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Senior Advisor

Re: Freedom to Fail- ARC payments


@hardnox wrote:

Reading between the lines, I guess you're miffed because you got maybe $30K and some of your neighbors got $125K per "entity".

 

I don't recall a single buyer when I floated the notion of placing strict payment limits on both supplemental payments and crop insurance subsidies. As I do recall, you responded with a typically hybrid free market/agrarian-populist rationalization.

 

Be happy- you're the owner of a government farming franchise and even if it is no longer economical for you to farm it you can collect government payments through whatever BTO you choose as the pass through entity. you can move to somewhere semi-nice, live semi-well and never work another day in your life if you choose.

 

BTW, I hadn't noticed the adjacent thread about biotech and Chipotle. As I said there, I haven't any idea but unfortunately the behavior of those companies makes it seem possible. That's one face of the rough beast that we've created and now call "agriculture."

 

 


I have been for the total elimination of both programs as long as I have been on this site. There is no limits and never will be. The small beginning farmer doesn't stand a chance when some BTO gets $125,000/entity from the federal government for nothing more than signing a few papers. What a total waste of tax dollars from a government over 18 trillion dollars in debt. Unsustainable.

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Advisor

Re: Freedom to Fail- ARC payments

But as most seem to argue, a pittance for the "cheap food."

 

Another interesting feature of the argument is that about 90% will respond to the effect that a cap is really unfair so better to have nothing at all.

 

I'll argue that there is nothing inherently more unfair about the 1000 acre and the 4000 acre farmer getting the same amount of support than is the current situation.

 

And I think that whatever theoretical efficiencies  are gained with ultra large operations, the returns to society as a whole are diminishing and quite vanishingly small-certainly not worth subsidizing. We aren't talking 40 acres and a mule here.

 

On the other hand there is value to still having some "family" sized farms, whatever that might be. Which can be quite efficient if you count in off farm income, income from other enterprises etc.

 

And as far as the folks who argue that you'll all starve if we don;t subsidize large operations, well, there would be plenty of capacity for those smaler operations to pick up a few hundred acres more each if large operations didn't want it.

 

 

 

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Advisor

Re: Freedom to Fail- ARC payments

BTW, I'm fine for a target date where farm subsidies are phased out although we, ahem, did that in 1995 and backtracked as soon as things got a wee bit tough.

 

What I would have done in the new farm bill is provide some countercyclical support to help farmers to transition out of the government sponsored bubble environment but have done it with some form of payment limit- people above the limit still get up to that much but then can make their own choices on how to proceed.

 

And then I'd have sunset it at the end of 7 years. Although as we know, the sun has a way of rising again.

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Senior Advisor

Re: Freedom to Fail- ARC payments

I wasn't in favor of ARC/PLC nor the supplemental insurance option, yet for some, there is benefit, possibly even a need.  I would argue that most of the benefits are not necessarily going to those really in need.   I realize my opinion is likely in the minority amongst actual farmers in general -- sure, if the government wants to set up a program to pay out some more money, why not?  Sure was a lot of hoops to jump thru for minimal benefit, plus annual signups.

 

When thinking about strict and meaningful payment limitations applying to those programs, as well as the crop insurance subsidies -- have also been in favor of that for quite some time, decades.  The 10-15% of the largest farmers who have the most influence with their congressmen, FSA, farm organizations, machinery dealers and suppliers -- they're against limitations.  In public, nobody wants to speak of limitations that would affect anyone.  In private, if individual farmers were confidentially polled, my own opinion is that it is likely that a clear majority would be in favor of meaningful limitations, especially if they understood the lack of impact of those limitations on their own operations. At or beyond some point (size), it doesn't make economic nor social sense to continue to subsidize -- at or beyond some point (size), continued growth and it's associated potential risks should be borne by those deeming it preferable to operate at that level.  The arguments about feeding everyone or implying that somehow nobody would farm the ground is hogwash -- if the largest 15% farmed less, the other 85% would farm a little more, or land availability as a barrier to entry would become just a little less oppressive.

Veteran Advisor

Re: Freedom to Fail- ARC payments

My first series of posts on this site, at least a decade ago, were about completely eliminating govt payments and price supports and how they acted as an impediment to young farmers seeking entry into agribusiness. as active farmers.

 

This was before no limit crop insurance, and the reality is that all the guarantees in the world are not stopping the current break in the dam as producers end up underwater.

 

Wish I would have tightened the belt more and not spent the millions on equipment and improvements. Cash in the bank right now looks every bit as valuable as it was in the 1980's.

 

Just checked on a near new (2008) 24-30 center fill corn planter that sold online yesterday at absolute online auction for $14,000. No misprint.....my combine looks to be worth about 25 cents on the dollar...right down the line.  It's a little depressing but thats also the reality.

 

 

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Honored Advisor

Re: Freedom to Fail- ARC payments

Good thoughts WCMO.

 

But land availability is not near the barrier that economics have become.  The chasm to be crossed is bigger with every new regulation and every new technology.

 

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Senior Advisor

Re: Freedom to Fail- ARC payments

True.  Don't see the regulations improving things any, likely to get even more regulatory attention in the future on fertilizer use and runoff, restrictions on land use, etc.  Some technology is negotiable.  I don't get the highest yields that I hear about, yet have never been on the bottom end either (so far), and I don't buy top-dollar seed nor do I fertilize for a record every year.  10-year old and older equipment is how I got started, and still works fine for me.  Just upgraded my 40-year old grain truck in 2015, to a 2000 model -- man it's nice to haul some grain now, actually gets up to highway speeds, the doors and windows all work, wow, now just if the price was like it was a few years ago.  The biggest problems with some of the younger guys, same as in years past -- they want to start out where the generation before them left off.  For those able to receive such a gift, good for them, don't squander it.  For the rest of us, it takes time, landlords willling to lease land reasonably, and working capital &/or equity buildup to get there.  Too many start too young, too big or too modern, then grow too fast for their equity and working capital, and eventually rely on government assistance, bailouts or bankruptcy to preserve something.

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