A Brief History of U.S. Farm Policy and the Need for Free-Market Agriculture

Agrarian roots run deep in American society. None other than George Washington called for a board of agriculture to disseminate educational information to the public.1 Although this speaks to the importance some founders placed on farming, many states vehemently opposed any central planning for agriculture.2 Until the mid-1800s, schools of botanical and agricultural research were mostly supported by state funds and private universities, not the federal government.3 A few congressional agriculture committees were appointed in the early 1800s, but legislative action was minimal. In fact, in 1836 when the Navy and State Departments were given $300,000 annually to collect foreign and potentially useful plants for agriculture, Senator John C. Calhoun of South Carolina deemed the project “one of the most enormous abuses under this government.”4

The federal government’s foray into agriculture regulation began in earnest in the mid-1800s with the Morrill Act, which allocated tracts of government land to the states in order that they might establish colleges of agriculture—now known as “land-grant colleges.” Shortly thereafter, in 1862, Abraham Lincoln established the Bureau of Agriculture, the purpose of which was to facilitate foreign botanical exploration and domestic crop improvement. The Hatch Act of 1887 transformed the bureau into the U.S. Department of Agriculture, adding the secretary of Agriculture to the president’s cabinet in the process.5 That set the stage for massive federal interference in agriculture, opening up the industry to the whims of Congress and lobbyists. Indeed, this was the beginning of an era of greatly expanded federal powers over farming in the United States.

Today, the USDA’s annual budget stands at approximately $72 billion, and its role has been vastly expanded to include governing the way sixty million Americans (government employees, public schoolchildren, etc.) are fed daily; advising Americans on a “proper” diet; controlling the types of food available for purchase through food safety regulations; and regulating domestic and foreign markets through subsidies, tariffs, and price supports.

The purpose of this article is to briefly survey the history of the USDA’s agricultural policies. In so doing, we will see how a small and seemingly innocuous government bureau has been transformed into a behemoth federal agency, one that, in countless ways, negatively affects every American every day.

Civil War to WWI

The USDA had what most Americans would consider an innocent enough beginning. In 1896, Secretary of Agriculture James C. Wilson wrote:

It is the aim of the department to bring the scientist to the help of the people, to ascertain what imported crop plants might be produced in our country, to search the world for fruits, grains, vegetables, grasses and legumes that might be found useful here, to secure new varieties of plants by breeding and selection, to control destructive diseases, to open new markets for plant products, and to improve methods of handling, shipping and marketing things the farmer grows, especially in the more perishable crops.6

The first commissioner of agriculture had an annual budget of less than $90,000, which enabled him to hire four experts—a horticulturist, an entomologist, a chemist, and a statistician—to oversee all of the nation’s farms.7 But only four years after the Hatch Act authorized federal funds for agricultural research at state-owned land-grant colleges, every state had such a college and was hiring personnel.8 By 1897, just ten years after the passage of the Hatch Act, the USDA employed nearly 2,450 people and had an annual budget of $3 million.9

The USDA remained focused on research and discovery during the first few decades of its existence, but expanded in the early 1900s to include food inspection. Harvey Wiley, its chief chemist, called for legislation that would reduce adulteration and improve sanitation of food products.10 In response, in 1907 Congress enacted the Pure Food and Drug Act, which called for enforced milk pasteurization and enacted an inspection system for foods sold via interstate commerce.11 Similarly, a Meat Inspection Act was lobbied through Congress by Teddy Roosevelt and, by 1912, the USDA’s annual appropriation of federal funds had grown to $24 million.12

From relatively humble beginnings, the USDA had grown, over four decades, to employ thousands and to expropriate millions from taxpaying Americans for agricultural research and food inspection. But this initial expansion in scope and budget would appear modest when contrasted with its activities in subsequent decades.

