For those that do not know there is currently a farm bill very slowly making its way through congress and eventually likely heading to the Presidents desk to be signed into law. The farm bill does create some new laws and regulations to farming, but mostly it is concerned with appropriations, who gets how much money for what. The current one has expired, but to give more time to congress the current levels of funding were extended back a few months ago. And the one that is under consideration will set funding levels for the next five years.
Biggest things being funded in the farm are of course the subsidy programs for grains. And of course one thing that has happened with this cycle is various congressional members have looked at the huge amount of money being paid out to grain farmers and said we need that for our ______ farmers back home too. You can fill that blank in with anything from apple, race horse breeders, vegetable, heck it can probably even include rock and cedar tree ranches that are famous where my grandparents once farmed.
To be honest I can see why everyone wants to get in on these, but fundamentally I am opposed to such things. It just is not good business for farmers to be dependent on those kinds of pay outs. I can sort of understand a payment kicking in during a crop or whether related disaster event – though really I am not even so sure of that. But I don’t think grains, apples, vegetables nor especially race horse breeders need subsidy payments just as a general rule. If you can’t operate the farm efficiently then maybe you need to scale back, get your expenses under control and then proceed.
All my life everything I have read about agriculture from the government and progressive farming techniques is to “get big, or get out.” As hard as it is to swallow the thing I am seeing here is getting big wouldn’t work. The efficiencies supposedly gained wouldn’t require millions of dollars of subsidies if they were tangible. The bottom line is the big corporate farms will cry you a river if you cut off this flow of money as they would all be going south really quick. My sentiment to all of them is “you have gotten big, now time to get off the teat.”
It gets worse though. A huge amount of the payments that included are so-called ‘direct’ payments to producers of grain. Those payments are not tied to the performance of grain prices, crop performance or hardly anything else at all. In these recent months and going on years, of near record high grain crop prices it is absurd. Granted, there is an increase in input largely in fuel for the operation – but the only limit on these kind of payments is 750,000 of income on the farm, of 1.5 million on a couple, filing jointly on the farm. Now what kind of operation that is pulling up to 750,000 in then can justifiably need an additional huge check from the tax-payers?
Quickly, an aside note – I mentioned maybe about weather related crop failures or just markets going in the crapper would be justifiable. I don’t even really believe this either. Everyone who is a farmer knows these kind of things are going to happen and you just have to be prudent in your growth and not be such a huge debt to begin with that you can survive a lean year or two. Further, I will point out that I had pigs, goats, and horses last summer – that I had to sell a huge portion of due to the worse haying (drought) and additional high feed cost during the winter to keep the few that I have. Not one of the government offered programs qualified me for any assistance at a time when hay was over 3x the amount it had traditionally been, it was having to be hauled in from out-of-state largely, with the huge fuel expenses, and we all know where the price of corn and soy beans has been – through the roof.
Bottom line is this – farmers as a group are generally independent minded. They are going to have to get over this need to have the cash influx from the government. Generally I have not agreed with a lot of what President Bush has done during his eight years running this country. However, this farm bill as it looks right now he is promising to veto, precisely because he doesn’t feel the subsidies are needed or justifiable at this point either. So my hats off to him for hopefully sticking this one out.
PS – I will be writing about the other side of these subsidies mean here shortly in this blog…