U.S farm policy: Have we become Zimbabwe West?
American agriculture is up in arms at a policy balloon launched by the Obama administration. It proposes to eliminate farm payments to farmers who have gross sales of over a half million dollars.
The idea may sound good to those who equate gross sales with net income, but it smacks of social realignment to those who operate a farm as a commercial enterprise.
I don't give the proposal a snowball's chance of becoming law or being effective if it becomes law. The farms that feed America fall into this half-million-dollar category with an estimated 75,000 farm businesses producing 75 percent of our agricultural production. If those above $500,000 are denied government payments authorized under the 2008 farm bill, then a call to a cousin in Mississippi would reveal the means to spread out control of the land and bring it back into the government program.
Farmers have sought to "right size" their operations since the first one went bankrupt. They realize that a farm that's too small is unable to survive without outside income and one that is too large works on too thin a margin to ride out major swings in the marketplace. The optimum size continues to grow as more technology becomes available and managers become more skilled at handling input costs and output sales. A large operator with gross sales of $100,000 in the 1970s is a small farmer today, and the trend will continue into the future.
What I don't understand is why the new administration went after the relatively small amount of money (seven to ten billion dollars) at the risk of alienating most of production agriculture. Every farm organization of consequence opposes the proposal to set a ceiling on gross sales of farm products. Regaining political goodwill costs a lot more than keeping it.
Secretary of Agriculture Tom Vilsack is also roundly criticized for inferring that wealthy farmers are taking money that would feed hungry children. I can make a case that these farmers feed hungry children by making large quantities of food affordable to literally all Americans and millions more around the world.
Zimbabwe is an extreme example, but the government there had prospered for generations with a small number of large farms as the major producers of food and foreign exchange. The Mugabe administration encouraged landless veterans to take over the land and decimated the agricultural system.
Instead of establishing their own farms, the squatters were soon unable to feed themselves and the entire economy was left in ruins. The lesson learned is that an agricultural system is fragile and a single season of disruption can damage it irreparably.
In the U.S., farmers and government have held an uneasy truce on price supports for many years. Too much control causes farmers to resist and too little in incentive payments makes them squirm.
On the government side, too little payment causes uncertainty in crop production and too great a payment causes overproduction of target crops at the expense of others. Too much money spent on subsidization is more destructive to farmers than too little, but eliminating payments results in wild swings in the marketplace that also eliminates producers.
Farmers are sometimes like the teenage boy who happened on a crew of ditch diggers. They found that if they bragged on him, he would do the work for them; but, if they mocked him, he would throw down the shovel and sulk away.
No one wants to be told they are rich or that their contribution is less than that of another. Maybe the president should run his cabinet through a crash course on diplomacy and try another tactic to provide more food aid, while holding tightly to those who produce it.
Editor's Note: This is Ken Root's 35th year as an agricultural reporter. He grew up on a small farm in central Oklahoma and started his career as a vocational agriculture teacher. He worked in Oklahoma, Kansas and Missouri as a broadcaster and was the original host of AgriTalk. He has also been the executive director of the National AgriChemical Retailers Association in Washington, D.C. and the National Association of Farm Broadcasters in Kansas City. Ken is now the lead farm broadcaster at WHO and WMT Radio based in Des Moines, Iowa. He has been a columnist for HPJ and Midwest Ag Journal for eight years.