The Day After Russia Attacks
What War in Ukraine Would Look Like—and How America Should Respond
I am sorry to say that I see this ravishment of the soil continuing at a faster and faster pace in the past 25 years throughout the Midwest, because of the cheap food policy and extensive exportation of our farm products that are being advocated by our national leaders.
-Jim Sage, Iowa farmer, in testimony before the soil conservation subcommittee of the U.S. Senate Committee on Agriculture, August 15, 1980.
What many people do not realize is that the bumper crops are coming at the expense of the soil. I am increasingly concerned that the President and Congress do not fully appreciate that Iowa is really "paying" for our reliance on foreign oil, as Iowa farmers help with the balance-of-payments problem through our tremendous exports.
-Robert Lounsberry, Iowa state Secretary of Agriculture, in the same Senate hearings.
United States exports of grain are breaking the record again. Allowing for some overstatement by conservationist farmers of the case attributing soil losses to exports, there is such a case. It deserves public attention. This is a good time for it.
John Block, the new U.S. Secretary of Agriculture, helped start a state soil-conservation program in Illinois where he was Director of the Department of Agriculture. But his enthusiasm for free markets and exports appears to override his concern about soil losses. As a state official, he pushed for export expansion of corn and soybeans, which he raises on his own farm. When he was named to the Reagan Cabinet he said he favored lifting "immediately" the partial embargo on grain exports to the Soviet Union. "Expansion of exports," he said, "is a key to a market-oriented agricultural policy." At the American Farm Bureau's annual meeting in New Orleans on January 12, 1981, he let himself go, declaring that "given the incentive, farmers will respond, and people won't believe how we can produce so much." He said he would oppose any budget cuts in agricultural research or in promotion of exports.
Agricultural exports aren't exactly slumping, as one might think from Mr. Block's tone. In the current fiscal year (ending in September) grain exports will increase over the previous year's all-time high from 111 to 119 million tons (seven percent), according to U.S. Department of Agriculture projections. Exports of soybeans probably will be lower than the 1979-80 record, because of a 22-percent decline in 1980 production and expected increases in the early 1981 harvests of Brazil and Argentina. Still, the USDA's expectation is for the second highest soybean exports ever.
In all, agricultural exports are projected to reach 170 million tons, compared with 164 million in 1979-80. The dollar value will be about $47 billion, a rise of 16 percent and an enormous credit for the U.S. balance of payments. This gain is occurring despite the world economic slowdown, short corn and soybean crops in 1980, and the partial embargo on sales to the Soviet Union. Clearly, the embargo, while it may have handicapped the Soviet Union in its grain import plans and cost it extra foreign exchange, did not slow the American farm-export boom.1
Exports of grain and soybeans have been growing rampantly in the last 30 years.2 The brief embargoes by Presidents Nixon and Ford, like that of Jimmy Carter, had no significant effect on the trend. In 1950, we exported only 15 million tons of grain, as compared with 119 million this year. The biggest growth has come in corn and soybeans (including processed soybean meal), the ingredients of meat, poultry, egg and milk production. Rising incomes in developing as well as developed countries have lifted demand for the high-protein foods derived from livestock. Soybean exports more than tripled in the 1960s and 1970s. Feed-grain exports (mostly corn) increased sevenfold!
We now export more than 60 percent of our wheat; more than half of our soybeans, cotton and rice; nearly a third of our corn. "In terms of competition for land," writes Philip M. Raup, a University of Minnesota economist, "we have reached a degree of agricultural export dependency for which parallels can be found only in the Antebellum cotton South or in our Colonial era."3
The export expansion has called forth an expansion of land devoted to the export crops. All of the 50-60 million acres held out of production under government reward and penalty programs in the 1960s have been brought back into cultivation. In addition, other meadows and pastures have been plowed and planted with grains and soybeans. In 1950, American farmers exported crops grown on 50 million acres, 14.5 percent of the cropland harvested. By 1975, crop acres used for export had doubled to 100 million, and by 1978 had climbed to 133 million. That was a third of crop acres harvested. Since then farmers have further increased grain and soybean plantings. This year the USDA projects an increase of 14.6 million acres of wheat over the 1978 figure. Total feed-grain acreage will be down slightly, because of a switch from grain sorghum to wheat in the Great Plains, but corn plantings are expected to increase by 3.4 million acres over 1978. Soybean plantings are projected to increase by 5.9 million acres.
