KJsimons, what you omitted is that at present the West is subsidizing farmers to NOT grow food. We also destroy large quantities of food each year for "sound" economic reasons (to whit, if we gave it to the hungry the price will fall, then we won't be able to sell anything for real profit, then we will go out of business, then there will be no food production).
Also, grain is much more efficient than, say, beef production on the same land, but as I redall there is quite a lot of beef production in the US - hence this land could be turned over to subsitance production if necessary.
Simply looking at the output figures is not adequate. Consider that the US is actually very under-populated and has a lot of free space for farm expansion, too. And lastly, consider, the developements of technology in their historic scale. In 1000 AD, a hide of land, about 120 acres, sustained at least one family. Britain had at this time a population of about 3 million. Today it only has 60 million; so we only need farming to be 20 times more efficient than it was in the iron age. And our technical production is a hell of a lot more than 20 times as efficient.
The history of mechanised farming in both the EU and America is one of purposeful artificial scarcity in order to maintain prices, and is openly discussed in those terms:
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By the end of World War II, the farm economy once again faced the challenge of overproduction. Technological advances, such as the introduction of gasoline- and electric-powered machinery and the widespread use of pesticides and chemical fertilizers, meant production per hectare was higher than ever. To help consume surplus crops, which were depressing prices and costing taxpayers money, Congress in 1954 created a Food for Peace program that exported U.S. farm goods to needy countries. Policy-makers reasoned that food shipments could promote the economic growth of developing countries. Humanitarians saw the program as a way for America to share its abundance.
In the 1960s, the government decided to use surplus food to feed America's own poor as well. During President Lyndon Johnson's War on Poverty, the government launched the federal Food Stamp program, giving low-income persons coupons that could be accepted as payment for food by grocery stores. Other programs using surplus goods, such as for school meals for needy children, followed. These food programs helped sustain urban support for farm subsidies for many years, and the programs remain an important form of public welfare -- for the poor and, in a sense, for farmers as well.
But as farm production climbed higher and higher through the 1950s, 1960s, and 1970s, the cost of the government price support system rose dramatically. Politicians from non-farm states questioned the wisdom of encouraging farmers to produce more when there was already enough -- especially when surpluses were depressing prices and thereby requiring greater government assistance.
The government tried a new tack. In 1973, U.S. farmers began receiving assistance in the form of federal "deficiency" payments, which were designed to work like the parity price system. To receive these payments, farmers had to remove some of their land from production, thereby helping to keep market prices up. A new Payment-in-Kind program, begun in the early 1980s with the goal of reducing costly government stocks of grains, rice, and cotton, and strengthening market prices, idled about 25 percent of cropland.
Price supports and deficiency payments applied only to certain basic commodities such as grains, rice, and cotton. Many other producers were not subsidized. A few crops, such as lemons and oranges, were subject to overt marketing restrictions. Under so-called marketing orders, the amount of a crop that a grower could market as fresh was limited week by week. By restricting sales, such orders were intended to increase the prices that farmers received.
In the 1980s and 1990s
By the 1980s, the cost to the government (and therefore taxpayers) of these programs sometimes exceeded $20,000 million annually. Outside of farm areas, many voters complained about the cost and expressed dismay that the federal government was actually paying farmers NOT to farm. Congress felt it had to change course again.
In 1985, amid President Ronald Reagan's calls for smaller government generally, Congress enacted a new farm law designed to reduce farmers' dependence on government aid and to improve the international competitiveness of U.S. farm products. The law reduced support prices, and it idled 16 to 18 million hectares of environmentally sensitive cropland for 10 to 15 years. Although the 1985 law only modestly affected the government farm-assistance structure, improving economic times helped keep the subsidy totals down.
As federal budget deficits ballooned throughout the late 1980s, however, Congress continued to look for ways to cut federal spending. In 1990, it approved legislation that encouraged farmers to plant crops for which they traditionally had not received deficiency payments, and it reduced the amount of land for which farmers could qualify for deficiency payments. The new law retained high and rigid price supports for certain commodities, and extensive government management of some farm commodity markets continued, however.
That changed dramatically in 1996. A new Republican Congress, elected in 1994, sought to wean farmers from their reliance on government assistance. The Freedom-to-Farm Act dismantled the costliest price- and income-support programs and freed farmers to produce for global markets without restraints on how many crops they planted. Under the law, farmers would get fixed subsidy payments unrelated to market prices. The law also ordered that dairy price supports be phased out.
These changes, a sharp break from the policies of the New Deal era, did not come easily. Congress sought to ease the transition by providing farmers $36,000 million in payments over seven years even though crop prices at the time were at high levels. Price supports for peanuts and sugar were kept, and those for soybeans, cotton, and rice were actually raised. Marketing orders for oranges and some other crops were little changed. Even with these political concessions to farmers, questions remained whether the less controlled system would endure. Under the new law, government supports would revert to the old system in 2002 unless Congress were to act to keep market prices and support payments decoupled.
