Subject: Re: Farming on life-support! (was: Will free trade take away jobs?) (LONG)

From: [email-masked] (Cameron Laird)
Date: 14 Jul 93 14:32:31 GMT

In article <[email-masked]> [email-masked] (Malcolm McMahon) writes:
			.
			.
			.
>In a competative market with many companys, with or without subsidies, net
>profits, allowing for the opertunity cost of capital investment (i.e. 
>interest rates) profits always tend to zero. In the case of agriculture the
>main mechanism by which subsidies are neutralised appears to be in increased
>land prices (and thus increased capital opertunity cost). Should subsidies be
			.
			.
			.
>There would, however, be structural changes that I regard as very desirable.
>The cost of land would now be lower relative to buildings and plant (in which
>area, unlike in land, there are potentially infinite suppliers). The economics
>of farming would then favour extensivication and low input farming, particularly
>organic and biodynamic techniques. These techniques are IMHO, only less
>profitable now because of the distortions caused by subsidies. This means
>decreased polution and soil degradation and, generally, and improved quality
>of life for livestock. Of course there is also and enormous saving in public
>money.
>
>IMHO what governements should do is to phase out susidies as we know them today
>and compensate landowners for the resulting decrease in land values. After all
>the inflated land values today are the fault of government. There is, of course,
>the separate issue of agricultural incomes which have always been depressingly
>low. However I do not belive that the forms of subsidy tried to date have had
>any effect on the incomes of agricultural workers, even in the medium term.
>
>Malcolm McMahon

You are entirely accurate in your analysis, of course.
I'll add a few figures from this side of the Atlantic
to bolster your points:
1.  inputs are already down.  There has been
    remarkable technical and managerial pro-
    gress at improving *material* productivity.
    Minimum-tillage methods has simply exploded
    in the US, and chemical amendments have
    become far, far more precise than they were
    even a few years ago.  There's a long way
    to go, but, as

	Zulauf, Carl R., and Luther G. Tweeten
	1993	"Reordering the mission of
		agricultural research at land-
		grant universities", Choices,
		Second Quarter 1993, pages 31-
		33

    for example, express it, "Productivity
    gains since 1950 alone accounted for 57
    percent of farm output in 1990, while
    conventional inputs accounted for only
    43 percent."
2.  The prospects for reversing soil degra-
    dation are even brighter under the
    economic regime you describe than you
    indicate above.  My reasons for so as-
    serting are mildly technical, and best
    discussed later.
3.  Ag incomes aren't low.  In the US, ag
    subsidies have declined over the last
    decade, but income of US farm families
    has been *higher* than that of those
    off the farm during the '90s.  This ag-
    gregate statistic certainly doesn't
    answer all questions, but it dramatizes
    how far we are from, say, 1950, when
    per capita disposable income of the
    farm population was 53% of the cor-
    responding figure for the US nonfarm
    population.
4.  One of the challenges to managing a
    transition of the sort you describe is
    for policy-makers to realize that there
    is supposed to be change.  The banking
    "crisis" in the US provides a useful
    comparison.  Crudely, since 1980, there
    has been excess capacity in traditional
    banking services.  Government bail-outs
    deliberately seek to "prop-up" failed
    banks, and give them (or, more precisely,
    their new owners) various competitive
    advantages.  Consequence:  the next-weak-
    est players in each market fail.  This
    process can continue indefinitely.
    Younger agriculturalists in the US have
    begun to understand that low land prices
    can *benefit* the health of the industry.
    The next step will be for government of-
    ficials to comprehend that a contracting
    physical plant in agriculture is *desir-
    able*--among other reasons, for the
    environmental impacts you have in
    mind.

I've adjusted follow-ups slightly.
-- 

Cameron Laird
[email-masked] ([email-masked])	+1 713 267 7966
[email-masked] ([email-masked])  	+1 713 996 8546

---

From: [email-masked] (Crafty)
Date: Fri, 23 Jul 1993 01:21:02 GMT

In article <[email-masked]> [email-masked] (Mark Armstrong soft) writes:

>A "few square feet" can provide your agricultural needs? What are you going
>to do, plant some corn, put a cow over the corn and raise some chickens on
>top of the cow?

	The guy I presently work for has four (4) acres in crops,
mostly veggies. His only problem is that he cannot keep up with demand.

>What are the cost of starting a farm? I can't imagine any
>farm with enough land to provide a living would cost under
>$100,000. Raising cattle, you need to start up you herds.
>Growing wheat, you are going to need tractors, seeders (??)
>harvesters.

	You don't have to raise cattle or wheat to work a living from
the soil, for one thing. You don't necessarily need 'a herd'; you can
get going with one animal (in combination with other products, of
course) and work up from there. 
The guy who edits _Small Farmers Journal_ in Oregon got his start in
farming when he bought four draft horses and some eqt. for $13,000.
What motivated him to do this? It was cheaper than mechanized eqt. for
the same purpose.
	I have forgotten the man's name, but he writes that one person
with a team o four can work 200 acres. 
	I agree with you that buying into industrial agriculture would
be a royal pain, but why do that when subverting it is so much cheaper
-- 
___________________________________
turn your back on weeds you've hoed, silly sinful sins you've sowed-
add your straw to the camel's load, pray like hell when the world explode...
						--Buffy Ste-Marie