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.
First of all, this "no risk" stuff is bull pucky. There are all
kinds of
risks involved with weather being the biggest factor. If you decide to
cover some of the downside risk in contracts, puts, hedges, etc., you still
must have the crop to meet your obligations. And currently, the futures for
corn or soybeans is about as attractive as sHrillary Clinton in a nightee.
Crop insurance only pays to have in 2 out of every 10 years, so it is a
loser 80% of the time.
Now, Cargill-ADM-Bunge monopolies controling the world grain supply are
posting record profits while grain farmers lost their backsides last fall
with record low prices for their crops and huge increases in harvest fuel,
harvest drying and harvest transportation costs. Okay wise guy, what
alternative "entrepreneurial" opportunities exist? The problem is
the
market monopolies in grain, livestock and dairy, not the farmers themselves.
And as you and I discussed over several fine beers and our pasture raised
steaks, our co-ops have failed to set price.
Dave G.