Part of the increase in grain and soybean land comes from continuous grain crops or, in the Corn Belt, from rotating fields only between corn and soybeans-instead of the old practice of including two years of oats and clover or alfalfa in every five- or six-year rotation. Chemical herbicides and insecticides make feasible these practices by controlling weeds and insects which otherwise would flourish in year-after-year plantings of corn and beans. However, this heavy cropping, especially in the case of intertilled crops such as corn and soybeans, greatly steps up the rate of erosion.
Soil erosion is a far more important problem in maintaining agricultural resources than the loss of land to agriculture for nonagricultural uses, an issue that has aroused popular alarm in recent years. The conversion of farmland to shopping centers, housing developments, highways and factories stirs the emotions of people worried about the world food shortage.
The government's recent National Agricultural Lands Study found that three million acres of farmland are lost to urban development each year. But only about one million of the three million acres are cropland. There have been massive shifts in cropland region by region throughout history. The Northeast, Southeast and Southern Plains have lost cropland since 1939, while the North Central, Mississippi delta, Mountain and other regions have gained. Rising energy costs for transportation of fruits and vegetables from the Pacific coast may induce the return of some of New England's abandoned farmland to food production. Now that the land retired under crop-control programs has been brought back into cultivation, the nation's total area of cropland is about the same as in the 1920s and 1930s, around 400 million acres.
Vast additional areas could be brought into crop production by clearing, drainage and irrigation, but at high cost-and much of the land would be fragile, with thin soil especially vulnerable to water and wind erosion. It would be sounder national investment policy to protect our most productive cropland against deterioration.
Undoubtedly, the nation could continue to expand grain and soybean production, given favorable weather, by developing new cropland, applying better erosion control on all cropland, and by adding more fertilizer and pesticides-though probably not as robustly as Secretary Block suggested in the full exuberance of a freshman Cabinet officer at the Farm Bureau meeting. After all, the new cropland brought in would be much less productive than what farmers are planting now, and nearly all of the most productive land is already being farmed with the latest technology (except for erosion control).
The crux of the food-agriculture problem facing America is soil resource maintenance versus unrestrained grain exports. At the rate exports are increasing, the danger of overexploitation of the land with permanent damage to productivity is becoming imminent. Yet exports have been the lifeblood of American agriculture, the most productive in the world, and are vital to farm prosperity.
Exports of agricultural products have always been important to America-from Colonial tobacco and indigo to cotton; later to wheat, rice, pork and lard; and then to corn and soybeans.
But the most recent rise in exports of agricultural products is truly phenomenal, even in American history. It must confound such theorists of economic development as Colin Clark. Clark wrote several decades ago about his classification of primary, secondary and tertiary industries and how the process of economic development consisted of countries moving up the ladder.4 He theorized that populations would advance from primary economic activities, (i.e., agriculture and mining) into secondary (manufacturing) and then tertiary activities (services). As a country became more capitalized and industrialized and reached higher income status it would reduce primary output and concentrate its resources on the higher stages of activity-importing from poorer, cheaper-labor countries more of the raw materials and food it needed.
Of course, that is what happens-except it hasn't happened that way in the United States. People have moved out of agriculture at a great rate, but output of the agricultural industries has gone up; instead of importing more foodstuffs and fiber, the United States exports more than ever. Colin Clark's hypothesis about capitalist development has been confirmed in practice more by the Soviet Union than by the United States.
What Clark overlooked-like the classical economists-was technological change in agriculture. He seems also to have given little weight to soil and climate factors and to the effects of socialized programs in a capitalist country in helping speed agricultural development and the "industrialization" of agriculture.
In a real sense, agriculture in America is no longer a "primary" industry as Clark used the term. In the top category of large-scale, technically advanced U.S. farms-say the largest half-million of the two and a half million farms in terms of sales, covering 80 percent of the farm production for market-human productivity today undoubtedly is as high as the average in manufacturing and probably higher. The USDA's estimates of farm-labor productivity show more rapid advances since World War II than labor-productivity gains for the economy as a whole.
This statistical gain in labor productivity on the farm is, however, something of an illusion. It is to a considerable degree the result of the transfer of functions off the farm into manufacturing plants, not just the substitution of capital for labor on the farm itself. In the case of poultry and egg production, almost the entire industry has moved from the farm to the factory. Comparing farm-labor productivity today with that of 50 or even 25 years ago amounts to comparing different industries. The work done on the farm to raise, care for, and feed horses has been replaced by machinery and fuel produced elsewhere. The other farm work going into a ton of corn has fallen sharply, because much of the work is done in factories: seed production, fertilizer, pesticides, etc.
