Disclosure and you

Now that we’re getting serious, our politics of ideas man Don Arthur has a confession. You’ll recall he’s a former official at the Commonwealth employment department who’s now doing a Phd full-time.


Don writes: “I was thinking over what you were saying on Late Night Live about Inside Out attracting people who are not part of peak groups. Here’s something people ought to know about me. I can afford to study full time because I’ve got a scholarship – it’s called an Australian Postgraduate Award (Industry). My industry partner is Anglicare (WA). I’m not exactly sure how the money thing works but Anglicare puts up some of the funds and is involved in setting the research topic. I have three supervisors, two from Edith Cowan and one from the industry partner.


“Before I saw the ad for the scholarship in the Oz I’d always thought these industry things meant mining companies, chemical manufacturers or bio-technology. I was very happy to learn otherwise. Sorry I didn’t say this earlier.”


Personally, I can’t see anything remiss in not disclosing this, unless you mentioned Anglicare in a piece, or were writing on religious charity or the like. But Don’s disclosure does raise the question of independence on this page.


I spoke to a Rotary lunch on Wednesday on the topic “Playing politics in post-egalitarian Australia” which made me think about what this page has turned out to be, and what’s the philosophy that’s come to underpin it.


1. After following Pauline Hanson around in 1998, I realised that I didn’t know much at all, had been lazy in accepting the truths of the experts without thinking about it,and was generally out of touch. I was also convinced that conversation across viewpoints was vital to national coherence and the search for a new consensus.


2. I had three main assets:

(1) I have access to information and an opportunity to scrutinise people of power because of my job and the paper I work for;

(2) I am independent. The only constraint I have is in speaking completely openly about the company I work for, although over the years I’ve come pretty close. That means I can be trusted – not to be objective, but to be honest.

(3) After going through the agony of using the “I” word in my Pauline Hanson book, I have thrown off the shackles of the myth of objectivity, which is really an excuse to hide the truth from readers, not expose it. It also falsely sets the journalist up as judge, not participant.

(4) Once you get over that one, you stop being defensive about criticism and realise that publication of criticism is a sign of confidence, and its censorship proof of insecurity. It also means that since everyone’s sitting at the same table, genuine engagement is natural.


As it’s turned out, the page has become an open ended-conversation with me as facilitator, as well as general rave merchant.


What’s the point of that? A big thing in its favour is that no-one believes anyone HAS the answers/the complete picture, anymore. We are in a transition of thinking, ideologically and philosophically, about our society and its values. To scream at and deride those who have different starting points castrates the debate, not enlivens it. It’s also depressing.


What I love about this page is that intelligent people from many starting points are interested in other thoughts. It’s exhilarating. It cleans out cobwebs and lifts feelings of disempowerment or hopelessness.


It’s also a pretty big challenge to the mainstream, in that it’s privileging ideas over who has them, and intellectual debate over rhetoric and conflict-thrill.


Going back to Don, I can’t check out every contributor and investigate hidden agendas. Basically this page is a trust exercise. I run most of what’s sent in, with my judgement being pretty simple – is it interesting, is it repeating previous contributions, is it accessible?


So it doesn’t matter who’s name is on it, in that sense, which is – apart from trying to free people from the constraints their work places put on their freedom of speech – why nom de plumes are cool with me.


But I do ask that if it would be reasonable to perceive a bias, or conflict of interest, in what you write, that you disclose this. Like the marginal seats reports – if you’re a party member, just say so. Also, if you’ve got expertise in an area you’re writing on, I’m sure readers would appreciate that information too.


Onward. Jack Robertson does Meeja Watch and John Crockett does over the SMH. Fiona Rothwell pines for a return to the politics of agitation. First-timer Paul Bannister, an expert on energy efficiency, weighs in on the Kyoto debate. Andrew Stapleton puts the case FOR dairy deregulation, and first timer Trevor Wallis picks up on the environmental objections to the policy mentioned in Tim Dunlop’s udder piece.



