Archive for Thursday, July 26, 2012

Risky business

No matter how good a farmer is, he or she can’t control Mother Nature.

July 26, 2012

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The current heat and drought in America’s heartland is taxing to everyone, but no one feels the effects of this kind of weather more than farmers.

As the number of farmers has declined in the United States, fewer people understand the financial risks farmers take every year and the devastating impact weather like we’re having this year can have on a farming operation. In tight economic times, it becomes easier to criticize federal farm policies such as crop insurance, without really understanding that many of those programs are what ensures that Americans have a reliable, affordable supply of food.

Recent news report offer a reminder of the impact of one variable over which farmers have no control: the weather. The Midwest corn crop is close to a total loss and soybeans are shriveling in the sun. Cattlemen are being forced to sell their cattle sooner than they want because there isn’t enough grass in the pastures to sustain them. In many cases, those forced sales are more than a one-year setback.

An Associated Press story in Wednesday’s Journal-World explained how it will take years for pastures to recover from the drought and for farmers to rebuild cow-calf herds. The story focused on one Kansas rancher who had carefully bred cattle for years to build a strong herd, much of which he now must sell off. He can rebuild his herd by buying cattle, but it will take far longer to replace the genetic breeding that went into his current herd.

Crop prices are high, but most farmers will have no fall crops to sell. Federal crop insurance payments will be enough to repay their production loans and allow them to plant again next year but probably not enough to cover many other expenses such as fuel and machinery costs.

There almost certainly are ways to improve crop insurance programs and make them less costly for taxpayers, but revisions to those programs need to recognize the ways farming differs from many other businesses. Farmers can be required to pay a higher percentage of their crop insurance premiums, but that cost must be passed on in the price of food or farmers will be driven out of business because they can’t make a profit. Farmers can respond somewhat to market demands, but no amount of better business management can prevent the kind of devastation that Mother Nature is visiting on farmers this year.

An important part — perhaps the most important part — of U.S. farm policy is to help American farmers stay in business so they can provide the food and fiber on which the nation depends. A year like this offers a strong reminder of the risks of farming, as well as the critical role farmers play.

Comments

Dignitas 3 years, 1 month ago

There is no mother in nature.. its earth

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