It is a truism of the sustainable agriculture movement that federal farm programs have distorted the planting decisions made by farmers. In short, you wouldn't see so much of the five big program crops around (corn, soybeans, wheat, cotton, rice) if the government didn't support them so generously. Obviously, there are some basic laws of economics involved. The extent of this distortion is often debated; Michael Pollan, of Omnivore's Dilemma fame, makes the argument for substantial market distortion quite persuasively, especially in regards to corn and soybeans dominating the industrial food system.
But you rarely hear mainstream, big-agriculture representatives talking about this subject. Usually, they're loath to admit that farm programs are market-distorting either domestically or internationally. That's why I was shocked to see an article from the Brownfield Network reporting on Rick Schwein of the North American Millers' Association testifying before a House subcommittee:
"Not many years ago, the thought that the U.S. would import cereal grains was unthinkable," Schwein testified. "Now, however, in most years, U.S. production of hard spring wheat for bread and durum for pasta is insufficient to meet total demand. Millers have no choice but to rely on imports to augment the short wheat crop."
Schwein, whose company owns an oat milling plant in Saint Ansgar, Iowa, as well as facilities in Eugene, Oregon, and in Canada, said the U.S. now imports virtually all of the oats it uses in food production. In fact, Schwein said the vast majority of all oats used by U.S. food makers are grown in a relatively tiny patch of Canada, which he called a "strategic risk" for the milling industry...
According to Schwein, there's no mystery about why U.S. millers have increasingly turned to wheat and oats imports. He said it's because of reduced domestic supply due to farm program loan rates have favored production of crops other than wheat and oats.
"We think there are inequities that result in swaying producer planting decisions as opposed to planting for the market," Schwein asserted. "We're delighted to compete with the ethanol industry, or corn, or beans, with other processors - let the market set the rates. But we can't compete with government distortions of those decision.
[Full Article Here]
Now, I don't know Rick Schwein and I'm not exactly current on what the general policy stance of the North American Millers' Association is. But I think it would be safe to say he's a representative of the mainstream agribusiness economy. Granted, he represents processors, not producers. But it is still remarkable for him to say that our farm programs are distorting planting decisions on an enormous scale. Oats are generally grown in the northern plains states (ie North Dakota). Not coincidentally, that is where we're seeing the largest increase in corn acres this year.