By George!


By Jack Robertson


Firstly, a word on the Meeja coverage of the Chinese/US diplomatic ‘crisis’ now underway, then some cheering life-signs from Aunt Abe.


Ask yourself this question – What is the worst thing that has happened during the whole kerfuffle over the Seppo reconnaissance plane that landed on Chinese soil after the mid-air collision?


Is it the ‘heightening’ of tension between the Americans and the Chinese? Is it the spectre of a new Cold War? Is it the implicit ‘challenge’ to new US President’s Bush’s authority? Is it the potential threat – by forcing world attention onto Human Rights issues – to the Chinese bid for the Games?


Watching most of the Meeja coverage to date – especially on the Box – you’d think that any and all of these ‘flow-on, Big Picture’ issues form the core of the story. The result, in my opinion, has been that the most important (and ongoing) nugget of news content has been overlooked, or at best not given the prominence it deserves.


That is this: as you read this, there is a Chinese pilot still missing. He’s probably dead already, but if he is not, he is bobbing about in a little blow-up boat somewhere in the middle of a freezing sea, scared out of his wits.


As a former military pilot myself, my first priority for ‘news’ is for ‘news’ about this poor bastard. Call me a naïve sentimentalist if you like, but surely focusing on the Human element of any story, no matter how ‘global’ its potential geo-political impact, is one crucial way the Meeja can help prevent incidents such as these being blown out of all proportion.


What is a diplomatic ‘crisis’, anyway, if not a Human misunderstanding multiplied by ten million babbling ‘experts’? The recent Colin Powell statement of ‘regret’ about this pilot’s fate is, in my opinion, a welcome move towards perspective. The Yanks are (admirably) concerned about their own blokes and blouses, but at least they are all accounted for.


And just imagine how CNN et al would be playing this if the roles were reversed. Remember the Meeja Frenzy over that fighter jock who went missing for a couple of days in Bosnia a few years back? Food for thought, anyway.


Now, to more Oz Election-relevant Meeja stuff: the entry of George Negus into the domestic political fray.


On Wednesday night (4 April), the 7.30 Report ran a segment in which the Crusty One (minus flak jacket) got ‘out and about’ in his home electorate of Cowper. The brief was ostensibly to cruise for grass-roots feedback on the GST, and that’s exactly what we got.


Negus – who was breezily open about his own link to the area – basically plonked a camera down, threw out a few curly ones, and let the people of Cowper talk about how the GST has had an impact on their working and personal lives.


There was a good cross-section of the Citizenry – farmers, small business people, an accountant, an artist, a publican, a group of oldies, and so on – and as a result we got pro-GST, anti-GST, and somewhere-in-the-middle GST comment.


The subsequent discussion also incorporated grass-root ideas on One Nation, on economic deregulation, and on the political process itself. Interestingly (and I thought most effectively), the program (apparently) did not elicit participation from the sitting member, Garry Nehl (although it did refer to him, and the fact that he is soon retiring), nor did it approach the ‘usual suspects’ (economic and political pundits, etc) for sideline comment. They didn’t even ask the editor of the local rag for an ‘overview’ of the electorate’s mood, a common tactic on such regional stories.


So rather than have the same old clichés trotted out, we got precisely what the segment promised: un-Machiavellian, grass-roots comment, perhaps of far greater value to the democratic process than any ‘professional talking head’ might have been. No doubt Garry Nehl, and/or his potential successors from all sides would have been araldited to their screens. (In fact, it turned out that one of George’s interviewees is a runner for Nehl’s slot himself so perhaps not all ‘grass-roots’ comment is as ‘un-Machiavellian’ as it appears!)


Recently, the 7.30 Report has been under implied strategic threat, both from Mr Shier’s touted reforms, and from media commentators who have suggested that Kerry O’Brien has lost his Mojo, that the program is turning into A Current Affair for chardonnay gluggers.


