As any farmer will tell you, farming isn't easy. Illinois farmer J. Gordon Bidner says "A lot of it comes down to whether or not you're a pessimist." (Betting the Farm) According to Business Week the farm economy has been nearly perfect for the past 5 or 6 years, but farmers are about to need to tighten down for a while. Mark Twain had a point that land is a nonrenewable resource, but he couldn't have predicted the challenges modern day farmers face when purchasing land. Record demands for crops such as corn for ethanol based fuels meant more land purchase, and since business was booming it meant low interest rates on land. Unfortunately the low rates meant pushing farmland beyond it's true value, so when the boom slows interest rates rise back up and changes the income to debt ratio. On the upside, Paul Pittman, chief executive officer of a farmland real estate fund based out of Westminster, CO predicts that farmers may not face major financial crisis because of the 5 years of good economy. (The Fat Years)
The government has had a way to help farmers during hard times since 1933, a program known informally as the farm bill. The farm bill is renewed about every five years and is a huge piece of legislation. (NBC) I've only scratched the surface. Part of the bill includes subsidies, one known as the Agricultural Risk Coverage (ARC) and the other Price Loss Coverage (PLC). The ARC insures farmer's income in bad harvest years, and the PLC compensates for when crop prices fall. The trouble with these is farmers have to predict and choose which subsidy they want, and they have to sign up by a deadline or they default to the PLC. Nothing like shaking up that magic 8 ball and literally betting the farm!
So, how do farmers really fare during tough times? How much does a subsidy run on average and how do they get one? I have always heard that farming required a crystal ball but I was unaware of the extent. Imagine how tough it would be to predict if a major natural disaster was going to wipe out your crop or if demand for your crop would plummet. After reading just about land values rising and falling so frequently, I have to wonder about the other expenses of running a farm. Not only is there large equipment and livestock to maintain, it's also income for the family. How could a farmer who owned a smaller farm not be tempted to sell everything and leave the work to bigger corporate farms? I believe in the tradition of the family farm, so I hope to uncover some information on how these smaller operations are still an integral part of modern agriculture and how they are keeping the tradition alive.
This video is from Alabama Co-op extension, but it was one of the shorter overviews of the farm bill.
video from
video from
Sources
NBC
Bjerga, Alan. "Betting The Farm." Bloomberg Businessweek 4420 (2015): 34-35. Business Source Premier. Web. 1 July 2016.
Bjerga, Alan, and Jeff Wilson. "The Fat Years End For American Farmers." Bloomberg Businessweek 4459 (2016): 18-19. Business Source Premier. Web. 1 July 2016.
Farm Bill 2014
Thank you for the information on those 2 subsides, I had no idea they existed. I mean who would unless you had a vested interest right? It's embarrassing to admit but I am one of those people that doesn't really know the depths of where my food comes from. I'm wondering how much the government really wants to keep family farms around and if they died out completely what would be the impact on our country. I once heard a farmer say that his son went to the big city to go to college because "farming was too hard of work for to little money."
ReplyDeleteWhat else I would like to know would be how the family unit itself plays a role on the declining of family farms? Are families moving on to bigger and better things? Is there less help to run the farms now?
I agree with you on how hard that would be to predict what is going to happen in life. I have a tough time sometimes predicting a week out with my money. :)
Agriculture is just not being taught unless you're in a rural area. It seems we all know the very basics from science class, plant seed, water seed, pick the plant. Traditional farming seems to be such a dying art, and the next big thing is backyard and container gardening. I've read quite a few articles that seem to point to the government support being more towards much larger farms, but I'm still searching!
DeleteWhat did you find interesting about the response? I find this topic super interesting. I did not know that the government was helping support farms then the 1933. I did not know there was the Farm Bill. Having to always worry about a potential storm that could wipe out the entire crops would be very stressful.
ReplyDelete• What would you add to this post? OR What questions does this post generate for you about the topic. I would not add anything more to this post, I think your doing a great job! Similar to the questions you asked, I wonder about how farmers really do make it through tough times? What happens if the entire crops were wiped out from a storm? Is there anyway to recover from that?
• What do you agree OR disagree with and why? I agree with you and your viewpoint. Supporting family farms and having them be successful is very important. This is some people's livelihood and incomes. Another question would be will family farms ever be successful enough to not be overtaken by a big corporation. I hope that family farms continue to be successful. I look forward to hearing your next blog post!
I didn't realize how much I didn't know, even growing up in a farming community! It's fascinating. I think I'll be looking at this subject long past this assignment. Thank you for your input!
DeleteI live in a rural area in northern Colorado where small family farms are all around. Our community is very ag based. And I can tell you that quite a few of them are now into oil to make ends meets. The big oil companies offered a lot of movie to drill on the land. It was great for the farms when it was good, but now with the way oil is, it's pretty much come to a stop. It's very sad to drive down country roads and see the fields full of oil tanks. But a man has to do what a man has to do to support his family. Do you feel the government should help farmers out more? Are you concerned that family farms will become something of the past? With new generations taking over to they have what it takes to continue the family farm? These are some questions that would be interesting to find out.
ReplyDeleteI have heard about the oil companies doing that, it is sad to see. I am undecided whether it should be a strictly government responsibility. So far I am unimpressed with the farm bill. I am definitely concerned that family farms may cease to exist. There are so many factors. People don't have as many children anymore, it seemed the family always ended up working on the farm as well in generations past. Everything is moving towards technology so many people don't have what it takes physically I'm sad to say. Farming is very laborious! I'm finding so many more questions coming up as I go, which is the point of this assignment so it's great!
DeleteWhere I live is around a lot of farms and oil fields. Many of my friends work in the oil field in fact on of my friends got laid off in colorado from the oil field and had to move to Texas to keep his job because there was no work left here in colorado. It is a scary thought to think that family farms are slowly going away.I knew nothing about a farm bill. Farming is very important to my life because my boyfriend owns his own cattle ranch and without the local family farms his cattle ranch would suffer.
ReplyDelete