FAMILY FARMING

My post earlier this morning, wherein I included family farmers in the list of those whose subsidies should be ended, has generated an interesting response which has prompted me to extend my remarks as follows:

My expertise in farming is extremely limited. My sense is that, with the exception of niche crops, that family farms are essentially outmoded. Indeed, the response pretty much acknowledges this:

Corn prices are the same (WITH subsidies) today as they were the year I was married (30 years ago). Tractor prices, fertilizer, etc. are not, by a huge margin. Our first 120 horse tractor: $27,000. The one we bought last year: $112,000 (same HP) Yields have increased but only about 70%.

When my husband’s father dies we will not be able to pay the estate taxes and keep farming.

My husband is working a 40+ hour a week job and farming on top of it. ALL the farmers we know under 60 are also working two or more jobs per family *besides* farming.

We pay, in cash, $10,000 per year for self-employed health insurance. That is the deal employers around here cut to employ farmers – we get extra time off in the spring and fall (usually 4 weeks, total) and they don’t provide insurance.

To the extent this case is representative, family farming is much like blogging–it’s a hobby rather than a way to make a living. Except that farming is much harder than blogging.

Another good point:

I maintain that when the only entity raising beef is Swift-Premium, who will have a stall-to-slaughter-house-to-store operation, prices will climb dramatically.

I oppose monopolies in most instances and think trust-busting is a legitimate regulatory function of government. My sense is that family farmers are no real competition for Swift-Premium anyway but that there will be other corporations to fight them off.

Mom and pop shops, romantic as they are, aren’t going to fare well competing head-to-head with Wal-Mart. But that doesn’t mean Wal-Mart is going to be able to set prices at will–not so long as Target, KMart, Costco, and others are in business.

Our economy is brutal, but it leads to creative destruction. Many of the people now struggling in the futile effort to maintain family farms will eventually go on to do something much more efficient and productive. While it is always sad when people have to give up work that they love, especially when it is one the family has done for generations, there are all sorts of industries that no longer exist as the economy evolves. My expectation is that, absent government subsidies, many family farms will go under and the people so employed will find something else to do. Much like the blacksmiths, cobblers, and people who used to make buggy whips did.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Kathy K says:

    Heh. The few blacksmiths and cobblers still left around command pretty outrageous fees now, too. My town has some cobblestone (expensive to even repair), and I once asked a blacksmith how much he would charge to make me a sword to specs (Bill Gates could probably afford one).

  2. James Joyner says:

    Heh. See: free markets work 😉 The supply went down to meet demand and now the ones left can make a nice living. Imagine if all the families who used to be in those businesses were all waiting to make swords for those who wanted one! They’ve be $2 each.

  3. craig henry says:

    The existing farm subsidies have biased the system to such an extent that “family farm” is frequently a misnomer. They are highly leveraged businesses that also dabble in land speculation. Cheap money and targeted benefits encourage some farmers to expand– and bailouts then save them if they misjudge the economics related to scale.

    OTOH…. the large agri-businesses receive many of the same benefits. So i’m not certain a pure free market in agriculture will mean total consolidation.

  4. Nice post, I agree. The free market is not alway nice (especially when you are trying to compete against economies of scale), but it is better than wasting tax money that could be better used elsewhere.

    Of course, I think most government subsidies should be ended.

  5. Martha says:

    Production or even gathering of food, a life necessity if you remember, is a skill that is lost to most of the population in U.S. That is the biggest danger of agribusiness. I am not a survivalist, but a pragmatist. You mention niche crops as an aside, but that is the future of family farms. They make a good living around here – selling free range chickens for $6 instead of Tyson’s $2 – but only if you order in advance and pick it up on the day designated. Healthy food, healthy profits and food production knowledge is retained locally.

  6. James Joyner says:

    Martha,

    I agree on niche farming. I didn’t mean it as a derogatory term. Just as mom and pop can’t compete with Wal-Mart on the sale of tube socks, Wal-Mart can’t compete with mom and pop on the sale of fine clothing or other businesses that require tailoring complicated things to the needs of specific individuals. So, rather than whine about Wal-Mart, entreprenueurs have to fill a niche that Wal-Mart can’t. Ditto farmers.

    I also agree that most people can’t grow their own food very efficiently. That’s the nature of specialization. But I’m not worried that Tyson’s is going to refuse to sell me chicken or that Del Monte is going to cut off my green bean supply.