When the food bank in Anchorage received a trailer-load of pickles in 5-gallon pails, it was clear that things had gone sour. The food bank needed produce and dairy, not pickles galore.
That started a round of talks among food-bank managers and suppliers, a round of talks that led to an unusual solution. The free market. Sorta.
Food banks give donated food to folks who can’t afford it. Food banks straddle the divide between the private sector, which grows the food, and the public sector, which pays for some of it. A quick Google search showed at least 14 federal programs to feed people outside the free-market system.
Look at what happened in Alaska. Feeding America is among the largest distributors of food to food banks and food pantries. Feeding America asked economists to figure out how to keep those pails of pickles out of Anchorage. The economists said, try a free market. Hold auctions, like eBay, for truckloads of yogurt or canned tomatoes. If a food bank wanted something, it could bid.
The economists said, Create fake money. Give some to every food bank to “buy” the donated food. Jonathan Goldstein reported on NPR that, “Every food bank in the network gets a certain amount of ‘money’ every day.” The more people a food bank serves, the more “money” it gets each day. At auction, it bids that “money” for food.
Now, Susannah Morgan, director of the food bank in Anchorage, can use her “money” to buy produce that won’t grow in Alaska, say, tomatoes, and dairy for the food bank. She reports that it is working well. No more pickle pails instead of milk cartons.
This was a free-market solution to what some, including a food-bank director who called himself a socialist but who later signed on to the fake “market,” saw as a problem that might require a government solution. For Feeding America, waiting for the government to come up with a better distribution plan wasn’t an option.
Others may be expecting too much of the government, as well. Especially farmers. Perhaps no economic group other than defense contractors has been more willing than dairy farmers to jump into bed with the government.
I understand why dairy farmers have turned to the government to set regulations and prices. Leave milk or yogurt on the counter for a day this month, and you’ll know why, too. Dairy products are highly perishable. A farmer with 900 pounds of milk in the cooler needs someone to pick it up and get it processed quickly at the dairy plant, too.
We also ask dairy farms to pump out (pun intended) milk every day. And, dairy cows are what economists might call an “inelastic” source. A cow cannot give milk until she has given birth. She cannot be impregnated until she’s a year or so old. She will be pregnant for nine months. For nearly two years, she is a “boarder” on the farm, called a “dry cow,” not an animal making food. Maybe these problems of perishability, supply and lead time got and keep the government in the dairy business.
But things can calcify when the government gets involved. Whatever the needs when the government sets up a program, the needs are likely to change more rapidly than the program can change. It may be also that government intervention leads to consolidation, since governments tend to prefer dealing with large rather than small businesses. Dairy consolidation has happened at the processing level. A few big dairies remain, so a farmer who wants to sell to a different buyer finds few available. Here in Maine, the number of dairy plants dropped to two from three and now is rising back to three. Can’t consolidate a lot more than that.
The number of dairy farms continues to fall, too. You probably read last Sunday in the Sun Journal about Brenda and Bussie York in Farmington, who face a deadline of Aug. 31 to figure out whether they can keep milking cows after their contract ends with one of the two national buyers of organic milk. If not, they could join the 10 dairy farms a year that have gone out of business in Maine since 2010.
Can the Yorks find a way to sell up to 3,200 pounds of milk a week? That’s 267 gallons a day. The Yorks have already dived deeper into the private sector, starting a farm store to sell items made from their milk. The store sells about 1 percent of the weekly 3,200 pounds of milk.
If you value the work or farmers, as I do, the drop in the number of dairy farms is worrisome because Maine can drop below critical mass. That is, below the number of farms needed to keep suppliers (tractor dealers and feed mills) in business and to keep Maine in milk. If you want landscapes to remain open, as I do, the drop in the number of farms is worrisome because it means some hay fields will grow up into trees, and you’ll no longer see mountains above the horizon. If you value communities that depend on one another rather than on some distant organization or agency, as I do, you may mourn that the decline in the number of dairy farms is leading to a decline of community.
Can a roster of agencies (USDA, Maine Department of agriculture, conservation and forestry, Dairy Herd Improvement Association, Maine Milk Commission, to name a few) think far enough outside the milk room to come up with solutions? I doubt it. Calcification, you know.
In a system so complex, it is difficult to think outside the box. It will require figuring out a market solution to the three issues of perishability, daily demand and lead time to production. This may be a job for the economists who took the pickles out of Alaska for Feeding America.
Bob Neal farmed for 30 years. He is grateful to Bussie York for a piece of advice Bussie offered 20 years ago. “There is always opportunity,” Bussie said.
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