Commentary: America’s farmers and ranchers need less regulation, not more
Ag groups understand protectionism has never been a pathway to prosperity.
By Nevil Speer
The Coalition for a Prosperous America (CPA) keeps telling us about agriculture. And they keep getting it wrong. As a review, several months ago I wrote about CPA’s misrepresentation of U.S. agricultural trade to advance its protectionist agenda (see also “We Need Facts For A Candid World.”)
They’re back at it again. CPA is now telling us “Big Ag” is “dead wrong on trade.” That declaration follows a letter signed by various agricultural trade associations urging Congress to support the World Trade Organization framework and “take this opportunity to refocus and leverage the WTO in support of a market-based global economy that makes America strong, safe and prosperous.”
Let’s unpeel some of CPA’s response.
Glaring omission. We’ll start with the letter; it’s signed by entities such as the following – and their respective representation (emphasis mine):
American Farm Bureau Federation says, “We are farm and ranch families.”
American Soybean Association notes it “represents U.S. soybean farmers.”
National Corn Growers Association explains it’s “creating and increasing opportunities for corn growers.”
National Council of Farmer Cooperatives points out “the majority of America’s 2 million farmers and ranchers belong to one or more farmer cooperatives.”
Apparently, CPA believes producers who are members of trade associations or co-ops (to advance their respective interests) are part of “Big Ag” (whatever that means). And then CPA accuses signees of not doing their homework, claiming: “the most glaring omission in the pro-WTO Big Ag letter is any recognition of how trade liberalization has affected America’s small and family-owned farms.”
But wait, the signees represent those farms – they do understand. That’s why they’re advocating for some trade certainty.
CPA then tries to further leverage the consolidation issue by pitting producers against one another. The group claims these “multinational agribusiness players” (i.e., trade associations) are “lobbying for more” free trade. And, according to CPA, “big producers have stood to gain an increasing market share while regular family farms are run out of business.”
Consolidation. As evidence of how trade has seemingly influenced agriculture, the group cites data from the U.S. Department of Agriculture’s Ag Census between 1997 and 2022, along with a 2018 report by the Economic Research Service detailing the past three decades.
That’s a narrow view. To that end, the group commits its own “glaring omission.” If CPA really understood agriculture, they’d know farm consolidation has been ongoing for nearly 100 years (see chart). Moreover, CPA avoids the primary causes of consolidation: At the top of that list is government regulation – more on that below.
Structure. Speaking of glaring omissions, CPA sidesteps the USDA report titled America’s Farms and Ranches at a Glance: 2023, which, not surprisingly, counters CPA’s caricature of U.S. agriculture. USDA explains, “U.S. farming is still overwhelmingly a family business. In 2022, 97% of U.S. farms were family farms, accounting for 90% of farm production.” So much for CPA’s pejorative depiction detailed above.
Lessons. What are we to make of all of this? There are a couple of key lessons. First and foremost, agricultural producers are being squeezed on both sides of the tariff issue: input purchases (e.g., fertilizer) and diminished export potential (i.e., retaliatory tariffs).
But second, and more broadly, is the issue of regulation and regulatory costs I noted above. Tariffs are parallel to more regulation. And no matter its form, regulatory burden is always regressive in nature – it inordinately impacts small business (i.e., farms and ranches) more than large business. (In an ant’s house, the dew is a flood.).
All of this brings us back to the principles. To that end, Leonard Reed (Foundation for Economic Education) wrote the following in 1971: “The alternative to the free market is the rigged, planned, dictatorial, coercive, interventionist, authoritarian market, variously known as the planned economy, the welfare state, omnipotent government – the kind of arrangement into which we in the U.S.A. are rapidly drifting.”
CPA seemingly embraces the “I’m from the government, I’m here to help” approach to business, thus the criticism of America’s farmers and ranchers (“Big Ag”) telling us something very different; they need less – not more – regulation.
The associations’ letter advocates for allowing them to compete and thrive in a free-market, less-regulatory environment. After all, they understand protectionism has never been a pathway to prosperity.
