Subsequently, under the 1938 Farm Bill, the federal government, and not a processor’s tax, would finance such subsidies, thus relieving corporations of any responsibility to maintain high commodity prices or profitable farms. Significantly, this funding structure was held in place during the shift in agricultural policy from the support of production to the support of prices by way of the doctrine of parity. The ongoing erosion of the doctrine of parity from 1952 onward, which included the lowering of price floors and reduction of supply management practices, sent farm prices crashing and ushered in a period of agricultural policy driven by agribusiness. Specifically, corporations such as Archer Daniels Midland and Cargill were instrumental in helping replace New Deal-era loan programs and land-idling arrangements with direct subsidies that supported low prices for corporate purchasers themselves. Anticipating the 1973 Farm Bill, for example, and alongside Secretary of Agriculture, Earl Butz, Cargill and the Farm Bureau argued that crashing farm prices would be a plus. They argued that not only would greater exports and new uses such as ethanol and sweeteners remedy the drop in price, but also that farms would remain profitable with the support of government subsidies. The winners and losers were clear under such policies: corporate buyers could acquire commodity crops for record low prices that were subsidized by the federal government while farmers continued to lose their lands and their income. Such policies, furthermore, cannabis racking systems constituted part of the larger trend in corporate growth, not limited solely to agribusiness.
For example, according to a 2013 Bureau of Economic Analysis, corporate profit as a percentage of GDP more than doubled between 1980 and 2013, rising from less than 5% to over 10%; before tax, corporate profit, as a percent of GDP, rose from less than 8% to over 12.5% between 1980 and 2013. Both periods, from the Great Depression and New Deal farm programs, to their erosion over the following decades, were characterized by structural racialization. Although New Deal-era legislation was geared toward pulling Americans out of poverty, it was itself a project of racial exclusion, with Black communities and other communities of color systematically barred from such supports. Southern committee members in Congress, for example, blocked efforts to include agricultural workers and domestic workers in the Social Security Act—the New Deal’s centerpiece legislation—largely because of the high concentration of black workers within those lines of work. In the 1930s, 60% of Black workers held domestic or agricultural jobs nationally while, in the southern United States, domestic and agricultural occupations employed almost 75% of Black workers, and 85% of Black women. Furthermore, although the National Recovery Administration set wages within the cotton industry at $12 a week, many Black workers had jobs that were not covered by the law and thus had their wages reduced by employers so that white workers could be paid more. Finally, Black agricultural workers were also left out of New Dealera agricultural union programs—namely the National Labor Relations Act, enacted and signed into law on July 5, 1935—while Black landowners in particular were excluded from federal farm support under the Agricultural Adjustment Administration. Significantly, the distribution of federal support during this period resulted in the dramatic decrease in the number of Black farms, from about 900,000 in 1930 to 682,000 in 1939.
Although these programs were slowly eroded over the next few decades, farmers of color continued to face great hardship relative to white farmers. The period of agricultural mechanization and industrialization after World War II, marked by the widespread adoption of scientific and technological innovations is usually credited with weeding out supposedly “non-productive, inefficient” farmers. Yet farmers of color and particularly Black farmers, in the context of the uneven application of New Deal era supports and years of discriminatory practices, were at a great disadvantage during this period because they were prevented from attaining the requisite access to capital and thus economic stability for such a transition. The Emergence of the Neoliberal Corporate Food System From the late 1970s and early 1980s until today, corporations have taken on a new and more deeply entrenched set of relationships within the food system. In short, this period is defined by neoliberal capitalist expansion and corporate control that began with the global economic shocks of the 1970s and 1980s During the 1980s, and working for the interests of multinational corporations in securing markets abroad for agricultural commodities produced domestically, Structural Adjustment Programs broke down foreign tariffs, dismantled national marketing boards, and eliminated price guarantees in the Global South. Alongside this destructive guarantee of foreign markets, the 1950s-onward trend of dismantling domestic safety net programs for farmers, guaranteeing low prices for commodity purchasers , and making up the potential loss for farmers with government direct payments continued. Such trends culminated in the 1996 Farm Bill—the “Freedom to Farm” bill. This Farm Bill eliminated the structural safety nets that had long protected producers during lean years. Corporate buyers and groups such as the National Grain and Feed Association, composed of firms in the grain and feed industry, pushed the 1996 Farm Bill to completely eliminate price floors, the requirement to keep some land idle, and the grain reserves that were meant to stabilize supplies and therefore stabilize prices, while simultaneously encouraging farmers to plant as much as possible. The 1996 Farm Bill thus marked the culmination of the shift from the federal government subsidizing production and consumption to diminishing price supports and the subsidization of agribusiness itself.
