The United States' Army Corps of Engineers is considering an expansion of the navigation infrastructure on the Mississippi River. The project will facilitate the export of U.S. grains from the Midwest out to the Gulf of Mexico. Expanded navigation on the Mississippi is strongly advocated by many large agribusiness interests and commodity groups. These organizations subscribe to the belief that increased exports will result in a higher price for these grains and subsequently increase farmer income. The exports are expected to improve the food security of low-income, food-deficit countries. This message resonates well with the popular belief that exploding populations and global food shortages necessitate greater U.S. grain production in order to 'feed the world'. This rationale also justifies intensive fertilizer and chemical use, large confined animal feeding operations, and the use of genetically modified crops.

The Institute for Agriculture and Trade Policy (IATP) has researched the impacts of grain export from the Midwest. Our preliminary analysis of grain exports for the past eight years does not show a correlation between increased exports and increased farmer income. Additionally, the majority of U.S. grain exports are not transported to food-deficient countries, but to countries with a sufficient foreign exchange to afford our grains.[1] Grains that are transported to food-deficient countries tend to create more disruption - through disturbances in local markets and displacement of farmers - than the benefits received.[2] Finally, the unsustainable methods of production for these grains result in excessive environmental damage to soil and water. Export agriculture is, in general, not assisting the U.S. farmer nor feeding undernourished populations, but rather the grain companies that benefit from the movement and processing of these grains.

The United States is the world's top producer of corn and soybeans and the fourth largest producer of wheat.[3] The majority of these crops come from the nation's "breadbasket", the Midwest. The rich soils, favorable climate, plentiful water supply have permitted continual increases in yields per acre.[4] Industrialization has dramatically increased the amount of crops each farmer produces.[5] Despite the technology and transportation advantages the U.S. farmer enjoys, monetary benefits have not materialized. On the contrary, farmer income and the vitality of rural communities have been in decline even while exports. Data indicate that the benefits of the export economy are not filtering back to the farmer.[6]

Since 1970, U.S. exports of corn, soybeans and wheat have all at least doubled. A correlation between the volume of exports and commodity prices does exist.[7] However, this has not translated into gains in farmer income. For example, from 1981 to 1995, despite corn exports at two to four times 1970 levels, the dollars per acre return to corn farmers, excluding government payments, was negative each of those years. For wheat, the return to farmers has been negative every year since 1980 excluding government payments.[8] Larger factors than simple supply and demand are obviously playing a role in farmer income.

Large demographic trends have emerged due to the decline in the agricultural sector. As industrialization reduces labor requirements and returns to farmers have been in decline, many rural agricultural counties have lost population. Those that remain are increasingly relying on nonfarm income. Dr. Richard Levins of IATP has analyzed the farm and nonfarm earnings for Swift and Martin Counties in rural Minnesota from 1969 to 1995. Initial data shows that farm earnings in both counties have been in slight decline, while nonfarm earnings have increased rapidly.[9] Instead of providing expanding benefits to the counties, it appears that in some years residents are actually subsidizing agriculture with nonfarm earnings. It is difficult to grasp how farmers in these and similar export-dependent counties have benefited from increasing farm exports.

More important to farmer income than expanding export markets is control of the food dollar. The percentage of food expenditures that farmers receive has dropped every year for the past 30 years, down to 23 percent in 1996. Farmers produce cereal and bakery products receive only seven percent of the food expenditure.[10] However, even this does not tell the whole story. The cost of farm inputs such as seed, fertilizer, pesticides and land have continually increased, grabbing a larger share of the portion of food expenditures that return to the farm. Dr. Stewart Smith of the U.S. Congress Joint Economic Committee found in a 1992 study that the percentage of the food expenditure directed to input costs has gradually increased throughout the century from 15 percent to close to 25 percent.[11] Export-oriented agriculture will not alleviate these trends, but continue the farmer's dependence on corporate marketing, processing, and transport of grains.

The majority of U.S. grains are consumed domestically by livestock. Of the three largest grain products - corn, soybeans, and wheat - only wheat has a significant proportion that is used for domestic human consumption, 39 percent. Twenty percent of U.S. corn, 36 percent of soybeans, and 43 percent of wheat are exported.[12] The vast majority of exported corn and soybeans are transported to other countries with a large livestock industry. Wheat is the only one of the three grains that is primarily directed to low-income food deficit countries (LIFD). Egypt, China, Philippines, and Pakistan are the largest importers of U.S. wheat.[13]

The U.S. has historically been generous in food aid programs. At times, these programs have been of great benefit to the recipient countries. The significance of food aid imports is diminishing, however, as market-oriented programs gain favor. This increases the impact of food price fluctuations for LIFD countries, and instability is likely as a more liberalized economy evolves.[14]

Food dependency in developing countries has grown, inherently increasing risks to food security. From 1961 to 1996, developing countries' grain imports increased 349 percent while population only increased 114 percent.[15] An estimated 828 million people in the world are chronically undernourished, and the number is rising.[16] Latin America and Sub-Saharan, historic net food exporters, are now net importers. Frequently the problem is not that population has expanded beyond production capacity, but that markets have been taken away from local producers. Mexico offers a clear example of the potential food security impacts from grain imports. Almost half of Mexico's population live in poverty, many of them in rural areas. A large inflow of grains from the U.S. has caused a glut in local markets. In 1996, with world prices at record highs, imports forced local food prices down approximately 20 percent from 1995.[17] Subsistence producers, who make up 50 percent of the rural population, are being displaced by these imports, forced to find available employment in other sectors.

