cows in field

Commentary: Heirloom Economy


In our debates why aren’t we discovering how we got where we are, focusing our efforts on creating a sustainable economy or exploring how the rest of the world lead comfortable lives and safeguard their resources?

By Tim Wightman

Added October 1, 2009. As our economy grinds down to find its footing again, it appears our leaders are bent on keeping things the same with a stimulus package geared toward fixing a few bridges, getting a few old cars off the roads to make room for imports, and propping up banks who still hold a vast amount of bad debt on houses and strip malls we don’t need, and who pray land values edge up a little before they cut loose the number of foreclosures they are sick of sitting on.

In our debates why aren’t we discovering how we got where we are, focusing our efforts on creating a sustainable economy or exploring how the rest of the world lead comfortable lives and safeguard their resources?

There is one root to the various problems confronting us now: economy, health care and food safety. And that root started 57 years ago, in 1952; the year of the first farm bill. It was announced that this first farm bill would overhaul and launch agriculture into a new century. Here’s what folks were told ….

  1. We are going to reduce the parity program due to the parity programs inability to adjust for efficiency.
  2. Food should be cheap so we can spend money on other more important things (enter consumer driven economics)
  3. The children of rural America deserve better than their parents had. The city is full of jobs and spouses there for the taking.

However, the unpublicized and underlying motivations were not so noble. Here’s what public wasn’t told, and was recorded in the minutes of those Congressional hearings.

  1. Reduce the cost of raw agricultural products (enter the term commodities, not food).
  2. Keep farmers too busy to organize beyond Farm Bureau.
  3. Keep farmers too broke to participate in their townships and county boards, eliminating those leaders who would put brakes to unlimited progress and cultivate thoughtful expenditures of the tax dollars.
  4. Empty rural America
    a) By lowering raw material food prices to below production
    b) Move farm kids to the city to enlarge the work force and depress wages.
    c) Decrease income to the farmer reducing the solidarity between labor unions and farmers.
    d) Weaken the rural communities who were resistant to change (to a consumer driven economy).

So began top down integration and our hard earned dollars funneled upwards, away from our local economies and into the hands of the few.

Here is where I would like to interject just what this means (other than the obvious example of Fall 2008)

  1. Agricultural raw materials have a multiplier effect of seven.
  2. All other raw materials like lumber, iron, brick etc. have a multiplier effect of three to five.
  3. Big box chain stores have a multiplier effect of at best two.

Simply put, when local dollars buy local raw food materials, the economy is robust. When local dollars buy imported or sent away and returned processed food, the economy goes bust. Bubbles are creates on next fool economies and we eventually go bust just the same.

It has been widely known, from the first time economists looked up from their studies, that to have a healthy economy, farm income must be at 10 to 12% Gross Domestic Product (GDP), financial
gain on banking/investment/interest should be about 1.3%, personal income 66%, corporate income 12.5% with other money generation making the total. In 2007 farm income was less than 1.6% GDP, in the best year on record, finance now is 52% GDP and personal income (business or job) is down to 32% GDP.

How much money did the economy lose by moving to a consumer driven economy?

From 1952 to 1982 we have conservative estimates of five trillion dollars ($5,000,000,000,000) removed from the U.S. economy from the creation of the first Farm Bill and it’s upwards creation of the money flow. We moved the money out of the hands and purchasing
power of the local economy to corporations, even though everyone lost out on the five trillion not produced in the process.

However, this was not enough and NAFTA was born from the same idea as the original farm bill; with a twist. It was extended to Canada & Mexico, now flooded with our cheap corn. The cheap corn displaced Mexican farm kids and farmers alike who went to the boarder factories because of the inability to produce a crop at competitive prices.

When factory workers (former farmers) demanded better wages, the companies moved to China where the process of exploiting farm workers began all over again. The factories in China are idled farmers, and farm kids are heading home and there is no longer the ability to produce food for a severe water shortage is now plaguing China’s food growing areas due to manufacturing polluting the water beyond use or lowering water tables to the point of an ability of replenishment.

Enter the Free Trade Agreement of the Americas - a new twist on the old Farm Bill idea. Just take the land and food and exploit the labor and soil, with no real offered benefit to the country other than a few roads to move products before Japan, China, South Korea, India, Royal Dutch Shell (largest land holder in Argentina & Brazil) buy too much of it.

One of the best things to happen to the sustainable/local food movement is the collapse of the health care debate. You are what you eat has not yet entered into the discussion. If you take a graph of the last 57 years on money spent on food in relation to total household income, and pair it against the rise in the need/cost for health care as a percent of total household income, a perfect X pattern results. The less we spent on food the higher our health care costs are.

If we’re going to fix health care, it starts with what we do three times a day…and that’s not checking stock quotes. It is true that parity did not have the tools to account for efficiencies or determine who should deserve the parity program’s insurance cost benefit to bring a fair price for raw food materials.

But now, local and sustainable farmers and consumers are creating a hybrid parity program with efficiencies factored in. In this evolved version, market forces will be applied, but this time in relation to quality and sustainability. Quality is directly related to taste; the higher the brix, the better the taste and quality and more demand is created. The money stays in the local economy to be re-spent seven times.

When talking about an economic stimulus package we only need to look back from where we came, give credit to what worked in the past, look past what we were told worked and take back our rights as local citizens. We must stop these new food safety laws that lure the feds with dollars and allow large corporations to remove the competition and comparison – fresh, locally farmed foods.

If we no longer can produce/buy safe fresh local food, the corporate offerings will be our only choice and if a few hundred million people get sick a year – that’s be the new norm – as diabetes, heart disease and cancer are now - and our children will know no different.

Tim Wightman is a founder and board member of the Farm-to-Consumer Legal Defense Fund and its education and charitable arm, the Farm-to-Consumer Foundation. He is the author of the Raw Milk Handbook, a handy resource guide for farmers interested in producing quality raw milk, and who wish to implement testing and safety standards. First published in 2008, the handbook is already in use in thousands
of small dairies worldwide.