546 Growing Place

The Way Cansons Live Today The Way Cansons Live Today has a lot to do with two publications that first appeared in the year 1776. The first, of course, was the Declaration of Independence, the second, Adam Smith's, Wealth of Nations. Smith had spent more than ten years analyzing the economic forces that transformed the social structure of feudal Europe. Within the century following the publication of the Wealth of Nations, the further development of commerce and manufacturing, which we now call the Industrial Revolution, would provide the impetus and the means for establishing mechanized commercial agriculture in the newly born United States. Adam Smith observed that all trade is based upon the exchange of agricultural commodities and raw materials for manufactured goods.

That is, an exchange of country products for city products. Smith therefore believed that economic prodgress required the mutual development of agriculture and industry. But the growth of English industrial centers far outstripped gains in domestic agricultural productivity, and it became necessary to seek food supplies elsewhere. Toward the end of the 18th century, merchants who had previously dealt mainly in luxury items for the rich began to haul cargoes of basic necessities for the displaced agrarian populace living in factory towns. The Industrial Revolution was providing innovative means of acquiring grain from distant regions, canals and railways penetrated new wheat lands, and improved storage systems were built along these transport routes. Better ships helped reduce freight costs, mechanized farm implements allowed individual farmers to till more acreage, and water-powered mills could grind more flour than older windmills.

Futures trading reduced some of the risks involved in commerce and advances in communication such as the telegraph and the transatlantic cable helped traders overcome distances. Reading the wealth of nations, you get the feeling that Smith's vision of the mutual development of city and country did not extend beyond the shores of Great Britain. It's hard to believe he could have foreseen the day when the hungry mouths of London and Lancashire would devour all the British harvest, plus grain from Australia, Canada, California, the Great Plains, Argentina and India. But what he called the silent and insensible operation of foreign commerce allowed the growth of England's industrial towns to continue unabated. It also provided a strong incentive for a migration of farmers into the previously unsettled grasslands and plains regions of three continents. Here in Kansas, as elsewhere on the Great Plains, this meant that a new kind of agriculture would be developed. Rather than becoming quilted with the small estates of independent freeholding farmers as Thomas Jefferson had envisioned,

the vast prairies were covered with huge commercial farms that required heavy capital investments and were tied to the intricate and often treacherous workings of international trade. In our next program, we'll examine a more recent era in which the increase of agricultural productivity surpassed the growth of urban markets, and we'll discuss some of the ways the United States has dealt with a problem of huge agricultural surpluses which has characterized modern industrial farming. This has been a production of KAMZ FM, made possible in part by funds from the Kansas Committee for the Humanities. In the next program, we'll discuss some of the ways the United States has dealt with the growth of the United States and the plains regions of three continents.

Agriculture has been a major pillar of America's strength since colonial days, but the relation between farm policy and foreign policy has become especially intricate within the last 35 years. At the close of World War II, when European and Asian agriculture had been devastated, people all over the world looked to the United States for relief from the threat of starvation. There was no ready supply of grain to meet this need because American agricultural planners, remembering the disastrous price collapse that followed World War I, had adopted a bear shelves policy during the war, but the demand was met by an amazing increase in productivity. Depressed economic conditions had discouraged innovation during the 1920s and 30s, but after 1940 a sudden jump in farm income brought about widespread modernization.

Internal combustion tractors and combines replaced workhorses, freeing millions of acres previously kept as pasture or planted in oats. The introduction of hybrid seed, chemical fertilizers, herbicides, and pesticides all contributed to astounding increases in farm output. Beginning in 1948, agricultural surpluses in this country swelled. By 1953, the government found itself with grain reserves so large that the estimated storage costs were a million dollars per day. The administration had to figure out some way to get rid of these surpluses without depressing farm prices since about 20% of the population still lived on farms and agricultural policy decisions could have important political consequences. Increased meat consumption in the United States helped absorb some of the overabundance of grain. It takes 7 to 10 pounds of grain to add just 1 pound to a steer's weight, but the astronomical growth of agricultural productivity made it possible, in a sense, even necessary that we become a nation of steak eaters.

But even though beef consumption nearly doubled between 1950 and 1970, during the same period, agricultural productivity was rising twice as fast as manufacturing productivity, and surpluses were a constant problem. Anchorage reduction, price ceilings, and adjustment of support levels, none of these measures succeeded in reducing output, so policymakers turned to programs designed for dumping the surplus overseas. In 1954, Congress passed public law 480, a measure whose language was broad enough to satisfy every type of food aid proponent, humanitarians out to combat hunger, advocates of foreign aid as a means of bolstering anti-communist allies, farm block members whose main concern was simply disposal of the burdensome surplus, and of course the grain traders who would handle the government sales. Though it did incorporate provisions for donations of emergency relief supplies to governments or charitable organizations, PL 480 was no giveaway program.

