I've written before about the University of Minnesota Regional Sustainable Development Partnerships, a citizen-driven program of the University that strives to create a more vibrant relationship between the citizens and their University, address issues according to sustainable development principles, and promote active citizenship through local citizen participation in designing and implementing projects in the region. The following article from the September 2006 Annual Newsletter of the West Central Regional Sustainable Development Partnership highlights one of the collaborative efforts between the Partnership and the University. It portrays a striking and worrisome picture of our agricultural economy and food supply.
IMMENSE FINANCIAL LOSSES INSPIRES EXPANSION OF LOCAL FOODS CAMPAIGN
The West Central Regional Sustainable Development Partnership (WCRSDP) is expanding its ongoing campaign along with its Pride of the Prairie partners to place locally produced foods in local markets. This effort will also bring policy ideas to political leaders such as Congressman Collin Peterson.
This initiative builds on an economic study showing that our region loses over $1 billion each year — an amount equal to one of every three dollars earned by the region's residents — because farmers and consumers trade with firms that draw wealth out of our communities.
Expanding local foods trade is one way to stem these losses.
Speaking at the 2005 WCRSDP annual meeting, economist Ken Meter cited public data that shows that West Central Minnesota farmers have lost, on average, $150 million dollars producing crops and livestock each year for the past 11 years. Although federal subsidies compensate farmers for these chronic losses, these payments end up drawing wealth from the region, Meter said.
Federal subsidies help hold commodity prices low even while they raise land prices, Meter added. Further, subsidies encourage producers to take on debt, and buy more inputs (supplies), from distant firms than the region can afford. He estimates that the region's farmers spend $600 million each year buying farm inputs from outside vendors.
Meanwhile, as farmers struggle to pay their bills, West Central consumers buy their food from sources outside the region. Meter estimates that residents buy at least $250 million of food from outside suppliers each year.
These three outflows of money total $1 billion each year, he added. Meter, president of Crossroads Resource Center in Minneapolis, has taught economics at the University of Minnesota. He draws his data from the Bureau of Economic Analysis (BEA), an impartial federal agency.
His study, commissioned by WCRSDP, covers the 12-county region including Big Stone, Chippewa, Douglas, Grant, Kandiyohi, Lac qui Parle, Pope, Renville, Stevens, Swift, Traverse, and Yellow Medicine counties, with 173,000 residents. Meter conducted similar research in northwest and southeast Minnesota as well as regions in other states including Iowa, California and Hawaii.
The region has 12% of the state's farms, with 21% of Minnesota's farms over 1,000 acres in size, as well as 21% of the state's irrigated land.
Yet direct food sales to consumers are small. USDA reports that 271 farms in the region sell $871,000 of food directly to consumers. Seven percent of Minnesota's organic foods (valued at $562,000) are produced in West Central.
Farm production losses result from day-to-day transactions, rather than big events. BEA data show that the region's 10,011 farm families sold $1.44 billion of farm commodities on average each year from 1993 to 2003.
However, they spent $1.59 billion, on average, to produce these crops, for a net loss of $153 million per year. This means a total loss of $1.7 billion over those 11 years.
Farm families collect $167 million in federal supports, and earn $80 million of other farm-related income each year, to cover their costs. Even taking this income into account, one of every three farms in the region lost money in 2002, according to the Agriculture Census.
Meter concluded his presentation by citing national trends that affect farmers and consumers in West Central Minnesota. Nearly half of all groceries sold in the U.S. is sold by five supermarket chains, with Wal-Mart & Sam's Club ranking first and seccond. The large distance between producers and consumers creates huge imbalances, he added. Studies show that 85% of food industries lack competitiveness, forcing food costs higher.
The “buzz” at the meeting — which included farmers, lenders, chefs, and educators — expressed great concern over the Wall Street Journal's report that the U.S. is about to become a net food importer on a permanent basis.
As a follow-up to Meter's presentation, WCRSDP is engaging West Central citizens in a broad dialogue that will lead to meetings with state, local and congressional leaders, including Collin Peterson, a member of the House Agriculture Committee.