Farmers will prosper with the right government policies. The world’s population is headed toward nine billion. Today it’s about 7.4 billion. Feeding these billions is pent-up demand for Kansas agricultural production. Getting our food and agricultural products to a hungry world is the way forward. This will result in higher cash prices for grains.
Current agricultural policy is government subsidy based. I don’t want Kansas farmers dependent on the kindness of incumbents. On principle, I oppose subsidies because the result is higher costs for seed, chemicals, and machinery. The price of land is similarly distorted. Federal involvement is further corrupted by the passage of omnibus spending bills which lobbyists use to attach special interest money requests to the public laws that also fund farm programs. I will advocate that Congress end federal subsidies because they inflate the costs of farming.
The current income support structure limits its protections to what are called “shallow losses.” This policy is specifically designed to force farmers to buy federal crop insurance. Even though subsidized, the program fails because the premiums are unaffordable. Both Kansas Senators favor government intervention in agriculture instead of programs based on marketing and trade agreements. The next stunt these two Washington experts are going to try is to put in bank regulations that require federal crop insurance as a condition of all farms loans.
Agribusiness lobbyists write the farm bills. Farmers are used as a conduit to move money out of the US Treasury and into companies like John Deere, Monsanto, and Northrup-King. The Agricultural Act of 2014 (often referred to as the “2014 Farm Bill”) provided two direct federal subsidy programs for covered grains such as wheat, corn, and soybeans. The Price Loss Coverage (PLC) option provides a guaranteed price. The government pays the difference between the commodity’s guaranteed price and the 12 month average market price applied to the farmer’s historic production volume. The Agricultural Risk Coverage (ARC) option is an income support program which guarantees a county-specific minimum of revenue per acre.
My goal is for young farmers to buy land. Both the PLC and ARC have led to the unintended consequence of windfall rewards for non-farmer ownership of farm ground. Cultivated land prices are inflated because absentee investors can get government checks that are equivalent to high yield insured CDs. The current farm bill needs to be replaced with policy where the rewards arise out of raising and selling crops and livestock.
The federal role should be limited to funding research grants to universities, use of diplomatic tools to protect the free trade of agricultural products throughout the world, and smart banking laws that alleviate the liquidity problems inherent in agricultural finance.
Congress also needs to end the ethanol mandate. The use of corn-based ethanol to blend with gasoline was promoted as reducing carbon dioxide emissions. There is no scientific support showing any carbon dioxide reduction. This mandate inflates the cost of corn fed to cattle in feedlots.