That the show is still prepared and able to crank out relevant, fertile, and – dare I say it, essentially good-hearted – political segments like this one, using proven journos of Negus’s calibre, suggests that there might still be some life in the Green Pen Brigade yet.


JOHN CROCKETT in Thirlmere


As much as I appreciate the publication of Tim Dunlop’s article in the Webdiary, I am disappointed with the SMH in its failure to address these issues in any sustained way on the opinion pages of the paper.


Adele Horin writes with passion and insight on the minutia of government policy as it affects our day to day lives but apart from the occasional article from professor Quiggan, neo-liberalism remains an ideology largely unexamined.


The SMH sees itself as the nation’s premier paper – a quality broadsheet – among the world’s best and yet there are times when the opinion pages in the SMH and the Daily Telegraph seem identical – Piers and Paddy, Paddy and Piers. As to why the SMH serves a daily dose of vitriol and bile from the rabid right remains a mystery.


To sum up Margo, I should not have to read an American publication such as the New Republic in order to gain an understanding of the political and social implications of policies initiated by the next step in the evolution of Conservatism – the compassionate conservative. ( for an analysis of Governor Bush’s income tax cuts on health and education budgets in Texas, look up The New Republic on the www.)





The UK general election has been postponed until 7 June. It seems that the advertising boffins however, have way too much time on their hands – the latest offering by the Labour Party shows William Hague and Michael Portillo on a Tory spaceship hovering menacingly over the City – the financial and business district of London. The advert is set to run for 5 long, really long minutes and is basically a rip-off of the Hollywood film, Independence Day.


It makes me wonder what standard of campaign we will see from Howard and Beazley et al? Will Kim portray John as the big bad business wrecker, hovering, spaceship-like over the Sydney CBD? Perhaps it will be the other way around?


Will either of them stand on their dais and dance to “Things can only get better” as Tony did here in 1997?


What are the bets that the standard ads of women in their kitchen, despairing over bills and blaming the [insert name of party here] will reign. Constant flogging of each party’s weaknesses, promises, promises.


Will we see John swaying to Aint No Mountain High Enough and Kim livin’ it large to ABBA’s The Winner Takes it All?


I want kissing of old people and babies, having a beer with the boys at the pub en route to yet another Party party, smiles, tears, laughter, reassurances. People in the streets, excitement about the future of the country, a return to the political campaigns of the sixties and seventies when it wasn’t so much about spin as agitation.


My mother has a photo taken in June 1974 of my brother and I wearing sloppy joes which said “Think again – Vote Liberal”. It was taken after a day spent campaigning for the return to power of the Liberal Party per Malcolm Fraser in the streets of Canberra. Mum and Dad had t-shirts which said “Turn on the Lights – Vote Liberal”.


My father tells the story that on the day of the dismissal of Gough, he took my brother and I down to (the Old) Parliament House and watched as Gough took his place on the steps and uttered those immortal words which, to this day, arouse such powerful feelings in Australians.


Probably the most successful (in terms of over throwing the incumbent) political campaign ever in the history of Australian politics was Gough’s 1972 “It’s Time” campaign which resulted in the first Labor government in 23 years. And he certainly picked up the ball and ran with it: ending conscription and withdrawing from Vietnam, implementing equal pay for women (and improving their entitlements generally), establishing Medibank, passing the Family Law Act and the list goes on and on. That great hulking love-it or hate-it Jackson Pollock in the National Gallery is all thanks to Gough and who cares that unemployment increased and that he spent more money than you could poke a stick at? I would too if I were PM.


It but it seems to me like there was this whole long period of the Libs running the show and then this force known as Gough flew in, wreaked havoc for a few years and then left again in extremely controversial circumstances, leaving his extremely controversial legacy all over the place. I wonder if that will ever happen again? (MARGO: Yep, if Howard loses.)




I am writing to you regarding the recent hilarity over the US withdrawal from Kyoto. I’m an energy efficiency consultant. My job, every day, consists of advising people how they can cost effectively save money by saving energy. According to the doyens of economic rationalism, I don’t exist. Why?