WWI to the FDR Era

In response to the disruption of European agricultural production by WWI, U.S. farms increased acreage and output to meet the overseas wartime demand, with prices of farms and commodities rising from three- to seven-fold during the war.13 As global agriculture recovered postwar, however, excess capacity in the United States resulted in plummeting prices until the economy began to collapse in 1929.14

Franklin Delano Roosevelt (FDR) is often credited with the country’s current farm subsidy programs and the massive expansion of the USDA. Although spending and federal power did increase drastically under his administration, some farm subsidy programs actually began prior to the FDR era. President Calvin Coolidge supported government purchase of cotton in order to reduce available supplies and thus maintain cotton prices, and, during the 1920s, Herbert Hoover (then secretary of Commerce) carried out such programs.15 The unintended consequence of these programs was a further depression of agricultural prices as farmers kept production capacity high in order to take advantage of the government programs. Hoover’s and FDR’s farm programs delayed the inevitable market adjustments that would have reduced postwar farm surpluses.

During the 1920s, as farmers defaulted on their mortgages, pressure built within the farming community for the government to provide relief. The USDA’s annual budget was increased to $150 million as it enacted price supports for crops, begun by Herbert Hoover.16 States enacted mortgage moratoriums, and farmers showed up at their own foreclosure sales and pressured against bidding by others, enabling the owners to buy back their properties for a few dollars.17 As Jim Powell, author of FDR’s Folly, writes, “During the 1920s, farmers had tried a number of schemes aimed at raising their farm incomes. . . . What farmers wanted was compulsion, some way of limiting what everybody produced, to force prices above market levels.”18

When Hoover was elected in 1928, he appointed a Federal Farm Board comprising executives in the farm cooperative, food processor, and railroad businesses. Congress granted the board $500 million toward both low-interest loans for farmers and government purchase and storage of crops.19 That was only the beginning of a series of collectivist schemes instituted to keep farmers in business. Louisiana Governor Huey P. Long, founder of the “Share the Wealth Society,” proposed a multistate ban on cotton production in 1932 in order to artificially increase prices and farm income.20 In the 1930s, various protectionist tariffs on foreign agricultural goods, including the Smoot-Hawley Tariff, were also enacted.21 These tariffs were disastrous: Roughly sixty countries instituted their own retaliatory protectionist tariffs, thwarting trade to the detriment of all.

Farmers played a significant role in FDR’s election. Within a week of his victory, Roosevelt, in order to “keep farmers from marching,” called for new farm policies offering subsidy payments to those who reduced crop and animal production, and the federal government soon began setting maximum allowable outputs for crops. These policies were codified with the passage of the Agricultural Adjustment Act (AAA) on May 12, 1933—the first “farm bill.”

The AAA raised tariffs, dictated farm acreage for specific crops, helped farmers refinance mortgages by authorizing banks to issue bonds, and empowered the government to restrict farm production and purchase farm surpluses.22 It also authorized a tax on food processors, redistributing the wealth to farmers who followed the government guidelines and limited their production—by destroying crops and other farm goods. Finally, it issued “marketing agreements” that restricted the output of the food processors and producers.23 In short, the Agricultural Adjustment Act of 1933 set out to protect farmers’ livelihoods by artificially increasing farm commodity prices and, correspondingly, the income of farmers.

Because the Act would not take effect until 1934, USDA officials paid farmers $100 million to destroy crops on ten million acres of farmland in 1933, particularly those used to grow cotton.24 Although this increased domestic prices as designed, it did not aid American farmers, because synthetic fibers and cotton production overseas filled the demand.25

Henry Wallace, FDR’s secretary of Agriculture, justified the AAA by claiming that free markets were to blame for an oversupply of farm commodities—a bizarre assertion given government meddling at the time. For instance, the destruction of oats, corn, and pigs was decreed and financed by the government. In the case of pigs, farmers were paid twice market value for each pregnant sow or piglet sent to the slaughterhouse, resulting in six million pigs becoming fertilizer or feed for livestock rather than human food.26 To satisfy demand given the lack of domestic supply, each of these items was then imported, usually at higher prices due to the tariffs. At a time when millions of Americans were starving (the Great Depression), USDA bureaucrats were artificially driving up the prices of crops and livestock while simultaneously issuing a bulletin informing the nation that “the great problem of our time is our failure to produce enough food to provide the people with a mere subsistence diet.”27

