TIME Flies: Part 4

June 7, 2009

Three decades ago, TIME magazine took an in-depth look at “The New American Farmer”. At the time of their feature, the business of farming was rapidly shifting from the inefficient, tiny farms that dominated the 1930s, to larger-scale family run operations that need to be adept at business, engineering, and technology to keep up with the world’s growing population

Over the past month, we’ve dissected this 30-year-old cover story, which holds as much relevance today as it did when it was first written. In particular, we’ve looked at the age-old myth that U.S. farms are being taken over by corporate agribusiness, as well as the litany of challenges facing the modern-day farmer.

The difficulties pinpointed by TIME’s writers include farming’s low profit margins, the need to constantly buy new, expensive technology to boost efficiency and meet growing demand, and the biggest wild card of all: government policy.

Farm policy was, and continues to be, essential to help growers cope with the unpredictable nature of farming. Farm policy arguably shapes the business of farming more than any other single factor. And since the ’70s, it’s undergone a massive transition to trim taxpayer cost, keep food prices the lowest in the world, and provide tools to help growers keep pace with such a fast-moving industry.

TIME explained the evolution of farm policy this way:

[A] sweeping change in federal farm laws enacted in 1973 has forced farmers to become marketing specialists. Nearly all crops these days must be sold on the private market. Washington will make cash payments to farmers if market prices fall below Government-set “target prices” that supposedly cover most—not all—production costs. But no longer will Uncle Sam buy and store crops to prop the price…

The result: instead of selling all their crops at harvest time, as they did for centuries (indeed, millenniums), farmers now spread sales all through the year. That forces them to face tricky questions: Will wheat or corn or soybean prices be higher next March than now, and if so will they be enough higher to justify storing 80% of the crop until then, or only 60% of it? To complicate matters further, a farmer can work out deals to sell part of his crop in October, say, but get the cash next January if that would be better for tax purposes. All of which should stir pride in the ghost of William Jennings Bryan, who insisted in his 1896 cross-of-gold speech that “the farmer … is as much a businessman as the man who goes upon the board of trade and bets upon the price of grain.”…

In 1973-74, [former Agriculture Secretary] Earl Butz tried a new tack: he lobbied through Congress the law under which farmers could no longer unload their crops on the Government, urged them to increase output by planting “fence to fence,” and set target prices far below market quotes…

The Carter Administration, which took office when farm prices were falling drastically, partially reversed the Butz policy. Besides urging farmers to participate in set-aside programs [by restricting plantings], it has, with considerable prodding from Congress, established target prices for wheat and corn that are above today’s market quotes, even though these target prices by no means guarantee farmers a profit…

There is considerable room for improvement in farm policy. If some form of price support has to be continued—and a case can be made for it as a kind of disaster insurance—the practice of setting target prices just high enough to cover most production costs is a good one. But many experts believe the Government should drop its set-aside programs and once more urge farmers to produce…

Washington also could help all farmers—and the world—by pushing agricultural exports even harder. For example, U.S. negotiators at the world trade talks in Geneva might insist that the nation will do nothing to open the U.S. market wider to European and Japanese goods unless industrialized nations let in more American-grown food. The Government might also expand its aid—$10 million this year—to farmers who organize cooperative groups that develop foreign markets. One tempting target: China, which has just begun to buy U.S. meat and grain and could use more…

In the end, the future of American agriculture is really up to the farmers. Paradoxically, in an enterprise perhaps more heavily influenced by the Government than any other, big and efficient farmers like [Minnesota’s] Pat Benedict are giving the nation a lesson in Adam Smith economics. By carefully calculating their potential profit in a free market, planning their operations around those computations and reinvesting the profits in more output, they are acting the way Smith said capitalists should. The results have been about what Smith predicted: growing production, rising innovation, expanding exports-and reasonable costs to customers.

Amazingly, TIME got exactly what it wished for in the ’78 article—well, almost. Congress did away with set-asides in favor of a safety net that kicks in when it’s needed most—when prices crumble or weather disasters strike. Lawmakers also invested in conservation programs to keep the most fragile lands out of production while providing cost-share assistance on productive lands to help farmers produce for local markets and for the growing world in a sustainable way. And, government officials have worked hard to open up many foreign markets for U.S. goods, although foreign ag subsidies and trade barriers still plague U.S. agriculture. However, one policy hurdle has surfaced that TIME never could have foreseen so many years ago. A group of well-heeled, vocal extremists from opposite ends of the political spectrum have turned their sites on America’s farmers and have used unmatched resources to turn much of the nation’s urban media—including TIME—against the “New American Farmer.” Here’s hoping the men and women who keep us clothed and fed can overcome this new obstacle. After all, as TIME so eloquently put it 30 years ago, “The U.S. and the world need all the food that American farmers can grow.”