How much evidence do you need?

0
112
Soybean harvest
Farm and Dairy file photo.

While “zombie ideas” isn’t a phrase you often see in farm publications, New York Times columnist Paul Krugman has popularized it to describe a uniquely American political condition.

Zombie ideas, the 2008 Nobel winner in economics explained in a 2018 column, are “ideas that should have died long ago, yet still keep shambling along, eating politicians’ brains.”

Trade wars

That column’s title, Trump and Trade and Zombies, was a pre-tariff takedown of how deeply-discredited ideas — like the White House’s belief that trade deficits were bad and import tariffs were good — resulted in its “trade-wars-are-easy-to-win” approach to China.

Zombies or not, trade wars aren’t easy to win, especially when the U.S. ag economy starts with one foot in the grave.

In fact, American ag’s near-sacred belief that it must build export market share by shrinking or eliminating the Farm Bill safety net is itself a zombie idea, argue Harwood Schaffer and Daryll Ray of APAC, the Agricultural Policy Analysis Center, in the Aug. 7 edition of their ag policy column, Policy Pennings.

In it, Schaffer, an adjunct professor at the University of Tennessee, and Ray, an emeritus ag economist at Tennessee, estimate how many “additional acres U.S. farmers would have to put into production to currently maintain the same export market share they had in 1996” for corn, soybeans and wheat.

Shocking decline

To come up with that estimate, they compared U.S. corn, soybean, and wheat production and exports for 1996 to 1998 with those for the same crops during the 2016-2018 period. What they discovered was both predictable and astonishing.

For example, “U.S. corn accounted for 68.6% of world exports in the 1996-1998 period, declining to 35.3% in the 2016-2018 period.” In short, American farmers owned two-thirds of the global corn trade in late 1990s but, 20 years later, they clung to a little more than one-third of it.

In the same 20-year period, the U.S. share of global soy complex exports (beans, oil and meal) fell from 37.1 to 26.2% while U.S. wheat’s world export market share dropped from 26.9 to 14.6%.

If the three-year starting point is moved back another 20 years, to the 1976-1978 period, the U.S. export share of the global corn market plummets from 81.6% then to 35.3% in 2016-2018.

Similarly, 40-year comparisons reveal that the U.S. share of the global soy market dropped from 64.4% in the late 1970s to 26.2% today while the wheat share fell from 43.8 to 14.6%.

What that means, figures the Tennessee team, is that for U.S. farmers to have maintained their respective, late 1970s global market share for corn, soybeans and wheat, they would need to collectively plant 114 million more acres of the three crops today, “a near impossibility.”

The larger point, they note, is that American ag policy “has been seeking to maintain the U.S. share of world crop exports for a long time and under various policy instruments and yet the U.S. share has inexorably declined.”

Not working

But that reality has yet to alter American farm policy gospel that preaches “lowering the U.S. price will increase or at least maintain export market share.” That was the goal of “the 1985 Farm Bill… the 1990 Farm Bill” and when both failed “…we doubled down and adopted the 1996 Farm Bill…”

None of it worked; the U.S. share of the global corn, wheat and soy markets fell under all those bills. In fact, for 40 years no export-directed ag policy has interrupted our almost constantly shrinking presence in the global corn, soybean and wheat markets.

But “Even with these results, many ag economists and politicians continue to repeat the Zombie idea that lower crop prices will…increase the share of U.S. corn, soybean complex and wheat markets,” write Ray and Schaffer.

Which make the Tennesseans wonder, “How much contrary evidence will be required to finally vaporize this Zombie fantasy?”

Most TV-zonked zombie hunters know the answer: Evidence doesn’t matter because zombies aren’t real; they’re purely fictional.

Like much of today’s U.S. ag trade policy.

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

SHARE
Previous articlePostal Service slowdowns could hurt rural residents during election time
Next articleAspirin can provide relief to dairy cows
Alan Guebert was raised on an 800-acre, 100-cow southern Illinois dairy farm. After graduation from the University of Illinois in 1980, he served as a writer and editor at Professional Farmers of America, Successful Farming magazine and Farm Journal magazine. His syndicated agricultural column, The Farm and Food File, began in June, 1993, and now appears weekly in more than 70 publications throughout the U.S. and Canada. He and spouse Catherine, a social worker, have two adult children. farmandfoodfile.com

NO COMMENTS

LEAVE A REPLY

We are glad you have chosen to leave a comment. Please keep in mind that comments are moderated according to our comment policy.

Receive emails as this discussion progresses.