Bruckner, Traci et al. 2005. Toward a Global Food and Agriculture Policy. Leopold
Center for Sustainable Agriculture, Iowa State University. Available at:
http://www.leopold.iastate.edu/pubs/staff/policy/globalag.pdf
The surest way to success in addressing food availability, food safety and stability in
the world is a global food and agriculture policy. For the economic system to
function properly, it is critical to have (1) a system of market protection (or
antitrust) to penalize collusion and to prevent undue concentration of economic
power, and (2) policies in place to deal with cost externalities such as environmental
degradation, odors, stream and groundwater pollution. This paper offers
suggestions for changes in U.S. policy that might become part of a larger global
dialogue.
Preferred policy options:
 Fine tune the authorities in the permanent farm legislation and return
powers to the Secretary of Agriculture. This would allow the Secretary to
reduce output temporarily in accordance with market signals.
 Most attractive fine-tuning possibilities:
1. Farmer-owned food security reserve,
2. Acreage diversion program managed through short- and
intermediate-term land idling programs and longer-term acreage
reserves, and
3. Economically rational price support programs for the major program
crops that are responsible for a great deal of the cultivated acreage in
the country.
Structural Transformation of the Agricultural Sector
Over the past few decades, we have witnessed an unprecedented level of
consolidation throughout the food, fiber and energy system. The United States
provides the most striking examples of this consolidation. The greatest economic
threat to farmers as independent entrepreneurs is the combination of concentration
in input supply and output processing and vertical integration. The higher the level
of concentration and vertical integration, the greater the risks of unacceptable
market conduct. If farming is to be made up of independent entrepreneurs as
producers, it is absolutely essential for producers to be assured of meaningful
competitive options. This requires limits on concentration of input supply and
output processing or handling, and possibly limits on the extent of vertical
integration.
Solutions:
1. Antitrust oversight
The approaches used by the U.S. Antitrust Division of the DOJ and by the FTC
in analyzing mergers have traditionally focused on the probably impact on
consumers, not the impact of concentration on producers. For agriculture,
however, the concern is assuring that producers continue to have
competitive options. Threats to producer competitiveness include
discrimination in distribution of inputs, agreements to control production,
price fixing, agreements to divide markets, group economic boycotts, and
tying products over which a firm does not have monopoly power to a product
over which the firm does have monopoly power. Aggressive antitrust
oversight at the federal level and among the states should focus on these
concerns, with the objective of ensuring that all sectors and subsectors have
equal, and low, economic power. It may be necessary for a body of the U.N. to
be funded specifically to maintain a substantially higher level of oversight
over structural shifts in food and agriculture on a worldwide basis.
2. Collective action by farmers
One possible strategy for farmers is to forge alliances among producers
(which is specifically allowed by federal law so long as it does not “unduly
enhance” price). Greater market power is likely to be achieved by bargaining
groups of relatively modest size and comprised of producers committed to
collective marketing and committed to producing commodities at a quality
level desired by processors and on a schedule consistent with the
purchaser’s capacity. To facilitate the formation and operation of such
collective marketing (and input supply) groups, enabling legislation at the
state or federal level is needed to assure that (1) agribusiness firms would be
required to bargain in good faith; (2) recriminatory behavior would not be
allowed by agribusiness firms; and (3) members of the unit would be
required to be producers (to bring the group within the exemption from
antitrust strictures found in the Capper-Volstead Act).
3. Reform of contract practices
Large disparities in market power tend to lead to contracts with oppressive
features (as viewed by the weaker party), retaliatory practices by the
stronger party, and vulnerability of the weaker party in terms of securing
payment. Legislation has been proposed to provide full information and lien
protection to the producer to secure payment of amounts due and reduce the
probability of economic retaliation in producer-processor contract
relationships. Specific provisions include:
 Require contracts to be stated in plain language and disclose material
risks,
 Provide contract producers with a right to review and a three-day
cancellation period,
 Prohibit confidentiality clauses,
 Provide producers with a first-priority lien for payments due under
the contract,
 Prevent capricious or retaliatory termination of the contract, and
 Prevent retaliation against producers who participate in producer
organizations.
4. More germ plasm in the public domain
Another potential solution for concentration in seed supply is to increase
support for crop breeding by land grant universities and other public
agencies with transgenic hybrids and varieties made available to smaller
seed companies, as long as germ plasm from public funds goes into the public
domain and is not channeled to transgenic seed producers on a basis of
exclusivity.
Conservation
Conservation-based policy should be designed to fulfill a mission to the
environment rather than being tailored to fit the interests of large-scale agriculture.
Conservation policy that is designed to fit large-scale agriculture only stands to fuel
agricultural consolidation, which will ultimately fail to protect the environment as a
whole. We must redefine agriculture as something more than the production of
human food and fiber commodities, and more public policy away from a system that
rewards production to one that rewards conservation practices. The value of species
on our working land needs recognition, perhaps by creating a market system to
accommodate these “conservation commodities.”
Recommendations:
 Shift our present support away from crop subsidies to incentives for
producing conservation commodities.
 More research on cellulosic ethanol, which would create markets for
alternative crops and allow more crop diversity.
 The Conservation Security Program (CSP) is the beginning of such a system
that could deliver a direct subsidy for conservation on private land. A
program such as this, if adequately funded and implemented broadly and
with integrity, would promote basic conservation on working lands, lessen
distortions in agricultural markets, and provide some much-needed income
to those who have responsibility for most of America’s landscape.
 Consider conservation policy as part of a broader rural development policy,
in which rural communities market “conservation commodities” by
providing public access to them.
 Create a National Private Lands Conservation Act that recognizes the
importance of private lands for our nation’s environmental well-being and
that commits us to a national program to support the millions of Americans
who ant to work to improve the health of their lands.
 Adjust conservation programs to fit local needs and help beginning farmers.
Strategies to Revitalize Rural America
 Establish a national rural policy that revitalizes rural communities through
new initiatives and reforms to existing policy.
 Cap payments to large farms and invest the savings in sustainable rural
community development.
 Establish a competition policy that provides fair market access to family
farmers and ranchers.
 Expand value-added programs that enable producers to capture a fair share
of food system profit.
 Award federal applied agricultural research grants based in part on whether
the research would strengthen or weaken rural communities.


Introduce modest supply management measures for years of extreme
surplus to prevent free fall in farm commodity price. This would moderate
the level of farm commodity payments and generate some savings for rural
development initiatives without undermining family farms.
Invest in rural entrepreneurship, such as financing for high speed internet
access, government-matched savings accounts to assist counties suffering
population loss, investment credits for non-farm micro-enterprises or
operating capital for beginning farmers, and federal guarantees on contract
sales and tax exemptions on interest income for beginning farmers.