The perpetually low income of farmers kept agricultural economists busy for most of the twentieth century. Policy after policy has been tried, rejected, and then tried again in an attempt to solve the farm income problem.
Ever since the New Deal, we have had price supports at various levels for many farm products. Since the Kennedy years, we have supplemented relatively low price supports with direct payments to farmers. All the while, supply control has been attached to most farm bills in one form or another. None of this has provided a lasting solution to low farm income.
Some see the failure of public policy as clear evidence that we should "get the government out of agriculture" and embrace free market philosophies. The 1996 "freedom to farm" bill is very much of this tradition. Global competitiveness, level playing fields, farmer freedom and increased efficiency became the battle cries in this new way to make farmers better off.
But within a few years, government payments to farmers were at record high levels, and getting the government out of agriculture had proven to be more expensive than keeping it in agriculture. Policy experts around the country are now busily crafting ways to go back to the future.
Government programs are based on the view that farmers are unable to act together in their own best interest. Thus, the government must act on their behalf. Free marketers see collective action as unnecessary and a general affront to the individual freedom they hold dear. As a result, the possibility of farmers acting collectively to take charge of their own economic interests has received virtually no attention in almost 70 years of farm policy debates.
Most economists, and many farmers, doubt whether farmers can work together for their collective economic interests. History is on the side of the doubters. Throughout the 20th century, most efforts to organize farmers eventually fell victim to the farmer's yearning for independence.
The twenty-first century is different, however. There are fewer farmers. The farmers we have are better educated and better connected with information technology. And last but not least, today's farmer lives in an agribusiness world of economic giants. Today's farmers have seen many other farmers driven out of business, and still others lose their independence to contracting. They know that more of the same is on the horizon.
Collective bargaining is not getting together and letting the smartest farmer in the group make marketing decisions. Nor is it about getting more efficient. And while supply control is popular, farmers who dump milk and kill baby pigs without targeted use of concentrated economic power serve only to shock the public. Instead, collective bargaining is face-to-face negotiation between a powerful farmer group and some other food system powerhouse.
Organizing 350,000 farmers (roughly the number of family-sized farms that could gross enough to make a decent living) may be difficult. But the experience of other industries faced with similar business circumstances says it's not impossible.
For example, the American Federation of Teachers has 1 million members and the National Association of Letter Carriers effectively represents 315,000 postal workers. And all workers in an industry need not be in the same union: 59,000 airline pilots bargain together while others that depend on airlines for a living have other unions. (For comparison purposes, the airlines pilots have about twice as many members as the American Soybean Association).
Will the new generation of farmers embrace collective action, or continue to try and make it on their own? Farmers, and only farmers, can answer such a question.
(More information is available in a 40-page article by Levins titled "An Essay on Farm Income." You can view it at http://agecon.lib.umn.edu, or contact the Waite Library, Department of Applied Economics, 232 COB, University of Minnesota, St. Paul, MN 55108. Or, call 612-625-1705).
Richard A. Levins is a professor and Extension agricultural economist at the University of Minnesota and a senior fellow with the Institute for Agriculture and Trade Policy. You can contact him at 612- 625-5238, [email protected]
Click below for the previous stories in the series, written by agricultural economists and marketing specialists, offering information on the 2002 Farm Bill.