The American Food System.

Via Monica Johnson
on Feb 1, 2012
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How Major Corporations Reign Supreme over Farming in America.

While the Occupy Wall Street (OWS) movement’s spark has recently dimmed, they have successfully illuminated discrepancies about who is controlling our food system. The OWS movement stated that “corporations — which place profit over people, self-interest over justice, and oppression over equality — run our governments.”

They specifically indict Wall Street for the quandary the food system is currently experiencing and further state, “They have poisoned the food supply through negligence, and undermined the farming system through monopolization.”  To see how our corporations currently control our food system, we must take a look at the major events that prompted their current reign. Agricultural policy as we know it did not exist until the 1930’s when it manifested as a part of Franklin D. Roosevelt’s New Deal. It was mostly constructed to address the financial strain experienced by the agriculture sector, and America in general, due to the Great Depression.

Photo courtesy of Worldchanging Team

Two factors were considered to be the main contributor to agriculture’s predicament: overproduction and price volatility. To combat overproduction, farmers were encouraged to produce less by putting some of their farm land aside, which benefited land conservation as well. In doing so, they received a government payment, or subsidy. This continues today in the Conservation Reserve Program (CRP). To tackle price volatility, the government offered to store the farmer’s harvest if prices were low at harvest time. This allowed the farmer to wait until prices rose and then sell their harvest for a better price. Negative incentives were in place to encourage farmers to not overproduce perishables, such as milk. Here price support and supply management worked together to stabilize the agriculture industry.

Born a few years after the Depression in 1946, Henry “Hank” Paulson, would eventually become an indirect, but key player in America’s food system. First working for the Nixon administration and then making the move to the private sector obtaining a position at Goldman Sachs, a multinational banking and investment firm. In 1996, as globalization took root, the focus of the farm bill shifted to agricultural trade expansion, mostly on an International level.

To achieve this, farmers were encouraged to produce as much as they could, but would no longer receive government payments for setting aside land. This resulted in more farm land being farmed and more food being produced. However, farmers were unable to get fair prices for their harvest and foreign markets resisted doing business with America. The markets became flooded with too much food and farmers were unable to sell it.

To remedy this situation, Congress enacted a series of $20 billion emergency bailouts.   In 2004, Henry Paulson, by then chief executive officer of Goldman Sachs, successfully lobbied for an exemption from the rule that investment and commercial banks do not have to keep money in reserves to cover unsuccessful trades. Now with excess money available, banks such as Goldman Sachs were able to place high risk bets in the form of “investments”.  When the investments did not work out, these companies either went bankrupt (Lehman Brothers) or were bailed out by the US Government (Goldman Sachs.) This deregulation on Wall Street set in motion a domino effect of negative reactions. Internationally, our financial distress triggered global hunger rates to rise. Domestically, agricultural markets have become more volatile while market concentration increases; family farms are being assimilated by larger corporate ones.

Photo by Manu H.

Wall Street’s reaction to this has been to continue to pour billions of dollars into Washington via lobbying and campaign contributions that support their deregulatory agenda, especially since the passing, in 2010, of the Dodd-Frank Financial Reform Bill, designed to limit Wall Street’s current unrestrained power.

In 2006, Henry Paulson left his position as Chief Executive Officer at Goldman Sachs to once again work in the private sector as the 74th United States Secretary of the Treasury, just before its financial crisis. Here, it becomes clear that big business and the Government are linked. The line between corporations, Wall Street, and our Government is quite hazy, intertwined and often inappropriately crossed. The men who run major corporations are able to influence our government and able to affect decisions related to the farm bill.

These decisions usually benefit the corporations, leaving the farmers of America to pick up the pieces of a failing food system.


Ed: Kate Bartolotta.


About Monica Johnson

Monica is Co-Conspirator at Hudson Farms, located in far East, Texas. Monica is currently using 2014 to build the farm's soil and experiment, but looks forward to selling nutrient-dense fruits, vegetables and value-added products made from local ingredients in the Spring of 2015. When she's not farming she's probably in the kitchen cooking healthy meals, enjoying a glass of wine, or listening to the St. Louis Cardinals baseball broadcast. To connect with Monica visit, follow her on Twitter: @broccolimojo, or on Instagram: MonicaMarvels


13 Responses to “The American Food System.”

  1. Mark says:

    I am ashamed to admit I didn't know much about this polarizing issue. It is unacceptable and mind boggling to see how this system is governed and overlooked. The author here does a great job discussing the key elements as well as formulating a thorough argument. Very well written and concise.

  2. Monica Johnson says:

    Thanks, Mark! The farm bill in general is very polarizing and complex (leading to much confusion) so I am glad you found it informative.

  3. Lorin says:

    Posted to Elephant Food on Facebook and Twitter.

    Lorin Arnold
    Blogger at The VeganAsana
    Associate Editor for Elephant Food
    Editor for Elephant Family

  4. jason says:

    its nice to see people connecting the dots. corporations will keep tugging away the strands until theres nothing left of our web of life. stop sending money to them and they will eventually go away.

  5. Jill Barth says:

    I posted this to the Elephant Green Facebook page. Thanks for sharing!

    Jill Barth, Green Editor
    Join us! Like Elephant Green on Facebook

  6. Monica Johnson says:

    Jill- Thanks so much!

  7. Monica Johnson says:

    Thank you for reading and sharing! That's how we all learn and grow.

  8. Monica Johnson says:

    Thank you for sharing on FB and Twitter! I love VeganAsana… I'm following on FB.

  9. Andy says:

    Great article! Well written and informative. Thanks!

  10. Monica Johnson says:

    Thanks Andy!

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  13. Interesting details by the way, that line about the question who is controlling the food system really is attracting the attention. Useful article!