Statement on Food and Agriculture Policy

"When the world’s most resourceful farmer, working the world’s richest soil with the world’s most advanced agricultural technology are manipulated by politics, subordinated to middlemen, and pitted against both consumer needs and the realities of hunger and malnutrition, we can be sure the fault lies not with those who produce our food but with those whom we have elected to high office."
Washington, DC • October 24, 1975

If the Nikon-Ford-Butz years have accomplished nothing else and there’s a lot to be said for that point of view – they’ve brought farmers closer together in the search for stability. It hasn’t been by design. The potential alliance of those who produce and those who eat represents a reaction to policies which have made life harder for both the producers and the eaters. Those policies have:

  • Increased retail food prices by 37% between 1971-1974, by 14% in 1974, and by a projected 10% this year. Food prices are 62% higher today than when the Republicans took office;
  • Run down our food reserves, so that those reserves today – at a time of surging world demand – reached the lowest level since World War II;
  • Slashed “Food for Peace” shipments, so that those shipments reached the lowest level – 1/5 the volume of prior years – at a time of international famine;
  • Called for all-out production while closing access to major foreign markets without warning, forcing surplus to back up to depress farm prices; and
  • Cut farm income in 1974 and 1975, leaving an expectation of bankruptcies this year.
  • Polluted our grain exports through mismanagement and fraud in our inspection agencies.

The litany could continue -- but you know its conclusion: farmer and consumer alike have been sacrificed to Secretary Butz’ free market fixation. Somehow, the Soviet grain authority managed to qualify as a free market force -- Adam Smith would have loved that: So, for the last seven years of food and agricultural policy, we’ve had an Administration committed to the view that the best government is no government -- no government for the grain exporters, for the food middlemen, for the giant agri-business combines and for Marxist state-trading authorities.

Old myths die hard. Secretary Butz opposed a long-term grain deal with the Soviets until his opposition left Secretary Kissinger so embarrassed that President Ford finally made it clear just who is running our agricultural policy -- that’s right, the Secretary of State. Because the White House hasn’t released the text of the proposed agreement, it’s premature to offer final comments. But, the history of the negotiations reveals the abject failure of the Administration’s non-policies in the food and agriculture areas -- and its betrayal of the farmers.

Despite our bare cupboard reserve program and the great grain rip-off of 1972, it is clear that the Ford-Butz team was prepared to “play it again, Earl.” Farmers were urged to produce without limit. Promises were made of unlimited -- and unregulated -- access to overseas markets -- mainly the USSR. Those promises could not be kept -- because food consumers would not stomach another 1972, and because Jerry Ford couldn’t swallow the political consequences of continued food price inflation. One promise has been kept -- Butz will not increase assistance for farmers forced to carry whatever surplus may remain. Nor does he think that government should act as a buyer of last resort -- or any resort. The farmers may be left holding the surplus bag if the Russians have -- as some believe -- already bought from others what we were negotiating for them to buy from us. And, there is some reason to believe that Kissinger’s insistence that grain be linked to a useless oil agreement delayed conclusion of the pact. The negotiations were a missed opportunity in another respect, too: they failed to secure a Soviet undertaking to implement the Rome Conference’s call for an international grain reserve system and world-wide production data. In the days ahead, we will want to pay particular attention to the interests of our traditional trading partners in relation to this agreement. I am for grain sales to the Soviet Union on a long-term basis. But that country should not be given preferred access to our market over Japan and other regular customers in times of short supplies. We will want to study the agreement with great care to make certain it does not have that effect.

The collapse of the Nixon-Ford-Butz food and agricultural non-policies has brought us to this incredible situation: among American farmers -- the most productive in the world -- concern with overproduction is growing at a time of mounting world demand for American grain. If that concern ripens into production cutbacks -- as it threatens to do -- the American consumer, no less than his foreign counterpart, will suffer.

That is the way it promises to be if Ford and Butz remain in office. There is a better way. It lies in recognizing the points of common concern -- the intersections of interest -- which farmers and consumers share. That shared interest is what a Shriver Administration would serve. And, beyond identifying that community of concern, my Administration would implement programs which link both groups in a common cause.

The points of common concern are clear. Farmers and consumers are neither natural nor necessary enemies.

To the farmers of America, I say this: I know you want to produce the best and largest crops at the least cost and that you and your families have devoted your lives to doing just that. Cutting back crops to keep prices up violates your most fundamental beliefs. As an Iowa farmer put it: “I want to do well while doing good.”

