More than a century ago, a rapidly urbanizing United States (the U.S. Census of 1880 found farmers a minority in the labor force for the first time) decided, through the political process, that farming was too important to be left to the farmers to manage. In a tradition going back to the ancient pharaohs, government was seen as the best way to control the food supply and its price for consumers.
Various methods have been used saince our post-Civil War turning point-that is, that our deflationary monetary policy, surplus exports, a fixed parity formula, floating parity, deficiency payments, emergency aid would somehow do the trick.
As farmers responded with soaring productivity gains, over supply and inadequate producer prices have been the central problem.
In the early decades of the 20th century, farmer-quits weren't a problem-indeed, as late as 1962, the USDA was still preaching about a surplus of farmers and a labor shortage for industry. However, since the 1930s, the strategy has been of one of providing the least amount of aid needed to keep farmers producing, not quitting-this to ensure enough commodity supply to keep consumer food prices from rising as fast as urbanite incomes.
Adjusted for inflation, farm income continues to drop while urban income doesn't, so food-spending-as-a-percent-of-income for urbanites continues to shrink. From near 25 percent in the 1950s, it's below 10 percent today.
The 1951 $1/gallon of milk should cost $8.26 today. It doesn't. Milk left the farm gate at parity back then. Today, it doesn't.
Dairymen now lose money on milk production. Without some subsidy, some might quit-supply might drop and retail prices might rise and consumers would go political.
The 20th century turning point came in the early 1950s, with a governmental decision to dump the full parity formula and go to partial parity.
Elected on a platform including that policy plank, President Dwight Eisenhower's Ag Secretary Benson declared that "parity was costing the government (translation: urbanite taxpayers) too much money." Read it yourself in "Problems of Plenty", an ag-economics history by Douglas Hurt.
In a time when "we're waiting for the farm vote" meant it still mattered (today, it doesn't) an urbanite-oriented campaign based on the "crisis" of soaring consumer costs was needed. After all, butter in 1951 sold for 86 cents/pound, twice its price of 1941.
Folksinger Woody Guthrie was enlisted to rewrite an earlier tune with new lyrics describing "One pound of butter for two pounds of gold" and it made the pop charts at no. 15 the year "Tennessee Waltz" was no. 1.
Guthrie didn't sing about the growth in urbanite income: average non-farm wage in 1951 at $3732, compared to $1462 in 1941. Yes, butter doubled, but wages nearly tripled. Food was actually getting cheaper, in terms of the real measure, minutes-of-work-needed-to-buy.
Read the historical stats for yourself in "The Value of a Dollar, 1860-2004" by Scott Derks. A crisis too good to waste (a little Democrat Chicago politics lingo there) had to be created; it was and it gave birth to the then new farm subsidy principle: "Just enough to prevent supply reducing producer quits."
Things might have gone differently.
In the late 19th century, the progressives wanted to control lots of things beyond farming-the then-new utility industry, for example.
The progressives established the Public Utilities Commission in 1913. Since then, federal and state governments have regulated power and communications producers, but had to promise them 10 to 12 percent return on investment (ROI) to get the authority.
Why didn't farming get the same status and the same ROI guarantee? Well, not enough column inches here for a full discussion, but suffice it to say that the progressives (who proclaimed themselves to be above mere politics and ideology "nobody in here but us highly-skilled above-average-intelligence managerial-expert technocrats, shouldering the burden of governing all you ungrateful lesser-intelligence folks") were sufficiently politically sensitive to realize that a "10 percent solution" was essential to seize control of the communications and power companies-but it wasn't needed to conquer a sole-proprietorship farming culture.
All of this history explains why, in Shakespearean phrasing, "What's past is prologue"-since the-'50s rise of ag-management practice there's the least amount of consumer subsidy needed to prevent producer quits. This is why Vermont Gov. Jim Douglas vetoed a money-saving (for urbanites) downward tweak of the current use formula for farmer subsidy; it will inevitably be overridden by Douglas' pro-consumer Golden Dome legislative branch.
For political reasons, the legislators have decided not to override immediately, but they have historical precedent and political, demographic arithmetic on their side.
Douglas has the now obsolete notion that a deal once made should be honored-and he'll soon be out of office.
The actual food producers, unlike the power producers, lack the organization and clout to get their 10 percent ROI as a regulated public utility or to get a reasonable price at their point of sale-such as goods-and-services providers which have controlled their own income via supply management: licensure for professionals, production-control for businesses.
In Vermont, the now politically dominant and skillful exurbanite class (mostly the landed gentry leftists) wants to reside amongst, and drive past, pretty looking farms but is not willing to pay a cent more to keep its bucolic viewshed without actually-ugh-working in it (manure smells and all).
I've seen this movie before in the last reel: the urbanite majority always wins.
Nationwide such least subsidy needed strategy has been long-term successful (exception being the dairy strikes of the 1930s). In Vermont, the gentry has always won in the past. My guess in this current use flap? They'll win again.
Longtime Vermont resident Martin Harris now lives in Tennesee.