Neoliberalism Down on the Farm

John Buell is is a columnist for The Progressive Populist and teaches at Acadia Senior College. His most recent book is Politics, Religion, and Culture in an Anxious Age.

Farming has always been a risky business. Even when the land is lovingly tended flood, drought, or disease can wipe out a whole year’s crop. Corporate media usually term such events “natural disasters.” Climate scientists are more likely to cite the role of human- induced climate change in increasing the severity of such events. But just which humans and what agendas are most guilty of squandering our natural capital? It turns out that one of the key culprits is our modern financialized agriculture. The damage that unregulated finance has done to our banking system is being steadily replicated in agriculture. Finance itself is a force increasing climate challenges and reducing the ability of the land and its human tenders to absorb and bounce back from trauma.

Jennifer Clapp’s and S. Ryan Isakson’s Speculative Harvest: Financialization, Food, and Agriculture tells a complex story in a concise, readable fashion. In many introductory econ texts, agriculture is portrayed as part of a true competitive market where supply and demand determine price. No one buyer or seller has enough of the market to influence price. Yet that is not the case now and has not been so for decades. In the years following WWII, governments in both north and South employed buffer stocks as a way of mitigating wild price swings in domestic markets. But with the crisis of New Deal liberalism in the late sixties and seventies, governments were under increasing pressure to deregulate both agricultural commodity markets and financial markets. Deregulated markets, however, were not perfectly competitive. As manufacturing profits were on the decline, finance increasingly became US capitalism’s fastest growing source of profit. And one of its most vital sectors was agriculture.

Trades in commodity futures contracts, promises to deliver certain quantity of a product on a certain date, had always been part of agricultural economics. But with this important limitation: Those who were not involved in or directly dependent on these commodities were limited in the number of positions they could take in the market so that outside investors could not corner the market.

Banking deregulation led agricultural policy down a dangerous path. Investment banks crafted and then sold large numbers of commodity index funds, funds pegged to the value of a basket of diverse commodities. However, concerned they might have to make large payouts if commodity prices rose sharply, investment banks requested and gained the right to invest directly, no position limits, in agricultural commodity markets.

The combination of index funds indirect and direct investment by lightly regulated banks made commodity markets more volatile, with especially harmful effects on the poor. Poor farmers cannot simply accumulate and store food stocks when prices are low.

Neoliberalism, however, if nothing else is resilient. If commodity markets are volatile by reason of weather and if poor farmers are too technologically backward, offer environmental insurance packages and/or loans for upgrading and/or consolidation of farms. These, however, have unfortunate side effects. Qualifying for these services required cultivation of a limited number of crops, ones for which the derivatives and international markets exist as well as adherence to standard industrial farming techniques. In the process the role of these crops on the farm and in the halls of Congress is only strengthened.

Biodiversity is a major casualty Helena Norberg-Hodge, founder and director of Local Futures (International Society for Ecology and Culture), points out: “Most farm subsidies in the US go to five crops — corn, soybeans, wheat, cotton, and rice — that are the centerpieces of global food trade.” The IMF estimates these subsidies and ignored environmental costs at $5.3 trillion per year. 

Clapp and Isakson show that at all points of the food chain investments are made to enhance shareholder value rather than the quantity or quality of the product. Neoliberal agriculture is a self-reinforcing system. Reducing farmland to a simple numerical quantity abstracted from its history and social context facilitates opportunities to play financial games with land and encourages shareholders to treat corporate decisions solely in terms of profit and loss. The belief—accurate or not-- that land can be quantified and sound models of risk assessment fashioned helps these markets escape regulation and grow. Their growth in turn adds to their political power and ability to continue to extort government subsidies. In a similar fashion sophisticated value at risk models and their underlying faith in predictability helped banks expand the market for the arcane securities they pedaled in the years preceding the Global Financial Crisis. 

To advance short term profits, mergers and acquisitions, which increase profit margins---often at the expense of workers and consumers—are widely practiced throughout the food chain. Nonetheless, displaced workers and consumers are offered the chance to invest in food through 401(k)s. In the process finance becomes a staple of everyday life. The whole dynamic depends on and reinforces the concentration of both economic and political power. In this context, the authors might have discussed the role that the virtual elimination of anti-trust law played in this process. 

If neoliberal agriculture is a self -reinforcing ecology at the political and economic level, it has analogous tendencies from topsoil to table to gut. Even at the level of the consumer, who may think he or she is getting high quality cheap food, the neoliberal food chain is not so beneficent. The authors point out: “Financial demands have influenced the… food that manufacturers make available to consumers. Food manufacturers have focused on growing markets for snack foods laden with salt, sugar, and fat, which encourage overeating, thereby maximizing profits” (120).

The assault on the diet is further aided by a nutritional “science” bought and paid for by the food giants. Jane Brody cites a recent example: “Coca-Cola has led an effort to undermine the contribution of sugar-laden carbonated water to the nation’s obesity epidemic….The company funded a study of childhood obesity that, without looking for a possible link between overweight and sugary soft drinks, concluded that low physical activity, inadequate sleep and lots of television watching were most important. To make such conclusions appear valid, Coca-Cola enlisted the participation of university-based scientists all of whom stood, directly or indirectly, to profit financially from their association with the research.”