If all agriculture and agribusiness were taken as a single industry, obviously the gain in productivity would not be as great as the on-farm figures show. But it would still represent an impressive achievement in agricultural productivity.
Foreign trade has been a driving force of agricultural productivity and development from the beginning. Autarky never has been seriously considered. Farmers objected to Hamilton's protective tariff policy as damaging to their interests, especially the Southern exporters of cotton and tobacco. They said it would raise their costs of imported goods and reduce European buying power for their products. The Greenbackers of the post-Civil War period and the Populists who followed them were free traders. They sensed the importance of cheap money in stimulating foreign buying, and they favored low tariffs. The Populist-Greenbackers stood almost alone against the Republican tide of protectionism, although the Democrats occasionally uttered low-tariff sounds.
The first decade and a half of the twentieth century saw rising exports and a golden era for American farming. After the First World War, the curse of overproduction, bringing low prices, hung over the 1920s and 1930s and was only temporarily lifted by the Second World War. There was widespread agreement among farm leaders that "the farm problem" was caused by a decline in exports. The Smoot-Hawley tariff of 1930 culminated the process of export shrinkage caused by World War I reparations, war-debt finance, and U.S. tariff policies. In the New Deal era, the Reciprocal Trade Agreements Act (1934) and farm-export promotion were seen by Henry Wallace and other agricultural politicians as the way out of crop controls.
The technological revolution in farming which came to full flower after 1945 stepped up production rapidly and increased the pressure for export-market expansion. Farm enlargement was part of the process. New technology was introduced largely by substituting capital inputs for labor, releasing millions of farm people for work in towns and cities. At the same time, rapid industrial development and high wages pulled labor from surplus rural areas into factories in urban areas. Farmers' input costs dropped, and they dropped more for bigger farms than for smaller. There are economies of size for suppliers of many of the new inputs. Socialized absorption of risk through price supports, deficiency payments, disaster payments and credit assistance also encouraged farm enlargement. And the greater bargaining power of the bigger farmers in both buying and selling, plus economies in larger unit aggregation and transportation of commodities, helped push the expansion of farm size.
When Dwight Eisenhower came to the presidency eight years after World War II, during a time of accumulating surpluses of important farm commodities, one of the principal Republican solutions was to subsidize farm exports. Various pieces of legislation on the books permitted this in small ways. The Eisenhower Cabinet and appointed officials in the Department of Agriculture were torn between their ideological objections to crop controls as an interference with free enterprise and to government interference in foreign trade. But they finally settled in 1954 on Public Law 480, a comprehensive subsidy measure, employing the usual euphemisms about feeding the world-Food for Peace.
The Administration and its supporters thought this would be the solution to the surplus problem.5 It contained party-line proscriptions against interfering with free markets and professed to stimulate private trade. There was always a strong element of genuine charity in the program. But if I were asked to rank the motives behind P. L. 480 on a scale of one to ten, I'd place charity at two and surplus disposal at eight.
Agricultural exports began to expand in the Eisenhower Administration, and much of this expansion was initially accomplished through subsidies under Food for Peace. Wheat exports under P. L. 480 averaged 12 million tons a year from 1960-61 to 1965-66, then fell to around five million tons in the early 1970s and were surpassed by commercial sales. Feed-grain exports under P. L. 480 have always been small and soybean exports negligible. The increase in exports of these feedstuffs has been almost entirely a commercial proposition, fueled by world prosperity and active promotion by feed-grain and soybean sales organizations.
In spite of Food for Peace, surpluses of grain continued to increase during the 1950s in the absence of crop control. When the Democrats returned to power in 1961, they revived crop-acreage restriction, along with continued export promotion.
When the Republicans got back in charge in 1969, they confronted the same dreary problem on the Western plains-surplus of grain. It is not hard to understand the glee of Agriculture Secretary Earl Butz in 1972 when the Soviet Union began to invade the world market for grain. The Soviets aimed primarily at the American supply, naturally, that being the world's principal reserve. To U.S. policymakers, Republican or Democrat, the reserve was seen as a surplus. The Nixon Administration, anti-communist by fervent faith, did not hesitate to facilitate the sale of wheat and corn to Russia, including the use of export subsidies to please the new major customer.
