- Farmers Need to be Active in
- ‘Wall Street’ Government
- By Richard Levins
University of Minnesota
- In today’s economy, farmers need to be involved in two governments: our regular, civic government; and a second “economic or Wall Street” government.
For generations, farmers have looked to the government to help solve their income problems. They have lobbied for commodity payments, disaster relief and other ways of compensating for prices too low for a decent family income. More recently, the rules governing international trade have become hot topics. The dispute over importing milk protein concentrates is the latest example.
In today’s economy, farm payments must compete with everything from prescription drug relief for seniors to bailouts for troubled airlines. Free trade has become second nature to both Democrats and Republicans. We keep hearing that, “We didn’t win, but we put up a good fight.” Meanwhile, prices for many agricultural products are in the toilet. Worse yet, there’s a heavy hand on the flush lever.
That hand on the flush lever is not the “invisible hand” of free enterprise that Adam Smith said would guide our economy toward constant improvement. No, it is a “visible hand” that large corporations use to move the economy in ways that better suit their objectives. Like everyone else, they try to influence Washington. But they work just as hard to influence Wall Street: the “economic government” of the day-to-day business world.
No matter what happens in the civil government of Washington, those who choose not to recognize the new rules of the economic government will likely get the short end of the stick.
Take the issue of mergers and acquisitions in agribusiness. Many farmers tell me that Washington allows too many of these. That may be, but even the most pro-business administration does not require them. The initiative comes from corporations working to strengthen their positions in the world’s economic government.
Here’s another example: A government obsessed with free-trade policies may choose to allow imports of milk protein concentrates. But the government does not require dairy processors to buy them. That is a decision made by processors seeking to improve their own bottom line. Higher profits make them even more powerful in the economic government. That stronger position in the economic government makes them stronger in the civil government, too.
It is tempting to view these developments in terms of good and bad. That works for politics, but not for economics. Here, it is better to look at what is, and then to act accordingly. This is one place that, in my view, farmers could do more. Farmers often choose not to participate effectively in the economic government. They put all their eggs in the Washington basket and hope beyond hope that hard work and good weather will bring economic salvation. This, sadly, is increasingly unlikely.
It need not be this way. Farmers, as a group, can represent themselves very well in the economic government of the United States and the world if they choose to do so. For example, a strong group representing the economic interests of all farmers could offset the economic power of ever-larger corporations in the food system. As a second example, that strong farmer group, once established, could work on equal terms with dairy processors to develop product sourcing policies in everyone’s best interests.
So, should we give up on civil government? Absolutely not. Farmers will need fair laws that allow them to develop and use their market power. On top of that, many of our thorniest problems on the agricultural scene will not be addressed by higher prices. The environment and the small-versus-big farm debate will still be with us. Biotechnology will remain contentious. These are problems that the civil government will have to address, and farmers and their representatives in Washington should have their fair say.
But when it comes to the issue of farm prices, I think there is only one way to make lasting improvements: through effective participation in the “second government,” that of the boardrooms and executive offices of our global economy. All farm groups, regardless of their political positions, need to act together if they are to be represented well there. There are many issues that farmers argue over, but they must not lose sight of the overriding goal they all share: farmers deserve a fair share of food system profits and fair prices for what they produce.
