The Farm Bill is a comprehensive federal legislative act covering all key elements of our food system, including crop insurance, nutrition programs like SNAP, export programs, loans, conservation, rural development, and much more. Enacted every 5 or so years, the most powerful lobbying interests come out in full force to protect entrenched subsidies and programs that have directly contributed to climate change and our chronic disease epidemic. The Farm Bill plays a major role influencing what and how farmers grow by creating incentives steering farmers toward monocropping corn, soy, and wheat, applying agrochemicals, and producing shockingly unhealthy food. Over the last several decades, the programs and perverse incentives at the heart of the Farm Bill have propped up a few massive winners at the expense of local farmers. As Secretary of Agriculture Tom Vilsack has stressed, farms have become larger through consolidation, and the few remaining small farmers generally lose money, are indebted, and cannot access capital.
Our current system subsidizes pernicious practices saddling our country with staggering health care costs (e.g., diabetes, obesity, and cardiovascular disease) and environmental costs (e.g., nitrogen pollution). The 2023 Farm Bill is projected to cost taxpayers $1.5 trillion over 10 years. Instead of incentivizing the very worst practices, this massive pool of funds should nudge farms to regenerative practices boosting resilience (in the face of increased flooding and droughts), minimizing energy consumption and harmful inputs, encouraging diversity, and producing nutrient-dense food. It’s extremely difficult to disrupt the status quo, but several politicians and organizations are fighting to bolster local farming, regional infrastructure, soil health, and regenerative agriculture. Hopefully some of their policy proposals will bake their way into the Farm Bill.
Prioritizing Local Farming & Leveraging Regenerative Agriculture
A recent webinar organized by the American Sustainable Business Network and Regenerate America highlighted the need to position regenerative agriculture at the heart of the Farm Bill. Senator Peter Welch (D-VT) explained that industrial agriculture focuses narrowly on efficiency and economies of scale, whereas many small farms also consider nutrition, soil health, and ecosystem preservation. If the Farm Bill preserves the status quo, whereby cost-cutting, yields, and monocropping dominate, our food system will continue to push out small farmers as land degradation, animal mistreatment, and unhealthy food proliferate. Senator Welch, who recently introduced a bill supporting organic agriculture, believes the Farm Bill should focus on local farming and regenerative practices (e.g., cover crops, diversification, and no tillage), which reduce carbon emissions, energy and water consumption, and agrochemicals. He exhorts the government to provide adequate financial and technical assistance to ensure local regenerative farms are profitable. Without incentivizing practices promoting nutrition and soil health, local farming will continue to suffer as our agricultural system becomes ever more concentrated. Emphasizing “food is health care,” Senator Welch believes it is time to treat fruits and vegetables as dietary staples instead of afterthought “specialty” crops.
Investing In The “Missing Middle” Of Regenerative Agriculture Supply Chains
To advance soil health and regenerative agriculture, Regenerate America and Calla Rose Ostrander, Managing Partner at Terra Regenerative Capital, are calling for the Farm Bill to underscore technical assistance, local processing, and market access. Calla notes our government has masterfully scaled commodity agriculture by creating cheap calories through government subsidies, crop insurance, guaranteed markets (e.g., SNAP), and exports (e.g., soy to China). Local farmers wishing to transition out of single commodities into a diversified and sustainable cropping system run into serious infrastructural challenges. The existing supply chain infrastructure caters to large-scale conventional players, and processors often are not able or willing to separate out relatively small volumes of regenerative and organic goods from conventional ones, thus preventing farmers from differentiating their products and securing premiums.
As elucidated by ASBN and Regenerate America, U.S. supply chains have “experienced extreme concentration as small and mid-sized slaughterhouses, grain mills, and other processing and aggregation businesses closed. This ‘missing middle’ severely limits independent farmers’ access to markets . . . Gaps in local and regional food system infrastructure [are particularly acute] for smaller producers, who often have to truck crops and animals across long distances, adding significant operational costs.”
The Farm Bill can fill in the “missing middle” gaps by supporting local and regional processing infrastructure and value chain coordination to better connect regenerative producers with businesses and consumers. ASBN and Regenerate America propose flexible capital pilot projects focused on market access; grant programs promoting value-added products and offering DTC marketing assistance; meat and poultry lending programs; financial and workforce training grants for small meat and poultry processing facilities; and the expansion of local and regional food markets and collaborations. A more decentralized approach will better serve our country’s 270,000 small-scale farmers, accelerate regenerative practices, and mitigate the risks associated with overly centralized supply chains.
Education & Technical Assistance Focused On Soil Health
Regenerate America recommends augmenting research, education, and training programs designed to nurture soil health. Leading experts can develop a practical curriculum, training resources, and extension services covering input reduction, cover crops, diversification, and adaptive grazing. In addition to advancing soil health pilot projects and farmer-to-farmer networks, the NRCS must streamline processes driving new conservation practices and soil health standards. The Farm Bill should also fund soil health programs and equipment grant programs to help farmers embrace regenerative practices.
