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October 9, 2009

Big Pork Loves Its... Pork
I was leafing through Pork Magazine the other day and came across this:

Members of the U.S. Congress have urged the USDA to lend assistance to the nation's pork producers to help them out of a two-year economic crisis, according to the National Pork Producers Council.

In separate letters sent to Tom Vilsack, USDA Secretary, 24 senators and 63 representatives have asked that USDA take the following actions to provide "much-needed emergency relief" to the U.S. pork industry:

- Purchase $100 million of pork with funds from the Section 32 program, which uses customs receipts to buy non-price-supported commodities for federal food-assistance programs.

- Collaborate with other federal agencies to help address swine disease surveillance on farms, related diagnostic and vaccine development and swine industry support.

- Work with the U.S. Trade Representative to open export markets to U.S. pork, particularly China, which continues to impose non-science-based restrictions on U.S. pork since the outbreak of H1N1.

The congressional efforts, led by Al Franken (D-Minn.) and Richard Burr (R-N.C.) in the Senate and by Tim Walz (D-Minn.) and Steve King (R-Iowa) in the House, were made to help pork producers survive losses averaging $22.50 per hog since September 2007.

Nothing like Big Ag to show that bipartisanship (well, a certain breed of it anyway) is alive and well. The pork industry bailout has of course been going on for some time. Vilsack happily touts USDA purchases of hundreds of millions of dollars worth of pork for food banks and the school lunch program. And with all of it going to people in need, who's to argue?

Anyway, these purchases are, for lack of a better term, only one, um, chop, in a much larger loin. Another bailout happens behind the scenes -- but this one makes the overall problem worse. Food Democracy Now recently put out an email action (and a petition) alerting people as to where their tax dollars are going:

The drop in export markets of both pork and poultry is the result of years of irresponsible overproduction brought on by unfair government subsidies and loan programs that have created an unfair competitive advantage for family farmers.

Now that the good times have finally ended, the factory farm industry is receiving further handouts from the government after corporations have consolidated the market and driven family hog and chicken farmers permanently off the land.

In 2008 and 2009 alone, the USDA Farm Service Agency (FSA) handed out over $265 million of hard-earned taxpayer money to factory chicken and hog farmers in loan guarantees to build new factory farms that compete against family farmers who are raising their animals the right way.

FDN goes on to observe that in the past the FSA has refused to offer these kinds of loan guarantees in times of over-production. But not so anymore. What this means is that over the last year or so, factory farms have expanded or started up -- even as the industry screams about cliff-diving sales. There's a solution for this kind of thing -- and it's being discussed for dairy, though not for pork (or poultry) at the moment. It's called Supply Management.

Canada uses it for milk, poultry and egg production to keep prices steady and supplies lined up with demand. While the "free" market is supposed to magically keep supply and demand in sync, in agriculture it tends to lead to classic, and extreme, boom/bust cycles. Interestingly, despite all the "restrictions" to the Invisible Hand up North, you don't hear about Canadian farmers screaming for a bailout (or pouring milk down the drains, for that matter). The downside of Supply Management is that it tends to kill the sector's export business since production targets are set based on domestic needs. That doesn't matter to farmers, but it matters to behemoths like Smithfield and Tyson -- exports are a major part of their business. But let's keep in mind that their corporate interests have nothing to do with farmers' interests at this point. But we do remember who calls the shots in all this, don't we? So, since we live in Smithfield's world, taxpayer bailouts it is. Hey, it works for them! And that, apparently, is all that matters.

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