Federal Food and Nutrition Programs

Introduction

The federal government creates and directs the nation’s agriculture policy and supports food and nutrition programs to assist vulnerable populations. Congress passes legislation underlying the relevant policies and programs and directs the United States Department of Agriculture (USDA) to administer them. President Lincoln created the USDA in 1862, calling it the “People’s Department,” because at that time half of all Americans lived on farms.^[1] The USDA administers several crucial pieces of legislation, including, for example, the Farm Bill, which provides a safety net to farmers, and the Supplemental Nutrition Assistance Program, which provides a safety net to individuals at risk for food insecurity. The Farm Bill and USDA’s food and nutrition programs will be reviewed below.

The Farm Bill

The term “Farm Bill” is a generic phrase used to describe federal legislation that forms the basis of much of the nation’s agricultural policy. The Farm Bill has been a controversial piece of legislation since its inception. The first version of the Farm Bill was the Agricultural Adjustment Act of 1933, which was enacted to address a “national economic emergency.”^[2] During the Great Depression, the price of agricultural commodities (wheat, cotton, field corn, hogs, rice, and milk products) were so low that farmers were in financial distress. The Act provided farmers payments in return for reducing acreage or production of commodity products. It raised revenue for this purpose through the imposition of a tax.^[2] A cotton milling corporation that was assessed this tax sued the federal government to challenge the taxation method. In United States v. Butler, the United States Supreme Court found that the Act was unconstitutional. However, Congress passed the Agricultural Adjustment Act of 1938 to address the same type of financial issues using quotas and penalties. It was upheld by the Supreme Court in 1939.^[4]

Several Farm Bills followed. The next radical change occurred in the 1970s when the Secretary of Agriculture, Earl Butz, led agriculture policy in a new direction. He famously said, “Get big or get out,” creating a payment and exportation system that favored large farms and led to the industrialization of American agriculture.^[5] Industrial farms grew and smaller family farmers sold their farms and left the business.

Farms became increasingly more productive. This stemmed from innovations driven by public and private research funding and a move away from human and animal labor and toward machinery and intermediate inputs including energy, agricultural chemicals, and purchased services.^[6] For example, harvesting machines replaced human labor, tractors replaced animal labor, and fertilizers and pesticides that increased crop yield were developed.

Congress reauthorizes the Farm Bill every five or so years; however, this does not always progress smoothly due to competing interests. Even if one Farm Bill expires, it is not always clear exactly when the next Farm Bill will be reauthorized. For example, the 2008 Farm Bill expired in 2012, but Congress was mired in lengthy debates about the future of certain provisions so it extended most provisions in the 2008 law for one year—to September 30, 2013.^[7] This extension functionally extended those provisions through the end of the fiscal year 2013.^[8] In January 2014, Congress came to an agreement about the 2014 Farm Bill and on February 7, 2014, the President signed the Agricultural Act of 2014. The provisions of the 2014 Farm Bill expire at the end of 2018, rendering an expectation that a 2019 Farm Bill may be next. In total, there have been 17 iterations of the Farm Bill between 1933 and 2014.

The primary controversies over the modern Farm Bills involve the titles devoted to nutrition assistance and commodity subsidization. Nutrition assistance programs make up the majority of all funding in the recent Farm Bills. In the 2008 Farm Bill, 67% of financial outlays were allocated to nutrition programs, primarily the Supplemental Nutrition Assistance Program (SNAP). Many of the debates over reauthorization involved different perspectives on how much should be spent on SNAP and whether the program should be more akin to monetary distribution or actually provide nutritional assistance. Although certain groups in the legislature threatened major cuts to SNAP spending, this did not come to fruition in 2014, and the foundation of the program was not significantly altered by the Agricultural Act of 2014.

In the 2008 Farm Bill, crop subsidies made up the second largest financial investment at 14% of all funding.^[9] From 2003 to 2009, commodity crop payments were made primarily for corn (41%), cotton (26%), wheat (11%), rice (7%), and soybeans (7%).^[5] Corn is used for a variety of purposes, falling into three major categories: animal feed, fuel in the form of ethanol, and food for humans.^[11] The USDA Economic Research Service reports that less than 10% of the U.S. field corn crop is used for direct domestic human consumption, approximately 40% is used directly as animal feed for livestock and poultry, and the remainder is used for animal feed, exports, ethanol production, seed, and industrial uses.^[12]

One product made from corn for human consumption is high fructose corn syrup, which is a sweetener derived from the wet milling of corn. (Other products made from the wet milling of corn include glucose, dextrose, corn starch, and ethanol.)^[11] Corn starch is converted into high fructose corn syrup in a three-step controlled enzymatic process.^[14] During the 2000s, food manufacturers replaced more expensively priced sugar with high fructose corn syrup. The vast majority of high fructose corn syrup is used by the beverage industry, followed by processed food manufacturers, cereal and bakery producers, and others such as the dairy industry. Less than 5% of the total U.S. corn crop is used to produce high fructose corn syrup.^[11]

The subsidization of corn, wheat, and soy is frequently blamed for the very low cost of foods produced with these commodity products and the livestock raised on corn feed.^[5] For example, a fast food hamburger is relatively inexpensive and comprised of corn-fed cattle beef; a bun formulated with wheat, soy, and high fructose corn syrup; and ketchup with high fructose corn syrup as a primary ingredient.^[17] The soda that might accompany the hamburger contains high fructose corn syrup as its second ingredient after water.

