Feed Me – Does U.S. Policy Fight Global Hunger?

By Jim Stafford, The Oklahoman

May 18–BOB WALDROP is an urban farmer, president of the Oklahoma Food Cooperative and a social activist who sees some disturbing Third World fallout from the efficiency of U.S. farm production as reports of food shortages emerge from different parts of the world.

“I think the overproduction here in the United States of certain commodity crops has had the effect of driving a lot of farmers out of business in other countries,” Waldrop said. “We subsidize corn and wheat, so a lot of it gets produced and small farmers in other countries can’t compete with that.”

However, Oklahoma State University agricultural economist Mike Dicks pointed to U.S. farm policy changes in the 1990s that decoupled subsidies from production as a key contributor to the ongoing world food crisis.

Maintaining enough for ‘any eventuality’

Before the Freedom to Farm act in the 1990s, U.S. farm policy managed supply and maintained enough stocks of grains to cover “any eventuality,” such as a worldwide production shortfall like that which occurred in 2007, Dicks said.

“This whole thing is about this excess capacity,” he said. “We always maintained enough supply to cover any eventuality. For a lot of years we did that. We paid a subsidy because holding all those stocks and all that land idle, to ensure that it could come right back into production, kept prices down. But in 1995 we threw that model out.”

The Freedom to Farm policy of 1996 reduced government stocks and eliminated much of the idled farm land that would have helped cushion consumers during last year’s worldwide harvest shortfall.

“A lot of marginal land has been taken out of production,” Dicks said. “We had over 8 million acres of planted wheat (in Oklahoma) in 1995 and 1996 and by 2000 we were down to less than 6 million acres. Without those subsidies, and given the freedom to do whatever they wanted to, they put it into something else.

“Now we need it and it’s not there.”

Feeding the world not just an idle boast

American farmers often claim that they feed the world, and that’s not an idle boast, said Alan Tracy, president of the U.S. Wheat Associates, which is responsible for marketing U.S. grain worldwide.

Wheat prices hit historic highs earlier this year, which has provided a financial incentive to produce more of the grain, he said.

“They are doing it,” he said. “They are responding to the price incentive to produce. And they can support biotechnology in wheat along with the other crops. They can support efforts to improve our food aid budgets.

“Those are some quite specific things where producers can help.”

What about NAFTA’s effect?

However, Waldrop uses the effect of the North American Free Trade Agreement (NAFTA) agreement on small farmers in Mexico who now have to compete with their U.S. counterparts, as an example of harmful policy.

“If you have a half-acre of corn you just can’t compete with a farmer who has 1,000 acres,” Waldrop said. “A lot of (Mexican farmers) have quit farming and gone to the city. It’s happening all over the Third World.

“All the Third World cities are ringed by casual slums, and those are almost all rural subsistence farmers who have quit farming and moved to the cities.”

Waldrop doesn’t pin the entire world food crisis that on U.S. farm policy. Energy policy contributes, too.

Federal policy that subsidizes ethanol production has diverted farmland into corn production to make biofuels, taking away other crops and using much of the corn that is produced to make ethanol, he said.

Plus, punishing tax policies and less than farmer-friendly governments in some countries have discouraged small farmers worldwide.

“If you have tax policies that penalize farmers and trade policies that really penalize the small farmer, then farmers are just going to quit,” Waldrop said. “Over time that is going to mean lower production.”

Conditions created a ‘perfect storm’

Jay O’Neil, an economist with the International Grains Program at Kansas State University, described the world food situation as more of a “supply and demand” issue than a food shortage.

The production shortfalls last year combined with other factors such as ethanol demand and increasing demand for certain foods in emerging countries such as China combined to create what O’Neil called a “perfect storm.”

“There are different parts of the world and different populations that are undernourished every year, even in the good years,” O’Neil said. “That relates to policies in their country and the ability of world food aid. World food aid groups have been saying for years that they need bigger budgets and supplies to feed the world’s hungry.”

Better growing season and harvest weather should produce bigger crops and relieve high prices that have contributed to the shortages, O’Neil said.

“Prices are going to remain high until the market knows for sure the final result,” he said. “And you won’t know the final result until you have those crops in hand.”

The World Bank recently warned that 33 countries are in danger of being destabilized because of rising food prices.

The United States spends little of its gross domestic product to support hungry people elsewhere, Dicks said. This nation spends about $40 billion a year to feed its own people and less than $1 billion on average for world food aid, he added.

“There are 800 million people who are essentially starving to death (worldwide),” Dicks said.

“Americans are selfish, that’s the bottom line. They aren’t really concerned about what happens overseas.”

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