Because if energy efficiency was economic, it would have been done already.


It is no surprise therefore to have the likes of the Australian Bureau of Agricultural Economics and their interestingly stacked committees say that compliance with Kyoto will cost the country. This is part of a broader process that goes much further than the committee stacking that determines the outcomes of some reports.


I used to work in solar energy research. It was great fun, I had a big solar dish I could show people and it attracted lots of PR and photos. But to be honest, it didn’t do much to solve greenhouse emissions and any energy it generated was pretty darned expensive. I have done infinitely more to decrease greenhouse emissions since I started working on energy efficiency.


What’s more we are talking about doing things that are economic today. But let’s be honest about this, energy efficiency has utterly no PR appeal. “Company fixes boiler” really doesn’t cut it against a picture of some solar cells on a roof, does it? This is not just a media problem, it’s a general societal view, perhaps part of consumerism. Creating new things is good, fixing old things isn’t very exciting.


At the other end of the spectrum there is another issue that compounds the problem. The supply side of the industry is very well organised. It has a small number of large players, and it is remarkably easy to get them around the table. The demand side consists of millions of players, and while a few big users of electricity pull some power, there is no-one out there advocating on behalf of the vast majority of the demand side market.


Result? We get supply side solutions to everything. Greenpower. 2% renewables. Fixing up coal fired power stations.


But let’s also be a bit honest about this. Getting people to improve energy efficiency is hard work. I have been working at it for years, and the ratio of opportunities identified to measures implemented is deeply distressing. Why? because on the list of corporate priorities for most organisations, energy efficiency is very much an also-ran. And before we accuse industry of being lax, I would suggest that energy efficiency is pretty much an also-ran for most of the public as well.


While I would generally agree that the Don Burke campaign is a waste of money (something a lot more aggressive might have been worth the effort – after all, we reduce the road toll by showing simulated accidents, why be all cutsie about energy waste?), I would have to stand in defence of programs like Greenhouse Challenge against the comments made by Jim Green (Webdiary April 4, Australia: Green enough for Kyoto?)


It is an injustice to the hard work and thought that has gone into the structure of the program to accuse it of being just an exercise in corporate plaque hanging. That the level of achievement of targets is only 10% is a worry but it would be far more worthwhile to identify how much has been saved overall (even if it hasn’t met targets). It’s still a result. Obviously the program is not beyond criticism but to suggest it is disingenuous is lazy.


I would also like to raise the question as to what the alternative is. It would be too easy – and indeed pretty ignorant – to say it is to regulate for energy efficiency. Technology alone does not solve energy waste (indeed often it causes it). The key problems of energy efficiency lie in better system design and modified behaviour.


Neither of these is easy, neither of them can be patented easily, and they are practically impossible to regulate. Furthermore, most of the issues are so poorly understood by the technical community that they are best considered as borderline research.


So there is no easy solution, no nice simple commercial model for success. A combination of government handholding and education appear to be the only practical future for the short to medium term.


That said, I want to make a one thing clear. If the Australian public and industry all went out tomorrow and implemented all the energy efficiency measures within their control that would produce a better than 2 year payback (that’s like getting a 50% interest rate on your bank account) then Australia would breeze through the achievement of its Kyoto target. What’s more the GDP would rise, jobs would be created and the economy would be more internationally competitive.


What stands between us and this goal is a very complex problem of which industry short sightedness is only one facet, and political short sightedness is just a symptom.




Economists and Rationalism.


Economics is only the study of the economy.


The Economy is a particular system of organization for the production, distribution and consumption of all the things people use to obtain a standard of living.


Economists try to understand what is happening in that system and what the effect of changes to the system will be.


Politicians make the decisions about changes to the system and redistribution of assets. One of the factors they take into account is advice from economists about the effects. If you think too much weight is being given to economic issues at the expense of other social concerns sack the politician not the economist.


