Clarity on Parity webinar with Iowa Farmers Union

This short presentation was given by George Naylor on an Iowa Farmers Union “Lunch and Learn” webinar February 3, 2022. See the webinar here: https://www.facebook.com/iowafarmersunion/videos/2805419456433906

Thank you Aaron.  It’s an honor to be on Lunch and Learn. 

My Farmers Union membership goes way back to when I was a young farmer over 40 years ago.   Phil Lehman, Aaron’s dad, was vice president then.  He was a fighter, and I had many enjoyable and enlightening conversations with him.  The 1980’s Farm Crisis was developing, and the Iowa Farmers Union was a member of the Iowa Farm Unity Coalition.  All the progressive farm groups were members.  Of course, the Farm Bureau and the commodity groups were not members and said there was no farm crisis until it turned into a banking crisis. 

I worked closely with the National Family Farm Coalition along with Dixon Terry in developing the Harkin-Gephardt Bill—the Family Farm Act that was based on parity prices. A Des Moines Register article in 1988 said that every Democratic candidate for President that came to Iowa made sure it was clear that they supported that bill.

I studied Math and Economics at UC Berkeley and I’ve kept in mind what a noted economist, Joan Robinson, said:  “The reason to study economics is to know when economists are lying to you.”  I’m sure she would say the same about politicians and the Farm Bureau.

I’d like to start out with a parity lesson from Gary Lamb—a former IFU president and one of the most inspiring farm leaders I have ever known.  I told him that when I was a kid, my dad paid me 25 cents for every cocklebur I pulled in the bean field.  Gary said, “Hey, that was 30 years ago.  A parity price on cockleburs must be at least a DOLLAR today! You need to pay your bean walkers a dollar for every cocklebur.”  Ouch!  We laughed, but that was truly a simple concrete lesson on parity.

This insight needs to be applied to minimum wages, bottle deposits, the nation’s fossil fuel budget, like it already is somewhat to my social security checks.  In other words, we have to make it the law of the land that certain things be indexed to inflation.* The minimum wage hasn’t been increased since 2009!  In effect, we as a society are saying that the hardships of minimum wage earners have not been our concern. 

Likewise, when Smithfield and Tyson pay only 1/3 the price for corn and soybeans adjusted for inflation from the time I started in 1975, we as a society say we don’t care if all livestock are fed and owned by vertically integrated corporations, while family farmers only have the option of raising cheap corn and soybeans to feed the corporate livestock.  Since inflation always decreases farm income, the few surviving farmers must do whatever they can to increase yields and farm more land.  This vicious cycle of the free market generates even lower farm prices. 

The tools for achieving parity prices were developed during Franklin Roosevelt’s New Deal with the intention of pegging farm prices to the parity index—an index that used 1910-1914 as the base years. (The parity index reflects changes in costs of farming, so the goal was to have the ratio of the “prices received index to the parity ratio be 100%”   Since the guarantee of parity prices was destroyed in the years since 1953, I think we can see how the free market vicious cycle explains the evolution of the disastrous crop and livestock system we have today. 

Here are the features of a parity program that would stabilize agriculture and get livestock back on family farms with sound crop rotations:

1)    Storable commodity prices supported at parity—If the parity program hadn’t been destroyed, buyers like Iowa Select would have to pay $13/bushel for corn instead of $4 or $5.  This involves NO government payments.

2)    Supply management—QUOTAS—to avoid wasteful overproduction

3)    Reserves supplied by surplus years to meet the needs of short crop years.  This assures food security and avoids the notion that we should increase prices by creating scarcity.

4)    Control of cheap imports.

5)    International agreements to eliminate dumping and destructive races to the bottom.

Having livestock back on the land, with perennial grasses and legumes in hay and pasture, and manure to provide nitrogen for other crops can actually create topsoil, stop soil erosion, and sequester carbon deep down in the soil.  Breaking up corn-soybean mono-cropping will eliminate the need for chemical weed control.  Conventional farmers can prosper without having to raise more and more for less and less.  Getting livestock out of CAFO’s offers an opportunity for young people to join farming operations and enjoy this more labor intensive, humane way to raise livestock. 

So I know you are asking, “Is a parity program realistic?”  Well I ask you, is continuing with the free market system we have realistic?  I think not.  Not if you are concerned with climate change.  Not if you want farmers being real stewards of the land, and young people becoming those stewards.  Not if you believe in real democracy. 

Can any politician explain to me how, when US farmers were experiencing a low price crisis, we could turn on the TV news to see Amazon Rainforest being burned in order produce more corn and soybeans for the global market? 

Of course, a parity program is not what members of Congress want to hear about because that’s not what corporate lobbyists want to hear about.  The American people need to know how the current system evolved from one main economic reality—the lack of a democratic government assuring its farmers parity.  They need to know parity does NOT, AND I REPEAT NOT, INVOLVE TAXPAYER DOLLARS.  The issues are not about BIG FARMERS VS LITTLE FARMERS.  The issue is whether we have a an agricultural system where the true costs of producing food, both current costs and costs to future generations, will be paid for by the corporations that profit from that production. 

Without repurposing government so we have a real democracy that intends to eliminate disparity and replace it with parity—for farmers, consumers, workers, global citizens and the global ecosphere, future generations will ask “what were they thinking of?”

* Isn’t it ironic that IRS Code Q45 that gives the carbon dioxide sequestration pipelines tax credits increases those to $50/ton in 2026 and then indexes the tax credit to inflation just like a farm program should index farm price floors to inflation? (The same rule Q45 also increases the credit for using the CO2 to rejuvenate depleted oil and gas fields to $35/ton and also indexes the credit to inflation.)

Q & A

What should be the overall goal of future farm bills? 

A.  I think we need to ask how all our agriculture can be sustainable or how it all can be organic.  It’s not going to happen if we think organic as a niche market will pave the way for consumers to understand what’s at stake and change their buying habits.  If that had any promise, almost all of our problems would be already solved, instead of getting worse. Parity must be the foundation of any farm policy—the purchasers of farm products need to pay real costs of producing food, current and future. Only then can we enhance the outcome by guiding farmers with new sustainable practices.