New dark clouds appeared by 1998, when demand for U.S. farm products slumped in important, financially distressed parts of Asia; farm exports fell sharply, and crop and livestock prices plunged. Farmers continued to try to boost their incomes by producing more, despite lower prices. In 1998 and again in 1999, Congress passed bailout laws that temporarily boosted farm subsidies the 1996 act had tried to phase out. Subsidies of $22,500 million in 1999 actually set a new record.
Farm Policies and World Trade
The growing interdependence of world markets prompted world leaders to attempt a more systematic approach to regulating agricultural trade among nations in the 1980s and 1990s.
Almost every agriculture-producing country provides some form of government support for farmers. In the late 1970s and early 1980s, as world agricultural market conditions became increasingly variable, most nations with sizable farm sectors instituted programs or strengthened existing ones to shield their own farmers from what was often regarded as foreign disruption. These policies helped shrink international markets for agricultural commodities, reduce international commodity prices, and increase surpluses of agricultural commodities in exporting countries.
In a narrow sense, it is understandable why a country might try to solve an agricultural overproduction problem by seeking to export its surplus freely while restricting imports. In practice, however, such a strategy is not possible; other countries are understandably reluctant to allow imports from countries that do not open their markets in turn.
By the mid-1980s, governments began working to reduce subsidies and allow freer trade for farm goods. In July 1986, the United States announced a new plan to reform international agricultural trade as part of the Uruguay Round of multilateral trade negotiations. The United States asked more than 90 countries that were members of the world's foremost international trade arrangement, known then as the General Agreement on Tariffs and Trade (GATT), to negotiate the gradual elimination of all farm subsidies and other policies that distort farm prices, production, and trade. The United States especially wanted a commitment for eventual elimination of European farm subsidies and the end to Japanese bans on rice imports.
Other countries or groups of countries made varying proposals of their own, mostly agreeing on the idea of moving away from trade-distorting subsidies and toward freer markets. But as with previous attempts to get international agreements on trimming farm subsidies, it initially proved extremely difficult to reach any accord. Nevertheless, the heads of the major Western industrialized nations recommitted themselves to achieving the subsidy-reduction and freer-market goals in 1991. The Uruguay Round was finally completed in 1995, with participants pledging to curb their farm and export subsidies and making some other changes designed to move toward freer trade (such as converting import quotas to more easily reduceable tariffs). They also revisited the issue in a new round of talks (the World Trade Organization Seattle Ministerial in late 1999). While these talks were designed to eliminate export subsidies entirely, the delegates could not agree on going that far. The European Community, meanwhile, moved to cut export subsidies, and trade tensions ebbed by the late 1990s.
Farm trade disputes continued, however. From Americans' point of view, the European Community failed to follow through with its commitment to reduce agricultural subsidies. The United States won favorable decisions from the World Trade Organization, which succeeded GATT in 1995, in several complaints about continuing European subsidies, but the EU refused to accept them. Meanwhile, European countries raised barriers to American foods that were produced with artificial hormones or were genetically altered -- a serious challenge to the American farm sector.
In early 1999, U.S. Vice President Al Gore called again for deep cuts in agricultural subsidies and tariffs worldwide. Japan and European nations were likely to resist these proposals, as they had during the Uruguay Round. Meanwhile, efforts to move toward freer world agricultural trade faced an additional obstacle because exports slumped in the late 1990s.
Farming As Big Business
American farmers approached the 21st century with some of the same problems they encountered during the 20th century.
The most important of these continued to be overproduction. As has been true since the nation's founding, continuing improvements in farm machinery, better seeds, better fertilizers, more irrigation, and effective pest control have made farmers more and more successful in what they do (except for making money). And while farmers generally have favored holding down overall crop output to shore up prices, they have balked at cutting their own production.
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The advent of agribusiness in the late 20th century has meant fewer but much larger farms. Sometimes owned by absentee stockholders, these corporate farms use more machinery and far fewer farm hands. In 1940, there were 6 million farms averaging 67 hectares each. By the late 1990s, there were only about 2.2 million farms averaging 190 hectares in size. During roughly this same period, farm employment declined dramatically -- from 12.5 million in 1930 to 1.2 million in the 1990s -- even as the total U.S. population more than doubled.
In 1900, half of the labor force were farmers, but by the end of the century only 2 percent worked on farms. And nearly 60 percent of the remaining farmers at the end of the century worked only part-time on farms; they held other, non-farm jobs to supplement their farm income. The high cost of capital investment -- in land and equipment -- makes entry into full-time farming extremely difficult for most persons.
http://usinfo.state.gov/products/pubs/oecon/chap8.htm
This message has been edited by contracycle, 04-22-2005 10:32 AM
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