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Could Price Parity, Supply Management Change the Game for BIPOC Farmers? | Civil Eats

Inequity in U.S. land and farm ownership has been in the spotlight in a new way this year, and it’s clear that the $5 billion in debt relief headed to Black farmers as part of the latest COVID relief bill is just one of a range of solutions needed.

According to a new coalition of farmers, growers, and academics led by the National Family Farm Coalition (NFFC), keeping existing farmers of color on the land—and helping new ones get started—will only be possible if they can get a price for their food that’s more than what it costs to produce it. In many industries—especially commodities such as milk, soy, and corn—the price the farmer gets goes up and down while farmers take out loans and rely on subsidies to make it through lean years—but often end up under water. In 2017, around two-thirds of small-scale farmers had to work off the farm to make ends meet.

The coalition, Disparity to Parity, has recently published a series of essays online that outline the harms of our industrial agricultural system: loss of Black-owned farmland, decreased profits for producers, numerous and untold environmental externalities, and crops that end up rotting in the fields. To achieve parity, which the coalition defines as economic and racial justice, they see a two-pronged solution: supply management and parity pricing.

Supply management involves literally managing the amount of food produced, to prevent overproduction. The coalition argues that without this basic piece of the puzzle in place, the food system pushes farmers and agribusinesses to grow more and more food, flooding the market and in turn making it harder for small farmers to turn a profit. Parity pricing, on the other hand, means setting a minimum or a floor for the price at which the food will sell.

Without both these elements—supply management and parity pricing—the coalition says barriers to entry in the agricultural sphere compound, further reinforcing racist dynamics within the industry.

“People understand that first you have to secure land for Black farmers and Black landowners—this is key,” Cornelius Blanding, executive director of the Federation of Southern Cooperatives/Land Assistance Fund and a member of the coalition, wrote in an essay on the Disparity to Parity website. “Even when that land tenure is secured, they have to maintain it. And the only way to maintain it is with fair prices, which are extremely important. Because . . . to have land and good tenure of it, you still have to make it productive. And there’s no way to make it productive unless you are getting a fair price, unless you are getting a floor at the very start.”

What Happens Without a Price Floor

Paying farmers more than what it costs to grow food and only producing what people can actually eat will result in manifold benefits: financially secure small farm operations, lower barriers to entry for new farmers, pathways to return land or make land accessible for Black farmers, and better working conditions for those who work the land.

In the 1920s, farming organizations decided that managing supply would guarantee income even if crop prices were low, said Amanda Starbuck, a Disparity to Parity coalition member and a researcher at Food & Water Watch. Historically, parity pricing was implemented to ensure that the cost of production of commodity crops like corn and soybeans were equal to the crops’ purchasing power on the market. The first farm bill, passed in 1933 as the Agricultural Adjustment Act, established federal supply management as well as quotas, price floors, and non-recourse loans, which allowed the federal government to create a stockpile of commodity crops.

But by the middle of the 20th century, federal farmers were encouraged to plant crops “fencerow to fencerow.” The excess corn and soybeans later snowballed into the creation of livestock feedlots and processed foods made with products like soy oil, lecithin, and high fructose corn syrup, and allowed for agribusiness to increase profits by making their processes more efficient, Starbuck said. “There are so many problems that have stemmed from this neoliberal system that presumes the market will control everything, [and] has really underlined so many of the problems that we have today within our food system,” she said.

Even now, the unpredictable market for commodity crops leads to a positive feedback loop of overproduction, says Starbuck. “The more prices drop, the more desperate farmers get, the more their debt is rising, the more they have to plant and plant so that they can eke out a little bit of a living.”

Many of the problems Starbuck refers to are a result of the 1996 Farm Bill, which “destroyed any vestiges of supply management,” leading corn prices to drop and causing farmers to overproduce in order to break even. “[It] felt like there was a turning point in the political discussion around that 1996 Farm Bill where there [were] fewer and fewer advocates in Congress pushing for these protections that were really ensuring small-scale farmers were able to cover their cost of production,” said Jordan Treakle, a policy coordinator at NFFC.

Photo credit: National Family Farm Coalition

This model of overproduction benefits the “middlemen,” said NFFC executive director Niaz Dorry. These middlemen are able to purchase commodity crops when prices are low, maintain a surplus, and resell to agribusiness for a profit. “When it comes to the industrial multinational corporations [controlling] the middle of the chain, somebody is making money here, but it’s not the farmer, the rancher, or the fisherman,” Dorry said.

“You don’t have to have that much oversupply in order for the power between a buyer’s market and a seller’s market—that power dynamic—to shift from the producers to the middleman,” said Kathryn Anderson, a postdoctoral fellow focusing on environmental and economic sociology at the University of California at Berkeley who is working with the Disparity to Parity coalition.

And yet, for a long time, parity pricing was framed as unnecessary government intervention as so-called free-market economics ruled the day, agribusinesses focused heavily on messages about “feeding the world” (suggesting scarcity), and very few in the industry were speaking openly about overproduction. But that all may be starting to change. As the Disparity to Parity site describes it: “In the summer of 2019, the taboo on talking about parity began to lift. As usual, with its literal dumping of fresh milk, dairy served as the doorway to discussions of supply management.”

Indeed, that same year, presidential candidates Bernie Sanders and Elizabeth Warren included supply management in their agricultural platforms. And supply management has increasingly been on the table in dairy industry meetings over the last few years. In states like Wisconsin—which has been hemorrhaging small and mid-sized dairy producers for the last decade and led the nation in farm bankruptcies in 2020—the idea has gained traction among farmers and policymakers. In the early days of the pandemic, the National Milk Producers Federation and the International Dairy Foods Association proposed a voluntary supply reduction program that offered to pay farmers a premium on their milk if they cut their production by 10 percent.

Canada’s dairy industry also provides a clear example of what government intervention could look like to ensure that every dairy can stay afloat.

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