Grain Reserves: Common-Sense Farm Policy

Farming is a tough job. Farmers deal with unstable weather patterns and have just a few buyers for most crops. This leads to boom-and-bust swings between bumper crops and dire shortages. Income isn’t guaranteed, and farmers are required to put a lot on the line to get their crop into the ground.

The uncertainty of weather and price volatility affects all farmers, but farmers who grow storable staple crops like wheat, corn, soybeans, oats and sorghum are all especially vulnerable to wild price swings.

For over a decade, U.S. farm policy has encouraged farmers to plant as many of these staple “commodity” crops as possible. But our farm policy no longer has any protective measures to manage this increased production or to prevent dramatic price crashes for farmers when there is a glut of crops on the market at the same time. Even though the prices paid to farmers may plummet if there is too much supply on the market, most farmers still overproduce.

So if farmers don’t benefit from overproduction, who does? It’s the corporate food manufacturers and factory farms that buy the grains, sometimes for less than they cost to produce, and then process and sell them at a huge markup to consumers. Unsurprisingly, it’s also these corporate agriculture interests that have the political sway to lobby Congress for policies that keep prices low, markets volatile and overproduction unchecked.

Government payments to commodity crop producers (payments made every year regardless of crop prices) have served as a stopgap measure since 1996 to keep farmers in business when prices plummet because of overproduction. The 2014 Farm Bill ended direct payments to most commodity crop producers and instead emphasized subsidized crop insurance as the primary farm safety net. Missing from the final bill are the real reforms we need, including restoring grain reserve programs that were historically used to provide stability for farmers and to rein in overproduction of these crops.

The United States maintains a Strategic Petroleum Reserve to supplement the country’s energy needs in times of emergency, but we no longer have such a program for the food supply. Because there’s no policy mechanism to manage the overproduction of staple grain products, especially corn, it’s resulted in a flood of corn that has drastically changed our food system. The oversupply of corn provides feed for factoryfarmed animals, creates cheap high-fructose corn syrup for processed foods, produces ethanol to mix with gasoline, and dumps excess corn on international markets, where it can ruin the market for family farmers in those countries.