You Grow Veggies, We'll Grow Corn. Forever.

Making the rounds of the sustainable agriculture websites is last weekend's Op-Ed in the New York Times regarding the "planting prohibition" in the Farm Bill. Simply put, farmers are not allowed to plant fruits or vegetables on acres that have traditionally grown one of the major farm program crops (corn, soybeans, wheat, rice, cotton) and are still receiving government payments. Jack Hedin, a Rushford, MN organic farmer, details his experience renting ground to produce vegetables- and then finding out that the local FSA office did not approve:

Last year, knowing that my own 100 acres wouldn’t be enough to meet demand, I rented 25 acres on two nearby corn farms. I plowed under the alfalfa hay that was established there, and planted watermelons, tomatoes and vegetables for natural-food stores and a community-supported agriculture program.

All went well until early July. That’s when the two landowners discovered that there was a problem with the local office of the Farm Service Administration, the Agriculture Department branch that runs the commodity farm program, and it was going to be expensive to fix.

The commodity farm program effectively forbids farmers who usually grow corn or the other four federally subsidized commodity crops (soybeans, rice, wheat and cotton) from trying fruit and vegetables. Because my watermelons and tomatoes had been planted on “corn base” acres, the Farm Service said, my landlords were out of compliance with the commodity program

Read the full article here- very well written and highly recommended.

From a public policy perspective, I can understand the fruit and vegetable industry's complaint that lifting the planting prohibition will provide an unfair advantage to those receiving farm program payments. Simply put, those individuals in the farm program would continue to receive government checks under two out of the three farm programs (direct payments for sure and countercyclical payments if crop prices are low enough). So somebody growing tomatoes on acres that used to grow corn will get a government check and somebody who has always grown tomatos won't. Thus the unfair advantage.

However, we feel that increasing fruit and vegetable production is important enough to justify getting rid of the planting prohibition. First, we need millions more acres of fruits and vegetables just to produce enough for the daily recommended intake of Americans. So this is a health issue. Also, as Mr. Hedin makes clear, the planting prohibition inhibits the ability of the farm to diversify economically- which has both economic and environmental benefits, and helps keep small farms in business. Moreover, Mr. Hedin stresses the planting prohibition is a real barrier to increasing the production of local/regional foods. Certainly it helps ensure that Midwestern consumers will continue to buy the vast majority of their fruits and veggies from the places that produce them today. In other words, it helps keep the fruit and veggie production and consumption status quo in place.

From a political perspective, the fruit and vegetable industry's arguments (and that of their Congressional champions) are simply a smokescreen for their true desire to block competition. First, if the industry was so concerned with fairness, they would push for a planting prohibition measure that bans anything from being planted on acres currently in farm programs- not just fruits and vegetables. Second, they have opposed any effort at a reasonable compromise, such as the one Mr. Hedin details in his OpEd:

Last year, Midwestern lawmakers proposed an amendment to the farm bill that would provide some farmers, though only those who supply processors, with some relief from the penalties that I’ve faced — for example, a soybean farmer who wanted to grow tomatoes would give up his usual subsidy on those acres but suffer none of the other penalties. However, the Congressional delegations from the big produce states made the death of what is known as Farm Flex their highest farm bill priority, and so it appears to be going nowhere, except perhaps as a tiny pilot program.

What's wrong with that? The farmer gives up his government payments for the year, and is then able to plant fruits and vegetables. In fact, one could easily argue that such a plan puts farmers using such a provision at a disadvantage, especially when renting land. A well-know effect of farm programs is to inflate the value (and cash rents) of land in farm programs- and somebody like Mr. Hedin is going to have to pay that inflated value to buy or rent land, even if he agrees to forgo government payments (I suppose you could also argue that the planting prohibition drives up the value of fruit and veggie land, but I would say that affect is a lot smaller).

Overall, this is an example of a classic flaw in market economies. When a firm or industry reaches a certain size, it begins to invest resources in preventing competition instead of furthering innovation. The fruit and vegetable industry is paying big bucks to lobbyists to keep the planting prohibition, thus discouraging competitor entry into their market (discouraging local foods is merely a side effect). The argument that fruits and vegetables "never got anything out of the farm bill" was always hogwash- they ensured almost no Midwesterners would ever compete with them. And now they're arguing for billions of dollars in government support in the next farm bill- but not to compensate for removing the planting prohibition. That's a deal they won't make. They want more money because the flood of fruit and vegetable from other countries has grown immensely since the last farm bill, and shows no sign of slowing down.

If getting rid of the planting prohibition increases the production of fruit and vegetable in the Midwest, we could also see another positive benefit: an investment in local/regional food infrastructure. That is a topic near and dear to us; infrastructure investment is perhaps the most important issue facing local and regional foods today. This was discussed in yet another good article, this time from Mark Anderson (via Ag Observatory):

The unmet annual demand for locally produced food in New York City is estimated at $860 million.

Produce and other food sold in local markets delivers greater income to farmers — 33 percent of agricultural revenue is produced on 16 percent of ag land, all located within 50 miles of a large city. Most of us would probably like to eat in the old-fashioned way – dining on food that’s fresh, delicious and raised on a farm just down the road...

Problem is, small farmers in Minnesota and elsewhere don’t have in place enough of the distribution system needed to get locally grown food from small farms to people’s tables.

Matching the capabilities of local farmers with the needs of the Cub Foods and Chipotles — the big institutional buyers — won’t be simple, said JoAnne Berken-kamp, local foods program director at the Institute for Agriculture and Trade Policy, a Minneapolis-based research and advocacy group.

Farmers are starting to pay closer attention to those needs, Berkenkamp said, but as they eye larger markets they’ll find other packaging, warehousing or distribution obstacles that are harder to get over.

We've said it before: If we ever want a substantial percentage of our food to be grown in healthy, sustainable ways, we must find ways to recreate America's food processing infrastructure. And we need good, wholesome, local and regional food to supply those processors. Getting rid of the planting prohibition is a necessary first step.

P.S: We shouldn't only single out the fruit and vegetable industry as a barrier to competition. In fact, this is one of the classic problems in constructing farm programs, period. Right now, we pay farm program payments on "base" acres- and the government almost never allows base acres to be added to farm programs. Which makes sense, because we don't want to encourage corn production on every acre possible. On the other hand, it means that current owners of base acres are at a serious economic advantage, especially when it comes to encouraging beginning farmers. A "base" acre is worth a lot more than a regular acre- and a beginning farmer who can only afford cheaper non-base acres is not going to get any help from the government, decreasing his chances of survival. This argument can go on forever.

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