The story later was told that the wily Russians, conspiring with the willing international grain companies, hoodwinked U.S. government bureaucrats and ripped off the American farmer and consumer. Grain stocks were depleted and prices zoomed upward; livestock feeders were caught with soaring costs at a time of cyclically large cattle inventories, and they liquidated; food prices climbed and consumers protested. All this was blamed on Earl Butz's and the USDA's naïveté in allowing the Russians to grab up our grain. I put more weight on the alternate explanation: that agricultural policymakers in the government did what came naturally in view of the long history of "surplusitis"-they seized the chance to dump the stuff.
Montaigne wrote that "excellent memories are prone to be joined by feeble judgments." American agricultural memory has resulted in feeble judgment on current policy. The passion for getting rid of the farm-surplus problem by shipping it overseas derived from the nation's history as an agricultural exporter.
With technological advance came specialization, further increasing export-crop production. The case of corn is instructive. Post-World War II hybrids could use larger amounts of fertilizer effectively, withstand dry weather, and yield more. The availability of cheap chemical fertilizer to replenish nitrogen made it possible to eliminate legume rotations and to cut the hard work of spreading manure. Continuous corn became feasible throughout the Corn Belt, especially on flat land. Fertilizer from factories replaced nutrients (at least all that seemed essential), and chemical insecticides handled the bugs which otherwise thrived in continuous cornfields. Larger machinery permitted planting, cultivating and harvesting bigger fields with less human work time. Moreover, chemical herbicides enabled farmers to greatly reduce cultivation for weed control.
If you didn't need to grow oats as a nurse crop for clover or feed for horses, why not plant more acres to high-value corn?
In the 1950s and 1960s the soybean came into its own. It had been around for many years as an Oriental curiosity but now had become the major source of high-protein meal for feeding livestock. (In the 1930s, soybean meal was regarded as a not-very-good hog-feeding supplement, because it made oily pork, as did peanuts. But that fault was overcome, and soybeans today are the main high-protein feed for hogs as well as cattle and poultry.)
Specialization powerfully concentrates the minds of producers on their particular commodities. Thus another aspect of the change in agriculture has been the rise of promotional commodity organizations-promotional in both commercial and political senses. The general farm organizations, such as the Farm Bureau and the Farmers Union, have been surpassed in politico-promotional power by such groups as the U.S. Feed Grains Council, the National Association of Wheat Growers, the National Corn Growers Association, the National Pork Producers Council, the National Milk Producers Association, the National Cattlemen's Association, and many others.6 The general organizations remain potent as suppliers to farmers of insurance, other services, and farm inputs. They are influential lobbyists on overall social policies but much less so on the "nuts and bolts" of farm-commodity policies.
Specialization increased the vulnerability of large-scale producers to the economic vicissitudes of one commodity or two. The old farming idea of diversification to withstand risk has been weakened by the efficiencies of specialization and other forces (among them, winter vacations, less hard work: "Corn, Miami; beans, Bermuda," said Earl Butz, making farmers peevish, but it was true). This has been accompanied by political pressure to get the government to share the risks of single-crop producers.
There can be little doubt that the emphasis of governmental support programs on guaranteed prices and benefits related to specific crops-cotton, wheat and corn particularly-has contributed to specialization and expanding farm size. The boom in exports of these commodities has pushed the process along, and vice versa.
The petroleum crisis also stimulated the drive to expand farm exports in the 1970s. The country's unfavorable balance of payments encouraged the government to push for larger dollar earnings from the sale of farm products overseas. Government spokesmen have often elucidated the value of increasing farm exports at a time of rising oil-import costs, though the main cause of larger grain exports, of course, has been rising income per person abroad.
Two new economic forces could have restraining effects on farm specialization and farm size in the future.
One of these is the energy problem-rising costs of, and dependence on, foreign oil. Big farming and agribusiness no doubt will continue to be able to obtain favorable allocations of scarce energy resources for agricultural power, pesticides and fertilizer. Nevertheless, farmers may shift to more crop rotations, use of organic fertilizers, and biological controls of pests if oil prices continue to mount, as they certainly will.
The second restraint on farm enlargement and exports may come from the deteriorating condition of farmland, caused by overcropping and excessive use of chemicals.
The rapid growth of export demand for American foodstuffs and the inexorable progression of population in the Third World have led to Malthusian alarms. America and other developed countries should economize on the use of grain in livestock feeding, it is said, saving more for direct consumption by less developed countries. In addition, America should not allow Japan, Europe, the Soviet Union, and other high-income countries to buy our grain for feeding livestock and enriching their already adequate diets. We should reserve more of our supply for needy countries.
