Stop calling “aid” what really is about supply management for US agricultural interests.
By Scott Freeman, Adam Diamond and Garrett Graddy-Lovelace, originally posted by The Globalist, June 18, 2016.
For the first time in a long while, Haiti’s peanut farmers are getting some attention. Kicked off by a blog post and Washington Post article, the decision by the U.S. Department of Agriculture to “donate” peanuts to Haiti has caused due ruckus on blogs and has inspired various editorial responses to and by the Washington Post.
Objections from the world of international development were swift and condemning. From Oxfam to Partners in Health, there has been fierce reaction to the “commodity dumping” by the U.S. Department of Agriculture.
Clearly, Haiti’s own peanut market stands to lose when surplus peanuts from the United States are flown in as food aid.
Throughout these debates, the seemingly noble act of donating peanuts to Haiti has rightly been criticized as undermining the already struggling smallholding peanut farmers in Haiti.
But this is not simply an issue of international aid policy. Smallholding farmers in Haiti are merely the most recent group of peanut farmers to be displaced by domestic agriculture policy. The first group was small and medium size growers in the United States.
Peanut farming in United States
The peanut has long been an important crop in U.S. agriculture. Agronomist George Washington Carver adapted and introduced the hardy legume to African-American and white farmers in the early 20th century as a way to fix nitrogen in soil depleted by cotton.
Peanuts thrived on low-input, low-resource farms throughout the southern states. Soon Carver and others began exploring different processing options to make use of the nutritious and abundant harvests.
For generations, peanut farmers maintained diversified small and mid-size farms, with high levels of crop rotation.
The U.S. government instituted marketing quotas in the late 1930s to manage supply, prevent gluts, and provide a price floor that kept peanut farmers and their agrarian economies afloat.
The overall quota was set to domestic demand and was then divided up proportionally among quota holders who relied upon it as a cash crop and rural economic anchor.
Meanwhile, the U.S. government protected the quota system with tariffs to restrict cheaper imports. Domestic peanut prices were higher than world prices for decades.
Increase in imports
By the mid-1990s, however, the new World Trade Organization’s Agreement of Agriculture deemed such tariffs trade-distorting, pressuring the US to relax them.
The 2002 Farm Bill repealed the peanut quotas, ushering in more imports and a decline in farmgate prices. Production shifted to areas with higher yields and lower production costs, forcing many small and medium-scale growers to leave the sector.
A geographically and demographically diverse landscape of peanut growers had already been consolidating, but after the market quotas were repealed, numbers fell even more. The remaining growers shifted away from crop rotation and toward peanut monocultures.
The number of farms producing peanuts declined from 9,000 to 6,561 from 2002 to 2012, according to the USDA Census of Agriculture — while total production increased.
Shellers and processors concurrently consolidated, to the point where two shellers now purchase more than 80% of all peanuts grown in the United States.
Meanwhile, the mid-2000s brought an upswing in domestic peanut consumption. High-end low-carb diet trends merged with a recession. Cheap protein was in high demand, and peanut butter fit the bill, despite the massive Salmonella contamination recall in 2009.
The 2014 Farm Bill
In 2012, the average American consumed 3.92 pounds of peanuts and peanut products according to the Economic Research Service.
Peanut production is still booming, supplying domestic demands (for sandwich spread and peanut-based processed foods) and international markets (for peanut oil).
The 2014 Farm Bill enables high volume peanut production at lower world prices through elaborate, government-subsidized price-loss and agricultural-risk crop insurance programs that provide payments to farmers if prices or yields respectively drop.
There is also a marketing loan program in which the government takes possession of farmers’ crops if the market price drops below $355/ton.
Meanwhile, the tripling of peanut allergies (from 1997 to 2007) may diminish institutional purchases of peanuts from schools to airlines, though the USDA has prioritized research funding to locate and breed-out allergens in the beloved legume.
Haitian peanut farmers stand to lose
So, the USDA is looking for an international outlet for the domestic surplus of peanuts. From a Haitian farmer’s perspective, such dumping is an affront and a dangerous threat to an agricultural economy.
It is merely the latest wave in similar policies that have marginalized Haitian farmers and worsened food security (the most notable example is subsidized US rice flooding the Haitian market.)
Smallholding Haitian peanut farmers and their families ultimately stand to lose. Still, appeals have been made by officials at the Department of Agriculture to the “daily struggle” of Haitians in order to legitimize the donation of peanuts to Haiti. But such language paints Haitians as powerless recipients of aid.
Haitian farmers are not isolated and unaware. They understand the broader economic policies that affect them. One author (Freeman) recently discussed the proposed policy with a good friend and peanut farmer in Southwest Haiti.
This is no charity
Sure, he said, today it may seem a good idea, but “tomorrow there will be negative consequences.”
As the Washington Post and others have pointed out, it would be a mistake to frame this situation as charity.
But, it would also be a mistake to reduce the situation to an us-vs-them narrative of greedy US peanut farmers bullying their Caribbean competitors.
In fact, the story of peanut policy in the United States is complex, beginning with a sustainable, nutritious cash crop that helped keep small – and medium-size growers — particularly African-American farmers on the land.
The far-reaching consolidation of the sector and extreme concentration of the processing industries speaks to larger political economic trends and forces in agriculture at large.
The story of the United States peanut policy divulges surprising parallels between U.S. farmers and their counterparts in Haiti — and elsewhere.