by Jo Freeman
published in In These Times Feb. 21-27, 1979, pp. 3, 8.
Several thousand farmers and approximately 3000 tractors from the Midwest and the South rolled into Washington Feb. 5 in the second annual demonstration by the American Agriculture Movement to demand higher government support prices for major farm commodities.
Moving at 15 miles an hour from camps in Maryland and Virginia, the farmers deliberately stalled the heavy morning rush hour traffic to attract attention to the economic bind they feel themselves in as a result of rising costs of production and lower prices for farm products.
Although entry routes had been worked out in advance, police found it difficult to control the tractorcade, whose “wagon masters” had no real authority over the farmers. The AAM claims to have no leadership, dues, or overall organization, relying primarily on consensus decision-
Fearing a week long repeat of the traffic snarls, D.C. deputy police chief Robert Klotz decided to surround the entire Mall where the tractors were parked – while their drivers rallied at the Capitol steps – with almost 200 city buses and trucks.
“As they continued to gather on the Mall, I realized we had to do something,” Klotz said. “The idea came to me that if I could block them in physically, I could prevent the disruption of rush hour and also force them to produce a leadership
At press time, most of the tractors were still corralled on the Mall, though some had been allowed to leave when chained to flatbed trucks to ship them home.
“Penned like animals.”
Despite much frustration and some anger by farmers at “being penned in like animals,” the tactic successfully prevented further disruption of rush hour traffic, On several occasions, police allowed up to 200 tractors out of the corral to parade around town.
Once, several dozen tractors went to the Lincoln Memorial for a rally, after which their drivers refused to return them.
Since they were not blocking traffic, police allowed the tractors to remain parked around the Memorial until the next day, when the farmers voted to return to the Mall.
Relationships with the police had other ups and downs, including some racial epithets thrown at the largely black D.C. police force. When one errant unmarked cruiser was spotted on the mall, it was “captured” by the tractors.
“Now you know how it feels to be trapped,” yelled one farmer. Two police officers stepped out of the car – smiling – and were alternately yelled at and slapped on the back. After the car’s aerials were broken, its tires flattened, and it was plastered with stickers, it was allowed to leave.
The “ransomed” police officers said they didn’t ask for assistance when “captured,” instead telling police near the area to stay away. “These people weren’t going to hurt me,” one said.
Other incidents were not so peaceful. For several days many farmers rode their tractors around the Mall repeatedly, out of boredom, and a few rammed police cars and motor scooters.
21 farmers arrested.
When tractors “went wild” police broke windows with billy clubs, tear-gassed the drivers and dragged them out of their cabs to face arrest. So far, 21 farmers have been arrested.
Farmers’ frustration was expressed in other ways. At least four tractors were burned on succeeding nights in protest against “the high cost of farming.” To prevent the police or fire departments from dousing the flames, a burning tractor was circled by others.
At one rally yield on the Mall, it was announced that a tractor would be driven through the USDA, an agency the AAM does not feel is sympathetic to its aims. As police and press gathered, a two-foot long toy tractor was pushed through the front door, a 12-ton tractor with a giant scoop rolled toward it as though going through. While the cameras inside focused on the approaching menace, the farmers stood just outside the open door, carefully guiding the tractor’s driver who stopped within three inches of the wall.
After two weeks of tractors, the estimates of damage to the sod, trees, benches and pools on the Mall ranged from $500,000 to $2 million. When criticized for this “destructiveness,” one farmer blamed it on the police corral. “If you pen a bull up in a china shop, you’ve got to expect some damage.” But a group of Maryland farmers said they would repair the damage when the protest was over.
Just when that would be no one was saying. Claiming the farmers would “stay as long as it takes” to get what they wanted, AAM received an extension on their permit to the middle of March. It may take that long, or longer, to get their message across.
Although AAM farmers lobbied all week, just what they wanted, and why they wanted it, was not clear to the press or the general public. So much attention had been focused on the tractors that the purpose of their trek to Washington had been obscured. Farmers hoped to clarify the reasons for their journey through hearings before the House Agriculture Committee which began last week.
The Farmers Take Their Case to Hill
published in In These Times, March 14-20, 1979, pp. 5, 8.
Farmers from the American Agricultural Movement (AAM) confronted members of the House Agricultural committee during four days of hearings last month held to review present programs. The hearings were called in response to the thosands of farmers who drove tractors to Washington, D.C. duirng January to demand increased price supports from the Department of Agriculture (USDA).
In the give-and-take of the hearings, it became clear that a stalemate exists between the farmers’ needs for protection against spiraling costs and food consumers’ need for protection against inflation.
Focus of the hearings was a bill (H.J. Res. 144) to require the Secretary of Agriculture to provide loans to farmers for milk, wheat, corn, soybeans and cotton equal to 90 percent of the parity price. The Secretary can legally provide loans up to 90 percent, but is not required to do so. Current loans for these commodities range from 40 to 55 percent of parity except for milk where support is at the 70 percent level.
The loan rates provide a floor for commodity prices by obligating the government to loan farmers participating in its programs an amount per unit produced set by the Secretary of Agriculture. Farmers have nine months to repay the loan, plus interest, or the government acquires ownership of the crop. If market prices rise above what the farmers owe, they repay the government and sell at the higher price. If prices remain below the loan rate, farmers are in effect guaranteed that amount for the crops.
The government in turn is forbidden to put the commodities it owns on the market unless the price rises significantly above parity. This prevents the government from competing with farmers in the open market and thus driving prices back down.
The parity price of a particular cmmodity is the price that would give a bushel of wheat or a pound of beef the same purchasing power that it had in the base period of 1910-1914. The concept was developed during the Depression and incorporated into public policy in the Agricultural Adjustment Act of 1933.
