A commentary by Anthony Pahnke of Fond du Lac, a Visiting Instructor in Political Science and Environmental Science at St Olaf College in Northfield, MN. He was born and raised outside of Fond du Lac, is a University of Wisconsin-Madison graduate and board member of the Family Farm Defenders.
Last year ended with various reports documenting systemic problems in agricultural production that indicates nothing short of a crisis. Widespread animal rights abuses farm prompted the nation's largest frozen pizza company — DiGiorno — to halt sourcing milk from one Wisconsin farm, while the DNR disclosed that a record number of manure spills took place in 2013.
In addition to opening a discussion about the current state of the environment and animal rights in agriculture, we also need address pricing and the growing income gap in rural America.
The 1978 and 2007 agricultural censuses allow us to observe current developments in light of a time when agricultural pricing — particular in the dairy industry — followed a parity formula.
Parity, for milk or any product, involves governmental interventions to assure that a producer receives a price that at least matches what they expend for inputs. Policies include price supports, subsidies, compelled production reduction, and government purchases.
In the United States, the idea came from Henry Wallace, one of Franklin Delano Roosevelt's Vice-Presidents and Secretaries of Agriculture, who sought to ensure farmers during the Great Depression a steady price. Despite parity's implementation for much of the twentieth century, the Reagan administration struck parity from the 1981 farm bill, thus sealing the fate for dairy and other farmers.
When parity was removed, Wisconsin's farms numbered 89,945, with roughly 50,000 dairy operations averaging 201 acres. Of those 89,945 farms, roughly half earned around $40,000 annually. When adjusted for today's inflation rate, that is the equivalent of $113,000. According to 1980 census data, middle class income for a family of four was $27,000; $40,000 was more than adequate.
Today, that rural middle class is gone.
Wisconsin farms earning between $2,500 and $10,000 in 1978 numbered around 22,000. Currently, that same income strata, without adjusting for inflation, is filled by around 49,000 farmers — more than half of the state's remaining 78,643 farms. While today's average farm size of 194 acres is lower than the 1978 figure, just over 11,000 dairies remain — an 80 percent decline.
Wisconsin's agricultural middle class, which comprised half of the economically viable operations around 1980, has been pushed to the lower rung of the farm income ladder. Only about 20,000 Wisconsin farms – 25 percent – now make over $50,000 a year.
Nostalgia for family farms aside, a consequence of income polarization is a blatant disregard for the law. Dean Foods and Dairy Farmers of America (DFA) were fined $159 million after being found guilty of violating anti-trust laws in 2011.
In a separate incident, in 2008, DFA paid the U.S. Commodity Futures Trading Commission a $12 million fine for price manipulation.
In 2013, the National Milk Producers Federation, DFA and Land o'Lakes were tied up in lawsuits over illegal monopolistic practices. Many commercially viable farmers also hire undocumented immigrants to milk thousands of cows in factory-style operations in order to expand production. This disregard of immigration law is compounded by regular labor law violations, which include refusing to pay overtime or firing workers without just cause.
Joining the majority of rural producers on the lower rungs of the rural income ladder are overworked and underpaid farm workers, whose lack of documentation makes them subject to the exploitative, often illegal, practices of their employers. While in different ways, both rural workers and farmers share a common vulnerability from powerful economic actors routinely breaking laws that place their livelihoods at risk.
Concentrated economic power creates a culture characterized by industry executives, who would rather pay fines, when caught, than alter their practices. Suppliers to large conglomerates seek production advantage by milking their cows, and workers, for all they're worth, regardless of immigration, anti-trust and labor law.
Economic power, when more equitable dispersed through the existence of a larger rural middle class, involves many actors rather than a few. And more producers with something to protect are more likely to keep the few in check.
If we truly are to engage in a discussion this year on the future of farming, then we should draw attention to pricing.
Consumers need not fear — from the National Farmer's Union's calculations, farmers receive only 15 cents of every dollar (for milk, $1.83 for every $4.69 gallon). That means that industry executives and supermarkets ought to (and can) pay. Documenting the fall of parity shows how a lack of pricing policy polarizes incomes at the expense of the rural middle class, contributing to a disregard to the rule of law.
The state's agricultural industry is now shaped by extreme inequalities in economic and political power. Improved pricing will ensure that smaller farms persist, and that new or young people may take up the occupation. They are the future of farming, where a healthy discussion of agriculture needs to begin.