Question about unsold U.S. food crops
July 30, 2018 9:21 AM Subscribe
From what I've been able to find, U.S. farmers plow under much of their unsold crops and the government pays subsidies to them in many cases. I know Trump has set aside $12B for subsidies as a result of the tariffs he has imposed. Why can't at least some of that food be distributed to food-insecure people, at least regionally? Is it just because of the expense of moving the food? Is it because most of it is feed-grade? Or are there other reasons? Thank you.
This new program suggests that the cost of harvesting and packaging is a challenge.
posted by pinochiette at 9:33 AM on July 30, 2018
posted by pinochiette at 9:33 AM on July 30, 2018
Keep in mind that one reason you pay Big Ag (let's stop pretending it's mostly small farmers) "not to grow" or "plow under" (quotes used because it's more complicated than that) crops is because you want to keep the capacity, talent, and land in place in case the US needs to ramp up agricultural production very fast. You pay them to stay in business and to not convert their land to housing, industrial, or other non-ag uses. Examples of such dire ag need would be major warfare (think WWII-level), catastrophic ag losses in the US, or other countries embargoing food shipments to the US.
So it's not so much that there's food going to waste as that it's an insurance against a possible future of dire production need.
posted by Mo Nickels at 9:56 AM on July 30, 2018 [16 favorites]
So it's not so much that there's food going to waste as that it's an insurance against a possible future of dire production need.
posted by Mo Nickels at 9:56 AM on July 30, 2018 [16 favorites]
This press release from the USDA about the new subsidies says that there will be a program "to purchase unexpected surplus of affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs," for what it's worth.
posted by Empidonax at 10:10 AM on July 30, 2018 [2 favorites]
posted by Empidonax at 10:10 AM on July 30, 2018 [2 favorites]
There are multiple commodities USDA distribution programs.
posted by Ideefixe at 11:31 AM on July 30, 2018 [3 favorites]
posted by Ideefixe at 11:31 AM on July 30, 2018 [3 favorites]
My understanding on the matter is that the US pays farmers to dump surplus milk because allowing on the market would only depress prices. In Canada, our farmers buy contracts to produce a certain amount of milk each year, so it's managed at the supply stage which seems more efficient and reliable to me but Republicans have decided that it's communitistic and unfair to their market.
posted by bonobothegreat at 4:20 PM on July 30, 2018 [3 favorites]
posted by bonobothegreat at 4:20 PM on July 30, 2018 [3 favorites]
There are many different forms of direct and indirect subsides for agriculture in the US, but, as others have noted it's not generally a direct payment to plow under crops. However, there is often an indirect process with the same basic result. For example, crop insurance rules often end up prompting farmers to plant in wet fields knowing that the crop will fail, or harvest corn that is too dry for direct human consumption.
Government involvement in the Ag Biz is intentionally confusing because it is essentially one of the largest welfare programs and one that primarily serves only rural America. Some of that includes things like small farms are exempt from FLSA (ie paying minimum wage), there's no such thing as overtime on farms, or all the state transportation infrastructure in farm country that is disproportionately funded by urban centers, or even that most of the insurance in the biz is backed by various government agencies.
Let's look at impact of the Commodity Credit Corporation (CCC), which is a government corporation like Fannie May and the idea of ever-normal granary. CCC has several other purposes, including the previously mentioned conservation of wildlife habitat (often marginal land), foreign market development (often through loans to foreign entities for the exclusive use of purchasing American grains) and direct aid in the form of income support and direct aid. But's it's primary purpose is to stabilize the price of many food items by acting as an ever-normal granary.
An ever normal granary only buys when prices are 'too low' and buys in enough quantity to artificially support the target price. It then disposes of the commodities either by dumping it abroad (last year it moved 1.2 billion tones), simply waiting until the quality of the grain isn't fit for human consumption, or serving it to prisoners/children, or hording it, like we have with cheese. The CCC has 30 billion $ available to move the market, so it can easily stabilize the price of a commodity.
An example: let's pretend I am a corn farmer, and while last year was bad and I got paid out in crop insurance, this year is great, in June the cash price was 405 a bushel, but now it's too great and now there is too much corn and by August prices are falling, so the price was down to 355*. At that price I'll go broke but when I get my corn harvested and stored on my farm, here comes the CCC, and it begins buying all the corn contracts so the price stabilizes at 375$. My farm is saved!
At the end of harvest the CCC isn't able to trade or resell my corn - so the CCC will store it. If I have planned ahead I will be ensure my storage at my farm is certified for CCC grain and that means that after the CCC has paid me an artificial price of 375 to buy my grain it will now pay me to store it. It will even loan me the money to build this storage at great rates!