The relative popularity of fast food also reflects one of the singular constraints of contemporary US capitalism, the war on free time. Fast food appeals because it is fast, and substantial umbers of US workers have multiple jobs or long hour jobs they dare not give up. It is also clear that many of the most successful corporate giants in high tech have succeeded by virtue of one of the oldest corporate techniques, the speedup and intensification of the work process. As in many other areas Amazon has used its immense market power to enhance its power over the human body. One journalist points out: “Twenty-five of its warehouses in North America use…robots. Of course, humans work at the… warehouse, too, 2,500 of them. Technology dictates their work in a different way. Computer screens are ubiquitous, giving workers information about their tasks and running updates on their rate per hour.” Bathroom breaks are timed. Workers who fail to achieve the desired rates are disciplined or fired. 

Workers in such a situation are inviting targets for the neoliberal food chain. The right combination of fat and sugar eases some of the strains of daily life—at least temporarily. There are reasons why agribusiness promotes Twinkies and not fresh broccoli. 

Financialized agriculture is headed for crises both at the level of individual and national budgets. Deteriorating health and explosive increase in obesity-related disease impose budgetary obligations even current neoliberal governments cannot completely evade. Ultimately exploitation of the soil and the surrounding biomes is socially destructive’ Since neoliberal agriculture is a complex, surprising assemblage of political and economic power, policy agendas, personal tastes and insecurities, and philosophical understandings of nature and human agency, we need interconnected action and conversation on several fronts.
 
Here are some preliminary thoughts: 

1. Articulate in clear language the ways financial capitalism works along all points of the food. Special attention should be paid to the fallacies and failures of the predictive models in finance as applied to agriculture. It is vitally important to start this discussion now. Clapp and Isakson have made an excellent contribution to this project.

2. Presenting alternatives is equally crucial. Alison Rose Levy suggests: “As part of a New Food Deal, we could erase these inequities by shifting land use, investment, and subsidy patterns away from corporate giants and towards regenerative agriculture’s local networks of farmers and food growers. Building food security across the country region-by-region will better address future climate disruption than expecting unresponsive monopolies with cheap food and expensive advertising to do it. Rural economic development has the added benefit of putting a safety net under rural populations maligned and rendered invisible by neoliberal policies and politicians.”

3. If finance plays such a role, reforms beyond mere re-regulation of futures markets will be necessary. Why not seek financial sovereignty as well as challenging corporate finance’s excesses? One fundamental aspect of sovereignty is the right to print one’s own currency. Nations lacking that right are forever at the mercy of bond and currency markets. The US prints its own currency, but under the sway of conservative finance theory acts as though it were constrained by the 19th century gold standard. Future work by scholars and activists might address the role that public banking or a Fed and Treasury liberated from a more repressive role could play in a reconstituted agriculture. These could address the rural anxieties that are central to some of the worst world politics.

4. On a more philosophical level activists might challenge the hubris inside modern neoliberal agriculture. Not only is its understanding of the magic of markets tragically flawed, its very conception of the exclusivity of human agency is dangerously limited. Several alternative philosophical traditions raise this pint. I am inspired by the vital materialism espoused by Johns Hopkins political theorist Jane Bennett’. More than fuel for us, gut and soil bacteria help enable our action in the world through their complex interactions. She puts the case as follows: “My flesh is populated and constituted by different swarms of foreigners… the bacteria in the human microbiome collectively possess at least 100 times as many genes as the mere 20,000 or so in the human genome… we are, rather, an array of bodies, many different kinds of them in a nested set of microbiomes. If more people marked this fact more of the time, if we were more attentive to the indispensable foreignness that we are, would we continue to produce and consume in the same violently reckless ways?” (112–13) 

5. Since neoliberal agriculture is sustained by the gut as well as a calculating brain the response to neoliberalism might endorse and draw sustenance—and food choices-- from the Slow Food movement, a theme Bennett and Brown University political theorist Bonnie Honig have analyzed in depth. The movement began as a protest against the first McDonalds in Italy. It called on citizens to resist the bland homogeneity of fast food on behalf of diversity of taste.

Hardly a nostalgic movement, Slow Food relied heavily on the speed of global communication even as it used that knowledge base to foster the local and the homegrown. The movement’s proclamation of a “right to taste” highlighted even as it acknowledged the distinctiveness, even absurdity of this claim from the perspective of the usual schedule of rights. Intending to defend the masses from the hegemony of fast food by making diversity available to them, the movement soon found that this seemingly elitist goal could only be sustained in conjunction with other not so elite goods including animals raised slowly without antibiotics, meals prepared and eaten slowly. 

Realizing, however, that they would need to appeal to a constituency hardened by a fast food taste and life style world they offered events and classes to nurture sensitivity to diverse complex and subtle flavors to which they had been desensitized. They also publicized and advanced their cause by awarding Ark Prizes to those who helped preserve vanishing fruit, animal, and vegetable species too delicate to survive commercial agriculture (See Bonnie Honig,, Emergency Politics and “Three Models of Emergency Politics,” Boundary 2). 

Our diet is hardly a manifestation of consumer sovereignty. Diets often reflect monopoly power, cultural expectations, a history of taste, and the millions of bio agents within and around us. There are grounds for hope and despair in this recognition. It is up to us to decide.