An “economically rational” person assumes that the consumer is rational and is the person who knows best how to get the most benefit and enjoyment out of each dollar that they spend. To achieve this the cost to the consumer should be the cost of the economic resources used to produce the good.


If a government chooses to increase or reduce the price through taxes, regulations or subsidies they are influencing the choice of the consumer and reducing the overall benefit to the consumer as that consumer defines benefit.


Obviously for some things (like perhaps cigarettes, burning fossil fuel, battery hens, fox hunting, some extreme forms of pornography) the social benefit of restriction outweighs the cost to the consumer.



Dairy Deregulation


How far should income support – the transfer of wealth from one group to support another group’s lifestyle – extend?


Personally I am happy to support the income of someone who is looking for but unable to find employment, can’t work because of illness or a disability, belongs to a racial group that has been systematically discriminated against for generations, the sole parent of a young child, a refugee, etc. All of these groups are regularly vilified while the guy who is running a business that will never be viable without receiving far more support than any of the above individuals is held up as a hero. Please explain.


If someone makes a decision based on a certain set of circumstances and the government acts to change those circumstances then they have a right to expect compensation from the government. Put another way, if there is a net benefit to the Australian population by deregulating the dairy industry then it should be possible to distribute that benefit so that the farmers are at least no worse off and the general public is better off.


So why are Queensland and NSW dairy farmers against deregulation and the Victorians for it? The sector of the market that is price regulated is drinking milk which is about 18% of Australia’s milk production [2].


Queensland and NSW farmers are far more reliant on regulated drinking milk sales than the Victorians. In the former states drinking milk makes up more than 40% of sales in most regions and over 70% in a few while in Victoria drinking milk makes up less than 10% of sales [1].


Victoria has a lower production costs, at 18.8 cents/litre than the average cost of production for Queensland farmers at 24.3 c/L and NSW at 23.4 c/L in 1999-2000. The cost of production is an average and there will be farms for whom the cost is higher meaning they aren’t viable as dairy farms. That doesn’t mean the farm is of no use – what is marginal dairy country may be ideal for beef cattle.


So what are some advantages of deregulation? “Australia exports more than 50 per cent of its annual milk production, and more than 60 per cent of manufactured products are exported. While Australia accounts for less than two per cent of world milk production, it is an important exporter of dairy products. Indeed, Australia ranks third in terms of world dairy trade, accounting for 15 per cent of dairy product exports.” [2].


The value of Australian exports in 1999-2000 was 2,291 million Australian dollars [2]. If the Australian Government is not providing support for its dairy industry, access to foreign markets will be easier.


Why hasn’t the price of a litre of milk dropped? The big corporations may be ripping us off. Some other factors may include-

* It takes time for prices to reach a new equilibrium, for people to compare prices and change brands, forcing competition;

* The quantity of milk consumed doesn’t fluctuate much, which probably means consumers are not price sensitive when they actually reach for the product in the shop and so there is less market pressure to drop the price;

* The GST was introduced at the same time, further hampering price comparison in consumers minds;

* When consumers change from brand x to brand y because the competition is 2c/L cheaper they force down the price of brand x. But the different milk products are not perfect substitutes – I like Lite White as a balance between fat and flavor while my friend drinks Shape and my father would only consider full cream.


Although the farm gate price of drinking milk dropped, the price of manufactured milk increased, so cheese will be more expensive. If there is consumer resistance to an increase in the price of manufactured products producers will find it difficult to afford to drop milk prices.


Put another way, although the price of milk hasn’t dropped by much I still want it on my Rice Bubbles in the morning but if the price of cheese goes up I will substitute tomatoes on the sandwich instead and producers are squeezed.


Because Australia exports more than 50% of it’s milk production Australian’s are paying the world milk price. On 30 June 2000 the Australian dollar was worth US 0.5986 and EU 0.6282, it’s now worth US 0.4874 and EU 0.5436. Now the world price for milk has probably dropped as well because the ass has also fallen out of he N.Z. dollar and together we are 45% of world exports but it probably hasn’t dropped as much as the AUD.


