Saturday, April 18, 2009

One guy, one computer, many repercussions...

I've been following Greg Vincent's adventure with the "Family McFarms" business.  It was a great article, but like some other readers, I haven't reached any different conclusions than I had before before about what this means. 

For my money, these guys come and go. And the idea of buying a farm management company seesm to leap to the conclusion that the farmowners involved are totally under the control of the current managers - little more than assets in the managment company balance sheet.  According to the farm managers I know, this idea is very suspect. In fact, if any connection has been made between tenant and owner (and smart tenants make sure that happens), the book of business could evaporate after current contracts expire.

But I was struck by his after-post about the article containing this paragraph.
How do they benefit their members?
That’s the $1,000,000 question. From what I have gathered from talking with Rosentreter and Mehmen the benefit is that it has helped them grow and become better managers. That is what they see as the benefit. Illinois Family Farms growth is mentioned in the article by the acreage numbers presented. The only information I could gather on the Mehmens’ (MBS) growth is their rise in the subsidy database. This obviously isn’t definitive on their growth, but it is a good indication of how much they’ve grown in three years. I understand that some readers may not see that as a benefit and that’s OK, this is simply one approach this company is deciding to take. [My emphasis]
Unless I'm mistaken, he is referring to the EWG database and analysis of farm subsidies. This is a stunning confirmation of something I suspected years ago: the best information we have on our own grain production industry structure comes from folks many consider our harshest critics.

This reinforces my assertion that NASS is useless, but I don't want to beat that deceased equine. But when one dude with a computer can do more to bring transparency to the farm program than farm organizations and government agencies, it demonstrates a strong preference for obscurity on these matters by producers and government.

Transparency is relentlessly change-producing.  And the Internet makes it sooo easy and cheap. Just like farmers are discovering with articles like Greg's shining bright lights on formerly mysterious transactions, the easy access to subsidy data will also change our business models to cope with scrutiny.  And in case you've missed it, transparency is all the rage nowadays.

I think we are underestimating how profound that change could become.

1 comment:

Anonymous said...

John,,very interesting article... for these "business models" at times seem to be all the rage---but that all comes at a cost too somebody....may be tough deal for some input suppliers for farm management firms they have a place for the absentee landlord... in our area the tenant that can sell himself and pay going rents can compete nicely on a personal basis....I see large amounts of farm land coming on the market in 10 years or less as kids have moved away and a $20,000 rent check pales in there eyes too having a million in cash...subsidy payments for crops are kinda stupid as everyone bids that money into land costs and just stops new entrants into farming--regards-kevin