3 - 1/3) or other arrangements.
I find that much of your philosophical theory and logic is not grounded in reality, juris.
The real world is a lot more complicated than your 'deductions' make it out to be.
I think you would do well to temper your education in philosophy with some careful study of real world economic trends.
That's why I recommended those books for you to read.
Perhaps when the pressure of your examinations is lifted, you will have time to study real world economics.
By the way, I'm not against subsidies per se.
I think there are good reasons for granting a subsidy, but in all cases there should be a 'sunset clause' to mandate removal of the subsidy when its purpose has been fulfilled.
Posted by: justintime | November 8, 2007 12:41 PM
nathanial snow/juris?/
your analysis is typical of the professorial, cerebral stuff that makes up academia. where in the world do you get tthat stuff aabvout buying out farmers, old land buyers, new bguyers etc, etc. what useless talk. the question is juris...will farmers around the world benefit from dropping farm subsidies? answer me that. or...who will benefit from dropping farm subsidies? will corn prices go up or down without price supports? comon talkers, get into the real world. think distribution, politics, costs of production, benefits. supply and demand still works. waxing over the family farm is nice but not the solution in a fast moving globval economy.
Posted by: jerry | November 8, 2007 7:56 PM
Where's Wolverine?
Where's Kevin S?
Jerry gets the last word on the global economy?
Posted by: justintime | November 8, 2007 9:43 PM
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