From an Australian consumer’s point of view the world price of milk, and as a result the domestic price, has increased.


Other Issues with Tim Dunlop’s piece


Regulation of farm gate price is the wrong mechanism to use as protection for the environment. They will not stop large feed lots or the resulting environmental damage and suffering of animals. Well drafted and enforced laws about animal welfare and pollution are far more effective.


There are times when it is better for legislation to have clear definitions and times when it is better to delegate responsibility for defining a term. In the case of “public benefit” it is probably better not to define it. Can you imagine getting a definition of public good through the Upper House and if it did pass what would it look like?


The public good is defined as “three parts of A to 2 parts of B and a sprinkle of C”. Does this definition apply exclusively to this law or should the courts take it into account in other matters? So this legislation is then handed to someone to administer. “You will base all your decisions on this definition … we’re sorry A, B, and C are measured in different units and can’t be compared … we should have included D but we where in a hurry and the Democrat’s negotiator didn’t think of it … bad lick that three different parties are going to challenge your interpretation in court but in a few years it will get to the High Court and they will make a value judgment about what we actually meant”.


Isn’t it better to hand the job of defining public benefit to a group of people who understand the issues and are reasonable ie. will consider and weigh up different points of view? This may or may not be the ACCC. I don’t think “not defined in the legislation” equates to “we don’t know”.



1.The Australian Dairy Industry: Impact of an Open Market in Fluid Milk

Supply. www.affa.gov.au/corporate-docs/publications/cover-page/economics/dairy-industry.html


2. Australian Dairy Corporation www.dairycorp.com.au/statistics/index.htm


3. Reserve Bank of Australia www.rba.gov.au




Loved your conversation with Phillip Adams on Tuesday night. The following is an article on the need to keep small farms.There was a report done for the Clinton Administration on a similar vein. It detailed how subsidies to farmers often ended up with the large farming concerns (typically monoculture farms) and that most innovation comes from the small farm sector. (See http://www.reeusda.gov/agsys/smallfarm/report.htm)


The piece firstmentioned is from the Foodfirst website (http://www.foodfirst.org/pubs/backgrdrs/1999/w99v6n4.html) The blurb states:


“The Institute for Food and Development Policy better known as Food First – is a member-supported, nonprofit ‘peoples’ think tank and education-for-action center. Our work highlights root causes and value-based solutions to hunger and poverty around the world, with a commitment to establishing food as a fundamental human right. As a progressive think tank, Food First produces books, reports, articles, films, electronic media, and curricula, plus interviews, lectures, workshops and academic courses for the public, policy makers, activists, the media, students, educators and researchers. We participate in activist coalitions and furnish clearly written and carefully researched analyses, arguments and action plans for people who want to help change the world. Food First provides leadership to the struggle for reforming the global food system from the bottom up, offering an antidote to the myths and obfuscations that make change seem difficult to achieve. Food First was founded in 1975 by Frances Moore Lappé and Joseph Collins, following the international success of the book, Diet For a Small Planet. The FoodFirst Information and Action Network (FIAN) is the action and campaigning partner of the Institute. Individual contributions provide half of our income, and volunteers and interns carry out a substantial part of our work. As a largely member-supported organization, Food First has independence, objectivity and commitment to the struggles of common people all over the world.”


On the Benefits of Small Farms


By Peter Rosset

Executive Director, Food First


For more than a century, pundits have confidently predicted the demise of the small farm, labeling it as backward, unproductive, and inefficient – an obstacle to be overcome in the pursuit of economic development. But this is wrong. Far from being stuck in the past, small-farm agriculture provides a productive, efficient, and ecological vision for the future.


If small farms are worth preserving, then now is the time to educate the worlds policy-makers about the genuine value of small farm agriculture.


Small Farm Productivity


How many times have we heard that large farms are more productive than small farms, and that we need to consolidate land holdings to take advantage of that greater productivity and efficiency? The actual data shows the opposite – small farms produce far more per acre or hectare than large farms.


