Down the Tubes: The Family Farm's Dangerous
August 5, 2001
Discussion Thread - Comment #s - 420, 416
The following opinion piece was written in response to Comments #420 & #416. The author is Rich Liebert, a Lieutenant Colonel in the Army Reserve -- a proud citizen soldier, and a rancher. Liebert lives and works in Montana, far outside the Beltway. He argues that the family farmer, like the front-line soldier, is the victim of a technology-induced death spiral.
Down the Tubes: The Family Farm's Dangerous Romance with Technology
By Rich Liebert, LTC USAR
The military is not the only institution or culture being seduced, distorted, and destroyed by excess technology.
The organization of farming and ranching under the mechanized industrial paradigm has also placed most of its emphasis on "might" machines -- bigger tractors, bigger combines, more powerful fertilizers and such -- at the expense of the people doing the farming and manning the support networks, including the family farmers and the small businessmen in the local communities, etc.
Like military reform, a more constructive policy would focus on People, Ideas and Hardware in that order. But agricultural innovators (i.e., the people doing the farming) still struggle with new marketing ideas, while being overwhelmed by multi-national Ag corporations like Archer Daniel Midlands, who are lusting for profit by over-pumping technology—hybrid grains, genetics, cloning and other technological tweaks. The agriculture industry, its lobbyists, and their wholly-owned subsidiaries in Congress promote such technologies at the expense of developing a SUSTAINABLE and more holistic agriculture that would benefit PEOPLE and communities through better ideas.
The bias toward technology is also evident in the large land-grant universities that are supposed to serve the local communities. The professors didn't think through the people and idea issues when they pushed for mechanization and petrochemical fertilizer during the 30 years from the fifties through the seventies. We are now only beginning to see the collateral effects of this bias, like ever increasing cancer rates among the farmers who actually handled the chemicals being foisted upon them. To those who say this is crass speculation, my advice is to start reading the obituaries in the local newspapers of farming communities.
Like the Pentagon, family-owned Agriculture is in a technology-induced death spiral—and for the same reason: technology is often pursued for technology's sake, and consequently costs are increasing faster than income (or budgets, in case of DoD) while the "tooth-to-tail" ratio is shrinking. Just compare the cost of agricultural equipment to the harvest value of the commodities that equipment produces: a new combine or a four wheel drive tractor can cost over $100,000 dollars, but a bushel of wheat, which weighs 60 pounds, only brings the farmer about three dollars, or 5 cents a pound.
Plenty of money is sloshing around the food system, however. This is easily seen if one compares the farmer's price to the price of his product at the supermarket: sixty pounds of wheat brings the farmer $3, while a 1 pound box of Wheaties sucks $4 out of the consumer - the farmer gets 5 cents per pound out of an exchange where the consumer pays 400 cents per pound.
Where does all the rest of the money go? No one really knows.
Like the Pentagon, the accounting system recording this exchange is too complicated to audit. Obviously, some of this money goes to the middle men—this markup (or markdown, depending on your perspective) is one reason why Michael Jordan gets far more money in advertisement royalties than the farmer who produces the ingredients for the product he hawks.
The increasing mismatch between cost growth and income growth has the same effect on farming that the mismatch between cost growth and budget growth has on defense: our farming "force structure" is getting smaller and older as it tries to contend with rising operating costs and aging hardware. Like the Army, recruiting and retention are down and sinking lower. Today, for example, there are only about 2.5 million people directly engaged in farming, but only the LARGEST operations on many thousands of acres can afford to modernize with such expensive equipment, which, naturally, is not produced in mass quantities.
My ranch is 1,000 acres (small by Montana standards, where the average ranch is 3,000 acres) and is valued at about $300 per dryland pasture acre without irrigation. This amounts to a value of about $300,000 just for the real estate. But to operate it, I need equipment: a new loader tractor could cost $50,000 -- or one-sixth of my fixed asset value. So, a new tractor simply doesn't 'pencil out,' as we like to say out here in the country. I must continue to use my aging John Deere 4020 tractor, built in 1964 (!). It still runs with good maintenance and cost me $8,000 in 1994.
In 1964, a simple Chevy pickup cost a rancher about $3,000, and he could sell his calves for about 25 cents a pound. Back then, a 400 pound calf would bring a rancher $100 dollars, so he'd have to sell 30 calves to buy a new truck in 1964. Today, a new Chevy truck, like a Silverado, costs at least $24,000, or eight times more than its equivalent cost in 1964. On the other hand, calves sell for about ONE Dollar a pound or only FOUR times more that they sold for in 1964. The bottom line is that I now have to sell 60 calves to buy a pickup truck.
Put another way, the cost of this production asset rose twice as fast as the farmer's product price. But there is more. This mismatch doesn't account for the Up and Down commodity cycles. On the other hand, the costs of trucks and equipment almost always rise and NEVER drop or fluctuate like commodity prices do. So, while the farmer always runs the risk of getting only get 80 cents a pound for his calves, he can always plan on the Chevy truck costing more, perhaps as much as $26,000 dollars in the following year.
So you should not be surprised that we farmers feel like the troops you and your compadres write about. We are also on the receiving end of a DEATH SPIRAL. We get sucked into the commodity whirlpool while the rising costs of operations drive more family farms into bankruptcy and the Corporations increase their control of all our natural resources—Energy, Food and Fiber and more.
Meanwhile, the hucksters in the agriculture industry brag about how modern technology makes it possible to do more with less—but "less" means fewer farms and fewer farmers in the real world. The techno-hucksters in the Pentagon also brag about how the Revolution in Military Affairs can do more with fewer brigades and fewer soldiers.
America may have the most efficient farmers on the planet (note I didn't say effective), but we farmers wonder why we still can't stay in business—and remember, we can't raise taxes or reduce social security to finance our continuing madness.
So, what do defense hucksters and agri-hucksters have in common?
Both are feeding off the dirty unwashed sweating away in the trenches. Sgt X in Comment #420 has lot in common with the vanishing family farmer.
Don't feel like you have a monopoly on these kinds of problems
Rich Liebert, LTC, Infantry, US Army Reserve,
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