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

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

bipoc farmers harvesting crops to sell for parity pricing at the farmers market

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.

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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Yet Andrew Novakovic, a professor of agricultural economics emeritus at Cornell University who’s spent more than four decades studying the dairy industry, says that Canada’s system works in part because they don’t export in the way the U.S. does.

“In the U.S., we spent the last 25 years becoming really pretty good at being an exporter of dairy products. And if you went around and said, ‘Hey, I got an idea: Let’s shut the door, have supply management and get a lot higher prices, most of which you’ll end up using to pay for a piece of paper,” Novakovic said, referring to the document that states how much dairy a farm should produce. “‘Raise your hand if you want to sign up for that system’ . . . I think pretty quickly you’d find out that really wouldn’t get a majority vote among dairy farmers.”

Novakovic admits that supply management would decrease the severity of some of the issues we’re currently seeing across the agricultural spectrum and especially within the dairy industry but doesn’t see supply management as the be-all, end-all. “[Canada’s supply management] is a more benign system and less of a dog-eat-dog system,” Novakovic said, adding that he doesn’t believe supply management is a silver bullet.

Parity as Racial justice in Food Production

The coalition sees racial justice and equity as central to the kind of agriculture policies for which they’re advocating. While a smaller percentage of the profit made on most food is going to farmers generally, the loss of profit isn’t affecting all farmers equally: In 1930, there were 880,000 Black farmers, comprising 14 percent of American farmers. By the turn of the century, the number of Black farmers fell to 18,000, or less than 1 percent of farmers.

The coalition is gathering farmer input on a series of policy proposals that would center racial, climate, and economic justice in farming policy. According to Treakle, Disparity to Parity plans to advocate for scale-appropriate price floors and ceilings; farmer-owned public grain reserves; acreage “set asides,” which incentivize farmers to literally set aside land for environmental conservation in exchange for non-recourse loans; managed imports and exports to prevent undercutting farmer incomes in the U.S. and limit dependency on foreign markets; and strong antitrust enforcement.

There are also contemporary examples of supply management and parity working in tandem to create livable wages and healthy working conditions for farmers. Anderson, who studied the California dairy industry, said that the cooperative Organic Valley already engages in a form of supply management.

“Their principal focus was saving family farms and doing so in an environmentally sustainable way. So, their immediate strategy was to say, ‘What kind of producer price is needed for the family farm to be profitable?” Anderson said. Organic Valley set its retail prices based on what was a livable wage for farmers—after the cost of production. In other words, it established price parity.

It’s not clear how much traction Disparity to Parity will gain in influencing federal policy, especially when it comes to Tom Vilsack, the recently confirmed, third-term Secretary of Agriculture who spent four years between working for the Obama and Biden administrations leading the National Dairy Export Council.

In early March, Vilsack told the National Farmers Union that supply management might not see the light of day in Washington, D.C., if it “results in significantly higher costs to consumers.”

Novakovic agrees that even with the potential, and as he sees it marginal, benefits of supply management, “there is not one shred of historical evidence to suggest that Congress would ever pass legislation to permit supply management for the United States dairy industry.”

That’s mostly because, Novakovic said, not all members of Congress represent farmers, but they all represent consumers, the individuals who are most likely to bear the brunt of the change in milk prices if supply management were enacted. According to Novakovic, studies show that milk prices could rise a little or quite drastically, depending on the context. “The range from the lower tier to the upper tier can be as much as 100 percent,” Novakovic said.

Bobbi Wilson, the policy and special projects coordinator at the Wisconsin Farmers Union, disputes that claim. Wilson said that research on supply management proposals in the state conducted by the organization in 2019 found that the impact on the retail price for a gallon of milk sat between seven and 10 cents. That’s a few cents more asked of the consumer “in order to provide significantly better prices for dairy farmers that would allow them to stay in business,” Wilson said.

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In an essay on the Disparity to Parity site, George Naylor, a farmer and long-time parity advocate, agreed. He wrote: “The price of raw materials as they leave the farm has little relation to retail prices. In fact, the ‘consumers’ for most farmers’ crops are really giant food processing and marketing corporations, not ordinary citizens. These corporations reap a windfall when farmers’ crops sell at disastrously low prices because retail prices are generally not affected.”

As Naylor sees it, more farmers would grow a diverse range of crops if they weren’t trapped in the current system, which rewards corn and soy monocrops, despite what he points out are the clear signs of environmental damage of today’s agriculture: “soil erosion, water pollution, air pollution, loss of biodiversity—the list goes on.” But he wrote, “like any enterprise in a free market economy, the only ‘choices’ are to make more and make it cheaper—raising more crops for less and less money, with the environment paying the price.”

Naylor also pointed to the rise of Concentrated Animal Feeding Operations (CAFOs) and the loss of small-scale farming systems that include animals. “When livestock were an integral element of the farm, the farmer could wisely choose to use different parts of the farm in different ways and make crop rotations the norm—rotations that saved soil, sequestered carbon, and could produce nitrogen (in the form of animal waste) for the next corn crop. These rotations also diminished the plagues of weeds and pests that result from the endless repetition of corn and soybeans.”

His hope, which is shared by others in the Disparity to Parity coalition, is that controlling overproduction and paying farmers a fair price could help reverse the tide and bring back ecologically diverse farms, as well as more opportunities and support for farmers of color.

NFFC’s Dorry is also hopeful that a discussion around parity and supply management will lead to positive ripple effects in the food system. “We’re going see it in the kind of agriculture and ranching and fishing that actually contributes to reducing impacts of climate change from food production, as opposed to exacerbating it, [and] we’re gonna see rural communities [become] more healthy.”

In his essay, the Federation of Southern Cooperative’s Blanding draws a connection between these potential outcomes and the need to see the nation’s farmers—especially BIPOC farmers—in a new light. “If we as a country, as a collective body of people, start to understand agriculture as a civil service, then we will understand the need for the government to be engaged,” he wrote.

Ray Levy-Uyeda is a freelance writer living in the San Francisco Bay Area. Her work has appeared in Mic, Teen Vogue, and elsewhere. Read more >

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  1. Great article to help re-orient U.S. readers to the terminology and the issues around parity.

    Of interest should be the fact that parity agriculture is now a major area of activism in the monetary reform movement. Organizations involved in drafting fact sheets, etc., are: National Organization for Raw Materials (NORM), the Green Party (see their separate website Greens for Monetary Reform), American Monetary Institute (AMI), Alliance for Just Money (AFJM is an action spin-off of AMI), American Agriculture Movement (founded in the 1970s). Collectively they refer to themselves informally as Parity Research Team.

    I have posted some of their recent Fact Sheets and videos on my National Resources webpage, under “Parity Agriculture”

    Note: I believe that most members of the Parity Research Team believe that deeper monetary reform (i.e., nationalizing the Federal Reserve) will be needed to support true parity agriculture. The best model so far is Dennis Kucinich’s 2012 NEED Act (former Ohio Congressman). The Summary is very readable:

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