Fred Stokes is a former cattle rancher who now runs a small family farm, mostly for his own use, in Mississippi. Stokes' county, Kemper, has only about 10,000 people, and Stokes, who is 76, says his small town has been shrinking; all the farmers are aging, most of the agricultural land is owned by one company, and it's almost impossibly hard to make a living as a rural American. "I'm not one of those who wants to reconstruct the Little House on the Prairie and be overly romantic," he says. "Mainly, I see the landscape being restructured in a very negative way."
I first came into contact with Stokes while I was reporting a piece on immigrant chicken farmers, and I thought about him when I read a series of posts by Prospect alum Ezra Klein a couple of weeks ago. First, in a post about how valuable cities are, Klein said in a brief aside: "But it would of course be political suicide for President Obama to say that part of winning the future is ending the raft of subsidies we devote to sustaining rural living."
That prompted two more posts, one in which Klein interviewed Agriculture Secretary Tom Vilsack, and Klein repeatedly made the point that, since cities are such producers and centers of wealth, we should spend time supporting them, too.
It's certainly true that the political system could do more to support urban life. President Barack Obama has taken steps to do this, establishing the White House Office of Urban Affairs. But on the whole, it's wrong to conflate farm subsidies with subsidies for rural life because we aren't supporting rural life at all.
A 2008 USDA report found that over the previous year, the population of rural areas increased at a measly rate of 0.4 percent, compared with a growth in metro-area populations of 1.1 percent, and attributed the difference mostly to people moving into cities. Most rural counties actually saw a population decline. Unemployment has skyrocketed. Children in rural areas are more likely to live in poverty, more likely to die, and more likely to be held back a grade. Rural areas receive more government support in the form of farm subsidies and income support like Social Security, but that's largely due to their aging and more disabled populations. In general, rural communities receive less money per capita to support community services like law enforcement and higher education.
Klein notes that the U.S. Department of Agriculture has an office of Rural Development that supports small-time entrepreneurs and infrastructure development like broadband in rural areas, but spends most of his time arguing against farm subsidies. First, farm life and rural life aren't quite interchangeable, and the billions we spend to support farms, including the $8.3 billion in direct payments and crop insurance we call subsidies, no longer support the actual people who live in rural America. In fact, they support the big factory farms that have eroded the quality of rural life.
But that doesn't make subsidies the problem. Sometime between Fast Food Nation and Food, Inc., progressives arrived at the simplistic conclusion that crop subsidies are bad for the environment and our health, and we need to end them. But crop subsidies were established for a real reason. The market for items like corn, wheat, soybeans, and cotton -- all nonperishable foods -- have serious problems that subsidies were designed to address. The reasons for subsidizing these crops are complicated, but they boil down to this: You can't trust the forces of supply and demand to set stable, fair prices. Government intervention in the market began in 1922 and increased during the Great Depression, when America realized that its interest in maintaining a strong agricultural sector necessitated a safety net for farmers. In the beginning, the government tried to smooth out the market problems by controlling supply -- in addition to grain stores and production quotas for some crops, the government also loaned farmers money in times of surplus so they would keep their products off the market until the price rose. That established a fair-value price below which crops wouldn't drop.
In 1982, under the Reagan administration, things changed. The administration instituted changes that allowed markets to fluctuate wildly, and the government simply paid farmers when the market price fell below a fair price. Because farmers could recoup whatever they lost on the market with government money, the government was actually setting a price ceiling rather than a price floor; the price of grains could, and often did, drop below what it actually cost to produce. That made the market price of grains way too cheap and encouraged farmers to produce more and more.
So we have the system we hate today. As prices decreased, so did profit margins, forcing small farmers out of the business and making big farmers bigger. It became easier and cheaper for producers to buy grain to feed their animals rather than grow their own feed. Farms stopped being whole systems, and this enabled the sorts of large factory farms we've come to loathe. In all, the benefits of agricultural subsidies have been passed on to companies instead of the farmers. Fewer people enter the agricultural sector, and those who remain struggle financially. Farmers are no longer able to support their rural communities, and the range of jobs rural Americans can get is waning. (That could be why, as Vilsack told Klein, so many rural Americans go into the military.) Ronald Reagan might have vilified the urban poor and stoked racial resentment among white Southerners, but his administration ruined things for the rural poor as well.
This doesn't mean we should abandon subsidizing farms altogether. "There is a baby in that bathwater," says Scott Marlow of the Rural Advancement Foundation International. "What I see too often is a discussion that is 'They're bad, no they're good.' And the answer is ... 'They're both.'" Subsidies for grain producers will likely always be necessary because the fundamental market problems still exist. We can change the way we subsidize farms, but that's a huge policy battle that will likely take years to fix.
Stokes and other farmers actually want government intervention to create a fair playing field. They don't want a handout. "We've got to true this thing up," he says.