Although the AAA was supposed to last for only two years, FDR urged that the law remain in effect until the end of the “emergency,” later admitting that his intention all along was to shift its policies into a more permanent plan for government-controlled agriculture.28 The Supreme Court ruled the AAA unconstitutional in January of 1936, but Congress soon enacted the Soil Conservation and Preservation Act, which FDR signed into law in February 1936. USDA scientists had noted problems with soil retention and nutrient depletion for decades, and, coupled with a significant drought in the early 1930s (often referred to as the Dust Bowl), this provided the justification for the Soil Conservation and Preservation Act, which paid farmers to plant acreage with soil-conserving crops such as legumes—thus reestablishing the federal government’s control in this regard.

The AAA’s agricultural adjustment scheme was also reinstituted, through the passage of the Agricultural Marketing Agreement Act of 1937. These agricultural marketing orders, or AMOs, originated with the growers themselves, who sought to keep prices high by establishing production quotas, along with fines for producers selling more than their quota.29 If the secretary of Agriculture, after a hearing with growers, thought a proposed AMO was worth pursuing, affected growers would be allowed to vote on the proposal and, with a two-thirds vote of support, a government-enforced AMO would then be issued.30 From 1933 to 1940, many states also adopted milk control laws that allowed a government board to fix prices and set production quotas. As Jim Powell notes, such laws “are the most blatant type of interference with U.S. agricultural markets, a throwback to medieval times when guilds determined who could work in various trades, how much they could charge, and how much they could produce.”31 This act even allowed the government to seize agricultural goods such as fruits, nuts, and milk in order to manipulate domestic and foreign markets.32 Such marketing orders restrict agricultural production to this day.

One example is the government-run raisin cartel, which has historically inflated the price of domestically grown raisins as much as tenfold. As Timothy Sandefur of the Pacific Legal Foundation notes:

Federal law creates the “raisin administrative committee” which every year decides on a quota of raisins that are to be taken off of the market so as to “stabilize” (i.e., increase) the price of raisins in the grocery store. These seized raisins are sold under a government brand to public schools and other entities, and the proceeds from these sales are used to subsidize American farmers who sell raisins overseas. This lets them charge below-market costs for such raisins, thereby making it harder for raisin producers in those countries to make a living. What’s left over after these subsidies are doled out is then given back to the farmers whose raisins were stolen in the first place. Obviously this is less than the actual value of the raisins in the first place.33

The USDA still actively enforces AMOs, and violators of these marketing orders are routinely prosecuted by cartel members—their fellow farmers. Hein Hettinga, a “maverick” dairyman and immigrant from the Netherlands, took advantage of a “regulatory loophole” in California that allows farmers to sidestep milk marketing orders, if they themselves bottle the milk from their cows. Few other dairy farmers have taken advantage of such loopholes, but Hettinga achieved stunning success by building his own production plants, bottling his own milk, and selling directly to Costco.34 His success, however, has been met with protest and punishment. Although Hettinga’s actions were technically legal, powerful lobbyists (the National Milk Producer Federation, the International Dairy Foods Association, and Dairy Farmers of America) arranged a congressional bill to stop Hettinga from “gaming the system” and claimed he was too large a producer to take advantage of the loophole in the existing regulation. As of December 2006, Hettinga has been ordered to pay more than $400,000 in fines per month to the Arizona milk pool.35 His crime? Being a successful businessman and besting a government-run cartel.