The USDA Economic Research Service (ERS) found that agricultural contributions to food account for only a small percentage of the total food cost. This is especially true for products that require more processing and packaging, because so much of the retail price reflects marketing costs, which include packaging, processing, advertising, transportation, and other related costs. The ERS estimated in 2008 that 15.8 cents of each dollar spent on food related to the farm value of the food, while the remainder related to the marketing costs.^[18] It studied products made with corn, including corn flakes cereal and soda with high fructose corn syrup, and found that a 49% increase in corn prices would be expected to raise the price of a box of corn flakes by about 0.5% and the price of a 2-liter soda by about 1%.^[19]

The ERS found that less-processed foods, such as eggs and fresh produce, would increase in retail price along with increases in farm prices.^[19] Other research has found that if all farm subsidies were removed, the price of fruit and vegetables would decrease.^[21] Given that dietary guidance recommends eating more fruits and vegetables, a decrease in produce prices would be considered a positive outcome. The Farm Bill has never invested in fruits and vegetables, which are considered “specialty crops,” to the same extent as commodity crops in terms of raw program dollars or in terms of priority. Specialty crop funding was one of the programs left out of the 2008 Farm Bill extension. Further, spending on specialty crop research has not kept up with the growth in the value of specialty crop production.^[22] The good news is that the 2014 Farm Bill contained increased funding and attention paid to specialty crop issues.

[1] http://www.usda.gov/wps/portal/usda/usdahome?navid=USDAi50
[2] United States v. Butler, 297 U.S. 1 (1936).
[3] United States v. Butler, 297 U.S. 1 (1936).
[4] Mulford v. Smith, 307 U.S. 38 (1939).
[5] Daniel Imhoff. Food Fight: The Citizens Guide to the Next Food and Farm Bill. Healdsburg,CA: A Watershed Media Book, 2012.
[6] http://www.ers.usda.gov/amber-waves/2014-januaryfebruary/agricultural-productivity-growth-in-the-united-states-1948-2011.aspx#.U7G3uECuCi0
[7] http://www.nfu.org/blog/?p=620
[8] Jim Monke, Randy Alison Aussenberg, and Megan Stubbs. Expiration and Extension of the2008 Farm Bill. CRS. December 16, 2013.
[9] http://www.snaptohealth.org/farm-bill-usda/u-s-farm-bin-faq/
[10] Daniel Imhoff. Food Fight: The Citizens Guide to the Next Food and Farm Bill. Healdsburg,CA: A Watershed Media Book, 2012.
[11] http://www.ers.usda.gov/topics/crops/corn/background.aspx#.U7GcRUCuCi0
[12] http://www.ers.usda.gov/topics/farm-economy/bioenergy/findings.aspx#.U7Gf-0CuCi0
[13] http://www.ers.usda.gov/topics/crops/corn/background.aspx#.U7GcRUCuCi0
[14] Peter S. Murano. Understanding Food Science and Technology. Belmont, CA: ThomsonWadsworth, 2003, p. 145.
[15] http://www.ers.usda.gov/topics/crops/corn/background.aspx#.U7GcRUCuCi0
[16] Daniel Imhoff. Food Fight: The Citizens Guide to the Next Food and Farm Bill. Healdsburg,CA: A Watershed Media Book, 2012.
[17] http://nutrition.mcdonalds.com/getnutrition/ingredientslist.pdf
[18] Patrick Canning. A Revised and Expanded Food Dollar Series: A Better Understanding ofOur Food Costs. Economic Research Report No. (ERR-114). Washington, DC: USDA EconomicResearch Service, February 2011. http://www.ers.usda.gov/publications/err-economic-research-report/err114.aspx
[19] http://webarchives.cdlib.org/sw1vh5dg3r/http://ers.usda.gov/AmberWaves/February08/Features/CornPrices.htm
[20] http://webarchives.cdlib.org/sw1vh5dg3r/http://ers.usda.gov/AmberWaves/February08/Features/CornPrices.htm
[21] J. M. Alston, D. A. Sumner, S. A. Vosti. Farm Subsidies and Obesity in the UnitedStates: National Evidence and International Comparisons. Food Policy, 2008133:. .470-479.
[22] Julian M. Alston, Philip G. Pardey. Public Funding for Research into Specialty Crops.HortScience. 2008; 43(5):1461-1470.