The dismantling of such price controls drove prices down and allowed corporate buyers to profit off heavily subsidized commodities while securing their power over producers. Specifically, deregulation left farmers increasingly vulnerable to market fluctuations caused by speculation, price volatility, and the profit-motives of corporate buyers. The shifts under the 1996 Farm Bill were deemed a failure by both farmers and legislators, and by 1997, rapidly falling farm prices resulted in direct government emergency payments to farmers, despite the fact that the legislation was designed to completely phase out farm program payments. Between 1996 and 1998, expenditures for farm programs rose dramatically, from $7.3 billion to $12.4 billion. They then soared to $21.5 billion in 1999 to over $22 billion in 2001. From 1996 to 2001, US net farm income dropped by 16.5% despite these payments. Rather than address the underlying cause of the price drop—overproduction—Congress voted to make these “emergency” payments permanent in the 2002 Farm Bill. As outlined below, neoliberal corporate influence remains particularly salient within two domains: the first is food production, processing, distribution, and service, and the second is education, research, and development.Commodity Supports: One major way corporations continue to profit and exert their influence on food production, distribution, and consumption is through commodity support programs. Once the safety nets of the New Deal farm programs were cut back during the 1980s and 1990s, and completely eliminated in the 1996 Farm Bill, farmers began to produce much more corn, soybeans, wheat, and other commodity crops. Specifically, harvest drying rack the 1996 Farm Bill eliminated the requirement to keep some land idle, which encouraged farmers to plant far more than they had before. As a result, the higher supplies of these crops brought down their prices, which drastically hurt farmer incomes and greatly increased the profits corporate purchasers reaped from purchasing even cheaper commodities. These low prices undermined the economic viability of most crop farms in the late 1990s, and subsequently, Congress provided a series of emergency payments to farmers. Furthermore, because continued oversupply kept prices from recovering, Congress eventually made such payments permanent in the 2002 Farm Bill. The dismantling of direct payment support for farmers thus ushered in another form of federally subsidized cheap commodities for corporate buyers that still leaves farmers themselves relatively vulnerable: disaster assistance programs and other emergency aid. The 2014 Farm Bill in particular cut funding allocated to direct payments by about $19 billion over 10 years—the most drastic policy change in this Farm Bill—with much of this money going into other types of farm aid, including disaster assistance for livestock producers, subsidized loans for farmers, and, most significantly, the crop insurance program. Crop Insurance: As fundamental as direct payments and emergency payments have been for subsidizing agribusiness profits, under neoliberal political and economic restructuring, crop insurance has surpassed them as the most egregious and expensive subsidy for agribusiness. For decades, farmers have been able to buy federally subsidized crop insurance in order to protect against crop failure or a decline in commodity prices. However, private insurance corporations and banks that administer the program, such as Wells Fargo, benefit the most from crop insurance subsidies. In 2011, these corporations received $1.3 billion for administrative expenses with $10 billion in profits over the past decade. In order to help cushion the blow from the reduction of direct payments, under the 2014 Farm Bill, $90 billion over 10 years will go toward crop insurance, which is $7 billion more than the previous farm bill. However, much of this money will go to private insurance corporations and banks instead of farmers. On the production side, the increase in government support will be directed toward the deductibles that farmers have to pay before insurance benefits begin. In other words, unlike non-farm insurance policies , crop insurance insures not only the crops, but also the expected revenue from selling those crops. Thus, Agricultural Risk Coverage and Price Loss Coverage only pays out when prices drop below a certain threshold. As of early 2015, corn crops have already reached this threshold. There exists a risk that this insurance program could cost far more than expected depending on how crop prices continue to shift: therefore, this is one of the more contentious aspects of the 2014 Farm Bill. Another contentious part is the uneven distribution of benefits. A 2014 report by the Environmental Working Group estimates that 10,000 policyholders receive over $100,000 a year in subsidies, with some receiving over $1 million, while the bottom 80% of farmers collect only $5,000 annually. In short, under the guise of cutting subsidies by repealing unpopular direct payments to farmers, the 2014 Farm Bill instead increases more costly crop insurance subsidies. Food Chain Workers: The pressure for corporate profit and the history of corporate consolidation with regard to the food system, both vertical and horizontal, has driven corporations to continue to lower wages for millions of food system workers and accumulate more wealth. A 2011 national survey of over 630 food system workers conducted by the Food Chain Workers Alliance found that the median hourly wage was $9.65 per hour. More than 86% of food system workers were paid poverty wages while 23% of food system workers were paid less than the minimum wage. Despite their significant role in every part of the food system—from production to processing to distribution and service—food system workers experience a greater degree of food insecurity than the rest of the US workforce. For example, according to the Food Chain Workers Alliance report, food system workers use SNAP at more than one and a half times the rate of the remainder of the US workforce. Additionally, as of 2014, twice as many restaurant workers were food insecure compared to the overall US population; as of 2011, in Fresno County, the country’s most productive agricultural county, 45% of farmworkers are food insecure. The situation is even worse in other parts of the country: in 2011, 63% of migrant farmworkers in Georgia were food insecure. Women and people of color disproportionately feel the economic pressure experienced by food system workers as a result of corporate consolidation. A comprehensive 2011 study of food workers and economic disparity found that people of color typically make less than whites working in the food chain. It found that half of white food workers earn $25,024 a year while workers of color earn $19,349. The study found that women of color in particular suffer the most, earning almost half of what white male workers earn. Furthermore, workers of color experience wage theft more frequently than white workers. More than 20% of all workers of color reported experiencing wage theft, while only 13.2% of all white workers reported having their wages misappropriated. Significantly, the study found that such discrepancies exist in all four sectors of the food system: production, processing, distribution, and service. Furthermore, such trends hold across the overall workforce.