Monthly Archives: December 2014

Pursuing Parity for Small and Mid-Sized Farmers by Amending Farm Bill Subsidy Distribution

The situation of small and mid-sized farmers is really interesting, so I was happy to delve into how the Farm Bill affects them, this past summer during my Food Policy and Law class. The group National Young Farmers Coalition has recently launched the strategy “Farming is public service.” I’m not sure this is a winning tack, but I’m also not sure what is. Farming is a business—maybe a nonprofit in some cases, but still a business. Capitalism is the true issue, but solving that is beyond the reach of the Farm Bill. Read on to learn a bit about the profit conundrum in America’s farmland.

The Agricultural Act of 2014 (Farm Bill) is the latest in a colorful history of the nation’s attempts to meet the needs of its agriculture industry. The Farm Bill addresses the following areas: Commodities, Conservation, Trade, Nutrition, Credit, and Rural Development. Title I, Commodities, has been criticized for increasingly distributing its direct payouts (now defunct) and insurance-premium subsidies unfairly, with the top producers in the United States netting the majority of the funds (The Economist, 2014). This paper explores the possibility of creating parity and enhancing diversity within agriculture by inverting the existing subsidy formula to benefit the country’s smallest farms first.

Due to 20th-century federal and state agriculture policies that favored larger and larger operations while ignoring their environmental and social-justice casualties, American farmers have been called to “get big or get out” (Philpott, 2013). The result: “Although most cropland was operated by farms with less than 600 crop acres in the early 1980s, today most cropland is on farms with at least 1,100 acres, and many farms are five and ten times that size” (MacDonald et al., 2013).

While young rural people tend to leave the farm after graduating high school, many young urban people (two or more generations removed from their closest agrarian ancestor) are “re-discovering” farming and launching small operations. The growing awareness of food systems issues and popularity of alternative food institutions such as community-supported agriculture, farmers markets, and community gardens has made possible micro-operations that sell specialty crops directly to upscale restaurants and to the public. In fact, the number of small farms in the United States has grown significantly—by nearly 300,000 since 2002 (Pullman and Wu, p. 8). This may help to rectify the “aging-out” of farmers with which the United States is currently struggling.

However, most of these farms are not sustainably profitable. Newcomers struggle with inflated land prices, equipment purchases that may never fully amortize, college loan payments, and paper-thin profit margins—in addition to implementing a skill set they “book-learned,” instead of having grown up with, and negotiating a complicated marketplace. The USDA estimates that a farm needs to generate $100,000 of annual sales to be solvent; 83 percent of small-acreage farms (10 or fewer acres) make $10,000 or less (Newton, 2014).

In a 2009 study of non-corporate organic farms in California, farmers are shown to address marketing challenges with strategies involving “values-based” purchasing decisions. “Successful small and mid-sized organic farms … are emphasizing the values that make their farms unique and are competing on these values, rather than low prices, where they cannot compete” (Cantor and Strochlic).

Why can they not compete on price? Pullman and Wu hint at the root cause of this problem: “While midsized farms are often too big to benefit from direct sales models … they are also too small to build partnerships with larger supply chain partners. Thus, declines in this sector are not expected to change without policy interventions” (emphasis mine, 2013, p. 9).

So, which policy? While figures are not yet available for the 2014 Farm Bill regarding the disbursement of insurance-premium subsidies, estimates are that they will benefit the top tier of U.S. agribusiness firms in approximately the same manner that previous, late 20th-century Farm Bills have (Dayden, 2014). As of the 2008 Farm Bill, approximately 62 percent of U.S. farmers received no federal subsidies while 10 percent collected 74 percent of all the subsidy funds (Pullman and Wu, 2013). The top four recipients of subsidies in 2012 each received more than $700,000 (Environmental Working Group, n.d.).

This is in addition to crop-insurance subsidies. Federal subsidies for crop-loss insurance have increased, and the profit-loss insurance program is controlled by price “floors” (United States Congress, 2014, p.12) that are written into the legislation (Dayden, 2014). “Overall, of the $40 billion in projected savings over ten years from ending direct payments, $27 billion go … back into these insurance programs” (Dayden, 2014).

Amendment of Existing Provision

One might consider these beginning farmers on small operations engaged in on-the-job training. An apprenticeship, if you will. In order to encourage them to continue, so they can gain experience and knowledge in order to increase the capacity, and thereby the profitability, of their operations, they need to be supported financially. Federally funded insurance-premium support can protect their investments, encourage them to innovate, and aid them in receiving loans (Shields, 2012, p. 2).

