The death of HR 2749? The Limitations of Policy.

As I wrote the first draft of this it looked as if  the House of Representatives had voted down a sweeping food safety bill, HR 2749. With a few new maneuvers, it looks like it may not be dead yet. If it stays dead, this non-event is perhaps one of the best things to happen to agriculture this year. I say this not because I am a fan of unsafe food. But this bill would have placed the same level of documentary requirements on food producers of all levels, regardless of the systemic risk posed by their operation. It as if the corner bike shop in your town had to meet the same regulatory requirements as General Motors. Despite a flurry of proposed amendments, some of them potentially big improvements, the bill died as it should have. It died because even legislators under pressure to do something about food safety recognized that this wasn’t the answer. It would have added huge costs and administrative burdens to the part of the food system not having any problems, without providing resources to do anything about the corners of the system where problems are known to linger. Why can’t we find a policy solution to a complex problem as important as food safety?

Sadly some of the trouble is with policy tools themselves. No matter how hard we try or how complex we make them, policies have a great deal of trouble with complexity. Policy handles course-grained issues well. More calories, less cost? Easy. All food must be organic? No problem. Everything must be from within 100 miles? Piece of cake, legislatively speaking. Policies and regulations are great at prohibiting certain actions or practices. Pass the law and it is so. (Implementation is another matter, of course.)

But does this produce the result we are looking for? Does it produce a food system with a wide variety of healthy food options for people of all incomes, successful farmers, happily fulfilled farmworkers, ethically treated animals, clean streams, thriving local businesses, empowered cook-at-home consumers, equitable taxes, delighted gourmets, abundant wildlife, pristine views, smart urban growth and development….

Sorry, kind of dozed off there for a second without finishing that sentence. But the point is that the preceding sentence can never be finished. Why? Because we want it all. And that’s the problem. We have never had it all, either through policy and regulation, free market capitalism, feudalism, monarchies, hunter-gatherer clans or any other form of human enterprise.

Does this mean we shouldn’t have policies or regulations? Of course not. But I’m skeptical that we will ever develop the perfect policy that delivers the perfect outcome. And if you look at the most dysfunctional aspects of our society, is it any surprise that they have the most regulation attached to them? To look at examples beyond food and agriculture, how good of a job does the Pentagon’s mountains of procurement policies do at ensuring our defense dollars are well spent? Does our tax code do what we want it to do? Pick a handful of state and local rules that impact you directly. How do they measure up?

My point is that no matter how much we complicate our policy, it can never  fully embrace the continually changing complexity of reality. What we are left with is an increasingly burdensome legacy that creates a lot of work for accountants, attorneys, consultants and bureaucrats. What happens when  the number of people regulating an activity approaches the number of people performing the activity? I’m not sure what would happen at a basketball game with 10 officials on the court.

I offer no solution, merely a recommendation for mitigation. Let’s look at paring down our libraries of statutes. Let’s consider that maybe some of the regulatory medicine is worse than the disease.  Didn’t we try deregulation in the financial markets, you ask? We did, and you are correct… it didn’t turn out well. But what really happened? A few outright frauds like Bernie Madoff are headed to jail. A few poorly managed companies no longer exist. Unreasonably inflated asset values returned to more rational levels, painful though the process was. I’m not trying to be cavalier about this… I know people got hurt. It turns out we did strip out a few important regulatory safeguards, but because of the complexity of the whole system, no-one recognized them as such. A simpler regulatory scheme would have been better. Enough capital reserves? Prudent risk assessment? Reasonable use of leveraged capital? A simple set of rules is superior to one that is too complex for anyone, even the experts, to follow.

Phrased another way, if Moses had brought down the 27,896 commandments from Mt. Sinai, would the whole Judeo-Christian thing have caught on? I think not.

Is Local Food Liberal?

