The societal effects of grocery prices
Rising food costs, which have increased about 12 percent over the last decade, may not be a major concern to the poorest of the poor. Most receive their food via government safety-net programs via food stamps that locally have seen a 97 percent increase in the last four years.
Food costs, however, are proving a considerable hardship to struggling families and retirees whose incomes are slightly above the poverty threshold. The USDA predicts that one out of seven American households are experiencing hunger in this bad economy.
This was the experience of my own family during the 1992 recession as a teenager in a family facing first job loss followed by the death of our breadwinner. For many years we survived thanks to the beneficent support of local food pantries.
In our communities, we have several that are deserving of our support, including Lyall Federated Memorial Church in Millbrook and Immaculate Conception, South Amenia Presbyterian and Saint Thomas Episcopal churches in Amenia.
Income-stretched consumers are hurting, but so also are farmers. While the consumer price index is rising (1.4 percent in 2010), agricultural expenses are growing disproportionately (gasoline costs went up 9.9 percent and diesel fuel went up 14 percent). Not surprisingly, our nation lost a startling 800,000 farmers/ranchers during the last 40 years.
The profit margin for farming is thin, about a penny on the dollar because profits tend to be disproportionately absorbed by other entities in the food chain. This was the subject of government hearings in Washington, D.C., in December, from whose transcripts much of the statistics referenced in this column are based.
Compared to 50 percent profits received by hog farmers in 1980, in 2009 they received 24.5 percent, with packers receiving 13.6 percent and the bulk (61.9 percent) going to retailers. Similarly, cattle profits fell from 62 percent in 1980 to 42.5 percent in 2009.
To the degree that rising food costs keep the industry sustainable, the increased costs are good — if the profits actually reach the farmers. Buying directly from farmers — as we in eastern Dutchess can easily do — is the best way to assure that the farmer makes the most profit from his/her labors. Beyond that public policy needs to ensure a level playing field for farmers through fairness and parity at the market.
A further method that is helping to keep farming costs down while also preserving farmland in our community is conservation easements. In addition to preserving open space and scenic views in our community for future generations and maintaining the rural quality of our towns, easements provide the farmer tangible benefits to lower the cost of farming. These include a one-time payment for the easement and a corresponding reduction in property taxes to reflect the lower property value caused by the contracted limitations on development.
This month the Dutchess County Legislature voted to extend the time period for the state review process by which the Bos Haven Farm in Washington/Verbank might eventually receive a conservation easement. Society benefits when consumers and policy makers alike take steps to support farmers.
Michael Kelsey represents Amenia, Washington, Stanford, Pleasant Valley and Millbrook in the Dutchess County Legislature. Write him at KelseyESQ@yahoo.com.