The major changes in American farm policy came during the Nixon administration with the appointment as secretary of agriculture Earl Butz, who reversed a New Deal era policy that stabilized grain production and prices...Food prices had been stabilized for almost forty years by the New Deal policy of government loans to farmers. The loans were given out to keep grain off the market, thereby allowing farmers to wait for prices to rebound, without gambling the farm. If prices didn’t rebound, farmers who were unable to repay the loan gave up their surplus grain to the government, which placed it in the eloquently named Ever-Normal Granary. The government could use the grain to lower the price during a spike, or to alleviate hunger...
Butz replaced this policy with subsidies to farmers when prices fell, thereby making up the shortfall for the farmer but without keeping the grain off the market. Prices fell precipitously, and overproduction of grain was allowed to run rampant, leading to a number of new contradictions...
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The article goes on to say that this drove smaller farms out of business & led to consolidation into larger farms (Butz's policies, & the Reagan recession, were the root causes of the 1980s ag crisis --remember "Farm Aid"?)
Dropping/unstable grain prices encouraged more production & increased use of chemicals & factory methods to increase production or keep costs down, as well as production of fewer varieties...
So what to do with the added production?
"Instead of using 'overproduction' of food to feed underfed or starving people in the U.S. and other parts of the world, new uses for staple crops were found. In order to get more calories into food, and more profits into bank accounts, Corporate America turned to processing whole foods into what Michael Pollan calls 'edible food-like substances.' It seems unbelievably simple and perverse, but industrial agriculture’s solution to an overabundance of calories was simply to reduce overproduced foods into their component parts, rearrange them, insert them into foods already eaten, or create new products dependent on high levels of processing. The secret? They largely share the same ingredients: sugars, starches, and oils derived from the Big Three of industrial food: wheat, soy, and corn."
(One of the reasons for the "obesity epidemic" that began circa 1980, when Congress also changed sugar tariffs in 1982 to make HFCS cheaper v. sugar. And one of the reasons there was a jump in average calorie consumption 80s-90s.)
"At least 43 percent of ADM’s annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM’s corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30.29"
"Novelty-shaped chicken nuggets are not a result of consumer demand, but pressure on food producers to elevate profit margins through increased market share and processing as a means of adding value. For those familiar with Marxist economics, the implications are clear: opportunities to extract surplus labor — and thus profit — are magnified by increasing the degree of processing. Cheapening the commodities that are a necessary part of the reproduction of labor cheapens wages, and therefore increases the amount of labor that is unpaid. Unpaid labor equals higher profits."
http://www.isreview.org/issues/70/feat-food.shtml