Chapter 1

America’s farmers and the federal government are natural allies in the fight against domestic hunger and malnutrition—and this alliance is enshrined in the nation’s farm policies. The U.S. public needs farm policies to ensure a safe and affordable food supply, to protect the sustainability of vital natural resources that agricultural production depends on, and to produce well-balanced, nutritious foods.

In recent years, the U.S. farm sector has recorded its highest growth rates since the 1970s. At the time of this writing, 2011 looks set to be the most prosperous year of all. The rise in global grain prices has been very good for the U.S. farm sector, and the U.S. Department of Agriculture (USDA) forecasts a rising demand for U.S. grain for years to come.

Few images are more iconic of U.S. agriculture in the 20th century than a farmer seated on a tractor. But how much do we know about agriculture today? The latest tractors come equipped with global positioning systems (GPS) so sophisticated that they can tell farmers where to plant seeds within a fraction of an inch to maximize yield.

By 2100, the global population is expected to peak at 10.1 billion. According to the United Nations Food and Agriculture Organization (FAO), agricultural productivity will need to increase by 70 percent to keep up with the growing population.

Rising commodity prices do not translate into higher profits for all U.S. farmers. As commodity prices rise, so do the costs of fuel, fertilizer, seed, and other inputs. Scaling up the size of a farm operation mitigates the effects of rising input costs, but not all farmers are in a position to increase the size of their operation.

“The future of U.S. farm policy must grapple with two fundamental questions,” says economist Robert L. Thompson, co-chair of the Agricultural Task Force for The Chicago Council on Global Affairs and a professor of agricultural economics at the Johns Hopkins School of Advanced International Studies. “Of the federal dollars allocated to agriculture and rural America, how much should go to farmers as individuals and how much should be invested for the greater good of agriculture and rural America?” asks Thompson. “Of the fraction that goes to farmers as individuals, how much should be linked to the production of specific commodities and how much should be decoupled from what the farmer produces?”

Some policymakers praise biofuels as a way to reduce dependence on foreign oil and cut the greenhouse gases (GHGs) responsible for climate change. However, not all biofuels are able to accomplish these things: success ultimately depends on the choice of feedstocks to produce the biofuel.

Thompson’s second fundamental question about farm policy asks whether it should be based on production and decoupled from which crops farmers produce. Basing farm support payments on production is problematic for several reasons. When commodity prices are high, farmers still get government support to produce crops, even though the market is providing plenty of encouragement. When commodity prices are low, farmers get government support to produce—and overproduce—when there is no market signal to do so. These subsidies distort trade.

The percentage of Americans who smoke has been dropping for decades as a result of greater public awareness about the health risks of tobacco use. Until recently, however, U.S. farm policies included support for tobacco farmers. In the 1990s, government support began to wane as the tobacco industry came under attack for marketing its products to children. Children were, in fact, the only subgroup of the U.S. population whose tobacco use had not decreased. In 2004, the government decided to get out of the business of supporting tobacco farming altogether.

So far there is little evidence to suggest that low-income households are a significant part of the consumer demand for local and regional foods. Farmer’s market purchases, for example, account for less than 1 percent of all SNAP redemptions. Wal-Mart has been criticized as doing a disservice to farmers by lowering the prices of locally sourced foods, but critics may not realize that people using SNAP benefits tend to shop at food outlets where they can find the lowest prices.

Michigan’s economy had plunged into a deep recession well before the rest of the United States followed in 2008. From 2000-2009, Michigan led the nation in job losses: nearly one of every four jobs lost was in Michigan. The manufacturing sector has been the mainstay of Michigan’s economy ever since Henry Ford and the rise of the U.S. auto industry. Despite the recent hard times, manufacturing is still a significant sector. As in much of the rest of the Rust Belt, many manufacturers in Michigan have scaled back production, moved overseas, or simply gone out of business.

A study by Michigan State University found that if Michigan residents ate just 20 percent more fruits and vegetables produced in-state, it would create $200 million in farmer income and almost 2,000 additional off-farm jobs.

Congress is scheduled to rewrite the farm bill in 2012 in the midst of a bipartisan push to reduce the federal deficit. Above all, the emphasis will be on eliminating unnecessary programs.

The U.S. Department of Agriculture website lists 11 major risk management programs, including crop insurance, which includes multiple products of its own.