Expanding Access To Flexible Capital
To catalyze regenerative agriculture, Regenerate America urges the Farm Bill to allow the Farm Service Agency (FSA) to unleash more private capital. To expand innovative alternative lending pathways, the Farm Bill should extend FSA loan guarantee programs to lenders focused on climate-smart agriculture and soil health. In addition, Regenerate America supports the DEFER Act (Deferments to Expedite Financing of Essential Resilience), which would allow FSA loan holders investing in soil health management systems to be eligible for FSA loan deferments (up to 50% of annual payments). There would be no out of pocket cost to taxpayers. Rather, this voluntary program would provide farmers implementing a pre-authorized conservation practice with the cash flow they need without red tape and lengthy delays. In return for the longer payment schedule, the FSA would benefit from the boosted value of the underlying asset (via investments maximizing the property’s health) and the farm’s increased resilience (as improved soil health reduces flood, drought, and pest risks). Soil health investments may also provide additional revenue opportunities to farmers through new carbon and ecosystem markets, which could further strengthen FSA’s investments. Given the dearth of high-quality removal credits, it will be necessary to rigorously vet any sanctioned carbon or ecosystem services credits.
Crop Insurance Adjustments
As Regenerate America laments, farmers applying conservation practices building soil health (and thus de-risking their operations) are ironically disadvantaged in receiving crop insurance. Strong soil health leads to greater water absorption and retention, and thus makes farms more resilient to floods and droughts. Accordingly, the 2023 Farm Bill should remove outdated barriers and create voluntary incentives in the Federal Crop Insurance Program (FCIP) recognizing the risk-reduction benefits of soil health practices. Given that 75% of insurance payouts are related to weather risks (with flood and droughts accounting for over 60% of payouts), it is critical to incentivize farmers to strengthen soil health because that will ultimately reduce the FCIP’s costs and help farmers adapt to climate change.
Business Assistance Tools
To free farmers up to consider regenerative practices, they must see a pathway to profitability. One potential nudge in the right direction might come from widespread access to easy to use software helping farmers run their businesses and gently guiding them toward more sustainable practices. Most small farmers do not have funds to hire employees to assist with accounting, marketing, operations, and finances. Farming is an incredibly time-consuming and complex job, and many farmers handle everything on their own with the bulk of their time tending to the farm. That means many of the key elements of running the business do not receive adequate attention. Easy to use (and free) apps assisting with accounting, finances, and marketing could make a meaningful difference for many small farmers. Consulting services and webinars to help farmers formulate business plans would prove valuable. Mentor systems whereby farmers could have regular check-ins with experienced farmers who can help evaluate business goals, risks, and upcoming decisions would be beneficial. Information sharing platforms, which could expand learnings and connect buyers and sellers of products and equipment, could also be quite useful.
The Farm Bill should devote significant attention to updating whatever business tools it currently offers and integrating sustainable practice tips (regarding cover crops, eliminating tillage, diversification, minimizing agrochemicals and energy use, etc.). For example, farmers could be encouraged to reduce certain harmful inputs or replace them with sustainable alternatives (in a small test pilot) to cut costs and improve results.
Significantly, over 75% of Farm Bill funding goes to SNAP and other nutrition programs like WIC. The Farm Bill and its nutrition programs must do an infinitely better job of rewarding farms producing healthy food and guiding people away from sugar, refined carbohydrates, and highly processed food. 50% of Americans are diabetic or pre-diabetic, 20% of our children are obese, and only 12% of Americans are metabolically healthy. Skyrocketing insulin resistance over the past half century is associated with higher cancer and other health risks. Sugar is arguably the main culprit, as heavy subsidies have made the most unhealthy foods extremely cheap and massive food companies have created incredibly addictive snacks, candy bars, and soda from commodity crops like soy, corn, and wheat. Indeed, the standard American diet is over 60% ultra-processed food from commodity crops like wheat, corn, and soy.
In light of our chronic disease epidemic, the Farm Bill should make a considerable effort to educate people about the risks associated with the typical American diet. (It would be even better for the Farm Bill to slash subsidies to the commodity crops that are making Americans sick, but that doesn’t seem remotely plausible in the near future.) This can start in our schools, day care facilities, and hospitals through comprehensive education campaigns and healthy food choices. A 2016 USDA report found that sweetened beverages, including soda, fruit juices, energy drinks, and sweetened teas, accounted for almost 10% of spent SNAP dollars, with soda representing the most purchased SNAP item (~5%). Given our chronic disease epidemic and its massive health care costs, it is high time to ban the use of SNAP dollars for soda and other sweetened beverages. I would also strongly consider adding many categories of snacks to such a ban.
This is very much on my mind because I was recently in a convenience store with my four-year-old son to get his passport photo and while we were waiting, he inevitably asked for a snack. He started with Cheez-Its, maintaining that it's a healthy snack because there is cheese in it. We often talk about the importance of consuming protein, but I explained that not all cheese is healthy and that nearly all other ingredients in Cheez-Its are unhealthy. My son pressed for pretzels and other snacks next. I told him we had to pass, and later thought about how difficult it would be to find even one legitimately healthy snack among the several hundred products sold in the chain store. If the purpose of SNAP and other nutrition programs is to provide nutritious food for those in need, it seems entirely reasonable to bar purchases of unquestionably unhealthy items like soda, candy bars, etc.
I have a host of other wishes for the Farm Bill. For example, I think it makes sense to eliminate corn ethanol subsidies as the number of bushels of U.S. corn grown for ethanol is roughly the same as that grown for human and livestock consumption, and a recent study suggests ethanol’s carbon intensity is higher than that of gasoline. I also believe there should be stronger oversight for how Farm Bill dollars are deployed and better course-correction mechanisms. Ultimately, I hope more dollars subsidize the best practices and disincentivize the worst. While our entrenched food system is hard to shake, I am pleased that more politicians and organizations like Regenerate America are uniting to make their voices louder and to chip away at the status quo.
Miscellaneous Non-Fiction & Fiction Recommendations
Michael Cembalest’s JPM Annual Energy Paper