One of the many wonderful things about getting older is seeing some problems for a second, or third or more time. You also see some suggested answers repeatedly. The last few months I have talked often about the economic difficulty facing much of agriculture. And it has prompted some familiar responses.
For example, I have received multiple emails with this type of solution:
“What would be the effect if all farmers voluntarily decreased their acres planted by 10%? They would spend less on everything from seed, fuel, machinery repair, etc. The machinery would last longer, interest on borrowed money would be less, etc. Wouldn't the prices on corn and soy and any designated crops go up? I know there have been instances where dairymen dumped milk and growers dumped cherries, etc. Wouldn't that achieve the goal of increasing income?”
That’s from Neal VanderWaal.
Another well-known solution to hard times in ag is parity pricing. This note from Jeff Ballard in Litchfield, Minnesota.
“The U.S. government has been publishing Parity Pricing of farm commodities for decades. Set in law that no commodity could be bought or sold below the parity price.
Every problem you talk about goes away, plus virtually every other problem associated with the farm bill, crop insurance, price supports etc. Top it off with a graduated land tax and things will really head in the right direction.”
Both of these ideas deserve fuller comment, so I’ll take them one at a time in the next two weeks. Overall, I am suspicious of seemingly straightforward solutions to complicated economic problems. I am reminded of the words of H. L Mencken, “For every complex problem, there is an answer that is clear, simple, and wrong.”
I will outline why these ideas are in my opinion, problematic. In the meantime, gentlemen, send me an address – you might get your mug by Christmas.