Institute of Agriculture & Trade Policy (IATP): Farm Bill Perpetuates Market Deregulation and Volatility
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FOR IMMEDIATE RELEASE
May 13, 2008
4:20 PM
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CONTACT: Institute of Agriculture & Trade Policy (IATP)
Ben Lilliston, 612-870-3416, ben@iatp.org
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Farm Bill Perpetuates Market Deregulation and Volatility
Small Gains in Bioenergy, Conservation, Local Foods, Food Aid
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MINNEAPOLIS - May 13 - The 2008 Farm Bill coming to the House and Senate floor this week includes
incremental gains for conservation, renewable energy, food aid and healthier
local food systems. However, it fails to fix the deregulation policies of the previous two
Farm Bills that have increased market volatility to the benefit of global food corporations
and at the expense of farmers, consumers, rural communities and the environment,
said the Institute for Agriculture and Trade Policy (IATP).
“Unfortunately, this Farm Bill became a narrow battle over budgetary issues, rather than
which policies will work best for farmers, consumers and the environment,” said IATP
Senior Policy Analyst R. Dennis Olson. “Neither payment caps, nor the experimental
revenue insurance program, address the extreme market volatility we are experiencing
today. The `so-called’ commodity reforms in this Farm Bill will do nothing to reverse the
trends toward increased market concentration, speculation and manipulation. Nor will
they do anything to address the range of issues contributing to rising food prices.”
Congress dismantled strategic grain reserves, acreage set asides and other market
management mechanisms in the 1996 Farm Bill. Since then, global food companies
have benefited from windfall profits. For example, Cargill’s profits have increased nearly
1000 percent from 1997/1998 to 2006/2007.
“Global food corporations’ profits increased when farm prices collapsed by 40 percent
after the market deregulation of the 1996 Farm Bill and they are making even more
money now that food prices have risen to crisis levels,” Olson said. Deregulation, in effect,
privatized crucial market information and decreased price transparency, thereby
increasing the ability of big firms to manipulate prices.”
Another glaring failure of the pending Farm Bill was the missed opportunity to strengthen
antitrust enforcement. “While some of the worst abuses of increasingly exploitive
contracts against farmers were eliminated,” Olson said, “a majority of the conferees
caved-in to corporate lobbyists on the more substantive market reforms, like the ban
on packer feeding, which would have helped curtail anticompetitive practices that deny
independent farmers fair market access.”
On the positive side, the new Farm Bill contained a number of important provisions:
• Bioenergy incentives for “Next Generation” feedstocks, including $70 million for the
new Bioenergy Crop Transition Assistance Program, based on the Reinvest in Minnesota
Reserve–Clean Energy bill passed by the Minnesota Legislature in 2007. IATP worked
with other groups and Minnesota’s Congressional delegation to gain its inclusion and
approval in the Farm Bill;
• A significant boost for conservation, including $12 billion for a revamped Conservation
Stewardship Program that would help farmers bring an estimated 115 million acres of
working farm and ranch lands under improved conservation management practices;
• Support for local food systems, including allowing a “geographic preference” through federal procurement
programs for locally grown foods, funding for new local and regional food supply networks, and $33 million
for the Farmers Market Promotion Program;
• The Diversity Initiative, which redresses civil rights violations and significant land loss suffered by minority
farmers. It also includes a $75 million investment in the Socially Disadvantaged Farmer Outreach Program;
• Support for Beginning Farmers and Ranchers, including a new Beginning Farmer and Rancher Individual
Development Account pilot program to help purchase farmland, farm equipment or livestock and additional
funding for technical assistance and other services for new farmers;
• Strong support for organic agriculture, including funding for organic certification cost share, an organic
data collection initiative, a new program for organic conversion and the Organic Research and Extension
Initiative;
• A revamped country-of-origin labeling requirement and a provision for the interstate shipment of stateinspected
meats should increase opportunities for independent livestock producers;
• A food aid pilot program, which allocates $15 million dollars annually to experiment with cash purchases
for international food aid – an essential reform to a highly inefficient program.
But these small wins do not make up for the larger issues that were not addressed. “Unfortunately, this Farm
Bill does nothing about the instability we are seeing in the agricultural marketplace,” said Olson. “The current
food crisis shows that it’s time to rethink the fundamental assumption from the Enron era that market
deregulation solves all problems. For starters, this should include the re-establishment of a publicly held
grain reserve and stronger antitrust enforcement. We need to continue to work on addressing these market
failures that have brought price volatility, skyrocketing costs, unhealthy food, environmental degradation
and decreased market competition.”
You can find a more in-depth analysis and background at IATP’s Farm Bill page: http://www.agobservatory.
org/issue_farmbill2007.cfm
IATP works locally and globally at the intersection of policy and practice to ensure fair and sustainable food,
farm and trade systems.
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