Doing good means full production -- for world as well as domestic markets. Doing well means assurance of a reasonable income in bad years, as well as promise of a better income in good years. Yours is a risky business. You confront not only the unpredictable forces of nature, but also world, as well as American, economic uncertainties. Managing family farms with an average investment of hundreds of thousands of dollars, you are exposed more even than most Americans to the ravages of inflation because you depend more than most on high priced oil, petrochemical fertilizers and other fuels to operate your sophisticated and costly equipment. More dependent than any other American industry on foreign markets, you are internationalists, rightly sensitive to any governmental effort to restrict access to overseas markets. You do not seek high food prices in the supermarkets of America, but you rightly demand your fair share of America’s bounty. That goal cannot be achieved by standing in splendid isolation from your fellow citizens or by supporting policies which put the government on the side of everyone but farmers and consumers. I ask you to join with me and America’s consumers in the search for solutions which reconcile your need for income stability with the consumers’ concern for price stability.

To the consumers of America, I say this: the last eight years have been a disaster for all of us. Between 1971 and 1974 alone, retail food prices increased by 37%. You pay today 35 cents for a loaf of bread that used to cost 25 cents. These prices rose 14% more last year, and some predict that 1975 will be another double-digit year. In 1973, soaring food prices meant that a family of four with an annual income of $7,280 had to spend at least 45% of its disposable income to maintain a modest diet. That’s almost $1 out of every available $2 for food -- and this in the greatest agricultural country in the world. Even worse, soaring food prices have coincided with a falling economy, so the American worker in 1974 suffered -- for the first time in 16 years -- a real decline in income -- the largest per capita drop since the Depression. For only the second time in this century, millions of Americans -- workers as well as the unemployed -- are haunted by the fear that they will not be able to give their families a decent diet.

American consumers do not want to deny farmers the opportunity to earn a good living. Without that opportunity, prices can only increase as suppliers decline. But consumers rightly demand an end to roller coaster food prices, and some reasonable assurance of price stability for the future. And consumers and farmers alike resent, bitterly, the high profits of middlemen and other distributors -- the only people in the food picture who seem impervious to economic instability. In 1974 -- an unbearable year for farmers and consumers -- the cost of bringing food products to market increased by 20% -- the largest annual jump in our entire history. I ask you, too, to join in the search for a better way.

To our foreign customers and to the legions of hungry people who look to American farmers for their survival, I say this:

America will meet her commitments to her traditional customers and will seek to meet the needs of others. But the game must be played under fair rules open to all -- rules which assure advance information about your needs and which establish long-term arrangements allowing American farmers to meet those needs without starving, or squeezing, American consumers. And those rules must bar the obscene practice of using American food for political ploys -- to support corrupt regimes, while millions starve, and tens of millions go without needed medicines or housing or education just so they can afford to eat.

What, then, should we do to accomplish reasonable food prices, a fair return to farmers and -- most of all -- stable food and farm prices?

If we are to expect farmers to produce in abundance, we must protect them against surplus production. While adequate in theory, the present price support system has been made obsolete in practice by an Administration which has irresponsibly refused to increase most support levels in five years. Supports today don’t even cover last year’s production costs. They must be increased to levels which are realistic -- in terms of real production costs and world prices.

But what about lean years, when production lags behind demand? How do we protect the American consumer against double-digit food price inflation and assure price stability at the market place? To provide this protection I advocate a new federal reserve program to facilitate storage of basic agricultural products in times of surplus and to sell in times of shortage, whether caused by crop failures or by high export demand. Such a program would take the wild gyrations out of food and farm prices. The very existence of reserves would help to break the inflationary expectations that dominate consumer thinking today -- the expectations that prices will go up because prices always go up. By setting the price at which grain is added to the reserve at a realistic support level, this system would establish a floor below which farm income could not fall. And by setting a ceiling price above which reserves would be released to the market, the system would set a cap on prices consumers would have to pay.

Farmers have traditionally opposed food reserves because they have been used to drive prices down to levels too low to support farm families. Political expediency has been allowed to dictate such reckless dumping, with the understandable result that many farmers come to believe that reserves are used only to accommodate whatever constituency may hold sway over those in charge.

So what we need is a mechanism for managing food reserves in a way that farmers have reason to trust -- a way that takes politics out of the grainery. When our country faced a similar need in the management of money, we created an authority independent of the political branches of government -- the Federal Reserve Board. The independence of the Fed was crucial to the survival of banking and of our economic structure. Today, that independence has gone too far; Arthur Burns exercises almost limitless power and should be subjected to new restraints. But in the agricultural area, what’s needed is a greater degree of independence -- independence from politics in the decision of how much food to accumulate, how much to release to the market and when to release it. The price would be set by the Board within a Congressionally specified floor and ceiling. To provide that independence, I would propose legislation to create a Food Reserve Board, answerable to Congress but not to the Department of Agriculture, the State Department, or the White House. The agency I have in mind would be the creature neither of a Butz, nor of a Kissinger, nor of a Ford -- nor of a Shriver -- but the servant of the only interests that should count when food is at stake: the interests of those who live by its production and of those who pay to consume it. The mission of this new FRB would be to formulate and pursue a consistent food reserve policy -- one farmers could rely on, and one that would protect consumers at the same time. It would operate within limits and under standards set by Congress, and with a membership including both farmer representation and a voice for consumers.