Experience in the 1970s showed the usefulness of large grain reserves in softening the shocks of variations in world production. The United States has made efforts to establish a cooperative grain-reserve program with other countries, as proposed by directors general of the U.N. Food and Agriculture Organization and several national and international food study groups. But that has not panned out; the other rich countries appear to be unwilling to help pay for a reserve program with the United States dominating such a massive share (two-thirds this year) of the world grain trade. But the stake of the United States itself in a more stable grain market could well justify a bigger national reserve program than we have been carrying. Moreover, the United States has always recognized a responsibility to provide relief for famine and emergency food shortages in poor countries. Building an adequate reserve of grain should be high on the new Administration's agenda.
President Reagan and his food-policy advisers will have to make farm production and export decisions with such considerations in mind. Much as it goes against the free-trade, free-enterprise doctrines of the new Administration, a government policy on the disposition of grain exports will be necessary in the future-sooner rather than later if the world should run into a series of dry years in the major grain-growing areas of North America, India, the Soviet Union and China at the same time. Indeed, another short U.S. corn crop this year would place heavy strain on our capacity to supply regular overseas markets and also provide adequate feedstuffs for domestic livestock feeding and reserves. The extremely dry fall and winter in the grain regions have reduced subsoil moisture, making lower corn and wheat production a distinct possibility. Corn production fell from 197 million tons in 1979 to 164 million in 1980. Fortunately, the large reserves (41 million tons last October) have permitted maintenance of domestic consumption and an actual increase in exports. The record 1980 wheat crop helped. But now grain reserves are being drastically lowered.
(All the grains are interchangeable as human food and as feed for livestock; hence the total grain reserve is the significant food reserve. Each year considerable amounts of wheat are fed to livestock in Europe, Russia and North America. But since wheat and rye are better for bread, the "coarse" grains-corn, milo [grain sorghum], barley, oats-are the principal livestock grains.)
The earth's finite supply of petroleum and natural gas, plus the cartel pricing policies of leading world producers outside North America and the Soviet Union, have caused Americans to turn to what are called "renewable" resources for producing energy. Of these, organic materials including crop wastes, garbage, wood, sugar cane (used extensively in Brazil for alcohol fuel), sugar beets and grain are being studied as sources of alcohol, primarily for transport-vehicle fuel. In the United States, corn has been seen as the principal source, mainly because of the abundant supply. The Carter Administration started a large-scale corn-ethanol program, with loans and grants to encourage development of fermentation and distilling factories. In addition to putting up this money, Congress approved elimination of the federal motor-fuel tax on gasohol of four cents a gallon. Gasohol is a blend of 90 percent gasoline and 10 percent alcohol, so this tax forgiveness amounts to a subsidy of 40 cents per gallon on alcohol. At least 25 states also forgive gas taxes on gasohol. The total subsidy is large, probably about $1 per gallon, and inviting for alcohol production from corn-at today's prices.
Conceivably, the gasohol market could take as much as a billion bushels of corn (25.4 million tons) a year by the end of the decade, assuming the government subsidies increase with inflation. The Carter Administration's goal was to get alcohol production up to 500 million gallons this year, using about 200 million bushels of corn, but that goal won't be reached. Enthusiasts for gasohol talk of a billion gallons of corn alcohol, or two, or four. (Carter Administration people talked of a 1990 goal of ten billion gallons, which would take more than half of the record 1979 corn crop if the alcohol were made from corn!) Two billion gallons would supply about two percent of current gasoline consumption and would use 800 million bushels of corn. This would send corn prices up sharply (demand for corn as for all grains is quite inelastic), probably by as much as 25 percent. That in turn would raise livestock production costs and result in some decline in output. Consumers would pay more for meat, poultry, eggs and milk in order to get more fuel for their cars.
The claims of the "feed the world" idealists, the commercial grain exporters, and the gasohol promoters cannot all be met without strain on domestic food consumers; that is, everybody. Choices must be made. These claims all stem, fundamentally, from the long history of American agricultural surpluses, bountiful production, world-leading agricultural research, and the tradition of big exports. The idea of scarcity of food production has never entered the head of the typical American farmer-or the city-dweller once removed from the farm, for that matter.
But the bigger claim, if one looks beyond the near decades, is to consider the state of the nation's agricultural resources. Long-range planning has not been a notable characteristic of this democracy. Limits to growth are anathema to Americans; they would rather talk about the growth of limits, through magical science and technology. But the oil is clearly running out, and so is the most precious of our resources-topsoil.