The list of New Deal farm programs continues. Executive Order 6340 established the Commodity Credit Corporation, which provided farmers with loans secured by their future harvests—which, for this purpose, were valued at above-market prices—in exchange for farmers guaranteeing delivery of the crops to a warehouse or grain elevator when harvested. Under this program, which is often referred to as FDR’s “New Granary,” if crop prices rose, farmers could reclaim the crops, sell them at a profit, and use the money to pay off their loans. If prices fell, farmers could forfeit the crops, keep the money, default on their loans, and let the government determine what to do with the crop surplus—which was usually dumped on overseas markets at a significant loss to taxpayers. Naturally, farmers increased their output to take advantage of the Commodity Credit Corporation program, thus increasing agricultural production despite the government’s efforts to decrease it.36

With the addition of FDR’s New Granary and the School Lunch Programs, by 1939 the USDA ballooned to nearly 80,000 employees, with a budget of approximately $1.3 billion.37 At this point, farm organizations, once committed to independence and skeptical of government programs, not only stopped objecting to government intervention in agriculture, but actively began lobbying for more federal funding.38 Rather than compete in the free market, farmers increasingly urged government to manage their industry and expected taxpayers to foot the bill.

Post-WWII to Present

The Truman administration was unsuccessful in its modest efforts to reform the farm programs of the Hoover and FDR eras. Ezra Taft Benson, secretary of Agriculture under President Eisenhower from 1953 to 1961, sought to make New Deal farm programs more responsive to market forces. But the resulting Agricultural Adjustment Act of 1954 did not come as close to establishing free-market reforms as Eisenhower or Benson had hoped. An alliance of Democratic and Republican farmers was enough to persuade Congress to propose more “flexible” price-support programs. New Deal farm programs eluded elimination. In fact, Virgil Dean notes, “the debate was permanently refocused: not on whether the federal government had a role in agriculture but on what its role and specific policy should be.”39 Decades later, in personal correspondence, Benson wrote:

I’ve looked up some of the legislation which brought the USDA into being through the action of President Lincoln. I’ve often wondered if it would not be well to have a Blue Ribbon Commission study of the whole question of the objectives and purposes of USDA in the years of Abraham Lincoln, then trace the history of more recent developments and determine the future possibilities of the USDA.40

Although consolidation of farms was partially spurred by adoption of new and improved technology in the 1950s (the so-called Green Revolution), the only farmers who could continue to survive in an era of low commodity prices—exacerbated and sustained by subsidies—were those who sought to expand their operations through the acquisition of more land, usually from those in financial difficulty. In subsidizing select crops, the government further consolidated agricultural resources and contributed to the demise of the “family farmer,” whom the New Deal programs were designed to “save.”41 By 1959, taxpayers, care of the USDA, were paying more than $2 billion annually in crop-reduction subsidies,42 and government handling and storage of surplus farm crops during 1959 cost taxpayers $482 million.43

The subsidies kept more marginal land in production than would have been planted in a free market. Land that would likely have remained pasture or woodland was ripped up to plant soybeans—a crop that, while enhancing soil nitrogen, also causes soil erosion due to its shallow root system. From 1945 to 1970, soybean plantings in the U.S. grew by 700 percent.44 Earl Butz, secretary of Agriculture under Presidents Ford and Nixon, envisioned a more centralized food system that could “feed the world” by providing processed food products made of subsidized grain and seed crops—primarily corn and soy. In the 1970s, Butz encouraged farmers to expand their operations, adopt new technology, and maximize production in order to sell vast surpluses overseas. But by the 1980s, the market was flooded with more of these commodities than it could bear. Prices fell accordingly and interest rates rose, burdening the farmers who had been encouraged by the USDA to borrow money in order to buy the technologies necessary for such mass production. Farm incomes plummeted, spurring further consolidation. Surviving farms responded to low prices by planting more and more, hoping to compensate for the low prices with higher volume. By 1983, government handling and storage of surplus farm crops cost taxpayers $2.8 billion annually.45

One company that has profited enormously from the economic distortions caused by the farm subsidy programs is Archer Daniels Midland (ADM). ADM lobbies to maintain price supports for domestic sugar and tariffs for foreign sugar. These supports and tariffs double the price of sugar and—along with direct payment subsidies that artificially cheapen corn products—artificially induce a large market for one of ADM’s products: high-fructose corn syrup (almost nonexistent in processed food products before 1970). Few Americans realize the manner in which farm subsidy programs have virtually transformed the American food supply. It is doubtful that a number of subsidized items—including high-fructose corn syrup, vegetable oils, and soy products—ever would have been used as widely as they are today in the United States without federal support. The demand for these items was created largely by government regulations.

