Americans must decide what they want from agriculture, farmer says
Richard Burd has mixed emotions about the latest U.S. Farm Bill. But he doesn’t have mixed emotions about farming and the food supply.
“The farm bill will give us some stability over the next six years. We have been, since 1996, in a very protracted and very flat and very low priced market. Some of the lowest prices in my life in terms of purchasing power of a dollar. Probably the lowest prices I have ever seen.’
The new farm bill, a $190 billion package aimed at supporting American agriculture, will “help a little. It’s not a massive handout.’
Burd said that Americans opposed to funding farm subsidies, however, need to ask themselves a question.
“How cheap, how safe, how available do I want my food supply to be?’
Ideally, Burd would like to see subsidies erased worldwide and farmers allowed to compete in an open market. Yet he sees farm subsidies as a necessary evil.
“They have been around as long as I have been in farming.’
And other countries heavily subsidize their farmers, creating an uneven balance in global competition.
“The bottom line in all of this is if we can’t get our money that is necessary to survive in the market then it has to come from somewhere. All of my career there have been subsidies in one form or another. But once again, we are the best, most cheaply fed society in the history of the world.
“To earn enough money to buy your food for the year you work from January to the first part of February, about 1/11th of the year. To pay your taxes, you have to work until May,’ he said.
The new farm will, he added, is an improvement. Yet it still doesn’t balance the scale.
“For the last five or six years I have been trying to figure out what has changed in the grain market. We are in this very depressed price period. What’s causing this? What’s behind it? Well several things.
“The strength of a dollar to the globalization of our industry is causing it,’ he said.
Burd explained that Brazilians are growing soybeans “at a tremendous rate. They are tearing up rain forest and grassland to plant soybeans. They have been at it for about 15 years and they are pretty much as a big a producer as we are. But instead of having to pay $3,000 for an acre of land, they pay $50 plus the cost of clearing it.
“Some South American countries don’t respect our intellectual property rights. When I buy a bag of seed, I pay for the costs to develop it. They don’t.
“All of this puts us at a tremendous disadvantage,’ Burd said.
A strong U.S. dollar also enters the mix pushing consumers worldwide to look for the lowest priced product.
“The farm bill will help some,’ he said.
“When you look at the fundamental analysis of grains we are at the lowest world carryover for corn. Our prices should be much higher. We are 9 percent under where we were in 1996 when corn hit it’s all time high. Either our customers have learned they don’t have to respond to short supplies worldwide or a strong dollar puts us at a disadvantage. Countries will increasingly source their product from anywhere in the world. Recently McDonalds began to source its beef from New Zealand. They say they can’t get enough from U.S. producers
“The other thing to look at is the infrastructure of our country. There are so few of us who farm any more. It’s amazing how little people know about where their food comes from. They don’t see a direct connection with a Wal-Mart being placed in a cornfield and our future supply of food.
“They have to ask what they want from their agriculture in the U.S. We have been the best fed, most cheaply fed and most safely fed people in the history of the world. But we get complacent. Food security can be a huge issue in light of 9-11.
“While it’s really inconvenient to have fluctuating energy prices, can you imagine if that was our food supply being dictated by someone who didn’t like our polices. What price do Americans want to put on safeguarding our food supply?
“I think this farm bill gives us a little direction that yes, the president and congress have given this some thought.’
Burd said not many producers of commodities “are making much money.
“That seems to be a perennial theme and if you study agricultural economics much you realize the long term return to agricultural assets is 2 to 3 percent. Once in a while you will hit a spike where you do pretty well but most of the time it’s not a high rate-of-return business.
“You don’t often see a doctor or sports figure quitting his job to go farm,’ Burd said.
He adds that farmers “produce the basic goods and services that underpin all of society. You have to eat. We have gotten so good at producing things we don’t take any second thought to maybe my food won’t be there tomorrow.’
Farmers struggle to remain in a business they love, he said.
“The short term answer is if you can’t make the money flow your business is doomed. You don’t see farmers living flamboyant lifestyles. You don’t see upscale car companies targeting farmers for their product.
“The farm bill does go in the right direction in some ways. We balanced some of the problems we found with the 1996 farm bill. We have added some commodities that are to be subsidized now that weren’t in the past. I think you’ll find that almost to a producer we would rather get our money from the market place. We don’t like government subsidies. But in the real world where some countries will subsidize their agriculture at a very high rate, you need help,’ he said.
For example, Burd added, one such nation is France. But he doesn’t condemn the country for its high subsidies to farmers.
“They remember going hungry during World War II. Once you are hungry you won’t forget it so they are very protective of their agriculture markets.’
Burd said the U.S. is only two production years away from its own food crisis. “If we get two very bad drought years, we can find ourselves in trouble.
“It used to be prices were at a level where you could work for four or five years and accumulate enough money or product to sell that you could weather the drought. That is not true anymore.
“We have to ask ourselves what is it worth to the U.S. to be secure in our food supply? We have to give Department of Agriculture the tools to do their job. Other countries have had problems, like Mad Cow disease and foot and mouth. All you need is one person coming into this country with that disease intentionally or unintentionally and things could be very tragic,’ he said.
Americans are fortunate, he added, that they “don’t have to worry about availability and we have reasonably priced abundant food and that is a big part of the quality of life in America.
“We may yearn to be thin but we also yearn for that predictability of food being available. We say I want to eat so many times a day and it won’t break my wallet and I won’t get sick from it.
“Many of us don’t have a clue on what has to be in place to make that happen.’
In frustration, Burd said, some farmers have hoped for a food crisis to dramatically bring home their point.
“I counter that with think what you are saying. We would like to see a little bit more respect and some economic return.’