Last Sunday the U-B ran the second article (“Crop insurance entices farmers to plant” from Bloomberg News) in recent times that is critical of the current farm program. Not surprisingly both have dwelled heavily on comments coming from groups like the Environmental Defense Fund and the Environmental Working Group.
Prior to and during the Dust Bowl era, there were no government farm programs to regulate agricultural production or to ensure the availability of reasonably priced food for consumers. Farmers were hurt financially during bumper crop years and consumers were hurt during periods of low production and high prices. Both groups suffered immensely during the Dust Bowl.
In order to assist farmers to survive and to insure adequate supplies of reasonably priced food for consumers our government developed the farm program.
In recent times those objectives are of less concern and the orientation has turned toward reduction of government expenditures to agriculture and to reducing our energy concerns by using corn to produce ethanol.
Ethanol now takes about 40 percent of the corn production. This has required new corn acres to meet both the demands of ethanol and feed. To assist in meeting the animal feed requirements, wheat has been used when corn supplies were short. This has resulted in higher wheat prices in recent times.
Those critical of the farm programs have lost sight of the original goal of adequate food supplies at a reasonable price and have centered their attention on government subsidies going to farmers who have benefitted from higher farm prices.
What their assumptions fail to recognize is that the record corn crop this year has enabled corn to meet the demands of both the feed and ethanol market. The price of corn, which was $8.49 last year, is currently $4.27 for this December. Wheat prices have taken a similar reduction.
In addition, the cost of production has gone up dramatically the past few years. In some cases the cost of production now exceeds the price.
Past government subsidies have required that farmers comply with environmental requirements to be eligible.
In recent times our government has taken away traditional subsidies and oriented agriculture in the direction of crop insurance. Farmers pay a substantial premium to participate.
If crop insurance becomes an onerous program causing farmers not to participate then we will have reverted to a period that most of our country would like to forget.