40 years ago, the US threw open farming to the corporate sector, something India now wants to do. How has this played out there? Los Angeles-based IITian Bedabrata Pain, an ex-Nasa scientist and national award-winning filmmaker, set out on a 10,000-km road trip across rural America to document the story of their farmers.
This is what he saw.
The roads were icy and the wind biting cold as we started our 10,000-km journey through the heart of America one January morning. Sristy Agrawal, Rajashik Tarafder — young physicists pursuing their PhDs — Rumela Gangopadhyay, a theatre artiste, and I wanted to witness the state of farming in rural America, the quintessential “Trump country.”
Shooting in the frigid weather amid a pandemic was grueling, but the warm welcome we got from farmers — Republican or Democrat, black or white — made up for it. We were surprised to learn that the American farm landscape, like India’s, is dominated by small farmers. They make up 90% of all farms, but produce only 25% of the market value. This was our first clue to America’s rural crisis. In the last decade, income of small farms has consistently been in the red. In February 2020, the median US income from farming was a negative $1,400. Brent Brewer, a farmer, told us that while production cost of wheat has risen three-fold in the last 20 years, the farmgate price is just about what it was during the 1865 Civil War. He was right.
The US farmer’s share of the retail price has declined from 50% in the 1950s to less than 15% today. Debt has touched $425 billion, just shy of the all-time high reached in the recession of 1981. Loan default rates and bankruptcy filings are up, so are calls to the suicide prevention lines. Farmer suicide rates today are 4-5 times the national average. We heard about a farmer calling a suicide helpline, seated alone in his empty kitchen with the lights out and a loaded gun in his hand. We heard about a local bank officer who killed himself when forced by his management to recall loans and bankrupt farmers — folks he had personally known for years.
Nearly 80% of rural counties have witnessed population declines. George Naylor, a grain farmer in Iowa, showed us boarded-up homes in his neighbourhood. As farming dwindled, local businesses like seed suppliers, grain elevators (granaries), repair shops and even hospitals started disappearing. Today, some 1,000 schools close every year in America’s rural districts. Nearly all the farmers we talked to held the Reagan-era “opening up” of agriculture and the rise of “Big Ag” — gigantic agro-businesses that now dominate American farming — responsible for their plight.
Ronald Reagan became president of America in 1981. He was a crusader for the free market and deregulation, or “dereg”. Opening up the agrarian economy to create a competitive market by ending government controls was sold as a panacea for farmers and consumers.
While the administration dismantled Great Depression-era mechanisms for family farms like price support, grain-reserve loans, and parity pricing (much like MSP in India), a global recession set in. Farmers woke up one morning to find farm-gate prices had collapsed, land values were decimated and interest rates had risen sharply.
Shorn of government support, a quarter-million small farms closed, over a million generational farmers were displaced, and deserted towns began dotting the rural landscape.
What happened to the land? Unsurprisingly, Big Ag gobbled it up as landless farmers started toiling under onerous contract farming terms. Giant corporations used financial clout to control the market, depress farm-gate prices, buy infrastructure for a song, and raise costs to a point where small farms became unsustainable.
Jim Goodman knew each one of his 45 cows by name. After struggling for 40 years, he finally sold his cows and closed down his dairy farm. Joel Greeno, another dairy farmer, now works 12-hour shifts in a factory, hoping to save whatever is left of his farm. The Naylors are trying hard to save their small grain farm. When a sharecropper missed out on one loan payment, a large machinery company remotely shut off his tractor in the middle of sowing season.
Things are worse for livestock farms. Mike Callicrate, a rancher, told us how the corporations colluded to force him to shut shop. A handful of meat-processing companies now own the livestock, while poultry, beef, and pig farmers are more or less serfs — raising the animals for them under contract. They have no bargaining power because these food giants are the only players left in town.
Nearly 75% of all US poultry farmers today live below the poverty line while Big Ag controls everything from “farm to fork” and from seeds to grocery stores. Four large firms control at least two-thirds of the seed market, 80% of chemical fertiliser, grain trading, dairy production, meat supply, and almost 100% of farm machinery.
Meanwhile, government money flows to the corporations in the form of write-offs, market facilitation and crop insurance subsidies. Over 70% of the $50 billion in US government subsidies goes to the top 20% of farms.
John E Ikerd, retired professor emeritus at University of Missouri, says this couldn’t have happened without political patronage. Batting for greater efficiency and consumer welfare, Reagan enabled the rise of powerful monopolies. In Reagan’s own words: “We’re going to allow people to concentrate power because it’s going to be more efficient… these guys are going to use it (monopoly power) to drive down the price.”
Did monopoly power reduce food prices? In the past 40 years, average food prices in America have shot up by more than 200%, while the earnings of the bottom 90% have increased by less than 25%. Joe Maxwell, who leads a campaign group called Family Farm Action, told us about entrenched rural poverty, child hunger, and food-insecure homes. Not what you’d expect to hear about the most powerful nation. Today, rural America feels abandoned, its dignity stripped away. As we drove home, one thing had become clear to us: far from being a panacea, the opening up of US agriculture, the elimination of MSP-like parity schemes, and the rise of contract farming has been a lose-lose proposition for everybody other than Big Ag.