The big bad BTO...
An interesting thread on agriculture.com concerning the argument that never ends - landowners and tenants. My opinions are pretty far to the libertarian side, of course, but it is significant to me that Iowa is finally seeing the market transparency that keeps many Illinois producers awake at night.
The underlying assumption for many commenters is that the BTO (Big Time Operator) must by definition be uncaring of the land and out to exploit the landowner. This is comforting conceit for those who feel threatened.
But what if the large operator is an outstanding person - well-liked, honest, caring, and a committed steward of the land? In fact, what if those very qualities have made him successful?
The current boom in cash grain will only accelerate the consolidation of agriculture, I think. Demonizing the successful won't make much difference.
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2 comments:
John,
As someone who did comment on the post through agriculture online, I wanted to share something that was not included in your comment. While there very much was concern over the BTO, one of my themes was not in that respect, rather, was to look at the big picture and basically address the new rent threshold (if such a thing exists). To me, there is more at play than simple economics. Maybe the BTO is a better farmer or will be equal, but to just cut the current tenent if he/she does not propose to pay more is a bit too much for me. My main point is this, at what price level do land rents go from competitive (for lack of better term) to greed. Certainly the landowner has every right to exercise his freedom to choose a tenent, and I support that, but at what level can we justify what is happening with rents. If corn goes back to $2.00 will the landowners adjust rent accordingly?
Anon:
Well said. The BTO prejudice is certainly present, but many folks are trying to find some common ground and fumble their way to "fairness".
This is holy grail-type quest, I fear. Fair is completely subjective. My current view is farming is so good right now, the demand for land to farm will de-leverage all renters to the maximum.
A complicating factor is the widening disparity of operator financial capability to handle risk. (Please see my last TP). By virtue of incredible production skills (one of these guys farms next to me, dang it!); superior marketing, or even a spouse who earns a lucrative professional salary, (or a pact with Satan, perhaps) somebody is paying $340 and the checks aren't bouncing. Arguing over illegal golf balls probably won't help win the match against these Tiger Woods.
The market is - and has - been indicating to farmers to own land, but that risk seemed too great for many. Now the risk of renting land has risen to match it.
While renters are growing increasingly fearful of the possibility of $2 corn, they are likely to lose ground by virtue of $5 corn, IMHO. Is it greed if the offer comes from another farmer and not the owner? Is it fair to the high bidder to turn down a superior offer?
Don't get me wrong. I am not happy about how much more difficult renting has become. But solving that riddle is increasingly how I make my money. (It's not steering the tractor anymore).
Thanks for reading and your perceptive comment. I've got a feeling these conversations are just beginning.
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