For most of the last half century American agricultural policy has been mired in a mess. In recent months, we've seen on the nightly news poignant pictures of farmers--some of whom had been millionaires only a few years ago--losing their loan-defaulted properties in public auctions. And once again Congress has come to the rescue with a farm bill of mind-boggling costs.
Obviously we can't do without farmers, the source of our food supply. Yet, it is not entirely cynical to raise the question of whether we can afford them, or more specifically the system under which they operate. To unravel the mystery of how we got into such a mess and why we remain there would challenge the talents of a medieval cabalist.
While hardly a cabalist, Joel Solkoff, a respected Washington-based, free-lance journalist whose work frequently appears in various national publications, spent a number of years on this analytic quest. And even if many policy mysteries still remain, Solkoff's book will edify--and disturb--almost anyone with the slightest interest in U.S. agriculture.
In this prodigious analysis, one shocking question emerges again and again, and that is whether the players--politicians, bureaucrats, commodity traders or the farmers themselves--ever fully understand the likely consequences of the game. It is not to disparage Solkoff's book to suggest that the title just as appropriately might have been "The Politics of Confusion."
For the last 50 years--excepting one brief chaotic period--the basic structure of our agricultural policy remained tied to a government creation of the Depression years--subsidy programs and programs restricting the number of acres under cultivation. Publicly appealing because of its stated aim to save the "family farm," this Depression-inspired program (which did save the nation's agricultural system) remained on the books, in similar forms, on into the postwar years, even after farmers had gotten back on their economic feet with the rest of the nation.
Solkoff notes that subsequent statistical analysis shows that "the family farm"--the Jeffersonian image of the small self-sufficient family freehold--was already an endangered species. Ironically that unrealistic image is still trotted forth by the politicians and the farm lobbyists themselves--even though now large-acreage farms, either owned by individuals or corporations or tied in with huge marketing cooperatives, provide an estimated 90% of our food.
In the postwar period, farmers, protected by government subsidies and crop loans, managed in most years to produce surpluses of one commodity or another, which accumulated in government warehouses. The Department of Agriculture, trying to get rid of some of these surpluses, even got into the welfare business with the creation of the food-stamp program.
Yet the surplus norm was abruptly changed in 1972 with the surprising Russian grain purchase deal. Overnight the nation's massive grain surplus was transformed into a shortage--to the uncomfortable surprise of almost everyone involved in the transaction.
In one of those strange twists of history Earl Butz stepped to stage center as secretary of agriculture. Narrowly confirmed because of his reputation as a free market proponent, Butz got his chance. The period of commodity shortages and concomitant rising farm prices following the Russian grain deal helped Butz get a bill passed to his liking. President Richard M. Nixon signed the bill Aug. 10, 1973.
The bill in effect turned control of agricultural policy by the government over to the marketplace. For the first time (and conceivably the last) in 40 years, farmers depended entirely on market prices for their income. Previous lawssubsidized farmers regardless of market conditions. The new law linked government payments to prices--so-called "target prices" deliberately set low, so confident was Butz of the market's magic powers. The new law also lifted acreage restrictions. Any farmer with the money could plant as much as he wanted.
And this they did--with a vengeance, plowing up everything within sight. Even as this happened, history intervened again: The Organization of Petroleum Exporting Companies imposed its fateful four-month embargo on oil exports and thus the skyrocketing costs of petroleum. The incubus for double-digit inflation had been born.
While it is not possible to delineate what happened during Butz's four controversial years of tenure, it's an understatement to describe it as a period of confusion. Farmers became paper millionaires as land prices rose. They used this increased collateral to obtain massive loans for more land and machinery from equally sanguine and eager lenders. Many farmers discovered that they had little notion of exactly where the "marketplace" was. It turned out to be the commodities trading exchanges, which for 40 years had been relatively unused.
And suspicions soon arose that a handful of multinational commodity trading firms dominated the domestic commodities market and also controlled the export markets. Whether this situation served the public interest was impossible to determine because of the secretive and labyrinthine structure of offshore trading subsidiaries.
When a stupid racist joke forced Butz's resignation in 1976, his successors promptly reinstituted government-supported surpluses and payments to farmers. So, back from the fire into the frying pan. Unhappily, Solkoff is not able to tell us how to straighten out this enduring mess. Happily, he has certainly raised the pertinent questions.