Why Is the USDA Continuing Loans for New Factory Farms?

by Lenny Russo

I am a card carrying member of the Land Stewardship Project. For those of you who are unfamiliar with LSP, it is a private, nonprofit organization founded in 1982 whose stated purpose is to promote sustainable agriculture, develop sustainable communities and foster an ethic of farmland stewardship.

This morning, I received an email from them alerting me to the USDA's Farm Service Agency policy of continuing to provide loans to build new specialized hog and poultry facilities at a time when overproduction in these agricultural sectors is leading to depressed prices, contract cancellations, abusive contract terms and increased corporate consolidation of the hog and poultry industries. This policy is a reversal of a directive issued on January 8, 1999, that suspended all direct and guaranteed loan financing for the construction of such facilities. The reasoning behind the suspension was the concern that FSA loans of this type could exacerbate the crisis of oversupply and depressed prices that were already affecting the hog industry. Shortly after assuming office in 2001, the Bush Administration re-instituted the loans, and so far the Obama Administration has continued to support this policy.

LSP's position on this is clear and unequivocal. They believe that the USDA is siding with so called "mega-operations" at the expense of existing hog and poultry contract growers and independent hog farmers by issuing these loans. In short, they claim that these loans provide public financing for speculators whose strategy it is to expand in order to seize greater market share when prices are low while existing hog and poultry producers are being forced to reduce production in order to cut their losses in an effort to correct the market by bringing the supply more in line with current demand. They insist that these loans favor corporate-backed farming over small family farms. They further contend that this is bad public policy that puts taxpayers' money at risk. Why, they ask, are we increasing production at a time when overproduction is creating a crisis for America's farmers? It's a good question and one that begs to be answered.

I have previously made know my dissatisfaction with the choice of former Iowa Governor Tom Vilsack to be the Obama Administration's Secretary of Agriculture. My objections to this appointment were not and continue not to be without basis. In 2002, then Governor Vilsack came out in support of genetically engineered pharmaceutical crops and, in particular, genetically modified pharmaceutical corn. The previous year, Vilsack was named Governor of the Year by the Biotechnology Industry Organization which is the largest lobbying organization for the biotechnology industry. He is also the founder and former chair of the Governor's Biotechnology Partnership. A widely criticized economic development program created by Governor Vilsack called the Iowa Values Fund trumpeted Trans Ova, a firm that has pursued technological development in the cloning of dairy cows. In 2005, Governor Vilsack pressured Republican State Senator Sandy Greiner to sponsor a bill that took away local governmental rights to regulate where genetically modified crops could be grown and proposed the elimination of all GMO buffer zones as well as the elimination of all regulations on GMO seeds. During his tenure as Iowa Governor, it was not unusual for Vilsack to be shuttled about on a corporate jet provided by agribusiness giant Monsanto. As Agriculture Secretary, Vilsack continues to ardently support the production of bio-fuels which have been shown to use as much or more fossil energy to produce than they can generate while contributing to an increase in world food prices. Finally, the legacy Governor Vilsack left in his wake, a legacy that was put in motion many years earlier when as State Senator Vilsack he voted to take away local control of hog factory farms from local government agencies, is one that saw the greatest proliferation of confined hog feeding operations in the history of the State of Iowa.

To be fair to Secretary Vilsack, he has over the last year moderated some of his positions on these issues. For instance, he has publicly supported a reduction in the $17 to $25 billion annual subsidies that go to chemical, energy-intensive and genetically engineered crops that have continued to bolster factory farms and the junk food industry while wasting valuable nonrenewable resources and contributing to the destabilization of our climate. He has also softened his support for the controversial biopharmaceutical crops by calling for mandatory labeling and insisting on strict liability for companies whose GMO crops cause genetic pollution.

Even so, these changes in policy do not go nearly far enough in establishing a new paradigm for American agriculture. Our current petroleum based food system consumes 19% of our energy while generating 37% of our greenhouse gases. Instead of continuing to appropriate massive subsidies such as the aforementioned FSA loans that serve to perpetuate this system, would it not be better for all of us if the federal government moved to help farmers and ranchers transition to more energy efficient and carbon-sequestering practices while fostering localized and regionalized systems of sustainable agriculture.

During his campaign for change, Barack Obama promised us serious reform. Continuing to support the USDA's policy of Farm Service Agency loans to factory farms is not change that I, for one, can believe in. I encourage anyone who opposes this policy to contact Secretary Vilsack at 202-720-3631 and voice your opposition to government funded factory farming and make known your support for America's family farms.