>Markets are efficient. They should be used to help protect the environment.
Market efficiency pre-supposes equal and simultaneous access to
information. Please help me understand how you find that to be true in
agriculture.
Here in Kansas this week at the country elevators oats have dropped
from $1.40 to as low as 80 cents. That might be explained by harvest.
Soybeans, however, have been quoted as low as $3.58, and the harvest
glut is months away. I wouldn't be at all surprised to see corn below a
buck at some of the high-basis elevators come harvest time.
Meanwhile, all over the eastern half of the state, guys are grabbing
native prairie a quarter section (160 acres) or even half section at a
time, spraying it with Roundup, and planting Roundup-Ready soybeans.
Two more shots with Roundup cleans 'em up pretty good, and they might
go 25 bushels per acre. That's about 1.5 tonnes per hectare for those
of you in the metric world...
Four hundred species per acre reduced to ONE inside of two months, all
for 25 bushels of $4.00 beans that nobody even wants.
As I see it, these guys are farming for *cash flow* now, and not even
for "profit" as traditionally reckoned. That happens in all industries
from time to time when people are waiting for prices to go back up, but
the trend in agriculture has been down for a long time and shows no
sign of changing anytime soon. I have to interpret Roundupping native
prairie to plant beans as a sign of growing desperation on the part of
the "Big Boys" of the regional farming scene.
It's getting grim out here in the Heartland, folks, and the claw marks
on the wall are increasingly visible.
Personally, I suspect we won't make a lot of progress towards
sustainability until the economy as a whole moves beyond its current
frenzy of consumption and debt. With over 3/4 of adult Americans now
owing more money than they're worth --- and their "worth" anchored in a
bloated stock market and over-priced real estate --- we have
collectively frittered away 8 years of a strong economy. What we see in
the farm economy is only a *symptom* of the same rot.
Based on 1075 years of price series (Europe and America), the only way
economies move beyond such frenzies of debt is with a wrenching
contraction. This has happened three times, with the prices deflating
25-55% in 3 to 7 years ---- (1315-22), (1596-99), and (1816-20).
These transitions were very ugly, but in each case the economy emerging
from the wreckage was different than that which preceded it. People
were forced by circumstances to think in new ways. Conditions are in
place for such a contraction in the industrialised world economy, and
emerging from the other side we might actually be smart enough to a
substantial environmental component in our economic thinking.
We'll certainly be badly enough shaken to entertain some new ideas
after 3 to 7 years of having our noses vigorously rubbed in the more
than ample evidence that what we were doing before didn't work.
Bart
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