There is indirect precedent for this idea: A proposal to the 2014 Farm Bill to reduce subsidies for producers with incomes of more than $750,000 (the limit is currently $900,000) was stripped out of the final version (Casteel, 2014). A number of legislative proposals have been introduced to address the need for insurance of specialty crops, which are grown on most small farms, such as the Local Farms, Food, and Jobs Act of 2011 (H.R. 3286/S. 1773); the Rural Economic Farm and Ranch Sustainability and Hunger (REFRESH) Act of 2011 (S. 1658 and H.R. 3111); and the Specialty Crop Insurance Act of 2011 (Shields, 2012).

The Farm Bill includes a 10-percent insurance-premium discount for “beginning farmers” in their first five years of farming (NSAC, 2014), but this is insufficient. An across-the-board full insurance-premium subsidy might also make up some of the loss from a 33-percent budget cut to socially disadvantaged producers (ibid.).

The proposed change to re-engineer insurance-premium subsidies would be addressed in Title I, Part II, Subsection F, Section 1605 (d), “Conforming Amendments,” which is a series of edits to the Food Security Act of 1985, Section 1001D(b). It’s beyond the scope of this paper to create an exact formula to achieve this goal within the existing budget; an actuary (or, most likely, a team of them) would need to be consulted. That said, the amendment would feature an inverse proportion.

Proposed language (in English, not Legalese): “All producers with gross income receipts of less than $100,000 shall have their crop-insurance premiums subsidized at 100 percent. Producers with income between $100,000 and $249,999 shall have their crop-insurance premiums subsidized at 90 percent. Producers with income between $250,000 and $499,999 shall have their crop-insurance premiums subsidized at 80 percent. Producers with income between $500,000 and $749,999 shall have their crop-insurance premiums subsidized at 70 percent. Producers with income between $750,000 and $999,999 shall have their crop-insurance premiums subsidized at 60 percent. Producers with income at or exceeding $1,000,000 shall have their crop-insurance premiums subsidized at 50 percent.”

The total amount allocated in the budget for insurance-premium subsidies could remain the same, or it could be reduced to accommodate the likely increase in administrative cost, as the number of policies issued would increase. Increasing the number of policies might be the impetus for new insurance companies that specialize in small and mid-sized farms. This proposed amendment to the Farm Bill would move the country toward a goal of creating parity and enhancing diversity within agriculture by inverting the existing subsidy formulas to benefit the country’s smallest farms first.

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Christmas Records

In 1975, I had a banner Christmas. Santa brought a Barbie Doll with a full case and clothes (even go-go boots!) and a record player. The best thing about the record player was that my parents expressly instructed my sister, Linda, and me that this toy was special and I did not have to share it; it was all mine. This meant a lot because—and you elder siblings know what I’m talking about—I’d had to make a lot of concessions since she appeared on the scene two years prior.

A Barbie case in point

A (Barbie) case in point …

The record player was orange plastic with yellow trim; it had three settings: 78, 45, and 33. The 45 adapter was built in; you just had to twist it into place. It was perfect for playing Mickey Mouse Club, Alvin and the Chipmunks, and those books that came with a record to narrate them, sounding a chime when it was time to turn the page.

I took very good care of this record player. Such good care that, when Mike and I hosted our first Solstice party in our first home, in the St. Johns neighborhood in Portland, we used it to play Christmas records we’d scavenged that summer. We timed our interest in mid-century Christmas records perfectly—their original owners were dying off, and their children didn’t want anything to do with them and sold them to us at their yard and estate sales for pocket change. By December, we had gathered a fine array.

That "Swing Bells" is really something

That “Swing Bells” is really something

The orange record player lasted two holiday parties. By then, it was nearly thirty years old. We first noticed that it was failing because everyone who was singing sounded slightly flat. The motor was losing its torque. The records started getting flatter, and more drawn out, until everyone sounded absolutely macabre. Because the motor was encased in plastic, there was no getting at it to fix it. After decades of service, the orange record player was dead. <moment of silence>

The following year’s holiday party was saved by our friend Chris, who was a teacher in a nearby school district. She was leaving school one afternoon and happened to notice that a dumpster was filled with record players. Apparently the school district had determined them obsolete and either lacked the imagination to donate them somewhere, or (more likely) there was probably some ridiculous inventory-release protocol that made dumping them into a landfill more practical. In any case, Chris looked around for witnesses and then quietly loaded a half-dozen or so into her car.

This record player was army green, industrial strength. Built to withstand being knocked off the teacher’s desk here and there. The turntable had a bit of shock absorption, which made it more difficult to cause the needle to skip by simply walking past (a definite problem with the orange one). It also had a larger speaker, so a room full of tipsy, chatting people was less able to drown out the sound.

