Monday, July 02, 2007

It's about acres...

Farming is receiving moderate coverage in the popular press, due to the impending farm bill and the ethanol boom. While I am reading with an overly-critical eye, I am still surprised when reporters who cover business can't use the same logic when reporting about farms.

Consider this passage from
Within the next decade those older farmers will be looking for someone to take over their operations and selling millions of acres of land.

Much of that land will be merged into bigger farms with fewer people working on them. Rural communities will lose even more young people, and a few will struggle for survival. Some stores that sell tractors and fertilizer will suffer.

"You lose a farmer here or a farmer there, you lose your customer base," said Burtchin, 60, who sits on the board that runs the local grain elevator. [More] [My emphasis]
Whoa- back up the logic express! Losing people doesn't change the number of acres needing fertilizer or tractors. In fact, losing people could mean we are employing more tractors, or at least bigger ones. Meanwhile, unless the planted acreage decreases, won't whoever is farming need similar fertilizer amounts? For that matter, grain production is booming, so why are elevators whining about losing producers.

From a retailer's point of view a few large farmers is preferable to many small farmers in some ways. And if large farmers threaten dealer margins, then how much value are they actually delivering?

We all have to earn our place in the value chain. Not even farmers should be guaranteed "tenure" for their career. To do so would elevate them to an even more privileged status.

Farms are consolidating because the labor input is dropping thanks to technology. Jan and I are "poster geezers" for this trend. I never thought we'd be able to cover 1700 acres by ourselves, especially with me gone so much. But like thousands of other farmers, we figured it out.

I suppose by making these leaps of efficiency, we have "squeezed out" other farmers in some eyes. But my problem was how do we choose which producers who should be protected from competition? Experience tells me the fairest way is to let the market select.

The market cares about acres, not operators. Our business is no different in that regard from most others in the world. Equating losing farmers to losing farms is as widespread as it is illogical. As farmers and their advocates allow the confusion to continue, they risk provoking some bizarre policy decisions.

1 comment:

Anonymous said...

"...then how much value are they actually delivering?"

Exactly! What is the local farm supply retailer providing anyway? At what volume does it make more sense for the basic manufacturer/distributor to by-pass the retailer and deal with farm operators directly?