An Inequality of Results

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Mike Dwyer

Mike Dwyer is a former writer and contributor at Ordinary Times.

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9 Responses

  1. Avatar Stillwater says:

    Nice post, Brandon. I think I’m a bit confused about the argument here, so I’ll ask a question first. You include in the post the following quote:

    When farmers take a conservation payment rather than plant a crop, they don’t buy fuel and fertilizer, they don’t buy machinery and seed, and they don’t hire help for the harvest. In short…the payments stifle the local economies by suppressing high-production agriculture in an area that boasts some of the best wheat-growing conditions in the world.

    If the purpose of the payment is to maintain farms as viable entities, doesn’t it follow that without the payment more farms would enter foreclosure, leading to the same problem in any event? That is, that without the CRP you’d have the same negative effects of shrinking demand for combines and such, but without the added benefit of habitat restoration?Report

    • Avatar Stillwater says:

      Whoops, sorry about getting your name wrong Mike. That’s sloppy in my part.Report

    • Avatar Mike Dwyer says:

      “If the purpose of the payment is to maintain farms as viable entities, doesn’t it follow that without the payment more farms would enter foreclosure, leading to the same problem in any event? “

      No. Prices for corn, wheat and soybeans are nearing an all-time high. Farmers stand to make more money off the CRP than on. The CRP program kept those farms out of foreclosure when commodity prices were low.Report

      • Avatar Stillwater says:

        Ahhh good. I thought that was the answer. So one solution is for CRP to dole out payments based on a finer grained set of conditions than they currently do. Another might be to eliminate the program altogether.

        What do you think the solution is, especially given that farmers are making more directly as well as indirectly by leaving the CRP payment structure as it is?Report

        • Avatar Stillwater says:

          I should add: it seems to me that an easy solution is to include a trigger on the payment structure such that if the projected profit derived from farming reaches 80% of the payment (or whatever), then the application is rejected.Report

        • Avatar Mike Dwyer says:

          I think you keep the CRP around – afterall, it’s completely voluntary. Additionally you can still try to incentivize other good wildlife management practices that still leave ample land for crops. Things like developing marginal spaces and planting edge crops.Report

  2. Avatar Remo says:

    Nothing is ever black and white, is it?

    I think the big question here is this: Is it worth to keep the CRP payment structure?

    It can be altered so that the amount it pays is more in line with current grain prices, but that might bring lots of side effects. Making its pay scale with the grain price in particular can lead to a nice inflation of the grain price due to lack of supply. On the other hand, keeping it at the current levels will mean a lot of the land that is used for biodiversity will be turned into farmlands.

    So, it is not simple. But the biggest questions that should be looked back are: Did the legislation have the desired effect? And was it worth it?

    It is impossible to fix a problem if you dont deal with the root of the problem. The CRP did deal with the root of the problem – it made it worth for farmers to stop using some of their lands for farming. However, that created a whole lot of other problems for the communities where those farms were located. All these problems must be weighted, and to decide upon what to do with the program you must have some sort of ‘net worth’. The problem of having more diverse biosphere locally is that the local impact is minimal, its impact on a larger scale can be large, but it is awfully hard to measure it.

    Although some people in the government would like you to think so, there is no magical bullet that can solve all of the problems.

    CRP at least tries to deal with the root of the problem – making it worth to have land that is not farmed, instead of trying some of the more magical solutions.Report

  3. Avatar James Hanley says:

    There’s a big part of me that favors taking land out of production to promote wildlife habitat, so I tend to like the CRP program. But the effects on local economies are undoubtedly real.

    It’s not at all certain what would happen in a true free market for agriculture, but it’s clear that our ag policies have had some unintended effects that nobody really likes. In addition to the local economic effects of the CRP program, our ag subsidies have led to consolidation of farms, as the future expected benefit of the subsidies gets discounted into the current price, making it harder for heirs to afford to pay the inheritance taxes on the land and pricing young farmers out of the ag land market. A friend of mine in Iowa who grew up on a farm and who’s dad until retirement was a farmer then a farm manger for a bank recently sold off part of his grandfather’s farm to cover inheritance taxes and take a little extra on the side. He liked the price he got, but only, he said, because ag land prices are much too high right now.Report

    • Avatar Kimmi says:

      The market is a killer for agriculture. It distorts production to an astonishing degree. Because farmers make more per acre with corn than anything else, a farmer is taking a fiscal loss to grow anything else. If they’re a new farmer and got a mortgage, that might not be something they can afford.Report