Soil productivity has sometimes been viewed as a renewable resource: you can replace the depleted nutrients with chemical fertilizers. Shortly after World War II, when new fertilization and weed- and insect-control methods were being adopted rapidly, the soil conservation movement which had bloomed in the 1930s began to fade. I remember a front-running farmer telling me in the early 1950s that it was foolish to worry about losing topsoil. He advocated growing corn and soybeans on the hills, saying he could restore the natural soil productivity with chemicals; he scorned growing clover and alfalfa as money losers.
In less extreme form, many farmers followed this policy, and so did the agricultural scientists and educators at the Land Grant agricultural colleges. The companies manufacturing and selling fertilizer and pesticides, naturally enough, pushed the revolution in agricultural techniques-and they exerted substantial financial and political power to get support from the agricultural colleges and the federal government.
Soil scientists who expressed alarm about losses of topsoil didn't get much of a hearing until recently. The chronic tendency to overproduction of farm products and the deliberate removal from production by government policy of 50-60 million acres of cropland made concern over soil resources seem absurd. But the return to full farm production in the 1970s and more evidence of big soil losses have forced a new look.
The National Resources Inventories conducted by the USDA three years ago showed that erosion is taking place on much of the nation's best cropland at a faster rate than the soil can be replaced. Topsoil lost by erosion is slowly rebuilt through weathering of the less productive subsoil, and the process can be speeded to some extent by cultivation and large additions of nutrients and organic matter.
The USDA has assigned soil-loss tolerances for most cultivated lands. These "T-values" never exceed five tons per acre per year (equivalent to about a half-inch in 15 years). For thin soils the tolerable level of soil loss is less than five tons. Losses beyond the T-values signify a deterioration of the resource and a long-term decline in productivity. That is, the topsoil is not replacing itself. The T-values are in some dispute among soil scientists, but they give us a rough measure of the state of soil resources.7 The USDA inventories indicated that 97 million acres of cropland are eroding at rates exceeding five tons per acre per year.8 That's about a quarter of the nation's cropland.
In critical areas, soil losses are much greater. Nearly a third of the land in row crops in the Southeast, and in the Corn Belt about a fifth of the row-crop land, is eroding at the rate of ten tons per acre per year. "Iowa," its Secretary of Agriculture said, "has the dubious honor of having the highest average soil loss of any state in the nation." Western Tennessee is another area with heavy soil losses from water erosion. Heavy cropping of corn and soybeans is the reason in both places.
As export and other demand for food increases, the pressure rises on land susceptible to erosion. Even the relatively flat lands of Iowa are eroding badly, from both water and wind. What is worse, though, is the washing of hilly land brought into row-crop cultivation in response to high prices for corn and beans.
John Timmons and D.C. Cory, of Iowa State University, have estimated that under a "high export scenario" through 1985 soil erosion losses for the Corn Belt would increase by 72 percent-and their scenario was considerably below the actual exports of 1979-80 and 1980-81. Timmons and Cory projected an increase in planted acres for the Corn Belt from 152 million in 1975 to 169 million in 1985. Presumably, if exports continue to rise, that acreage will be exceeded.
Nobody knows for sure how long present soil losses can be experienced without a decline in national food-producing capacity. Erosion may not be the only cause of deterioration of soil resources from heavy grain cropping. Compaction of the soil from big machinery on large-scale, one- and two-crop farms already is a problem in some places. Bigger machines with more power may solve this problem for a while, but there must be limits. The relations between soil productivity and rates of erosion and soil compaction are not precisely known. It is evident, however, that there is an analogy between overuse of cropland and the extraction of petroleum or coal. As John Timmons has pointed out, both soil and petroleum are formed by geological processes. Through excessive erosion, soil becomes an exhaustible resource-essentially nonrenewable. Petroleum is destined to have a short life-span on earth, but topsoil can be used and reused indefinitely if properly cared for.
In sum, evidence is accumulating that our use of agricultural resources is verging on the reckless, that the soil is being mined to the detriment of productivity for the long run. Agricultural production and foreign trade policies up to now have ignored the long-range resource maintenance factor. It is time for a change.
America's food-producing capacity is a powerful asset to the domestic economy and to this country's conduct of world affairs. Despite the wonders of modern agricultural technology, this capacity rests heavily on the nation's primeval soil and water resources. Agricultural and foreign trade policies which result in overexploitation of soil resources and a loss of sustainable capacity to produce would endanger the nation's future.
