Farm bill helps huge farmers, not California's innovative ones

Updated: Aug 26

California farms produce twice as much food as any other state, but you wouldn't know it from federal government subsidies, which tend to reward tradition instead of innovation

Carolyn Lochhead, Chronicle Washington Bureau

Sep. 22, 2007

Dale Coke ponders the perils of farming from his small organic farm in San Benito County near San Juan Bautista. An organic pioneer operating for 25 years, Coke invented the spring mix lettuce now a staple in every grocery chain - an invention born of necessity when he wound up one year with too many different varieties left over to sell individually.

But this year has been tough. He ran out of water on part of his 250 acres. He faces costly new food safety rules because of last year's E. coli outbreak in bagged spinach. There's a quarantine on the light brown apple moth in Monterey County, where he also leases land, and a looming immigration crackdown could force him to fire many workers.

And this season hasn't been all too good for growing leafy greens, organic or not. The market is flooded, prices have crashed, and Coke can't recover his harvest costs on radicchio, frise and escarole. He is mowing them down.

Even so, he wouldn't want any of the billions of dollars that go to farmers of corn, cotton, rice and a handful of other crops subsidized or protected by the government since the 1930s to shelter them from risk.

"It's part of the cycle," Coke said, fingering some of the shallots and cippolini onions that will cushion the blow. "We brought it upon ourselves. I should deal with it."

Besides, he said, "I think there are better things the government could do, like provide education. Or how about health care? Especially if we're having farm programs that encourage production of the kind of food that helps cause people to become diabetic and obese ... health care, that would be way more important than subsidies for anybody."

Phillip Bowles in one of his fields full of cotton plants that are near ready for harvest. The company has 6,000 acres of cotton. Philip Bowles is President of Bowles Farming Company in Los Banos. Congress is working on a farm bill that will have a dramatic impact on the way farming is conducted in California. One of the issues at hand is subsidies for California farmers. Photographed in, Los Banos, Ca, on 9/11/07. Photo by: Michael Macor/ The Chronicle Mandatory credit for Photographer and San Francisco Chronicle No sales/ Magazines Out Michael Macor

In the upside-down world of farm programs, California produces twice as much food as any other state, but mostly without crop subsidies because fruits, nuts and vegetables are ineligible. Fresno County alone produces more food than South Dakota, but South Dakota gets more than 10 times as much federal crop money.

That's the way it's been since the 1930s, and that's pretty much the way it would stay under the $286 billion farm bill that passed the House in July and the Senate is now considering - yet another five-year plan for agriculture, billed as a temporary remedy for stricken farmers 75 years ago, renewed by Congress as farm income breaks U.S. records.

Within a 200-mile radius of San Francisco are some of the most innovative farmers in America - conventional and organic - in a region that has become the hotbed of a movement beginning to reshape American farms and food.

It aims to bring the forces of creative destruction to agriculture - to displace the industrial model of factory farms and processed foods with a web-style network that reconnects small, local farmers directly with consumers.

Emerging spontaneously among entrepreneurs who often came from outside agriculture - Coke took up farming when he was diagnosed with cancer - today that movement is reaching a critical mass.

Organic farming is the fastest growing segment of agriculture, led by California. Conventional growers who scoffed at organics are quietly working on experimental plots or making total conversions. As big companies go organic, the movement is evolving to locally based food chains.

In Northern California, the foundation-backed Roots of Change project has embarked on a radical rethinking of California's food and farm economy. The goals: fresher, healthier, less standardized food, a more vibrant rural landscape and pesticide/herbicide-free farms that now cover a quarter of a million acres in the state - or about half the size of San Mateo County.

Standing athwart this change is the federal farm bill.

Billions of dollars in public money flow to farmers who don't need it, enriching often prosperous individuals. The entire superstructure of federal support for agriculture - a mind-numbing array of programs packed in an 860-page bill that dictates crop prices to the third decimal point - is bent toward propping up a system rooted in the past.

Seven decades of congressional flotsam - subsidies, loans and regulations - prop up markets for Depression-era crops: corn, cotton, wheat, soybeans, oats, dairy, sugar, wool, peanuts, honey, peas, lentils and even flaxseeds.

One program gives up to $40,000 to farmers for doing absolutely nothing. Called "direct payments," the checks are based on a farmer's history growing subsidized crops. The plan was to wean farmers off the government by phasing out the payments over seven years. That was 12 years ago.

This year, the House raised the payment cap from $40,000 to $60,000. For the very large family farms rapidly dominating U.S. agriculture, the checks would be much higher: $120,000 for a couple, or $360,000 if two married children work with them.

The purpose of the money is to shield farmers from risk. Yet California farmers deal with risk without the aid and outproduce every other state.

They operate on a simple concept that mystifies Washington.

"The first mistake a lot of farmers make is to figure out what they can grow and grow that," said Jim Cochran, an organic strawberry and vegetable grower on the coast north of Santa Cruz. "Which is a really big mistake. The first thing they need to figure out is what they can sell."

In fact, if California vegetable farmers got crop subsidies, we might all still be eating iceberg lettuce, said Daniel Sumner, an agricultural economist at UC Davis. Crop subsidies discourage the innovation that is evident everywhere in California.

Imagine, Sumner said, what today's produce aisles might look like had Congress decided to subsidize salad in 1933.

"The payments are made for iceberg, and you think the market's going to demand romaine," he said. "You say, 'But I have to give up my payments to do that.' You can picture the scenarios."

In the San Joaquin Valley, farmers are planting tens of thousands of acres of almonds because prices are high. In Georgia, the market is calling for pecans, but Congress subsidizes peanuts - regardless of the market.

Federal crop money fuels the accelerating trend toward larger farms, bidding up land prices, making it more expensive and difficult to break into farming and giving the largest handouts to the largest farms that can spend that money buying out their neighbors.

On top of that are billions of dollars in conservation, marketing, trade, research, pest and environmental programs - money economists say at least delivers public benefits. (Unlike other industries, farms are paid to improve the environment, rather than penalized for polluting.)

This year, specialty crop growers got a $1.6 billion share of those programs and increases in fruit and vegetable spending in food stamps and school lunches. The money was considered a breakthrough, but it is shared nationwide and remains a token compared with other crop spending, especially given California's $32 billion in agricultural sales.