Why is a farm program essential?

Why is a farm program essential?

Eric B. Allen

Hutchison, Kan.

In our commodity market for every winner there is a loser and price discovery is mostly set by supply and demand factors which helps to determine the daily price. When prices are higher that usually means it's assumed there is or to be a shortage of supply or increase in demand and when prices are lower that suggests that perhaps the supply is plentiful and demand is lower. In agriculture these supply and demand factors are the daily risks that our farmers take and are all effected by the above and the weather, politics and wars around the world. For example, right now our grain markets are taking a hit based on daily reports of less heat more rain and expectations of higher yields. This is what our farmers deal with each day and if they like gambling they don't even need to go to a Casino!

However, for the benefit of our people there are actually commodities that we need a surplus of. I can actually think of 4 and I'm sure there are more. First of all, how about oxygen, the human body cannot live much more than about 6 minutes without it. Fortunately, we have a surplus of oxygen and for now we don't have to wear a meter to put coins in to pay for it. Next would be water, the human body can't live much more than 3-5 days without water and the quality and quantity of water is becoming more of a challenge. Next would be food, the human body can't live much more than 8-21 days without it and we actually have people starving around the world today! The next surplus we need would be military war supplies, and we can't expect manufactures to make missiles planes and bombs and wait for us to call for them. Our military puts out orders and they are made on a cost/ plus profit contract. As farmers we are proud that we can provide this abundant food supply, but the market doesn't always provide a profitable price so price supports during these times are essential for us to do our 'ob.

And now we are faced with the Project 2025 Presidential Transition project from the Heritage Foundation, to layout the agenda for the next Republican president. The document is over 900 pages and the 30 pages section addressing their recommended changes to USDA and was authored by Daren Bakst. Under this mandate for leadership "The Conservative Promise", the USDA would get a lot smaller if enacted, farm subsidies would be cut or slashed and several USDA programs for farmers would be eliminated or reduced. The food-aid program known as SNAP would be moved to the Department of Health and Human Services, This SNAP program has always been an important part of our farm program and has amounted to 70% of our budget and has always helped get congressional support to pass each farm bill.

2025 also wants to remove the CRP Conservation Reserve Program (CRP) and the project would also like to see the two main commodity programs repealed, the Agricultural Risk Coverage and Price Loss Coverage (ARC and PLC) which are used on 22 commodity crops and no mention was made to dairy subsides. The ARC and PLC are very important price support tools for our farmers. They also want to reduce premium subsidies for our Federal. Crop Insurance and farmers that collect on crop insurance not be able to receive ARC or PLC that year.

There is even talk of putting tariffs on all imports from China and the last time we did this in 2018 China retaliated by raising tariffs as high as 25 percent on many US goods including agricultural products and food devastating US farmers making their costs go way up and the president took $20 billion from our CCC fund to compensate our American farmers.

It is now serious with incredibly high Chemical, Fertilizer and fuel cost that don't seem to come down because the monopoly that the manufactures have. With low prices our revenues are well below our cost of production and this is not a good picture. If things don't, change we are nearing a crisis like we last experienced in the early 1980s. I know because I was there to experience it. One thing was different we had loan interest rates as high as 18% and interest was our biggest expense. Today I think our biggest expense is Chemicals/Fertilizer/seed and fuel.

I know this is thinking out of the box but if the 2025 plan comes to be our future and we have no price support system, over time we may lose many farmers and someday we may end up with 5 major corporations farming all of our land, our farm towns would die off because the big 5 corporations would do no business locally, all of their chem/fert/seed and equipment would come in by rail from the manufacture and crops would ship direct to the processors. The Big Five would control the food supply and food prices would be as high as they wanted.

It has been our Farm Service Agency established in 1930s and the many farm bills along with farmer-owned Cooperatives and the Farm Credit System which is also a farmer owned cooperative, that have helped keep the family farmers in business and prevented the large Corporations from taking over and controlling our food supply and prices. The average age of our farmers is now 57 and we need the help of our farm programs to help get the next generation established into farming.

I am a registered Republican and I have long voted for our Republican congressmen and some Democrat congressman that have done a great job supporting agriculture but I can no longer vote for any congressmen supporting this 2025 Presidential Transition Project.

— Eric B. Allen is a retired Ag Economist with Kansas State University and a crop share landlord.