Similarly, in the 1970s and 1980s, the glut of cheap, subsidized corn and soy led to an explosion in confined animal feeding operations (CAFOs), and today roughly 55 percent of U.S. corn is now used for cattle feed. The subsidization of corn, soy, and feedlot waste disposal under the USDA’s EQIP program (more on this later) has made CAFOs much more prevalent and less expensive than they would be in a free market (i.e., the same effect as with high-fructose corn syrup).

By 1984, 120 years after its inception, the USDA had grown to nearly 136,000 employees. It was then four times larger than the State Department and seven times larger than the Labor Department. Its annual budget was then $30 billion and roughly half of its funding was allocated to the Food Stamp and School Lunch Programs—both concoctions of the FDR era, tenuously related to agriculture.46

Over the past twenty-five years, the USDA budget has grown enormously, particularly the Food Stamp and School Lunch Programs. Between 2002 and 2007, roughly two-thirds of the Farm Bill was allocated to these two programs, up from half of the budget just twenty years prior. The mission of the USDA seems permanently redirected from the Bureau of Agriculture’s original purpose, agricultural research. Farm “support” and nutrition programs, neither of which were adopted until the 1920s and 1930s, now make up a staggering 99 percent of the “farm bill” budget,47 which, for 2009 onward, is projected to be $72 billion annually.

One result of these increasingly interventionist policies is that the U.S. agricultural sector has undergone rapid consolidation of agricultural output. We can see this in the significant long-term change in farm size and number. Small, independent, family-based farms with a diversified source of income have increasingly given way to or been absorbed by large, consolidated, single-product operations. From 1935 to 1997, the number of farms declined from 6.8 million to 1.9 million while average farm size increased from 155 acres to 487 acres.48 In 1999, large farms (i.e., those with annual sales of more than $250,000) or “nonfamily” farms (corporations or cooperatives with hired managers) constituted only 8 percent of the number of farms in the United States but produced 68 percent of farm goods. While some consolidation undoubtedly would have occurred in a free market due to new technologies—which enabled fewer workers to produce more on less acreage—such consolidation would have been driven by the needs and demands of the market, not by the arbitrary dictates of a government bureaucracy. In a free market, farms consolidate or multiply as necessary to maximize efficiency and profits. For instance, in the more capitalist era from 1850 to 1930, average farm size decreased from 200 to 150 acres while the number of farms increased from roughly 1.5 million to 6.8 million.49 Given the demand and technology of the time, smaller farms in greater numbers made for more fruitful farming, and farmers were free to act accordingly.

Farm Subsidies: A Closer Look

Between 1995 and 2006, the government doled out $177.6 billion in farm subsidies, yet during this same period 67 percent of all U.S. farmers and ranchers did not collect government subsidy payments.50 Who got the money? Those who know how to exploit the system did.

Between 1995 and 2006, each subsidy recipient in the top 10 percent received an average of $33,265 annually. During that same period, each recipient in the bottom 80 percent received an average of $669 annually. In recent years, commercial farmers reporting an average income of $200,000 and net worth of nearly $2 million have collected the majority of farm subsidies. In fact, between 2003 and 2005, more than fifty billionaires received a combined total of more than $2 million from farm welfare programs.51 As Brian Reidl writes in Farm Subsidies for Millionaires:

Payment limits exist—on paper. However, an entire industry of lawyers exploits loopholes, rendering these limits meaningless. . . . Tyler Farms in Arkansas has collected $37 million in farm subsidies since 1996 by dividing itself into 66 legally separate corporations. Other farmers evade payment limits by signing up family members, such as the Georgia farmer who reportedly collected thousands in additional subsidies by listing his two-year-old daughter as a co-farmer.52

Perhaps unsurprisingly, a significant number of federal lawmakers receive subsidies, among them Senator Jon Tester of Montana, who farms 1,800 acres and received $232,000 in farm subsidies between 1995 and 2005. His opinion on farm subsidies? “Without these programs, there are some years that we would have been in very, very dire straights [sic].” Representative Marion Berry of Arkansas also champions the system. He and his family’s farming interests received a total of almost $2.4 million in federal payments between 1995 and 2005. “He has firsthand experience of how this really benefits farmers,” said his spokeswoman, Angela Guyadeen.53 And Tom Vilsack, former governor of Iowa and the current secretary of Agriculture, received farm subsidy payments of $42,782 between 1995 and 2006.54 Presumably, he approves of subsidies as well.

