Barriers to Sustainable Agriculture

1
Barriers to Sustainable Agriculture

• November 1, 2004

2
Major Barriers to Sustainable Agriculture

• Transition/Knowledge alternative approaches
  take time and expertise.
• Conventional agriculture APPEARS to be less
  expensive than sustainable agriculture. However,
  this has much to do with HIDDEN COSTS ? the PRICE
  of food does not reflect its true COST
• Agriculture subsidies 20-50 billion/year
• We lose 3 billion tons of topsoil/year 18
  billion
• Soil erosion leads to 5-10 billion/year in
  damage to surface waters
• ??? Billion/year in environmental damages,
  health costs and loss of wildlife due to
  inappropriate use of chemical fertilizers and
  pesticides

3
Major Barriers to Sustainable Agriculture

• Government Subsidy Programs
• Agricultural subsidies originated during the
  1930s, intended to help the family farm
• Since then, farm subsidy policy has been set
  every six years as part of the Farm Bill
• Until 1996, and since 2002, one of the most
  significant subsidies to farmers came in the form
  of deficiency payments under the Commodity
  Support Program

4
How the Commodity Support Program Works

• A TARGET PRICE is set for seven program crops
  (wheat, corn, sorghum, barley, rye, cotton and
  rice).
• Participating farmers establish a BASE ACREAGE
  (five year average) and an ESTABLISHED YIELD
  (five year average)
• When market price is lower than target price,
  farmers receive a DEFICIENCY PAYMENT base
  acreage X established yield X (target price
  market price)

5
Sample Calculations of Deficiency Payment

• Sample farm 100 acres, corn yield averages 120
  bushels/acre, target price 2.50/bushel, market
  price 2.00/bushel.
• Scenario 1 all 100 acres kept in corn for five
  years in a row. Deficiency payment 100 X 120 X
  (2.50-2.00) 6,000
• Scenario 2 one year in the last five, the farmer
  practiced crop rotation and planted 100 acre
  field to alfalfa. Deficiency payment 80 X 120 X
  (2.50-2.00) 4,800
• Scenario 3 every year the farmer practices strip
  cropping, alternating corn and alfalfa or clover.
  Deficiency payment 50 X 120 X (2.50-2.00)
  3,000