Researchers: Midwest’s Agri-food System Must Transform to Survive

Midwestern researchers said ag system designed for Dust Bowl must move beyond corn and soybeans to remain sustainable and profitable.
June 2, 2020

Researchers from around the Midwest say the COVID-19 crisis has revealed that the region’s nearly century-old agriculture system needs to transform in order to remain sustainable and profitable.

More than two dozen experts from Midwestern universities and organizations co-wrote an essay saying the region’s current corn and soybean monocrop system is not serving the needs of farmers, consumers or the environment and needs to be re-envisioned for the current century.

The experts, whose disciplines include agriculture, economics and other specialties, said the current crop system grew out of a need to provide an inexpensive and secure food supply after the Dust Bowl of the 1930s, but it is now outdated and is causing economic, social and environmental problems.

“We designed a lot of federal policies to support farmers to grow corn and soybeans. Even in years when they didn’t grow very well, they still effectively paid farmers through subsidized crop insurance and other types of policies to continue growing corn and soybeans. And what we’re increasingly seeing now is that that system, even before COVID-19, wasn’t really serving the needs of farmers,” said Linda Prokopy, professor of natural resources social science at Purdue University.

Areas where corn and soybeans are grown in Indiana.

Growing corn and soybeans is important, as about 75% of all grocery store items contain corn of some kinds and both corn and soybeans are used for animal feed.

But Prokopy said limited markets for those crops have forced farmers to grow their operations to sell enough to earn a profit. That has caused a series of problems for individual farmers, including increasing farm bankruptcies, declining farm employment and climbing farmer suicide rates.

According to the U.S. Department of Agriculture, before the COVID-19 crisis, net farm income in the U.S. was expected to increase by $3.1 billion in 2020. At the same time, the average net cash farm income was expected to decrease nearly 9% even before the pandemic drove crop prices down.

More farmers have had to take out loans to expand to keep above the profit margin or continue operating their farm. Because of that and other factors, farm debt is expected to increase by $9.7 billion in the U.S. this year. Farmers may be having difficulties keeping up with those loans, as bankers said they have already seen a decline in the rate of loan repayment.

In 2019, the number of farmers filing for Chapter 12 bankruptcy nationwide rose by 24%. The American Farm Bureau Federation found that more farmers filed for bankruptcy in the Midwest than in any other region of the U.S., although Indiana actually saw a decrease in the number of farmers that declared Chapter 12 bankruptcy between 2018 and 2019.

Source - American Farm Bureau Federation

“I have a huge amount of respect for the corn and soybean farmers that I work with,” said Prokopy. “It’s tough, and it’s hard. We’ve seen increasing farmer suicides. We’ve certainly seen the deterioration of many rural communities as many people have left their localities as farms have gotten larger and there’s less need for farmworkers.”

Researchers found that between 1992 and 2010, farmers had a suicide rate above all other occupations, and self-employed farmers were even more at risk for suicide due to financial stress.

At least 450 farmers committed suicide between 2014 and 2018. The actual number may be higher, but variances in recordkeeping by states and redactions in data shroud the truth.

It’s unclear how farmers will deal with the added difficulties imposed by the pandemic, but Prokopy said the virus has made more people aware of problems existing in the current system.

Prokopy and her colleagues said the agricultural system in the Midwest must move beyond just corn and soybeans in order to prosper in the 21st Century. USDA photo

“When COVID-19 hit, it had a huge impact on every sector in society, but we’re seeing a lot in the news about the impact on agriculture,” she said. “Consolidated meat processing plants, with farmers having to throw away food and basically till food back into the ground because they’re losing markets for it. I think COVID-19 really shines a light on the lack of resilience in our current system. Many of us were already aware that resilience wasn’t there, but COVID-19 is emphasizing that and I think it’s really hopefully it will serve as an impetus to move this kind of change sooner rather than later.”

Prokopy and her colleagues said the virus has made painfully clear that the agricultural sector at all levels must acknowledge and accept that corn and soybeans alone are not enough.

They said it is necessary to increase the diversity of agricultural systems at farm, landscape and market and supply chain levels so they are more resilient for farmers, rural communities and the environment.

The researchers recommend land diversification plans like incorporating small grains and forage crops into extended rotations, replacing some corn and soybean acres with perennial bio energy crops, incorporating agroforestry, more cover crops and horticultural food crops and other plans.

The researchers said land diversification must be paired with the development of local and regional processing infrastructure and less reliance on lengthy supply chains and consolidated markets to allow farmers and food businesses to be financially viable.

Prokopy said the current system makes it difficult for farmers to branch out and try to adopt new farming strategies.

“Farmers themselves are struggling financially but don’t have an obvious way out. There are some farmers who have innovated and have developed other crops, integrated livestock back into the land and found their own markets,” said Prokopy. “There are limited markets for alternative crops, and so it’s really hard for farmers to step out of the dominant corn-soybean rotation when that’s being subsidized by the government and other things are not being subsidized by the government.”

The U.S. Department of Agriculture administers about $20 billion in agricultural entitlement programs yearly that support farm income, help farmers after disasters and conserve natural resources.

Most of those programs focus on helping farmers who plant crops on a short list of approved commodities.

Programs like the Agriculture Risk Coverage pay farmers when actual crop revenue declines below a specified level.

The Price Loss Coverage program provides payments to farmers when the price of one of 22 covered commodities, which includes corn and soybeans, falls below a reference price set by the USDA.

Other federal laws, like the Renewable Fuel Standard, encourage the growth of certain crops for nonfood purposes. The RFS requires every gallon of gasoline sold be mixed with certain volumes of renewable fuels made from starch feedstocks like corn and grain sorghum.

These and other federal measures most often available only to traditional farming systems make it difficult for farmers to be flexible in the crops they grow.

Current federal programs help subsidize insurance for farmers and protect farmer income, but the programs mainly protect farmers who plant specific types of crops. USDA photo

Prokopy said many federal agricultural assistance programs should be reexamined. She said crop insurance policies should be expanded to include more crops and should not contain restrictions that will limit the farmer’s ability to be flexible and creative.

She said she believes everyone in the agricultural supply chain, from farmer to supplier to Farming Bureau, should get together and think through a vision of what the future of farming could be in the Midwest to fulfill the needs of both producers and consumers.

“I think we need to be thinking big and really think through questions with everyone about what do we want to be, what do we value as a society and what we want the landscape to look like,” said Prokopy.

The American Farm Bureau Federation, a national insurance company and lobbying group for the agriculture industry, has not said whether it supports the changes to the current crop system.

In a written statement to the Indiana Environmental Reporter, Shelby Myers, an economist with the American Farm Bureau Federation, said many factors shape a farmer’s decision on which crops to plant.

“Farmers plan their business in three main stages – paying for large upfront expenses, growing a crop, then harvesting to sell at a price they don’t get to negotiate. It is truly a matter of hoping for the best and planning for the worst, then taking a gamble with Mother Nature,” she wrote.

A federal agriculture assistance program that will begin accepting applications in June will offer assistance to a diverse variety of commodities.

The Coronavirus Food Assistance Program pays farmers who have suffered a 5% or more price decline in their commodity or have had losses due to market supply chain disruptions due to COVID-19 and face additional market costs.

The eligible commodities in the program include 11 types of non-specialty crops, including corn and soybeans; a wide array of specialty crops like fruits, vegetables and nuts; three types of livestock; dairy; and wool.

Researchers: Midwest’s Agri-food System Must Transform to Survive