The top crops and programs that receive USDA money are, in descending order: corn (more than $56 billion between 1995 and 2006), wheat, cotton, the Conservation Reserve Program (CRP), disaster payments, soybeans, rice, sorghum, dairy, livestock, peanuts, barley, the Environmental Quality Incentives Program (EQIP), tobacco, sunflowers, apples, sugar beets, canola, oats, and wool.55 Ninety percent of all farm subsidy money in the United States is linked to just five crops—corn, wheat, cotton, soy, and rice. Conversely, producers of fruits, nuts, and milk—while not receiving subsidy payments directly—are still subject to the marketing order agreements begun in the FDR era to “stabilize” (i.e., raise) prices. So while fruits, nuts, and milk are made artificially expensive, grain products (including high-fructose corn syrup), vegetable oils, and soy products are made artificially cheap.

Consumers may be surprised and dismayed to learn that the federal government severely penalizes American farmers for planting any crop in place of certain subsidized commodity crops such as soy, corn, wheat, rice, or cotton. Jack Hedin, a midwestern vegetable farmer who ordinarily farms one hundred of his own acres, recently rented an additional twenty-five acres of cornfield due to the increased demand for local vegetables during the summer. However, he found that the two farmers who rented him the land on which to grow the vegetables not only lost their corn subsidy, but also incurred thousands of dollars in penalties to the federal government for being in noncompliance with the commodity program. Such penalties are supported by politically connected vegetable and fruit farmers in California, Texas, and Florida who fear local competition.56 Predictably, this program results in less consumer access to fresh, local produce and higher prices to absorb the costs of shipping produce from afar.

Two more farm subsidy programs bear a brief mention, because both illustrate the tendency of government to design new programs in an effort to “solve” the problems created by previously created government programs. The crop subsidies of the past decades, most notably from the 1970s onward, encouraged overproduction, and thus the overuse of highly erodible land or nutrient-poor soils for crop production. So, in 1985, the Conservation Reserve Program (CRP) was instituted to solve this problem. The CRP, which resembles FDR’s Soil Conservation Service, pays farmers via ten-year contracts to draw such marginal land out of production, with the stated goal of enhancing soil fertility. After subsidizing crops to the tune of billions yearly, the CRP dispenses even more tax dollars to pull approximately 40 million acres of crop land from production each year—the equivalent of every farm in Wisconsin, Indiana, Michigan, and Ohio combined.

The Environmental Quality Incentives Program (EQIP)57 was instituted in 1996 to clean up confined animal feeding operation (CAFO) manure waste. Modern CAFOs, which began in the 1960s and were spurred to ever-greater numbers and sizes by corn and soy subsidies, concentrate thousands of animals in a small area. In feeding operations where the animals are spread over a larger land area, the waste safely decays and contributes to soil fertility. But the concentrated waste in a CAFO must be transferred from the close quarters in which the animals are kept to a nearby “manure lagoon,” often polluting water supplies and creating obnoxious odors for local residents. EQIP spends taxpayer money—up to $450,000 per feedlot—to clean up such waste. Why should taxpayers pay for this? Why should not farmers, like everyone else, be responsible for their own waste disposal? The answer, of course, is that the government caused the problem to begin with.

The rights-respecting solution to the government-caused problems that the CRP and EQIP purport to fix is to eliminate soy and corn subsidies. It is time for the government to stop appropriating taxpayers’ money to clean up its messes, and, more fundamentally, it is time for the government to stop making such messes.

