Tuesday, August 3, 2010

The era of the family farm is over

The New York Times recently ran an op-ed about a 378-year-old family farm calling it quits. Writer Verlyn Klinkenborg doesn't understand that its the wheels of production that have made this business model obsolete. He instead blames government subsidies:

"It is too simple to say, as the Tuttles have, that the recession killed a farm that had survived for nearly 400 years. What killed it was the economic structure of food production. Each year it has become harder for family farms to compete with industrial scale agriculture — heavily subsidized by the government — underselling them at every turn. In a system committed to the health of farms and their integration with local communities, the result would have been different."
The frustrating thing about his view is that he doesn't see agricultural subsidies as a problem, he just thinks they are misapplied.

Agricultural economists like Daniel Sumner disagree and think farm subsidies should go away altogether. When asked about the local, small-scale food production model Klinkenborg yearns for, Sumner said it would not be affordable and waste a lot of resources; adding:

"If wealthy consumers demand more local production they will get it. Rich folks in New York or San Francisco can hire personal gardeners to grow things for them in the backyard or on the roof tops as noted in recent NYT articles. But given the huge costs of such practices, that is unlikely to be a significant share of the food consumption for normal people."
Family farms are not a good way to produce food today. Our technology level has advanced and created an industrial process that makes tons of food. Fear mongers want us to believe that is a bad thing, and make a lot of flawed arguments about health, environmental and economic problems that come with efficient food production. Exposing the nonsense behind those views has become the focus of this blog.

Klinkenborg wants protectionism for family farms. I must admit, however, I can relate because I really miss having pudding in metal cans.

When I was a kid I liked the little pull-tab and the clink of the spoon on the bottom of the can. Today, pudding comes in tiny plastic tubs and I can't find metal cans anywhere. It seems manufacturers found a cheaper way to store individual servings of pudding. I miss that aesthetics that come with the old way of selling pudding, and for me to get that is to pay more in a niche market, or as food Luddites like Klinkenborg want, force the taxpayers to make up the price difference so expensive metal cans have the same price tag for consumers.

But some of those tax payers don't care about pudding containers. Why should they have to pay for my niche preference? The truth is, they shouldn't, and tax payers shouldn't have to subsidize food production - large or small.

Family farms are now a niche market to satisfy an aesthetic preference, not a cheap and affordable way to produce food. Don't blame lobbyists, don't blame bureaucrats and don't blame illegitimate business practices. It's technology that killed them - the technology of large-scale production.


  1. I am confused, what does pudding have to do with family farms?
    And are you making a distinction between family-run farms and home gardens? I can see that a rich person hiring someone to tend to a family farm would get expensive, but gardens (once someone has the land of course) are very economical.

    But I think the obvious point is that producing anything in large scale is going to cut down costs. Is that the technology you are referring to that is killing family farms? Large-scale production?

    Also, what is your opinion on the farm subsidies?

    I am having a hard time figuring out what your stance is and what your argument is based on, which is unusual! Maybe I need to read it again...

  2. I agree, he's usually much more clear in his argument, usually wrong, but always clear :)

  3. The pudding can is a metaphor for outdated methods.

    Home gardens are a hobby - not a business. They are only economical in terms of dollar bills. Seeds are cheap and home gardens use little materials. However, they are a lot of work. This eats up a lot of time, and if you have a busy life you may not have time for it. People must enjoy gardens as a hobby or be desperately poor to make them economical.

    Yes, the technology I was referring to. I added that to the last paragraph to make it clear.

    As for farm subsidies, I'm against all of them. Here's an excerpt about Daniel Sumner from the same Freakonomics link I used above:

    "Q: Are there any good arguments that support farm subsidies? If so, to what extent and in what manner may they be justified?

    A: No.


    I look at a dozen suggested rationales for farm programs and reject them all except the last one — which is we have farm programs because we have had them for 75 years and people are afraid of even thinking about a world without subsidies."

  4. Ahhh I gotcha...

    I think I agree with you then. Of course, no subsidies means that food goes up in price to reflect an accurate value. That will piss people off. And it would be all food too, not just veggies, so people couldn't argue that only the rich could afford to each healthy, because if their were no sugar and corn subsidies, all that junk food goes up in price too.

    What fun!

  5. Seriously though, you really don't want food prices determined by market value . . . just look at other countries to get an idea of what happens when you let the free market affect the price of bread. A country can survive a recession as long as they can afford to buy food

    And for the record . . . I have no sympathy for family/small businesses that don't make it. I'd rather have a walmart that's open 24 hours a day than a small store that closes at 6.

  6. The anti-subsidy argument, as I understand it, is that food prices are already at least as high as they would be without subsidies - the price is just hidden, because we pay it as taxes instead of at the grocery store.

    The relevant questions are thus:
    1) The economic policy question: In the long run, does the way subsidies work make food actually cheaper (not just cheaper at the grocery store) or more expensive in the long run (by adding a bureaucratic middle man)?
    2) The social policy question: Should people who pay higher taxes effectively subsidize the grocery shopping of those who pay lower taxes, redistributing the burden of the grocery bill?

    Conservatives would probably argue that they actually make food more expensive overall and that such redistribution is unjust, while liberals would probably argue either it doesn't make food more expensive, or that even if it does, it's okay to make the rich shoulder the burden.

    This is getting a bit off topic, but if the question is about making basic staple foods cheaper so the poor can afford them, an alternative to farm subsidies would be to tax non-essential/luxury foods to subsidize staple food prices. Conservatives would likely still oppose it (in part because it would price the middle-class out of luxury foods they can currently afford, widening the social gap between rich and poor), but maybe it would be less of a mess than farm subsidies.

  7. In light of Daniel's comment, there's an additional question: Does it make the prices more stable? If prices are higher but stable, is that a worthwhile trade-off?

    I'm not taking a side on any of the questions I've posed - just trying to figure out what the relevant questions actually are.

  8. Here's an interesting note - Sumner said that the subsidies are a very small part of the price of food at the supermarket. The use of corn syrup is a result of sugar tariffs more than anything else.

    In addition, the price of a box of cereal does not fluctuate with the market because American consumers do not like changing prices. Produce is an exception, but things like blue jeans, stereos and loaves of bread tend have sticky prices not because of "menu costs," but because consumers simply dislike the fluctuations.