How then can we preserve the resources that make our food-producing capacity possible? The answer must be threefold: setting priorities among major claimants on agricultural production; a natural resource conservation policy, including both protection for farmers and incentives for their participation; and, finally, intensified technical assistance to developing countries for their food production. Let us start with the question of export policy.
America's mighty granary-of-the-world is being exploited by grain-importing countries to the disadvantage of American consumers and producers, even in the short run. The United States has been willing, a few minor embargoes excepted, to sell grain in any amount to anyone who will buy ever since the sanctions against trade with communist countries were dropped. Most countries, at least those in the industrialized world, shelter their own producers and consumers against the cold winds of world agricultural competition. They have been able to hold grain prices relatively steady while the American market absorbs the shock of changes in world supply and demand.
The Russians have used the American free market as a reserve or buffer-stock mechanism, buying heavily when their harvest is down and buying little when they get a bumper yield. Because of weather conditions, grain production on the Russian steppes is notoriously erratic. The trend toward larger importing in order to improve Russian diets has been noted; the high variability and unpredictability of Russian grain imports (due to both weather and politics) has drawn less attention. The five-year agreement ending this year (with firm commitments for a minimum six million and maximum eight million tons) was an attempt by the Ford Administration to stabilize the Soviet grain trade. (The post-Afghanistan embargo only stopped sales over the eight-million-ton ceiling.) Now a similar deal has been made with China, setting minimum and maximum quantities, with room for exceeding the limits after proper warning and agreement. There are to be no more great grain robberies, as the huge Soviet purchases of 1972 were called.
Extension of such bilateral agreements on exports with other big buyers might be one way to establish greater regularity in the outflow of American grain. It also could be a method of slowing down the rise in imports by the rich countries in order to reserve more for the less developed, poorer importers. It could be a way to check runaway exports in order to reduce the danger of excessive soil depletion.
J.R. Groenewegen and Willard W. Cochrane, of the University of Minnesota, have suggested a variable export levy to insulate the American economy from "transitory surges in foreign demand" for grain.9 The American grain market would be left open to the world market whenever prices were within a predetermined stabilization band. Groenewegen and Cochrane also would establish bilateral agreements with major importers to assure them of grain and to help stabilize the market. This would minimize the probability of the export levy being used.
There is something repulsive to the American spirit of free enterprise in the setting of limits or quotas on trade. In agricultural circles, it is much less repulsive, however, to fix quotas on imported cheese or beef or sugar than to fix quotas on exports. But a public interested in preserving national food-producing resources surely would stand for some restraint on exports that were causing stress on those resources. Of course the public interest in lower cost food would also be served by such a policy.
Stabilizing prices against the gyrations of foreign demand for grain requires a larger national grain reserve program than has been tried so far. The farmer-held reserve developed in the last two years, with voluntary release and mandatory "call" prices, has been popular. In addition, the Commodity Credit Corporation needs a modest reserve under its direct control which can be used flexibly to meet emergency relief needs or to prevent undue acceleration of prices.
Considering the ominous reports on soil losses from the nation's most competent soil scientists, one possible source of strain on the land could be eliminated with minimum pain-gasohol. Despite the wild projections of some biomass alcohol promoters, the hard fact is that a significant amount of transport fuel from grain would be very costly in terms of food supplies and soil depletion. At present prices for corn, massive subsidies are needed to make ethanol out of corn profitably. The more corn is used that way, of course, the higher the price goes. It would be disastrous to try to run our cars by using food resources for the job.
The gasohol promotion boom, like the export boom, stems partly from the half-century of surplus psychology in U.S. farming. As of March 1981 the Reagan Administration seems likely to continue the Carter gasohol program, with some reduction in loans for new plants but maintaining the gas tax forgiveness. At least that's what John Block wants. Realistic examination of the nation's soil resources eventually will result in common-sense conservation policies, including prudent limits on production of grain in vulnerable areas. But there is little evidence of that now.
The farmer has a legitimate claim to protection against a policy of conserving resources that would limit his markets and lower his prices-even if the land being conserved is his private property. The fact is that soil conservation-including investment in terraces, contour farming, and the withholding of land from cash-crop production-is too costly for most farmers to do on their own. The average farmer does not have a long enough planning horizon to justify the investment. He cannot expect the land to improve enough to pay off for him in the 25 or 30 years he expects to be farming.