A Looming Bureaucracy: The National Animal Identification System

The Animal and Plant Health Inspection Service of the USDA now wishes to enact a new program called the National Animal Identification System (NAIS).58 Its goal is to assign fifteen-digit IDs to livestock animals and to track them from birth to death with radio frequency identification chips, something supporters claim will make the food supply safer. The USDA originally aimed to require all meat producers to register with the program by January 2009, but NAIS has received considerable opposition at the state level and from independent farmers and ranchers. Unfortunately, large producers with an export interest—represented by such groups as the National Cattlemen’s Association and the National Pork Producer’s Council—support NAIS. These producers must already comply with foreign regulations that require livestock to be traceable from start to finish; their support for NAIS presumably stems from a desire to subject producers without export interests to the same competitive disadvantage.

The USDA states that the goal of NAIS is to quickly identify the source of an infected animal and/or to protect citizens from terrorists who contaminate the food supply. Under the program, farmers would be required to log every “event” in an animal’s life—from going to a county fair, to being trucked to another farm, to participating in a rodeo. Dozens of farm species would be covered by the program. Animals’ birth and death dates, lost animals, and lost tags, would all have to be reported within twenty-four hours, on pain of massive fines for violations. Veterinarians would also be required to report sightings of untagged animals and to register the animals with the USDA. The National Animal Identification System is, at the time of this writing, lurking in several congressional bills (including HR 875, which would create a massive new federal agency, separate from the USDA and FDA, devoted to food “safety” regulation).

It is unprecedented for the U.S. government to conduct surveillance of citizens simply because they own a specific type of property. Motor vehicles and guns are registered at the state level, but NAIS would subject all owners of even a single farm animal to federal surveillance and control. The Independent Farmers and Consumers Association has estimated that this program will cost less than $7 per head for owners of 400 or more head of cattle—but more than $63 per head for owners 25 or fewer head of cattle.59 Obviously, this program would make it difficult for small producers to remain profitable. The American Livestock Breeds Conservancy, an organization devoted to maintaining rare livestock breeds, has expressed serious concerns about NAIS and its potential effects on the food security of the United States:

For a variety of reasons, many of our country’s rare, endangered and heritage breeds of livestock and poultry are stewarded and maintained on small, independent farms and ranches. . . . Policies, procedures, and regulations that . . . discourage farmers and ranchers from considering or continuing to steward rare, endangered, or heritage agricultural animals could lead to the extinction or functional loss of the genetic resource these creatures represent. Such a loss would diminish our country’s genetic legacy, significantly reduce the capacity of present and future animal breeders to respond to new challenges and opportunities, and potentially compromise our nation’s food security.60

NAIS alone is unlikely to eliminate the meat industry of the United States. Although the program would significantly limit consumer access to local, pastured food animals—not to mention the genetic diversity of U.S. livestock—large producers with political pull would remain in business. Perhaps most disturbing about NAIS is not the disproportionate regulatory cost for smaller operations, but the potential pernicious use of this program: It would give the USDA ownership information of every farm animal in the country. Should the Environmental Protection Agency (EPA) decide to enact CO2 emissions taxes on livestock, ownership information collected by the USDA for NAIS could be passed directly to the EPA, especially given increased communication between federal agencies since September 11, 2001. This is of particular concern because the USDA has already hinted at even wider, massive controls over agriculture:

Many of the emissions are the result of natural biological processes that are as old as agriculture itself. For instance, technology does not currently exist to prevent the methane produced by enteric fermentation associated with the digestive processes in cows and the cultivation of rice crops; the nitrous oxide produced from the tillage of soils used to grow crops; and the carbon dioxide produced by soil and animal agricultural respiratory processes. The only means of controlling such emissions would be through limiting production, which would result in decreased food supply and radical changes in human diets.61

The USDA is entering a new phase in which its mission might shift again. Once a governmental organization devoted solely to exploration, research, and marketing, its purpose shifted in the early 1900s to food safety and then, a few decades later, to farm subsidy and nutrition programs. Although we have remained in this last phase for roughly seven decades, the USDA has now admitted that, should the EPA choose to control “greenhouse gas” emissions, it will have no choice but to place limits on animal and crop production. Under George W. Bush, Agriculture Secretary Ed Schafer announced in December 2008 the intention to establish a new USDA Office of Ecosystem Services and Markets to promote “carbon trading.”62 It is not beyond the realm of possibility that the USDA, in cooperation with the EPA, could become an enormous bureaucracy devoted (among other things) to mitigating “climate change” by limiting plant and animal production in the United States. The only difference between this potential new era and the production-limitation designs of the FDR era is that the intended beneficiary of the new proposals would be, not farmers, but planet Earth.

