Milling & Baking News - September 20, 2011 - 40

Regulatory Affairs 

What if farm policy started over?
BY ROBBIN JOHNSON

Have you ever wondered what farm policy would look like if we were starting afresh? I tried to think about that, and here is what I came up with. Others no doubt would have different ideas. First, I don’t think it would have a commodity focus. In today’s world it would be about serving customers, both here and abroad. That means it would need to segment its markets and attune farmers to winning business. Market demands would vary by income level, with U.S. farmers likely targeting not only domestic consumers but also consumers in low-, middle- and upper-income countries abroad. Second, it likely would not be driven by price and income objectives but by broad social priorities. Among those that seem most prominent are nutrition, sustainability and global competitiveness. People have different nutrition needs and preferences by age, income and ethnicity. Rising pressure on land and water resources is heightening concern about sustainable abundance. And with the output from one in four acres going abroad, ensuring global competitiveness would be a likely goal. So, what would such a market-focused, socially responsible farm policy look like? Nutrition policy Nutrition means different things for different income groups. For the very poor, it means access to affordable calories and needed vitamins and minerals. Driving down the real price of food, enriching dietary staples and pushing up their meager incomes are the fulcrums of healthier diets at the bottom of the income scale. For middle-income consumers, cost is still important, but variety, choice and safety become new imperatives. Once their basic caloric needs are met, these people seek better taste and more protein, fruits and vegetables to round out their diets. For high-income consumers, values and preferences become important new dimensions in the food chain. Animal welfare, pesticide use and “organic,” “natural” or “local” become key adjectives in describing their demand and marketing to them. In a world of such diverse
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nutritional profiles, what should be the public sector’s role in helping farmers serve these markets? With public finance increasingly scarce, the most promising role would be fostering innovation. Public funding of research for enhancing productivity has declined in relative terms. To help reduce real food costs, enrich staples, promote healthier diets and incorporate valued production practices into farming, 21st century farm policymakers would want to ramp up their support for research and development. Innovation policy, however, needs to reach beyond public research and extension. Many of the best ideas and solutions will come from the private sector, both large established firms and new ventures. Pushing out the production frontier, adapting to changing growing conditions, combating disease and waste or opening new product markets all require fresh thinking. Providing incentives for such research while allowing market demand to direct the outcomes would require a careful balancing of policy tools. At the same time, ensuring safe products and production processes would become a more important regulatory role. And supporting consumer understanding and accep-tance of new products and techniques would require greater transparency in regulation and guidance in post-approval marketing rules. Sustainability policy Producing the food needed today without compromising the ability of future generations to meet their food needs is the essence of sustainability. Once again, this translates into different actions for different points on the income scale. Low-income consumers often live in countries or regions that suffer from degraded land, stressed water and threatened habitat resources. For them, sustainability means restoring the nutrients mined from the land, using water resources more efficiently and intensifying production on the best lands to help shield natural habitats from land-use conversion. Middle-income consumers share such concerns, often with a greater sense of urgency for some of them. They worry about depleting or contaminating water resources,

exposing lands to wind or water erosion, excessive fertilizer or chemical use, soil compaction and the like. They have come to understand and value high agricultural productivity, but they want new techniques that conserve and protect the resource base. High-income consumers add to these demands a new set of values. Among these preferences are: preserving open spaces; maintaining wildlife habitats; connecting to producers through local farmers markets, and re-foresting lands. The public sector may try to regulate farming practices to yield these outcomes, but it is more likely to promote sustainability by clarity around goals and carrots for good performance. Innovative thinking and collaborations are likely the keys to the challenge of producing more with less. Partnering around activities that contribute to sustainable abundance seems the more promising public role. Global competitiveness policy The third broad goal is likely to be a globally competitive agricultural system. To avoid having this come about at the expense of nutrition or sustainability goals, competitiveness policies should cluster around “public goods.” Most public goods by definition yield benefits across all three of the consumer segments we are looking at — low-, middle- and high-incomes. To this end, investments in rural roads and infrastructure, health, sanitation and education are the kinds of actions most likely to enable rural areas to compete more effectively with urban ones and to compete better in global markets. Coupled with public support for the innovation and sustainability policies envisioned above, rural America in general and farming in particular should be able to compete strongly in a rapidly changing, increasingly integrated world. Of course, we are not starting afresh with farm policy. Deliberations will begin from the commodity-based, income-support-oriented structures inherited from the mid-20th century. But, what if? MBN

Robbin S. Johnson, a fellow with the Hubert H. Humphrey Institute of Public Affairs, is a contributing editor at Sosland Publishing Co.
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