Eventually that record player, too, gave up the ghost. We bought an actual turntable after that. Last weekend, we had our first winter solstice party in twelve years—as I mention in this blog post we switched to summer solstice parties when we lived in the Gorge. Out came the records! There’s something special about the pop-and-gravel sound of laying a needle on a record. And there’s something special about inviting a whole mess of people to your house to celebrate the solstice. Happy Solstice, and Merry Christmas!

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Foiled by a SmartAppliance

I’ve talked up my crafting friend Ivy in Get Your Pitchfork On!. She can make anything! She made a poppyseed cake covered with daisies when Mike and I celebrated our wedding in Portland. She lines up rocks and leaves on her tables and her walls. She doesn’t just make fruit jam, she adds things like cardamom and lemon rind. She has a special egg-scrambling technique, which I have documented but haven’t shared with you yet. In due time.

In May, Ivy and her friend Ria came out to visit. Ivy brought a special gift-project: wool mittens! She had knitted them already and wanted to felt them in our washing machine. It was funny to try on mittens on a brilliantly sunny and warm day.

They're kind of big!

They’re kind of big!

Kristy Athens

Wool mittens and lilacs–not usually in the same picture

Note to Wool-Felters: Don’t try to felt wool in a new washing machine!

Ivy’s usual method is to dump extra-hot water into the drum and add the unfelted mittens, then agitate until they have shrunk down to the desired size. We bought our washing machine last year, shortly after moving to Wallowa County. It has a computer. It sounds like a arcade machine when you turn it on. The lid locks while it’s running. This machine determines the size of the load by weighing it, and if there isn’t enough in there it won’t run. It wouldn’t run.

Ivy tried a couple different methods to fool the machine into shrinking our mittens. Eventually, she gave up, hauling four sopping, still-oversized mittens upstairs and hung them on the porch rail to dry. She brought them back to Portland and washed them in a dumber machine, and they came back to us just in time for cold weather!

I hope you all have such a gifted, crafty, and generous friend!

I ❤ Ivy

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Solstice Tree’s Revenge

Because of my school schedule, Mike and I got a tree a little early this year (early by rational standards, I mean, not capitalism standards). We’ve cut trees from “u-cut” lots and off our own land before, but never on public land. We wondered where to go.

This decision turned out to be a process of elimination: the pamphlet that came with our $5 permit from the Wallowa-Whitman National Forest listed a number of off-limit areas. “Please follow these simple rules,” it read:

Cut your tree at least 50 feet from the road. Cutting is prohibited on active timber sales or areas planted with new trees. Cutting is prohibited on private land, wilderness areas, designated campgrounds, or existing tree plantations. Cutting is prohibited in posted old-growth areas or within a quarter-mile of wild and scenic corridors. Cutting is prohibited within sight of a state highway. Cutting is prohibited in the Baker City watershed (wherever that is), Anthony Lakes Campground or Ski Area, Starkey Experimental Forest, La Grande watershed (ditto), or Hurricane Creek or Lostine drainages.

Whew! Okay! Hurricane Creek was already out, as we know it to be the territory of leg-hold fur trappers. Every year a dog gets caught up in one of those traps. Not only is the trapper not liable, you can actually get in trouble for moving the trap! Never mind your poor dog. Having two curious dogs, we don’t want anything to do with Hurricane Creek until April, when the season ends.

Up the forest road

Up the forest road

Entering the national forest

Entering the national forest

Lucky for us, there are numerous routes into the Wallowa-Whitman National Forest that are just minutes from our house. We drove toward Ruby Peak, rumbled slowly up the forest road and parked almost in time to get Cap’n out of the cab to barf (she still has trouble with bumps and curves). Then we walked until we crossed into the forest and starting sizing up trees.

It didn’t take long to find a sweet little pine tree. It had a great shape, was the perfect size, and was not too far from the path (but not too close either—don’t want to bum anyone out on their nature walk by presenting a stump). We considered a few others and decided that was our tree.

I felt a little guilty, murdering a tree in front of its friends and family. But …

It took only a few swipes of the saw, and we were ready to haul it back to the rig. I pulled the permit tag from my pocket, but it was too hard to work the zip-tie wearing my gloves. I doffed them and started wrapping the tag around the trunk—OUCH!

I looked more closely at the tree. A spruce? We cut down a damn spruce??

As you stalwarts of the forest know: Never shake hands with a spruce. Each needle is just that—a needle. Unlike the friendly Douglas fir or grand fir, or even the elegant Ponderosa pine, the spruce does not want to be your friend.

Ow

Ow

However, the deed was done. It was still a beautiful tree; we would just have to be very, very careful when trimming it. Very careful.

Everything worked out

Everything worked out

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