According to the AAM, 1910-1914 was picked because there was little inflation, low unempoyment, the country was not at war, and their was “an appropriate relationship” between the income of farmers and non-farmers. However, the USDA says that this period was not chosen because of any inherent fairness in the prevailing price ratios, but because in 1933 “no other basis of comparison.... was possible due to lack of data.”
Although the parity formula has been adjusted several times the USDA feels that vast changes in technology and production invalidate it as a useful index. In particular, parity calculations do not take into account the dramatic increase in the productive capacity of an acre of land since the base period. “Thus even as a measurement of farm purchasing power, the parity concept is defective,” according to the USDA.
The major concern expressed by farmers at the hearings was that they were caught in a cost-price squeeze. Charles Rhodes, executive vice president of the Minnesota Association of Wheat Growers stated, “It is evident that costs of the various items we have to buy are increasing at a rate far greater than in the past and certainly out of bounds for our present income.” Listing some of the purchases farmers must make to produce their crops, he pointed out that recent increases in the price of oil had a major effect on farmers as they rely more and more on energy rather than labor for their high yields.
Because the farmers more than any other industry operate in a “free market” economy, they have even less control over the prices they receive than those they pay. Consequently, for the last couple years, some farmers have been receiving less for their crop than the cost of producing them.
How farmers dealt with his “squeeze’ was described by newly elected Congressmember Marvin Leath (D-TX). “as a country banker, I began to notice that my customers were more frequently asking to increase the loans on their land and their equipment. These farmers and ranchers were, in fact, themselves subsidizing the cost of food to the American and foreign consumers by continuing to borrow money on their fixed and personal assets in order to stay in business.
Although few opponents of 90 percent parity testified at the hearings, many believe that the cost-price squeeze is temporary and will work itself out over time. But Rep. Peter Peyser (D-NY) was concerned that “the first effect of a full-parity program based on loans and purchases would be a steep rise in food prices coupled with a decline in consumption. That in turn could further fuel inflation enough to erode any real gain in consumer income next year.”
When he quoted estimates of a 15 to 18 percent increase in food prices resulting from 90 percent parity his figures were challenged by the farmers. Identifying his source as the USDA won Peyser hisses from the audience, but when he added that if the calculations were wrong, the responsible Agriculture officials should be dismissed, he got an ovation.
Peyser’s position was backed by Robert Wager, president of the American Bankers Association, who reported that his association had requested Chase Econometrics, an economic research and consulting firm, to program 90 percent parity into its computer model of the economy. The probable effects by 1981 of H.J. Res. 144 were reported to be an additional 9 percent increase in the food bill over what it is currently projected to be, an increase in the overall inflation rate by another 2.1 percent, an increase in the unemployment rate to 7.9 percent and a decrease in the GNP by 1 percent.
Patty Stulp, a farmer and rancher from Yuma, Colo., challenged the likelihood of such drastic effects resulting from 90 percent parity. “I don’t think anyone will deny the price of food will go up,” she said. But she added, “It is time to approach this topic realistically.
“There is approximately three cents worth of wheat in a loaf of bread. Less than 10 percent of the price paid for cornflakes goes to pay for the corn used. It is important to note that the major rise in raw farm commodities will be the commodities with the smallest impact on the consumer food bill. Also, raising the price of what or corn will not raise the cost of handling that product whether it costs $2.00 or $3.50. It will cost no more to transport, package, process or market the product.”
Stulp added that “last year the average consumer spent only 16.8 percent of income for food. That compares to over 17 percent for recreation..... If there are to be subsidies to low-
income groups, it has to come from the entire population, not the efforts of less than 4 percent of the country.”
Expanding foreign markets.
A major question raised by some Congress members who support higher incomes for farmers is whether 90 percent parity would exacerbate the problem. Berkley Bedell (D-IA) argued that increased price supports would primarily benefit the biggest producers, giving them the capital to buy still more land, thus raising land prices and making it even more difficult for young people to enter farming.
He introduced legislation to eliminate surplus grain by requiring farmers to make it available for subsidized gasohol production – a substitute for gasoline. Bedell argued that his program would “eliminate massive carry-over stocks of grain which are detrimental to grain markets, produce enough ethanol to replace 2 billion gallons of gasoline per year, worth $600 million and set the stage for government withdrawal from feed grain subsidies by establishing a commercial use for surplus grain.”
Although farmers were sympathetic to the production of gasohol, and some carried signs to that effect on their tractors, no one else at the hearings either supported or opposed Bedell’s idea.
Instead, the farmers focused on how to increase foreign markets. Several people argued that the U.S. produced such a substantial portion of world wheat supplies that it would easily control the world market price for wheat. “Imported oil should teach us that price has very little to do with demand if the need is present, and the need for U.S. food and fiber is not disputed,” Ron Chase of Colby, Kan., said.
Arguing that the price floors set by the USDA is a major price determinant on the world market, he asserted that “In agricultural production we expose ourselves to trade deficits twice, once when oil is imported at prices higher than domestic oil and second when we export our product at less than the cost of production.
“We have to buy the oil at an agreed upon price, which produces a profit to those oil producing countries. Why don’t we make up some of the difference when we sell our product?”
The idea of a “grain cartel” is being pursued seriously by the American Agricultural Movement. Grain farmers from Australia, Canada and the U.S. met February 21 to discuss the possible formation of an International Grain Exporters Agreement. Together, these three countries export over 70 percent of the world’s wheat The AAM said this proposal was triggered by the unsuccessful ending of the International Wheat Agreement talks in Geneva recently.