Dependence on food production on another continent does not enhance food security. Countries that are the least food secure do not have the foreign exchange to afford food at world prices. Furthermore, the only income for many malnourished people is from agriculture. They cannot compete with U.S. agricultural production that exports grain below the cost of production. Unfortunately, our food policies are not only not feeding the world, they are not feeding the U.S. According to a 1997 Census Bureau and USDA report, almost 12 percent of U.S. households are considered food insecure, while four percent of households experienced moderate or severe hunger for one or more months in the previous year.[18]

The Midwest has developed an infrastructure for the production, processing, and transportation of grains. Farmers have a limited number of products that can be locally processed, which in turn promotes monocultural production. Farmers maintaining single-cropped fields frequently need pesticide and artificial fertilizer inputs to compensate for soil depletion and pest infestation. These practices have many adverse impacts, most notably on drinking water. Over 4.3 million Americans are exposed to herbicides in their drinking water at concentrations exceeding the acceptable cancer risk level established under the Food Quality Protection Act. Commonly used agricultural herbicides contaminate the tap water of 374 Midwestern towns.[19] The U.S. Geological Service found that nitrate concentrations in about 12 percent of domestic-supply wells in agricultural areas exceeded the U.S. Environmental Protection Agency's drinking-water standard.[20]

Industrialized agriculture is also impacting the Midwest's environment in a less overt fashion. The fungal disease wheat scab (Fusarium Head Blight) has emerged in the wheat-growing regions of Minnesota and North Dakota. Wheat scab is associated with short crop rotations and a lack of crop diversity combined with high precipitation. Sixty-one percent of all crops planted in the region in 1996 were wheat and barley, and the losses from scab are estimated to have a value of $428 million dollars from 1991 to 1997.[21] These farmers are searching for alternative crops to plant besides small grains, but the short growing season, coupled with the lack of a market for processing other products in the region, has made a transition difficult. Signs of a collapse in the Corn Belt's corn-soybean rotation are also apparent. A variant of the corn rootworm can now survive through a rotation of soybeans, reducing the effectiveness of the corn-soybean rotation.[22] Soybean cyst nematode, an insect that is estimated to cause over $1 billion in damage to soybeans, flourishes in short crop rotations.[23]

Another recent emergence has been a hypoxic zone in the Gulf of Mexico. Hypoxia occurs when the dissolved oxygen concentration in water drops below two parts per million, thus making the water body uninhabitable for most aquatic species. The zone in the Gulf has doubled in recent years to approximately 7,000 square miles, endangering the large commercial fishing industry.[24] Nitrogen, which promotes algae that in turns uses up oxygen, is the probable cause of the expanding zone. The majority of the nitrogen originates from the Upper Mississippi River Basin, which drains most of the Midwest's corn and wheat belt. Due to the geographic distance between the cause and effect, hypoxia has resulted in an interesting policy debate between Midwest farmers and Gulf fishing interests.

Environmental concerns are of critical importance at this time because of a $51 million study of the Mississippi River navigation system currently being conducted by the Army Corps of Engineers.[25] The Corps is investigating the feasibility of expanding navigation under the assumption that grain exports will double in the next 25 years and that barge shipment is the most efficient means of transportation. The cost of the expansion is enormous, from $5 to $6 billion, with the majority of funds coming from taxpayers. Environmental scientists are concerned that the expansion of the locks, the subsequent increase in barge traffic, and the resulting decline in fish and wildlife habitat threatens the Mississippi ecosystem.

The rationale for expanding U.S. grain exports - increased farmer income and improved food security - is misplaced. More important for the viability of the U.S. farmer is the percentage of the food dollar retained, which has dropped consistently the past 30 years. Of greater significance to international food security is the maintenance of local agricultural production, which has become more precarious with the export of grains from industrialized agriculture. Furthermore, environmental concerns are best addressed when agriculture is rooted in local production and consumption. Localized agriculture allows for greater recognition of good farming practices and greater accountability for environmental harm. Our best - and only - method to "feed the world" is to promote sustainable agriculture and local consumption both in the United States and around the globe.

[19] "Tough to Swallow: How Pesticide Companies Profit from Poisoning America's Tap Water", Environmental Working Group, http://www.ewg.org/pub/home/reports/toughtoswallow/contam.html, Washington D.C., August 1997.