It provided for purchases of American grain by underdeveloped countries on terms they could afford. The Department of Agriculture was doing its part to export not only farm commodities, but U.S. farming techniques and dietary habits as well. Market development programs urged Middle Eastern importers to sell American rice in their markets, and encouraged the rice-eating peoples of Asia to eat bread made from American wheat, American soybeans fattened livestock for the tables of Europe and Japan. In our next program, we'll discuss developments of the early 1970s, which have brought this all-out export policy into question, just when some people believed it was working better than ever. This has been a production of KAMC FM, made possible in part by funds from the Kansas Committee for the Humanities. The volume of international grain trade today is more than five times greater than it was before World War II.

Dietary changes have played an important part in this growth. Meat consumption has risen in the industrial nations. Livestock and poultry on their way to the table now eat as much grain as the human population consumes directly. Brand has also gained a new popularity among rice-eating peoples in many parts of the world. United States government policy has encouraged these developments for a very simple reason. Providing the largest part of the grain for international trade, the United States has derived the most benefit from the growth of the commercial market. Sales of agricultural products now play a crucial role in maintaining a favorable balance of trade. Between 1971 and 1975, annual earnings from agricultural exports jumped from $7.7 billion to over $21 billion.

The benefits of this growth are obvious. Let's consider some of the less obvious effects of our all-out export policy on consumers, farmers, and taxpayers. American consumers were hard hit by increased food costs following the Russian purchases of the early 1970s. As soon as price controls were lifted after President Nixon's re-election, the national food bill increased faster than any time in the previous century, rising $54 billion between 1972 and 1975. Those hurt most by inflated food prices were, and are, the poor. The Nixon administration had worked hard to gain the support of farmers. In the spring and summer of 1972, as Secretary of Agriculture Earl Butts traveled throughout the farm states campaigning for Republican candidates, the government was buying up surplus corn to bolster prices, pulling acreage out of production and raising price supports. Direct payments to farmers in 1972 reached a record high for $4 billion.

Despite this fact, the official Republican farm policy was designed to reduce the role of government in agriculture. The expanded overseas sales of American grain did raise the prices of agricultural commodities, and some farmers still regard Nixon and Butts as heroes. Others have termed the Russian grain deal the great grain robbery because they feel that farmers were short-changed, while the Soviets paid a very low price and the grain companies made huge profits. As production costs have risen faster than commodity prices, many who praise the Nixon administration's policies have found that free market farming is far less lucrative than they had anticipated. But some farmers here on the high plains were so excited by the jump in farm prices that they planted crops in 1973 and 1974 on land that hadn't been broken since the Great Depression. The soil and conservation service estimates that reckless cultivation during this period led to the loss of 60 million tons of top soil.

This raises one of the most important issues in assessing our agricultural policy, the hidden costs of production. There are several factors that don't get figured into the grain trader's supply and demand equations. Among them are the cost of maintaining public transportation systems, highways, ship channels and riverways. Secondly, there is the depletion of non-renewable resources such as petroleum, groundwater, and the crop land that is being overworked eroded or devoured by urban sprawl. The inflated price of farmland and the huge capital investments required to get a start in farming today have left many young people with no choice but to seek their fortunes in the city. And these changes in agriculture have contributed to our costly urban problems. It is not our foreign grain customers who foot the bill for these hidden costs of production, but citizens of the United States, landowners, consumers, and taxpayers in all regions and at all levels of society. In our next program we'll consider the role of multinational grain companies in the export trade and how their interest can come into conflict with those in the countries in which they operate.

This has been a production of KAMZ FM, made possible in part by funds from the Kansas Committee for the Humanities. This country's grain business is dominated by five companies that account for 85% of the United States export trade.

In merchants of grain, Dan Morgan writes, At first glance, the American grain market seems a diverse and intricate system in which it is difficult to discern any clear pattern of corporate domination, with millers, feed producers, feed lots, brewers, and many others all competing for parts of the harvest. But the grain companies, he says, have made themselves indispensable because of their control of the distribution systems, the processing plants, the technology, the capital, and the communications between buyers and sellers. Farmers take the risks of falling prices, bad weather, and governmental policies that sometimes depress farm prices. The grain companies, one stage removed from the production process, can make money whether prices are rising or falling. The complexity of the grain companies' operations is staggering, admirers call them the most efficient organizations ever formed to transfer wealth and basic resources among nations. But the decisions made by these multinational corporations may not be in the best interest of the countries in which they operate.

