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Farm Program–Yes or No? or Why?
Editorial from the November/December 2001 issue of Small Farm Today® magazine.
A farm is a living biological unit, concerned with plants and animals that live, grow, and die. It is run by a landowner, who, because he or she is the steward—caretaker—of the land and animals thereon, is willing to work long hours—14-16 hour days, or whatever it takes to complete the job.
Almost anything done on a farm must be done a year or more in advance. If you breed a cow, she spends nine months pregnant, and there are six more months before you can sell the calf as a feeder—15 months total. If you plant a corn seed in April, it is October before you can harvest it—6 months, or longer if you add value through processing. In no way can a farm be turned into a factory, which can start or stop production in just a few days. try as the techno pro's might.
A typical farmer, no matter how large they are, cannot adjust industry price, due to their volume of production. A farmer can only affect what happens on his or her farm. A typical farmer raises their crop or livestock, hauls it to town, and asks, "What will you give me for it?"
The only way for a farmer to change their production plan is to sell their living factory (e.g., the cow, or the land in the case of corn seed), which means they are out of business. Although a farmer knows he or she must be profitable in order to be sustainable, survey after survey from the past to the present shows that farm income ranks below quality of life and lifestyle in importance.
A typical big company—like Ford Motor Co.—produces a product to sell—in this case, cars. They keep their assembly plants running at full production, three shifts a day, when sales are good, while actively seeking the latest technology to produce and expand their current output—more cars. Ford adjusts both short-term output and long-term capacity to meet market conditions, and price and profit targets. Ford has more production capacity than it needs, and has no qualms about leaving some assembly plants idle. Under no circumstances does Ford allow the price of their cars to approach the variable cost of producing a car.
Typical town income and costs show some interesting figures combined with farm census information in the last 50 years. In 1949, there were 5,722,500 farms in the U.S. In 1997, there were 2,190,510 farms in the U.S.—about a 62% decline in farm numbers.
In 1949, you could buy a house in town for about $14,500. The average salary was $3,216. So, in town, housing costs have gone up roughly 722% in that 50-year period, but wages increased 3,163%. In 1949, a 160-acre farm with house could be bought for $7,680 ($48/acre). Net farm income was about $2,233. On the farm, income increased 470%, but expenses have gone up 1,893%. Every $1 increase in income has been met by a $4 increase in expenses on the farm.
The agricultural problems I am discussing here are traditional ag problems—not the direct marketing, sustainable-type farming encouraged by Small Farm Today magazine. Nevertheless, we still need traditional farmers growing traditional crops, because these crops serve many uses—such as vegetable oil or ethanol or cosmetics or glue or biodegradable plastic or any of thousands of other everyday products.
In a recent column, a local newspaper publisher, Hank Waters, said, "It makes no more sense for the federal government to directly hand money to farmers than it would for them to hand money to grocery store or shoe store operators." This is an unfortunately common belief. Let's put aside the issue of food security for the moment (and the fact that without farmers to produce food and leather, there would be no grocery or shoe stores). The truth is that the government, time after time, to my recollection, has saved the Chrysler Corporation, the Federal Land Bank, and recently, the airlines, so this is not a new problem.
Let me say now that I am not for subsidies—but we do have a problem and it needs to be solved quickly and finally. I would like to point out, though, that any government funding comes from us—our tax dollars at work. It makes more sense to me to return it to those who produce our food.
One university professor has written a book advocating the U.S buy all of its food from Third World countries, who can grow it cheaper than we can. The recent terrorist attacks should convince us that, in the interest of national food security, we should want to grow our own crops rather than buy them from across the water. Food safety and food quality are also best done in this country—we already have better systems than other countries, and can choose and enforce the laws we want to be enforced. Many of the chemicals we have outlawed here are still allowed in other countries, meaning we are just importing these problems back with our food.
Agriculture supplies one-fifth of our workforce and 16% of our GNP. It would be economic suicide to let agriculture fall on its face—and produce a costly shortage of food. What can be done?
There are three types of farms: small, medium, and large. The IRS has a definition for a farmer—not a small farmer, but farmer, period. Their definition is you must sell or could sell $1,000 of agricultural products. Just a few years ago, there was some talk of raising that figure to $10,000. With this new definition, some states would have virtually no farmers. All the businesses working with farmers cried foul, because their funding depended on having more farmers, not less. Therein is the crux of the problem with subsidies and their distribution—the definition of a farmer and their size.
At Small Farm Today, we define small farmers as anyone who lives on and operates a farm from 1-179 acres , or grosses $50,000 or less per year. Throughout his editorial, Mr. Waters repeatedly tossed out the terms farmer and small farmer, and referred to small farmers as "marginal farmers". Let's talk numbers again. Our country dropped from 6.5 million farmers in the 1930's to approximately 2 million farmers today. Of that 2 million, roughly 300,000 farmers make their living entirely from the farm. Using the SFT definition, 85% of all farmers in the U.S. are small farmers. Most small farmers subsidize their farms with in-town jobs. If a farmer has survived this long in agriculture, they can hardly be called "marginal". SFT calls these folks agripreneurs.
SFT defines a mid-size farmer as anyone not a small farmer, grossing $50,001-$249,999 per year, who lives on and operates a farm (usually 180-999 acres). Large farmers are anyone not small or mid-size farmers, who live on and operate their farm, and gross $250,000 or more per year (usually on 1,000 acres or more).
There are distortions in the subsidy programs and how they are distributed—large farms get an unfortunately larger share, while small farms get almost none—but the real question is, why? It is obvious that because of their difference in income—and usually in size—that these three different farmers will have different educational needs, and need different legislative help. Our government needs to adopt these definitions of farm size and income. It would also be beneficial for the government to require that a farm be lived on and operated by the family to receive any government aid. This leaves out absentee owners and large factory-type corporations which are not true family farms. At the minimum, restrict any further growth of factory farms—they do not help the environment (they are unsustainable), corporations are no more efficient than small and medium producers, they make the U.S. more vulnerable to disruptions in the food supply, and they tend to raise—rather than lower—food prices.
To solve a problem, you must first recognize it as a problem, then—the hard part—you must do something about it. If farmers do not solve their own problems, the government and every self-interest group out there will—and not with good solutions for farmers. Now that I have probably made everybody mad, I am looking for some solutions. If you have a plan, let's hear it. It is your choice. We must work together.
Happy and Profitable Farming,
Ron Macher
Publisher/Farmer