I have been traveling recently, focusing my efforts on farm and ranch income. Wherever I go (even worldwide), the challenge of profitable farms and ranches is an issue that is similar in every country, regardless of the commodity or farm type. It seems that food production and those who produce it are not valued until there is a shortage of production.
In the U.S., where we have not experienced widespread hunger, we do not value what family farms and ranches accomplish each year: the production of abundant food that keeps our grocery shelves full. We are willing to risk this system in the name of inexpensive food. It seems acceptable that prices go up for everything else we consume, but the price the farmer and rancher receives must stay low.
In the European Union (EU), the weak position of farmers in the food supply chain is rapidly climbing up the political agenda. European parliamentarians and EU governments are also rallying to support farmers by drawing up new rules to allow them to band together to coordinate production and costs and negotiate contracts jointly. EU farmers are poised to win new powers allowing them to form cartels to fight low prices.
I believe it is time that we value our food production system more and understand the importance of food production to our nation and society. As we write this next farm bill, we must focus on the programs that enable family farms and ranches to achieve profitability.
Profitable farms and ranches drive our economy. Agriculture generates new wealth year after year and is critical to our country’s economic success.
One of my frustrations is when experts suggest that more capital is the solution to the farm and ranch economy. It is important, but does not solve low prices or the ability to earn a profit.
Capital, by definition, is cash or goods used to generate income. It is also defined as something that consists of anything that can enhance a person’s power to perform economically useful work. Capital follows profitability and is widely available when farms and ranches are profitable. Credit unions, banks and other lenders gladly lend capital when they believe a farmer or rancher can pay them back. We have great lending programs for federal and state guarantees and beginning farmers that work well, if they are fully funded. Do remember though, the challenge in agriculture is not getting capital, it is being profitable.
It is our job as Farmers Union members to remind the experts and our elected officials that the backbone of rural America is agriculture. It is essential that farms and ranches are profitable for rural economic success. More borrowed money will not address the challenges of low commodity prices and extreme weather conditions. We simply need better market prices or a farm program that reflects the cost of production and risks associated with production agriculture.