The primary purpose of the federal crop insurance program is to offer subsidized crop insurance to producers who purchase a policy to protect against losses in yield, as well as crop revenue and whole farm revenue. Significantly, more than 100 crops are insurable. The 2014 Farm Bill increased funding for crop insurance, primarily for two new insurance products: the Stacked Income Protection for cotton and the Supplemental Coverage Option for other crops. Ultimately, with the decline in projected spending for Title I , and the increase for Title XI , the 2014 Farm Bill underwent a decline of $8.59 billion in spending on the farm “safety net.” Under the Farm Bill, the miscellaneous title includes various provisions affecting research, jobs training, and socially disadvantaged and limited resource producers, as well as livestock production and oil heat efficiency, among other provisions. The 2014 Farm Bill extended authority for outreach and technical assistance programs for socially disadvantaged farmers and ranchers, expanded support for military veteran farmers and ranchers, and created a research center to develop policy recommendations for socially disadvantaged farmers and ranchers. Finally, it reauthorized funding for the USDA Office of Advocacy and Outreach for socially disadvantaged and veteran farmers and ranchers, and mandated receipts for service or denial of service in order to increase transparency.CORPORATE POWER HAS LONG PLAYED A ROLE in the institutions, processes, practices, plants racks and infrastructure that make up the US food system: how food is produced, processed, distributed, and consumed.
Part I provides a snapshot of the state of corporate consolidation and control in the US food system then addresses the history of the US food system with regard to the relationship between the federal government, corporate consolidation and control, and structural racialization: first, from the 1930s to the 1950s with the Great Depression and New Deal farm programs; and second, from the 1950s to the late 1970s with the erosion of such programs. It then addresses the emergence of neoliberal economic and political restructuring in the late 1970s and early 1980s—characterized by privatization, free trade, deregulation, and cuts in government spending in favor of the private sector—and the emergence of the neoliberal corporate-controlled food system. Part I then elaborates upon two major domains within which corporate influence under neoliberalism remains particularly salient. The first domain is that of food production, processing, distribution, and service—with such influence exerted by way of commodity support and crop insurance programs, labor regimes, and international food aid. The second domain is that of education, research, and development—with such influence exerted by way of lobbying efforts, private funding, strategic mergers, and the “revolving door” between corporate employees and government officials. Significantly, corporations continue to exert such influence via lobbying efforts, private funding, strategic mergers, and the “revolving door” between corporate employees and government officials. Ultimately, Part I argues that the Farm Bill, from the first Farm Bill in 1933 to the Farm Bills of the 1980s onward, is defined by the long term shift from the subsidization of production and consumption to the subsidization of agribusiness, and that low-income communities and communities of color have been structurally positioned on the losing side of such shifts. It is important to note that corporate consolidation and corporate control are two related, yet different, phenomena.
Corporate consolidation can take the form of horizontal consolidation, which refers to the consolidation of ownership and control within one part of the food system, such as production, processing, or distribution; or vertical consolidation, which refers to the consolidation of firms at more than one part of the food chain, such as upstream suppliers or downstream buyers. The term “agribusiness” is often deployed in reference to corporations that exhibit one or both sets of processes within the food system. Corporate control, however, refers to the control of political and economic systems by corporations in order to influence trade regulations, tax rates, wealth distribution, among other measures, and to produce favorable environments for further corporate growth. It should be noted that corporate consolidation is a prerequisite to corporate control. In other words, it can be looked at as a two-part process: once corporate consolidation has been achieved, corporations are much better suited to assert their control over political and economic systems as they have little competition in their respective sectors and industries. Thus, as Susan George states: “It is not just their size, their enormous wealth and assets that make the [corporations] dangerous to democracy. It is also their concentration, their capacity to influence, and often infiltrate governments, and their ability to act as a genuine international social class in order to defend their commercial interests against the common good.” A New and Changing Farm Bill: Toward Low Prices and Big Buyers The period of agricultural policy between the 1930s and the 1950s was greatly informed by the Great Depression—a consequence of the stock market crash of 1929. The crash marked the disruption of capital accumulation in every sector of the economy, including agricultural production. During the 1930s, the massive drought and soil erosion that characterized the Dust Bowl intensified the impact of the Depression upon agricultural production and had far-reaching social, economic, and environmental consequences.
The Dust Bowl affected over 100 million acres and prompted the largest migration in US history within a short period of time. Approximately 3.5 million people moved out of the Great Plains states in search of work between 1930 and 1940. Pressured by the need to support remaining farmers and thwart massive farm loss, Congress passed the New Deal-era 1933 Agricultural Adjustment Act, which aimed to raise the value of crops and reduce crop production and surplus. The 1933 Farm Bill reduced agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock. However, the goal of agricultural policy did not remain tied to the support of production. Rather, by the end of the 1940s, “doctrine of parity” set standards for commodity prices and undergirded the 1941 Steagall Amendment, the Agricultural Acts of 1948 and 1949, and the permanent funding of the Commodity Credit Corporation . For the next few decades, particularly between the 1950s and 1970s, agricultural production was characterized by high-yielding varieties of a few cereals , the heavy use of subsidized fertilizers, pesticides, irrigation and machinery, and their global proliferation under the “Green Revolution.” Furthermore, from 1952 onward, the “parity” farm programs of the New Deal era were eroded, as price floors were lowered and supply management was reduced. Beginning in 1973, policy changes during the Nixon Administration precipitated the drastic deregulation of the corn market in particular by dismantling New Deal era supply management policies, selling off federal grain storage reserves, and implementing “fencerow to fencerow” planting, plant growing trays ultimately promoting overproduction and the consolidation of farm operations. Simultaneously, the system of loans and land idling schemes that supported farmers was replaced with a system of direct subsidies that supported low prices for corporate purchasers by encouraging farmers to sell crops at any price and ensuring that direct payments from the government would make up the difference. Ultimately, these changes not only reflected and upheld corporate consolidation and control, they also resulted in massive farm loss: the number of farms decreased from 7 million in 1935 to 1.9 million in 1997, with the greatest drop occurring from 1935 to 1974. The changes from both the 1930s to the 1950s, and the 1950s to the 1970s, were tied to corporate power, as reflected by several key moments in the history of the Farm Bill. First, the money for production subsidies under the 1933 Farm Bill was originally generated by way of an exclusive tax on corporations that processed farm products. Yet, according to the 1938 Supreme Court case, United States v. Butler, the act’s tax provision unfairly targeted corporations and was thus deemed unconstitutional. 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, 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. 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.