Ann,
The main problem lies in the fact that they touted Freedom to Farm as a
movement to free markets making planting decisions and setting market prices
yet they kept in the corn and soybean loan deficiency payment (LDP) at
around $1.85/bushel for corn and around $5.25 for beans. (I think they also
have a wheat deficiency payment but it is less than $2.00/bushel). Anytime
a producer sells his corn or beans and the market price is below loan rate
the government kicks in the difference, ie loan defeciency payment. These
LDP's are the biggest variable in the program. It doesn't take a phd in
economics to understand that it is encouraging farmers to grow corn and
soybeans and as many bushels as possible when they have a price floor under
every bushel they produce. In fact, someone like me foregoes up $60/acre to
plant anything besides corn and soybeans such as wheat, oats, rape, pasture,
hay and even grazed corn. These LDP's are just bid into cash rents so
people like me that would plant hay, pasture, or corn for grazing have no
reason to even enter the bidding process. Then if we start looking at the
big picture of what kind of impact this guaranteed over-supply of cheap
grain has on the consolidation and integration of the livestock industry it
becomes apparent to all but a handful what the true intentions of our
governments farm plan is.
I've been disapointed that the sustainable agriculture community has not
come out more vocally against this farm program that just encourages the
great corn and soybean wasteland. Its one thing to suggest economic
incentives for environmental stewardship but first we need to eliminate the
dis-incentives for environmental stewardship.
Best wishes,
Greg Gunthorp
Free range pig, chicken, and rabbit farmer
-----Original Message-----
From: E. Ann Clark <eaclark@uoguelph.ca>
To: sanet-mg@ces.ncsu.edu <sanet-mg@ces.ncsu.edu>
Date: Tuesday, May 02, 2000 10:26 AM
Subject: Re: Farm revenues/supports
>Michele: very interesting, as usual. Now, let me make sure I'm
understanding
>all this.
>
>1. "direct government payments" - this is money that actually goes from
gov into
>farmer hands? Not entitlement stuff (like for lower interest loans) or
research
>funding or whatever, but outright cash payment? Is this systematic money,
or
>one-off type money as for disaster relief? I'm a bit confused on this,
because I
>had thought that the whole point of all the hoopla with the OECD, Canada,
US,
>etc. was to "reduce" government payments. You know, that free market
thing. And
>indeed, the OECD figures up through 1995, if memory serves, showed such to
be the
>case. Have I misunderstood something? What has happened since 1997?
>
>2. If %change in total farm income (incl. gov pay) since 1997 is -1%, then
I
>take it the gov payments have effectively counterbalanced the loss in
commodity
>value (yield x price) since 1997? How much of this loss in commodity value
was
>due to human-induced problems (e.g. Asian crisis; ill-conceived gov
policies
>promoting hog output etc.) vs. weather (e.g. midwestern drought).
>
>3. How is this loss in farmgate receipts (if I am understanding this
correctly)
>and gain in gov handouts distributed across farm sizes? Are the gov
payments
>based on acres? yield? stewardship? Pardon my ignorance, but I have not
kept
>up with these strategies since the base acreage program was dismantled (or
was
>supposed to be - was it?).
>
>4. If teeny weeny farms gross $1900/ac and megafarms gross $21/ac (e.g. 2
orders
>of magnitude difference??? is this a typo??), is this a function of
commodity
>type (e.g. strawberries vs. coarse grains)? Any basis in that dataset for
>comparing apples with apples (or strawberries and strawberries) across farm
>sizes? Any sense of "net" vs. "gross"?
>
>> Can someone explain to me why destroying years of agricultural research
>> is a terrorist crime, while destroying billions of years of evolutionary
>> research is Progress???????
>
>Love it. Just love it! Ann
>
>>
>>
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