One reason for the low levels of production on large farms is that they tend to be monocultures. The highest yield of a single crop is often obtained by planting it alone on a field. But while that may produce a lot of one crop, it generates nothing else of use to the farmer. In fact, the bare ground between crop rows invites weed infestation. The weeds then invest labor in weeding or money in herbicide.


Large farmers tend to plant monocultures because they are the simplest to manage with heavy machinery. Small farmers, especially in the Third World, are much more likely to plant crop mixtures — intercropping — where the empty space between the rows is occupied by other crops. They usually combine or rotate crops and livestock, with manure serving to replenish soil fertility.


Such integrated farming systems produce far more per unit area than do monocultures. Though the yield per unit area of one crop — corn, for example — may be lower on a small farm than on a large monoculture farm, the total production per unit area, often composed of more than a dozen crops and various animal products, can be far higher.


This holds true whether we are talking about an industrial country like the United States, or any country in the Third World…In the United States the smallest farms, those of 27 acres or less, have more than ten times greater dollar output per acre than larger farms. While in the U.S. this is largely because smaller farms tend to specialize in high value crops like vegetables and flowers, it also reflects relatively more attention devoted to the farm, and more diverse farming systems.


Small Farms in Economic Development


More bushels of grain is not the only goal of most farm production; farm resources must also generate wealth for the overall improvement of rural life – including better housing, education, health services, transportation, local business diversification, and more recreational and cultural opportunities.


Here in the United States, the question was asked more than a half-century ago: what does the growth of large-scale, industrial agriculture mean for rural towns and communities? Walter Goldschmidts classic 1940s study of Californias San Joaquin Valley, As You Sow: Three Studies in the Social Consequences of Agribusiness, compared areas dominated by large corporate farms with those still characterized by smaller, family farms.


In farming communities dominated by large corporate farms, nearby towns died off. Mechanization meant fewer local people were employed, and absentee ownership meant farm families themselves were no longer to be found. In these corporate-farm towns, the income earned in agriculture was drained off into larger cities to support distant enterprises, while in towns surrounded by family farms, the income circulated among local business establishments, generating jobs and community prosperity. Where family farms predominated, there were more local businesses, paved streets and sidewalks, schools, parks, churches, clubs, and newspapers, better services, higher employment, and more civic participation. Recent studies confirm that Goldschmidts findings remain true.


If we turn toward the Third World we find similar local benefits to be derived from a small farm economy. The Landless Workers Movement (MST) is a grassroots organization in Brazil that helps landless laborers to organize occupations of idle land belonging to wealthy landlords. When the movement began in the mid-1980s, the mostly conservative mayors of rural towns were violently opposed to MST land occupations in surrounding areas. In recent times, their attitude has changed. Most of their towns are very depressed economically, and occupations can give local economies a much needed boost. Typical occupations consist of 1,000 to 3,000 families, who turn idle land into productive farms. They sell their produce in the marketplaces of the local towns and buy their supplies from local merchants.


Not surprisingly those towns with nearby MST settlements are better off economically than other similar towns, and many mayors now actually petition the MST to carry out occupations near their towns. Local and regional economic development benefits from a small farm economy, as do the life and prosperity of rural towns. Can we re-create a small farm economy in places where it has been lost, to improve the well-being of the poor?


Recreating a Small Farm Economy


Recent history shows that the re-distribution of land to landless and land-poor rural families can be a very effective way to improve rural well-being. We can examine the outcome of every land reform program carried out in the Third World since World War II, being careful to distinguish between genuine land reforms – when quality land was really distributed to the poor and the power of the rural oligarchy to distort and “capture” policies was broken — and “fake land reforms” — when the poor have been relegated to the poorest, most remote soils. In every case of genuine land reform, real, measurable poverty reduction and improvement in human welfare has invariably been the result.


