Monday, February 9, 2009

Excuse me sir, but may I have more gruel?

If you aren't involved in agriculture, you probably missed this news story in November - despite its appearance on the front page in Iowa. And, I'm writing about it because I suspect many intelligent folk (read in - you!) are generally unaware of how these things work.

The November GAO report identified $49 million dollars that were given out between 2003 and 2006 for farm program payments to ineligible or inappropriate recipients.
  • eligible recipients must earn less than $2.5 million annually.
  • eligible recipients must be actively engaged in farming.
  • farm programs focus on commodity crops (corn, cotton, rice, soybeans and wheat)
Some of the identified recipients clearly have other primary occupations ( basketball franchise owner, insurance and financial service executives) and others reside outside of the United States - which makes it difficult for me to believe that they are terribly active in day to day management of a US agricultural operation. Yes, there are some problems with implementation for the FSA offices. BUT, I ask you how these people can justify taking this money in the first place?

I'll admit, this is a small percentage of the nearly $15 billion paid out annually for farm commodity crop support programs. However, take the information above AND the fact that 10% of the recipients receive 67% of the total payout. This makes it clear to me how this program impacts our nation's agricultural system. Small, non-commodity crop producers need not apply.

And, before you tell me that $49 million is a drop in the bucket in the grand scheme of things - let me remind you that just $10,000 to small farms such as ours would serve nearly 5000 of us. That much money is enough to put a roof on a barn such as ours. Or put up high tunnels for extended local food production. Or put in reasonable cooling facilities for produce storage. Or help us to put up a wind turbine - or solar panels.

If we're going to put money into agriculture, why do we insist on putting it into a structure that encourages reliance on a price structure support? It doesn't increase the desire to innovate or pursue sustainable alternatives. All it does is encourage us to work harder to milk the highest yields of a limited number of crops for the highest monetary return. Then, we have to come up with programs (such as CRP - which I am not entirely against for other reasons) to encourage farmers to reduce production of those commodity crops.

Meanwhile, the bottom line (highest yield per acre) is bought at a cost that is yet to be fully realized. Why do you think so few of our farmers are willing to try to reduce tillage or spray levels? One factor is the simple fact that price supports like these can make innovation risks seem more costly than they are. All it takes is a little bit of misperception and alot of institutional bias and you leave our farmers with a very limited set of choices.

And... if there is one thing I am learning, it's to understand why people do things the way they do. That 10% that receives 67% of the payments are likely driving policy. That leaves 90% of the commodity crop farmers playing the game - in part - because they believe they have to if they want to make a decent profit.


  1. Great Food for thought!

    1. And, what thoughts does it make you think?


Thank you for your input! We appreciate hearing what you have to say.