By stimulating production and by protecting consumers against sky-rocketing food prices, these policies should make a major contribution to achieving stability for farmers and consumers alike. But they will not succeed at acceptable cost to the taxpayers unless we are committed to expanding our food exports. Exports are vital not only for the farmer, but for the consumer who will otherwise bear the burden of supporting farm income through higher prices or higher taxes. In 1974, almost 21.5% of our corn crops, 41.8% of our soybean production, and a whopping 55% of our wheat crops were sold abroad. These crops could not have been sold on the domestic market without driving prices below levels acceptable to farmers or, under the reserve program I propose, calling upon the government to support the cost of storing massive amounts. But; although exports are vital and must be maintained, the American consumer must never again be forced to subsidize foreign sales.

Access to American grain supplies must instead be assured on a basis consistent with maintaining reasonable food prices at home. That objective can be accomplished by establishing an export policy in place of the stop and go non-policies of the Republican Administration -- non-policies which rob consumers, farmers and our trading partners alike. The policy I advocate would set minimum and maximum quantities for all major foreign buyers, so that fluctuations in demands will be smoothed by requiring importing nations to accumulate stocks in times of high world production. Our Government’s approval would be needed for a country to buy more -- or less -- than the agreed amounts. To assure adequate domestic supplies, the United States would announce to the world its domestic requirements, as well as its commitment to foreign customers and less developed countries. We would make it clear that those supply requirements would be met by whatever management devices are required.

As an essential element of our export policy, the United States should take the lead in creating with other exporting and importing nations an international reserve program for grains -- as called for by the World Food Conference. Such a reserve would serve not only the interests of the participating countries but also our moral obligation to the hungry.

These policies would not displace the free enterprise system. Rather, they would put that system to work for people by taking the shocks out of supermarket purchases and farm sales. But we must recognize that the system will not work if farmers and consumers are pitted against each other in a struggle which can end only in losses for both. The compact between farmers and consumers which I propose guarantees neither group everything it might wish. As in any partnership, there are risks to be shared and hard choices to be made. The accommodation of conflicting interests which I propose means some give and take by all. The reserve system puts a ceiling on the prices consumers must pay in bad crop years, just as it sets a floor under the prices farmers will get in surplus crop years. I believe American farmers and consumers will accept this.

To cement the new alliance between farmers and consumers, we must also focus attention on those trends in equipment manufacturing, food processing and agricultural marketing that work against the interests of producers and families alike. When, according to the Federal Trade Commission, supermarkets enjoy a 16% return on investment, when monopoly in the manufacture of farm machinery costs farmers a quarter of a billion dollars each year, when monopolistic meatpacking robs consumers of half a billion dollars annually, when bread prices rise nearly 17% at the same time flour prices fall 25%, and when shoppers continue to be misled by labeling and advertising that distorts the truth about nutrition, it doesn’t take an expert to conclude that manufacturers and middlemen need to be brought into line -- and fast. It’s not enough to talk about vigorous antitrust enforcement in litigation that will take years and may consume millions of dollars. In food, as in fuel and medical care -- and in every industry that is vital to daily survival -- legislation is needed that would shift the burden of proof against those wielding concentrated or irresponsible economic power. Wherever those interests fail to justify their structures, and practices to fair-minded men and women, they must be broken up or subjected to whatever controls are needed to create prices people can afford, under marketing principles people can accept.

What all of this adds up to is a specific instance of that principle I described on the day I announced my candidacy: above all, what this nation and the world need is a commitment to a common existence -- a sharing of benefits and burdens in a community of interest between groups that cannot succeed or even survive unless they come to perceive their mutuality of concern and learn to act in creative concert rather than divisive competition.

We have long talked about turning our swords into plowshares. But the truth is: we have yet to make the most of the plowshares already available. When the world’s most resourceful farmer, working the world’s richest soil with the world’s most advanced agricultural technology are manipulated by politics, subordinated to middlemen, and pitted against both consumer needs and the realities of hunger and malnutrition, we can be sure the fault lies not with those who produce our food but with those whom we have elected to high office. It is time to bring new vision and new leadership to the farm and food policies of America. That is my pledge in this campaign; it will be the commitment of my presidency.

Peace requires the simple but powerful recognition that what we have in common as human beings is more important and crucial than what divides us.
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Sargent Shriver
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