Japan, South Korea, Taiwan, Cuba, and China are all good examples. In contrast, countries with reforms that gave only poor quality land to beneficiaries, and/or failed to alter the rural power structures that work against the poor, failed to make a major dent in rural poverty. Mexico and the Philippines are typical cases of the latter.


More recently IBASE, a research center in Brazil, studied the impact on government coffers of legalizing MST-style land occupations cum settlements versus the services used by equal numbers of people migrating to urban areas. When the landless poor occupy land and force the government to legalize their holdings, it implies costs: compensation of the former landowner, legal expenses, credit for the new farmers, and others. Nevertheless the total cost to the state to maintain the same number of people in an urban shanty town — including the services and infrastructure they use — exceeds in just one month, the yearly cost of legalizing land occupations.


Another way of looking at it is in terms of the cost of creating a new job. Estimates of the cost of creating a job in the commercial sector of Brazil range from two to twenty times more than the cost of establishing an unem-ployed head of household on farm land, through agrarian reform. Land reform beneficiaries in Brazil have an annual income equivalent to 3.7 minimum wages, while still landless laborers average only 0.7 of the minimum. Infant mortality among families of beneficiaries has dropped to only half of the national average.


This provides a powerful argument that using land reform to create a small farm economy is not only good for local economic development, but is also more effective social policy than allowing business-as-usual to keep driving the poor out of rural areas and into burgeoning cities.


National Economic Development and “Bubble-Up” Economics


A relatively equitable, small farmer-based rural economy provides the basis for strong national economic development. The post-war experiences of Japan, South Korea, and Taiwan demonstrate how equitable land distribution fuels economic development. At the end of the war, circumstances including devastation and foreign occupation, conspired to create the conditions for “radical” land reforms in each country, breaking the eco-nomic stranglehold of the landholding class over rural economies. Combined with trade protection to keep farm prices high, and targeted investment in rural areas, small farmers rapidly achieved a high level of purchasing power, which guaranteed domestic markets for fledging industries.


The post-war economic “miracles” of these three countries were each fueled at the start by these internal markets centered in rural areas, long before the much heralded “export orientation” policies which much later on pushed those industries to compete in the global economy. This was real triumph for “bubble-up” economics, in which re-distribution of productive assets to the poorest strata of society created the economic basis for rapid development. It stands in stark contrast to the failure of “trickle down” economics to achieve much of anything in the same time period in areas of U.S. dominance, such as much of Latin America, and to the Asian financial crisis, which happened after many of the original policies had been discontinued.


Good Stewards of Natural Resources


The benefits of small farms extend into the ecological sphere. Where large, industrial-style farms impose a scorched-earth mentality on resource management – no trees, no wildlife, endless monocultures — small farmers can be very effective stewards of natural resources and the soil. To begin with, small farmers utilize a broad array of resources and have a vested interest in their sustainability. Their farming systems are diverse, incorporating and preserving significant functional biodiversity within the farm. By preserving biodiversity, open space, and trees, and by reducing land degradation, small farms provide valuable ecosystem services to the larger society.


In the United States, small farmers devote 17 percent of their area to woodlands, compared to only five percent on large farms, and keep nearly twice as much of their land in “soil improving uses,” including cover crops and green manures. In the Third World, peasant farmers show a tremendous ability to prevent and even reverse land degradation, including soil erosion.


Compared to the ecological wasteland of a modern export plantation, the small farm landscape contains a myriad array of biodiversity. The forested areas from which wild foods and leaf litter are extracted, the wood lot, the farm itself with intercropping, agroforestry, and large and small livestock, the fish pond, the backyard garden, allow for the preservation of hundreds if not thousands of wild and cultivated species. Simultaneously, the commitment of family members to maintaining soil fertility on the family farm means an active interest in long-term sustainability not found on large farms owned by absentee investors.


The Small Farm Path


To the productive, economic, and environmental benefits of small farm agriculture, we can add the continuance of cultural traditions and of the rural way of life. If we are truly concerned about rural peoples and ecosystems, then the preservation and promotion of small, family farm agriculture is a crucial step we must take.

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