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September 26, 2006
Mr./Mrs. Farmer: Are You Really Needed?
Are US farmers really needed, or should Americans buy their food from underdeveloped nations? Should food production be subsidized, or should food consumption be subsidized? Before you destroy your computer, or create social havoc, there are some new answers to these old questions that you should always be ready to argue and defend your profession. Does the world need US farmers? Is food a privilege or a right? How would you answer these questions?
There are two trends which are inarguable facts: the number of farmers is declining and the US is importing more and more of its food. From that scenario economist Steven Blank in 1998 concluded that “U.S. farmers are among the highest cost producers in the world. Given the high cost of land, labor and the environmental regulations with which U.S. farmers have to comply, he concluded that the United States could import most of its food cheaper from poorer nations than it can produce it. Therefore, he suggested that the U.S. should import all its food from less developed countries, while utilizing its land for higher value uses such as recreation and urban expansion. According to Blank, this would improve consumer welfare. In fact, one of Blank’s major conclusions could be restated as the hypothesis that U.S. consumers do not “need” U.S. farmers to meet their food needs.”
There is a good chance the typical farmer might be a bit riled by that statement, which is the embarkation point for three economists from the University of Missouri to explore the need for the US farmer. Mary K. Hendrickson, Harvey S. James, Jr., and William D. Heffernan rhetorically ask does the world politically and economically need US farmers, even if Americans don’t.
While the Steven Blank point of view is economic, the ongoing issue with the WTO is political. More recently the World Trade Organization may force the reduction of US farm program payments, whether or not the US gains greater access to foreign markets. So the gauntlet has been thrown down, the gloves are off, and benches have been cleared.
Let’s begin with some other trends that are impacting this debate:
1) The Walmarts of the world are reorganizing and restructuring the food production and distribution chains.
2) Agribusinesses have been consolidating with abandon. 6 companies sell 77% of agrochemicals. 5 companies provide 29% of the world’s commercially available seeds. 3 companies trade the majority of the grain that moves between countries.
As agribusiness and food purveyors redefine how our food is produced, distributed, and sold, the US consumer obtains more imported food from worldwide sources, and much of it from developing countries where farmers may work at subsistence levels.
The Missouri economists approach the issue with several questions:
1. If the U.S. does not need U.S. farmers, does it still need U.S. agriculture? The economists contend the mechanization of agriculture and the growing productivity of cropland prove that more is produced by fewer farmers. Other nations have a lower productive capacity, and some of their production should be kept for their own consumers instead of being exported. “However, population growth, reductions in productive farmland, and the rising cost of fuel could force even the U.S. to confront constraints. Competition from the biofuels industry might also place constraints on land available for crop or livestock production. All of this suggests the following question: Does the world need U.S. farmers or the productive farmland of the U.S., however it is farmed and whoever farms it?”
2. Does the world need U.S. farmers or U.S. agriculture? Hendrickson, James and Heffernan say trading patterns continue to demand US food products, even though US consumers may not want all that is produced. That suggests the world needs US agriculture (farmers), but they ask, “As long as some U.S. agricultural sectors remain viable, is the decline of U.S. farmers acceptable?
3. How is the U.S. food footprint of consumers and producers felt around the world? What implication does this have on what role U.S. farmers and agriculture have vis-à-vis the poor, hungry and malnourished of the world? The Missouri economists say:
• In 2000, about 1.2 billion people lived on less than $1 per day, while 2.8 billion lived on less than $2 per day,
• The global incidence of poverty is currently over 50% and is expected to decline only to about 40% by 2015.
• 852 million people worldwide were undernourished in 2000-2002.
Consequently, “The world might need U.S. farmers to supply certain foods that the poor, hungry or malnourished cannot provide themselves. The degree to which it is perceived that U.S. farmers have a duty to provide such foods for the world might depend largely on whether food is considered a right or a mere privilege.”
4. Is the role of U.S. farmers in the world dependent on whether food is seen as a privilege or a right? If food is a privilege, then whoever has enough money may buy what is desired. But if food is a right, then how would someone exercise his or her claim to that right? Wealthy nations will have what they want, and poor nations will not have enough, whether or not they exercise their claim.
5. If the world needs U.S. farmers and agriculture, should U.S. agricultural subsidies be continued? “If food is a right, then subsidies to producers might be one way of ensuring that the claims of the impoverished and malnourished are met.” The economists say, the argument about food being a right and needing to be supplied could be a compelling one for the continued use of agricultural subsidies, as long those subsidies actually related to nutritional goals already established through other programs and did not distort markets here or abroad.”
Summary:
While US consumers may be buying more foreign food, the US farmer is still supplying the majority of the US market, as well as exporting significant volumes of food. True, our productive capacity has increased, diminishing the needs for individuals, but if farmers are equated to agriculture, both are still needed within the US and the world. While it may be important to assist foreign producers to increase their productive capacity, it may be necessary for all of their production to remain in their countries to feed their growing populations. If the supply is still short, then the US will be available to meet the need.
Posted by Stu Ellis at September 26, 2006 5:28 AM | Permalink
Comments
We do not produce all of our own oil and look where gets us.
Posted by: Paul Essington at September 26, 2006 7:50 AM
The way we 'account' for exports in this country tells me that the extremely large amount of ag dollars we export that our American consumers do not consume, helps to offset the amount of foreign food we do eat. I suppose one could argue that if we were to replace the ag dollars with some other type of exportable items from our soils that were 'farmed' in some fashion, perhaps their value would be worth more in net terms. My question would of course be, "What?"
Posted by: Don Griffiths at September 27, 2006 3:09 PM
Two words, "FOOD SECURITY", any questions??????????
Posted by: Pat Dailey at September 27, 2006 9:42 PM
The economic analysis above by the three authors above relies heavily on Steven Blank, who, noding to econonic theory, says that US farms are at a relative competitive disadvantage in land-intensive crops -- so countries with more land per capita for land intensive crops such as grains would do better here than us. But my question is, which countries have a relative competitive advantage to the US in grains? Russia? -- the arable land there is actually quite small, because most of the country is colder than Alaska. Certainly not China or India -- they have competitive advantages in labor-intensive crops.
It seems to me the basic premise of Hendicksen et all is flawed.
Posted by: Randy Kirk at November 3, 2006 3:35 PM
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