* Last year I visited the USDA in Washington DC
* and, amongst other things, had a staff member
* try to explain to me the support structures
* in place for US grain farmers in particular.
*
* It took me a while to cut through the
* bureaucrat language but in the end I asked
* him
*
* "So what you are saying is that US grain
* farmers are in effect supported on price and
* yield. What risk is the farmer taking ?"
*
* A no risk no reward mentality is what you get
* in agriculture when it is protected and
* supported. The entrepreneurial effort of
* farmers is channelled into extracting as much
* as they can from the support schemes.
*
* Tom Mason Canterbury New Zealand.
Hi,
Yes, it's embarassing to some of us here.
Why is this policy the way that it is?
The logic, implementation, and effects seem contrary to common sense.
You happened to see it the way that you saw it (as fostering a no risk no
reward mentality), but it morphs from decade to decade, seemingly at random.
In my opinion, the best way to rationalize US government crop support policy
is to think of it like weather. A butterfly flutters her wings in Peking and
we either get a three week drought or a gentle overnight rain.
I actually have some authority defending this theory of explaining US ag
policy.
In the fall of 1965, I happened to sit down in a class on Introductory
Agricultural Economics, Dept of Ag Economics and Rural Socialogy, College of
Agriculture, The Ohio State University, on the world's largest single college
campus.
The professor reviewed US agricultural policies from the beginning of policy
implementation in the United States.
We looked at the original rationalization (of each instance), how it was
implemented, and what happened as the result.
It became abundantly clear that all attempts shared a common characteristic.
That characteristic was that: They NEVER did what they were supposed to do!
They were all failures considering their stated purpose. Some of them were
extremely bad for the nation.
At that point, the professor reviewed prices of the major agricultural
commodities going back to the founding of the Republic.
It was obvious that the the country, in many decades had been plagued with
wild whipsaw prices. Prices so wild that reasonable planning was impossible.
The prices fluctuated in the extreme for the whole period, from the founding
of the country up until the moment, EXCEPT during periods when some kind of a
Federal Ag policy was in effect.
The conclusion was that ANY National farm program, regardless of how poorly
thought out, or cantrary it was was to the country's hopes and best interest,
It did have the effect of creating a drag of the whipsawing of farmgate
prices.
In other words considering stabilization of farmgate prices, even the worst US
farm program in history was better than no program.
Arbitrary and capricious as they are, we (farmers) are better off having farm
programs because they stabilize prices enough that we can sometimes make
reasonable plans for the future.
--
Kindest regards,
========================
F. W. Owen
Owenlea Holsteins
9430 Spencer Road
Homerville, Ohio 44235
e-mail fwo@bright.net
home page http://www.bright.net/~fwo
voice & fax 330.625.2369
cell 330.635.2287
========================
