April 2009 Dairy – Publisher's Prespective
Who Really Controls American Agriculture?
The answers might surprise you. The question we ask is - what are we willing to do about it?
I have given a great deal of thought to a concern of mine and maybe of yours. When I consider the problem and all of it’s ramifications it has always raised the hair on the back of my neck. It has to do with how much of American agriculture American agriculture does not have control over.
I have provided my list of those issues impacting American agriculture. Examine it and consider which components do you, we, us, have some control of, have no control of, someone else has control of, but they are friendly to agriculture, and someone else has total control of and does not have agriculture’s interests at heart.
Land Use
Water Use
Banking and Lending
Electricity
Fuel
Seed
Insecticides and Fertilizers
Air Quality Boards
Water Quality Boards
City and County Legislation
State Legislation
Federal Legislation
Crop Selection
Property Taxes
Federal Taxes
State Taxes
Workers Compensation
Health Insurance
Labor Relations
Employee Wages
Employee Safety Regulations
Equipment and Vehicle Registration Fees
Diesel Emission Standards
Transportation
Imports
Exports
Marketing
Market Prices
Distribution
Consumer Awareness
Consumer Education
As we each examine this list and take note of the number of things American agriculture does not have control over, you might get a better understanding as to why the hair on the back of my neck stands up every time I think about this list and its implications.
I know of a 90 plus year old company right here in California who recently lost their long held bank line of credit. It was not because they hadn’t or couldn’t make the payments; not because they couldn’t make money for themselves, the shareholders or the banks; but because the substantial property they held had been so badly devalued as a result of the current State and National economy.
The bank just pulled up stakes and said we won’t provide financing because we perceive the value of your property that helps secure the line of credit as not stable and that it will not likely return to viability in the near future.
Nearly 5,000 jobs were directly affected because of this one bank’s perception of one state’s property values. To me this is a prime example of a company that had allowed only one component of it’s business, a very key component I might add, to be left in the hands of people who were so far removed from what was reality and what mattered most to the company, that a rational common sense decision was no longer possible.
So what single issue could bring this type of sweeping change for American agriculture? Lending and Finances? Government Regulations? Markets? Land Use? Property Values? Water Allocations? Loss of Consumer Confidence? Imports? Exports? May I submit that any one of these issues, when left in the control of others, could easily be the proverbial straw that breaks the camel’s back.
I would hope that an alarm is going off in your head. It is high time that the American farmer started to wield far greater influence and it needs to start by taking step by step control of each and every facet of the business. With control comes greater responsibility for sure, and it won’t get done over night. But in the end it may well be the only way to survive.
I said to a friend the other day; we talk too much to each other, but we don’t do much communicating outside Ag circles. Some of those in agriculture do, but guess what. We and they are outmanned, out financed, and just plain out spent. Things have got to change. It’s going to take some time, so the sooner we get started the better.
We would like to hear from you as to what you are thinking and what you are aware of that needs fixing. The list is going to get longer before it gets shorter, but it’s high time we made our list of things that need to be changed or improved, all designed to ensure the continued viability of American agriculture. We need to construct a list of action items that are prioritized and get to work.
Top on my list would be “price equity for Farmers that is connected directly to retail pricing. I vote agriculture gets a percentage of retail. No less, no more. We may need to pay our marketing people and brokers out of our share, but I think a percentage of gross retail is the right way to make it happen.
What’s a fair percentage, might be your first question? There are a ton of possibilities for sure. But considering the risk, considering the investment, considering all that it takes from start to finish, I would first float 60% of gross retail and 80% of wholesale.
We’ll grow it, we’ll get it to market, but we share in the upside. I might even support setting a percentage for the middle man and the retailer. 20% of gross retail and wholesale for the middle man in both wholesale and retail transactions and 20% of gross retail for the retailer on all food and fiber products sold.
For far too long everyone else has made a whole lot of money on the backs of the American Farmers and it’s high time we balanced the playing field and the books.
We’ll crunch the numbers and the ideas some more, but we would love to see your list of priorities that should be added to the list of things that American Agriculture should do to immediately take back control of it’s own future.
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