Farm subsidies, tariffs, agricultural marketing orders, pasteurization mandates, nutrition programs, and the fledgling NAIS must be abolished. These USDA programs violate the rights of Americans by redistributing billions of taxpayers’ dollars to select farmers and, in so doing, drastically distort food prices, promote dubious nutritional recommendations, and pose serious problems for free-trade agreements and the long-term viability of agriculture in the United States. Unfortunately, although the current farm subsidy programs have critics, few trace the root of the problems to subsidies prior to the Butz era and fewer trace the problem to its legislative root: the establishment of the USDA itself.

The USDA is premised on the idea that a particular industry—agriculture—is so important as to justify expropriating the wealth of taxpayers. But nothing justifies this massive violation of rights, and this is what Americans must recognize in order to challenge the USDA’s policies and its very existence. Only then will the federal government’s meddling in agriculture come to an end, enabling American agriculture to become all it can be.

The Promise of Free Market Agriculture

Although farming is and has been highly regulated in most developed countries, one country has had an almost completely free market in agriculture for the past thirty-five years.

In 1984, New Zealand, under a newly elected labor government, swiftly eliminated farm subsidies. The results have been astounding. Only 1 percent of farmers lost their farms in the process. Total lambs, percentage of ewes producing lambs, and lamb carcass weight have all increased. The cost of milk production is now among the lowest in the world, with output and net incomes both higher than they were in 1980. Since 1984, horticultural exports have grown by a factor of five. In the past two decades, the number of countries to which New Zealand exports has grown by a factor of ten. Agricultural growth in the country prior to 1986 averaged about 1 percent annually; between 1986 and 2003 it averaged almost 6 percent annually. In 1986, the agriculture industry’s contribution to New Zealand’s gross domestic product (GDP) was 14.2 percent; by 2000 it had increased to 16.6 percent.63 Over the past ten years, the country’s agricultural productivity has grown at twice the rate of the country’s economy.64 And this massive increase in productivity has been accomplished on less and less land: Between 1984 and 2003, the land devoted to livestock and arable farming in New Zealand declined by about 15 percent.65

The empirical evidence offered by New Zealand in support of the viability of a free market in agriculture is simply unassailable. The advice of the Federated Farmers of New Zealand to the farmers of America? “Get off the subsidy gravy train as soon as possible.”66

If farm subsidies and the regulatory stranglehold over farming were abolished in the United States, the agriculture industry would boom and thrive. Farmers would quickly adjust to freedom and learn to produce what the market—rather than the government—demands. Farms would adopt new methods, become more efficient, and diversify their sources of income in anticipation of future market demands. And the U.S. agriculture industry would soon be seen as the model for the reform of every other regulation-afflicted industry in America.

Nearly a century of federal interference in the agriculture industry has violated Americans’ rights and distorted the market. Although no one can specify in advance how the shift to intervention-free farming in the United States would play out in detail, one thing is certain: A free market in agriculture would be more just, more innovative, and more productive than the rights-violating, wealth-redistributing, subsidy-granting boondoggle with which we are currently saddled. The question is, are Americans willing to fight for what is right?

About Monica Hughes

Monica Hughes is a mycologist and freelance writer with interests in agriculture. She holds a BS in biology from Houghton College and an MS and PhD in forest pathology and mycology from State University of New York College of Environmental Science and Forestry (SUNY-ESF). She is the founder of Free Agriculture – Restore Markets (FA/RM), fa-rm.org.

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