Most nations have some sort of marketing board that acts as an agent for their agricultural producers. Following the Russian grain sales of 1972, which cost an unprecedented rise in consumer food costs in the United States, Oregon Democrat James Weaver introduced a bill in Congress that would have made the commodity credit corporation into such a marketing agency for U.S. farmers. At the time he said, we have a world of monopoly buyers and monopoly sellers and a few grain companies. The free market is a fraud and a delusion. Weaver argued that the United States could become an agricultural OPEC and that wheat farmers could get $10 per bushel if the government were selling for them. Weaver's ideas and the example of the OPEC nations serve to illustrate that the ability of countries to control and derive maximum value from their own resources has become an urgent problem in the 1970s. In addition to the economic factors, there are also humanitarian and strategic concerns involved in the issue of allocating basic resources.

In many countries, food imports are a crucial element in maintaining a stable social order. As we've recently seen in Poland, disruptions of food supplies can trigger large-scale disturbances. After more than 20 years of government policy aimed at reducing American grain surpluses, the huge Russian purchases in 1972 depleted our reserves dramatically. That same year, world food output dropped by 33 million tons. Other declines occurred in 1974 and 1975. In the last months of 1974, there were over 700 million people facing starvation and for the first time in two decades, it seemed that world food supplies might have fallen to a level that was dangerously low. Controlling United States food supplies means having great influence on the course of world events, and in case of chronic shortages keeping starvation from ravaging millions of the world's people. Agricultural scholar Murray R. Benedict says he believes the world's largest producer of surplus foodstuffs cannot afford in any period of greatly disturbed international conditions to operate only on the basis of such stocks of storeable foodstuffs as will be maintained privately in the normal channels of trade.

In our next program, we'll examine the role of United States food imports in relation to the hunger of the world's underprivileged. This has been a production of KAMC FM, made possible in part by funds from the Kansas Committee for the Humanities. In the next program, we'll examine the hunger of the world's underprivileged. Much of the world's population is severely underfed. According to a report published by the United States Department of Agriculture, it wouldn't take much to alleviate their hunger.

500 additional calories per day for each of them would do it. That's less than 2% of the world's average annual output of cereal grains. 10 times that amount is now being fed to the livestock of just two nations, the United States and the Soviet Union. Current agricultural production could easily feed all the world's people, but those hungry people are too poor to buy the food other countries might sell them. And as the National Research Council reported in 1977, hunger and malnutrition cannot be addressed solely by food programs. Social and economic development must be considered, including programs concerned with access to resources, distribution of income, extension of health services, literacy and general education. In most countries, measures not directly related to food are necessary to reduce malnutrition and improve health.

Though the lion's share of exported American food goes to the industrialized nations, another portion of our marketable surplus moves through the channels of commercial trade or through food aid programs to a number of the so-called developing nations. This trade helps prevent the build-up of American grain surpluses, extends the United States' sphere of influence and provides new opportunities for the operations of some multinational firms. Unfortunately, it frequently does little or nothing to improve the diets of the poor. This is due largely to the political and social structures of the countries involved. Among those importing food from the United States are Indonesia, the Philippines, Brazil, Pakistan and South Korea, all of which are governed by small privileged classes and characterized by very uneven distribution of wealth. Iran, under the rule of the Shah, serves as a good example of how importing American food can affect a country's development.

Not long ago, Iran was nearly self-sufficient in food production, but over the course of a decade its food supply system underwent radical changes. New poultry and dairy industries came to depend on the United States corn and soybeans. Recently adopted farming techniques required machinery and chemicals manufactured by U.S. firms. Because of the terms of food aid agreements, the United States Department of Agriculture had the right to review proposals for Iranian farm projects, and seven American specialists were members of the Iranian Ministry of Agriculture. Iran had become a virtual agricultural protectorate of the United States. The motives for such a policy from the American standpoint are obvious. Our farmers are able to sell all the grain they can raise. The grain merchants and other multinational concerns get new business opportunities. Corn and soybean sales help maintain a respectable balance of trade, and other nations' dependence on U.S. food imports gives our government political leverage in many areas of the world.

But in the long run, it seems there are two major drawbacks to this policy. The stature of the United States is diminished by its support of autocratic regimes, and the political consequences of that support may be increasingly unpleasant in the coming decades. Secondly, as the prices of agricultural commodities have risen precipitously since the early 1970s, many nations are finding their imports of American food as economically burdensome as oil imports. And if the resources of the developing nations are drained by the rising costs of food and energy, they may lose their potential for becoming new growth markets for the technology and manufactured goods of the United States. Certainly, the political application of American agricultural prowess could do more to alleviate the plight of underprivileged people, and build a steadier foundation for the mutual development of industries in both rich and poor nations. This has been a production of KAMC FM, made possible in part by funds from the Kansas Committee for the Humanities.