by Eric Shierman
On this Thanksgiving I am tremendously thankful for the abundance of food our industrial agricultural sector provides for us; indeed they are so good at what they do, they can afford to compete with those who want to produce alternative choices. I made it out to the Cascade Policy Institute’s monthly policy picnic last week where Cascade board member Gilion Dumas spoke about the issue of food freedom, a policy area that might serve to unite progressive Portland urbanites into a free-market cause. The fig leaf of exaggerated public health claims gets used by a number of rent-seeking food industries to stave off competition. From food carts to backyard chicken coops, this strikes at the heart of the Portland foodie scene.
For a variety of reasons a growing number of discerning grocery shoppers want something different than what the mass production of high economy-of-scale industrial agriculture offers them. Some want a more humane treatment of animals; others want to retain the nutrition lost from government-mandated processing. I am not one of them. My favorite food is the cheapest thing I can buy at Winco, but I will defend other people’s right to consume what they want until the day I die. This secret war on alternative foods across this country is an outrage.
There is a significant economic cost to this regulatory induced market failure. The potential demand of this market niche is being driven by very affluent consumers who, if freely allowed to consume what they want, would be able to finance tremendously lucrative business opportunities for the not so affluent rural residents of America. Rather than pursue transfer payments by taxing the wealthy more to fund publicly administered bread and circuses, we ought to be expanding more opportunities to transfer this money through voluntary exchange. Allowing the growth of Oregon’s non-industrial farming sector to take off should then be a no-brainer. Instead we see lobbyists in Salem looking for every opportunity to heap on costly barriers to entry into this largely untapped market.
In the next legislative session, raw milk is about to come under attack. The sale of raw milk in Oregon is already heavily curtailed in several ways. Farms are limited to 3 cows or 9 goats. I think that reveals a great deal about the intent of a regulation when it is entirely devoted to reducing the size of a farm’s output. Let’s put the 3 cow limit in perspective. The largest dairy farm in Oregon has 40,000 cows. The “small” farms have only a couple thousand. If a raw milk farm adds a fourth cow it breaks the law!
The other main restriction on the sale of raw milk in Oregon also reveals much about the regulatory intent of Oregon agricultural policy. It is against the law in Oregon for a raw milk farm to advertise. Seriously! We’re not talking about safety regulations regarding the proper handling of raw milk; the blatant point of the law is to prevent this huge potential market from even marketing. The market for raw milk in Oregon remains limited to a small group of hard core Oregon foodies that know the secret handshake.
It is a fact that raw milk has safety issues that pasteurized milk does not, but let’s keep in mind that raw spinach and raw oysters present no less a risk. We don’t mandate they get precooked, nor should we. You can have raw spinach on your Subway sandwich and down a raw oyster at nearly any bar in Portland. Spinach and oyster producers have a financial incentive to comply with the proper handling of their product, so do raw milk producers. It is a Darwinian function of markets to put a producer linked to an Escherichia Coli outbreak out of business. A formerly profitable farm in Wilsonville, Oregon named Foundation Farm sold raw milk that became the source of 19 E coli infections earlier this year. Though they were a diversified farm selling far more than raw milk, it is now up for a fire sale with the shamed owner able to ask for no more than $75,000.
Since 1990 there have been only five other outbreaks, so what is the proper response to this rare event at Foundation Farm? Look no further than Charlotte Smith of St. Paul, Oregon. Owner of the Champoeg Creamery, whose iron clad reputation allows her to sell raw milk for around $14 a gallon, she has established an elaborate system of best practices that Smith now hopes to transfer to other raw milk farms by founding the Oregon Raw Milk Producers Association in May of this year.
This private sector response to legitimate concerns about raw milk in the wake of a headline grabbing event reflects the most effective form of consumer product safety regulation: branding. She hopes to create a means for fellow raw milk producers to transparently demonstrate they have adopted her process and safely sell raw milk to this growing market. Smith has developed an elaborate system around what she has learned to be the key aspects of raw milk safety: healthy cows, grass grazing, the right equipment, sanitation during milking, quick chilling, pathogen testing, and sterilized containers.
In Oregon’s legislative pipeline however is the wrong response, an attempt to all but ban the production of raw milk, to nip this growing business in the bud. Since an actual ban would be fairly controversial, if a more innocuous policy had the same effect, wouldn’t that be grand for the Oregon Dairy Farmers Association? Earlier this year the Oregonian reported that the ODFA was meeting with legislators and regulators to push for a crackdown on raw milk production.
According to Leah Rodgers, field director for the Friends of Family Farmers, in the works is an elaborate scheme of licensing and insurance fees to impose higher fixed costs on farms limited to three cows. It is interesting to note who would benefit from this regulation and who would not. It is being opposed by the actual consumers of raw milk and supported by the producers of pasteurized milk which goes to show that often the greatest threat to free markets comes not from progressives, but by the rent-seeking political entrepreneurship of businesses themselves.
I will always personally prefer the product of the Oregon Dairy Farmers Association’s members primarily because pasteurized milk is inherently cheaper and in my view inherently safer, but by opposing the right of others who value the unique properties of raw milk enough to willingly accept its risks, the ODFA is making itself the enemy of more than just a growing source of new competition. The ODFA is becoming the enemy of freedom itself. In this next legislative session we all need to stand up to the ODFA and stand up for food freedom.