A few years pass and the CCC isn't able (or willing) to get rid of my grain as that might depress corn prices. An inspection finds that the grade of corn in my storage bins is no longer fit for direct human consumption. That means this batch isn't getting shipped abroad or turned into coke. Now the CCC is motivated to actually use that corn. This CCC corn might get sold as cattle feed - for significantly less that the $375 it paid me for, or it might sell it for ethanol production further subsidizing that industry. I got a subsidized price, paid again for storage and then the industrial market for corn products get a steady supply of low priced corn.
The corn isn't 'wasted' entirely, it's just a very inefficient and expensive method to pay out farmers with the added bonus of some sugar or fuel. A staggering amount of food is intentionally degraded in this fashion and I choose corn because it highlights the governments role in supplying the surplus of corn that ends up processed into sugar, packaging, animal feed and fuel.
Last year the CCC spend over 2 billion on 'processed' or ready consumable food items and I couldn't even find how much it financed in commodities. But I figure it's a whole lot because this handout says the CCC has storage available for:
posted by zenon at 11:58 AM on August 6, 2018 [2 favorites]
Government involvement in the Ag Biz is intentionally confusing because it is essentially one of the largest welfare programs and one that primarily serves only rural America. Some of that includes things like small farms are exempt from FLSA (ie paying minimum wage), there's no such thing as overtime on farms, or all the state transportation infrastructure in farm country that is disproportionately funded by urban centers, or even that most of the insurance in the biz is backed by various government agencies.
Let's look at impact of the Commodity Credit Corporation (CCC), which is a government corporation like Fannie May and the idea of ever-normal granary. CCC has several other purposes, including the previously mentioned conservation of wildlife habitat (often marginal land), foreign market development (often through loans to foreign entities for the exclusive use of purchasing American grains) and direct aid in the form of income support and direct aid. But's it's primary purpose is to stabilize the price of many food items by acting as an ever-normal granary.
An ever normal granary only buys when prices are 'too low' and buys in enough quantity to artificially support the target price. It then disposes of the commodities either by dumping it abroad (last year it moved 1.2 billion tones), simply waiting until the quality of the grain isn't fit for human consumption, or serving it to prisoners/children, or hording it, like we have with cheese. The CCC has 30 billion $ available to move the market, so it can easily stabilize the price of a commodity.
An example: let's pretend I am a corn farmer, and while last year was bad and I got paid out in crop insurance, this year is great, in June the cash price was 405 a bushel, but now it's too great and now there is too much corn and by August prices are falling, so the price was down to 355*. At that price I'll go broke but when I get my corn harvested and stored on my farm, here comes the CCC, and it begins buying all the corn contracts so the price stabilizes at 375$. My farm is saved!
At the end of harvest the CCC isn't able to trade or resell my corn - so the CCC will store it. If I have planned ahead I will be ensure my storage at my farm is certified for CCC grain and that means that after the CCC has paid me an artificial price of 375 to buy my grain it will now pay me to store it. It will even loan me the money to build this storage at great rates!
A few years pass and the CCC isn't able (or willing) to get rid of my grain as that might depress corn prices. An inspection finds that the grade of corn in my storage bins is no longer fit for direct human consumption. That means this batch isn't getting shipped abroad or turned into coke. Now the CCC is motivated to actually use that corn. This CCC corn might get sold as cattle feed - for significantly less that the $375 it paid me for, or it might sell it for ethanol production further subsidizing that industry. I got a subsidized price, paid again for storage and then the industrial market for corn products get a steady supply of low priced corn.
The corn isn't 'wasted' entirely, it's just a very inefficient and expensive method to pay out farmers with the added bonus of some sugar or fuel. A staggering amount of food is intentionally degraded in this fashion and I choose corn because it highlights the governments role in supplying the surplus of corn that ends up processed into sugar, packaging, animal feed and fuel.
Last year the CCC spend over 2 billion on 'processed' or ready consumable food items and I couldn't even find how much it financed in commodities. But I figure it's a whole lot because this handout says the CCC has storage available for:
- 14 billion pounds of sugar
- 9.2 Billion bushels of grain and rice
- 42.2 million pounds of dry processed goods
- 19.6 million bales of cotton
- 3.7 million tons of peanuts
posted by zenon at 11:58 AM on August 6, 2018 [2 favorites]
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In other words, it's not so much that the farmers are throwing away produce as simply being paid not to grow produce in areas where overfarming has wiped away native species.
I'd suggest if you're interested in ameliorating food safety, that you focus more on produce that is flat-out thrown away due to imperfections.
posted by saeculorum at 9:33 AM on July 30, 2018 [6 favorites]