What Do You Tell the Kids?
Twenty-five years ago I was 21 years old, fresh out of college with a good job. My fiancÈ was a fifth-generation farmer working the same section of land his family had always worked. Soybeans were selling for $10 a bushel, corn was at $2.25, land was selling at $2,000 per acre, he was shopping for a brand new $30,000 tractor and life looked pretty rosy.
Today I have an 18-year old daughter in college and a 15-year old son in high school. Both have strong ties to the land. They enjoy working with livestock. When we talk about careers, we discuss agriculture, farming, chickens, hogs and beef cattle. Agricultural land in our area is selling for $3,000, except for the neighbors who are selling for development. Development land in our neighborhood is going for $18,500 an acre. A new tractor is listing at $110,000.
Beans aren't as good of a deal as they were when I was young. They are selling at $4.28 and we can get a LDP (loan deficiency payment) from the government to bring that up to the loan rate of $5.26. Unfortunately, our production costs are $5.93. So even with a buck $1.98 per bushel subsidy from the government, we stand to lose 67 cents. The cash price at the elevator on corn is $1.90. The government loan rate is $1.76. When the cash price is above the loan rate you can't get a government subsidy. It costs us $2.43 to produce a bushel of corn, so if we sell today we'll lose 53 cents a bushel.
We are negotiating a new ag policy for this nation commonly called the "Farm Bill." Everyone who eats should be aware of what that ag policy funds. It subsidizes far more than farmers. But very few people know that the legislation funds a variety of programs ranging from your kids' school lunch to the National Forest Service. This year the hot topics are conservation and commodity support payments, because those are the two items meeting with the most opposition.
If the American public had a greater awareness of ag policy, there would be far more than two items under scrutiny. Farm assistance is vital for agriculture and rural America. But the current policy has failed nearly everyone involved in agriculture. The Environmental Working Group has an excellent website listing the subsidy amount that every farmer in America has received from the government. Oddly enough there is a little disparity between the big guys and the little guys.
As you can see from the explanation of my grain sales, many grain farmers are losing money. So what's the cause? One of the major causes is that the government will make up the difference between what buyers are willing to pay and the loan rate established by the government, which is below many farmers' production costs. So the buyers can pay less for the raw products for their industries. Who are the buyers? Farmers who feed livestock and poultry, many of whom do so under contract to large corporations, as well as processors and grain traders, many of which are large multi-nationals. So while the farmer gets the government check, who gets the biggest benefit?
So why do we farmers continue to produce the very crops that are in surplus? Because the government will subsidize us to grow these crops because that is what our farms are set up to do. Because we've invested in pricey equipment designed for those crops and large tracts of land to raise those crops. Changing is hard and expensive.
So what shall I tell my kids who dream of a future in agriculture? I'll tell them that conservation of our natural and non-renewable resources is truly a worthy cause on which to spend our money. I'll tell them farm assistance is vital for agriculture. But what our government is currently calling farm subsidies is truly subsidizing multi-nationals to insure that they will always have a plentiful supply of a cheap raw product.
The true problem in this farm bill is concentration ó the merger of companies that own and control every level of the food industry ó and it's not being addressed. From farm-to-table, these few conglomerates are monopolizing this country's food system.
Until our policy leaders address the issue of concentration, there will be no future in agriculture.
LaVon Griffieon of Ankeny, Iowa, is a farmwife and co-founder and president of 1000 Friends of Iowa. LaVon is also a Food and Society Policy Fellow, a national fellowship program designed to educate consumers, opinion leaders and policymakers on the challenges associated with sustaining family farms and food systems that are environmentally sound, health promoting and locally owned and controlled. The Thomas Jefferson Institute, Columbia, Mo., administers this fellowship program, in partnership with the Institute for Agriculture and Trade Policy, Minneapolis, Minn., with funding from the W.K. Kellogg Foundation.