So any national agricultural resource conservation policy that will work must include means of paying the farmer to cover his extra costs. The acreage set-aside system provided in the 1977 Agricultural Act is one device for reducing production and holding it more or less in line with a reduced export volume, thus offsetting the effect of lower exports on prices. The Act expires this year. It could be modified to assure the adoption of more conservation practices, but that would cost more money, which President Reagan does not want to spend.
After all those 40-odd years of crop acreage limitations, a really fair and effective plan has yet to be devised. Paying farmers subsidies for withholding land and for preventing erosion probably would be fairer and more effective, however, than paying subsidies based on number of pounds or bushels produced. The latter method simply rewards efforts to conserve less and produce more on the eligible land.
If the United States is to maintain its food-producing capacity, it will have to take action to prevent deterioration of the soil base. That very likely means in the next two decades the withholding of production of grain and soybeans to some extent, depending on the ability of new agricultural research and technology to increase output per acre without soil losses. This will be extremely difficult to accomplish politically at a time when world demand from both developed and underdeveloped countries is certain to increase, because of population growth and income improvement.
But America cannot "feed the world"-that is, meet foreseeable food deficits-under any conceivable circumstances, even with all-out production now-to say nothing of the needs in the twenty-first century, soon to be upon us. Concern over the world's hungry and malnourished must be turned toward development of their local food-producing power. Allowing them to become dependent on the United States for steady supplies of grain, and serving as a ready reserve granary as well, is no service to the hungry-because we can't keep it up.
Earl Heady, Director of the Center for Agricultural and Rural Development at Iowa State University, has shown that the possibilities for increasing food production in the developing countries are great.10 "Developing countries," he writes, "have 60 percent of the world's cereal area and produce 36 percent of the grain, while developed countries produce 64 percent on 40 percent of the area. While both developing and developed countries produced around 1.15 tons of grain per hectare in the period 1934-38, the developed countries had lifted yields to 3.0 tons by 1973-76 while the developing countries had attained only 1.4 tons." (The United States averaged 3.5 tons for all grains and 5.0 for corn; some countries have achieved 6 tons for rice.)
Plowing money, fertilizer, seed, technical assistance and, above all, applied research into the agriculture of the developing countries would pay off far better than exhausting the soil productivity of America in order to supply the mounting world demand.
2 The extraordinary rise in U.S. agricultural (and other) exports in the 1970s was partly caused by the decline in the exchange value of the dollar beginning in late 1977. Studies by the Treasury Department and by the Organization for Economic Cooperation and Development indicate that, with floating and therefore uncertain exchange rates, it takes up to 30 months for depreciation of the dollar to show up in increased price competitiveness of U.S. products in foreign trade. The sharp decline of the dollar in the first half of 1980 thus probably will support exports through most of 1981. However, the appreciation of the dollar in late 1980 and early 1981 may tend to reduce exports in 1982 and in later years if the Reagan Administration carries out its announced tough anti-inflation, tight-money policies. World demand for American grain undoubtedly will continue strong, despite a strong dollar, but demand pressure for further expansion in the trade may ease up.
3 From a symposium on "The Future of American Agriculture as a Strategic Resource," published by the Conservation Foundation.
4 Colin Clark, The Conditions of Economic Progress, London: Macmillan and Co., 1940.
5 For a historical review of the political maneuvering on Public Law 480, see Trudy Huskamp Peterson, Agricultural Exports, Farm Income and the Eisenhower Administration, Lincoln: University of Nebraska Press, 1979.
6 See the compilation of commodity organizations in Harold D. Guither, The Food Lobbyists, Lexington (Mass.): Lexington Books, 1980.
7 W.E. Larson, a soil scientist with the USDA's Science and Education Administration, wrote in the January-February 1981 issue of The Journal of Soil and Water Conservation that "current T-values may be too high in many cases for maintenance of long-time productivity. Perhaps scientists should set a new T1-value based on perpetual productivity maintenance. A T1-value could reflect the effect of erosion on crop yields. This would consider lost nutrients, remaining depth of the A-horizon [topsoil] and root zone, and subsoil productivity."
8 The National Association of Conservation Districts criticized this estimate as too low. It said USDA included as "cropland" millions of acres of hayland (16 percent of the cropland) on which erosion is slight. This, according to NACD, makes the erosion situation in grain-growing areas look less serious than it is.
9 American Journal of Agricultural Economics, November 1980.
10 See his paper presented at a meeting of research directors sponsored by the Organization for Economic Cooperation and Development, Paris, December 1979.