I read a good article by my friend Larry Yee this weekend about the way that supermarkets are fudging (“abusing” or “exploiting” if you prefer) the term “local” in their produce sections. Much of the online commentary was supportive, but a couple of readers, deducing that an educated Ojai  type is probably a “liberal”, dutifully set about ridiculing his ideas. I don’t think Larry would dispute the liberal label, but there was nothing in his piece demanding socialized healthcare, gay marriage, or whatever other issue is this month’s Grave Threat to America. His basic points: Know the people you do business with, buy hometown products, and if it’s not the truth, don’t use it to sell your product.

Perhaps Larry is a conservative after all.

Americans have gotten pretty comfortable with the easy right/left, liberal/conservative labeling system. Just about any issue can be quickly divided up, and you can predict with great accuracy who will be on either side of a debate. I think the popularity of the “Red State/Blue State” terminology is due to it being simpler just to drop the pretext that our partisan battles are even rooted in a coherent philosophy.

But food issues just don’t work that way. As an independent and natural contrarian I find it funny to watch the inconsistencies. Much of our food industry is kept alive by big government programs and subsidies paid for with our tax dollars. Yet when liberals suggest that a better system might be more innovative, entrepreneurial, and small business friendly, conservatives attack. Really? Shouldn’t true conservatives embrace a roll-back of the government’s intrusion into the marketplace for food? After all, that is what is at the heart of many of the buy-local and slow-food concepts. On the other hand, liberals rarely grasp that many of today’s food system problems derive from deliberate and well meaning policy decisions to have the federal government ensure enough food for a healthy population. Monsanto and other agribusiness giants are as much a result of our cheap-food policies as the cause. This has led me to an observation:

Sometimes no policy is better than bad policy. (Now I sound libertarian…)

My great fear is that we will create a system that enjoys the worst of both worlds. Will we maintain the big government system of subsidies for crops that we now produce out of proportion to our actual need for them, while simultaneously using other tax dollars to restrict and discourage their consumption? Does that sound absurd? We do it already in tobacco. Will we allow small, entrepreneurial food networks to flourish, or will we tax and regulate them to the point that only largest, most sophisticated can survive? In short, rather than creating a new more flexible, more innovative food system, will we simply graft new bad ideas on top of the old?

Lisa Hamilton has it right

“Sustainable agriculture is founded on the principle of farmer leadership. The first step to creating a sustainable food system is restoring stewardship, that elemental relationship in which a farmer balances food production with ecological health and social well-being. That is possible only when farmers are empowered: trusted to lead, respected financially, and encouraged—indeed, allowed—to be independent and free.”

This paragraph is lifted from a letter written by Lisa Hamilton to President Obama. (Read the whole letter here.) In it, she perfectly captures what I consider to be the defining challenge of a more sustainable food system: The fact that the people who best understand it are restricted in their ability to innovate and compete. Elsewhere in her letter, she points out that the bureaucratic burdens of operating within a highly regulated framework put the small farmer at a severe disadvantage. She cites the NAIS program as a prime example of a program, that however well intended it might be, makes it difficult for the farm without a major regulatory compliance to succeed.

I understand that some of this comes with the territory with a bureaucratic system. In one of my earlier professional lives as an employee of the federal government I saw it first hand. I recall feeling that I had to choose between getting the job done, or completing all the required weekly, monthly and quarterly reports that would demonstrate exactly why I didn’t. My immediate supervisor trusted me, but unfortunately that trust could not translate back to Washington.  The bureaucrat’s surrogate for trust? Documentation. What a relief it was to leave that job for the private sector in Silicon Valley.

Part of the allure of the farmer’s market is the ability to reconnect with the farmer and experience the trust that comes from a direct, personal relationship. I’ve experienced it myself: contrary to my own prediction, at last week’s Outstanding in the Field dinner, few seemed to care whether I was organic. But they did want to know about me… they wanted that trust.

Can we maintain that trust in a food system beyond the very small and local? That remains to be seen. But I hope so. A sustainable system where farmers were trusted to do the right thing appeals to both the progressive and the libertarian components of my nature.