Dakota Marketing Coalition, National Farmers Organization, and South Dakota Farmers Union brought a couple of speakers to Aberdeen Monday evening to talk about the chronically dire financial position of American farmers and ranchers. As I waited for the program to start, I heard one of the guys behind me (very few gals attended) joke to his compadre, We don’t have to register Democrat at the end, do we?
I saw no voter registration forms in the hall… although Ron Wieczorek and a guy from D.C. were at the door promoting Lyndon LaRouche, a Hamiltonian National Bank, and fusion power as the solutions to farmers’ problems and everyone else’s.
I dig fusion, but our NFO speakers—NFO board member Frank Endres from California and Agricultural Policy Analysis Center director Dr. Harwood Schaffer from Tennesse—flew a flag in their speeches as unfamiliar to me as some of Ron’s LaRouchisms: parity. From what I gathered from the speeches, parity is simply farm-activist talk for a fair price, a living wage for food producers. I heard no quantitative threshold for parity—although USDA calculates “parity prices” based on farm prices, wages, rates, and taxes from 1910 through 1914, and Endres did have charts showing parity above 100% during the “Golden Era of Agriculture” from 1941 to 1952 and now at a meager 29%. Dr. Schaffer said NFO’s goal is 100% parity, which I must assume means not just breaking even but having enough left after paying Case IH, Monsanto, the elevator, the bank, and Uncle Sam to buy shoes and college and maybe some fishing tackle.
If free markets worked, we probably wouldn’t have two-and-a-half-hour meetings to talk about the lack of parity in farm prices. People making things of value would win fair compensation for the work they do. People making the most valuable things, things we can’t do without, like food, would get some of the best compensation.
But one main message of Monday night’s program was that the free market doesn’t work today in American agriculture. Endres noted that Adam Smith’s theory of supply and demand assumes that buyers and sellers have equal strength in the marketplace. Big-industry consolidation among ag suppliers (Monsanto, read Endres’s slide—Bayer, Chem China, Syngenta, DuPont) and buyer/processors (Cargill, Saputo, JBS, ADM, Tyson, Bungee) squeezes farmers, ranchers, and dairy operators from both sides. Unless ag producers form their own conglomerate (there’s the NFO/Farmers Union pitch!), they cannot compete against the oliogopoly vise.
Even if farmers can organize effectively and counterbalance the market power of Big Ag, they may not be able to get parity without government intervention. Dr. Schaffer noted that, just like healthcare, the food market “does not meet the textbook conditions of a free market.” Ag demand has low elasticity—we eat about the same amount of food whether prices are high or low. Ag supply has low elasticity, too—when prices go down, farmers don’t quit planting; they “maximize production to reduce fixed costs.”
Dr. Schaffer also rebutted the contention of the American Farm Bureau Federation that free trade is good for American farmers. He noted that since peaking in the late 1970s, U.S. exports of the eight biggest crops have remained mostly flat while imports have doubled. Since the implementation of NAFTA in the mid-1990s, U.S. stockgrowers have seen our negative trade balance in beef with Canada and Mexico go deeper. We import more livestock from 20 free-trade agreement countries than we export to them, while we maintain a positive livestock trade balance with the rest of the world.
The free market doesn’t serve American agriculture well; government apparently does. Dr. Schaffer argued that the four most recent periods of relative propserity for American agriculture all resulted from government decisions:
- During World War I, farm prices rose because the federal government asked for more hogs to make up for the decline in European production.
- World War II again drove ag production, but farmers benefited further from production supports maintained through 1952.
- The Nixon Administration laid the foundation for the 1970s farm boom by agreeing to Soviet purchases of U.S. grain to make up for crop failures down on the kolkhoz.
- In the past decade, corn prices went up when the Bush Administration briefly, minutely overcame Cheney’s petro-fixation and backed ethanol as a fuel additive.
With crop prices on course to remain low for the next decade, Dr. Schaffer contends that we need government action again, in the form of a good federal Farm Bill, to bring agriculture back to parity prices. He proposes a host of measures on which I will not pretend expertise, including a market-driven inventory system and a reform of crop insurance based on yield (“random risk”, in Schaffer’s words) and not on price (“systemic risk”).
The policies needed to restore fair prices in agriculture won’t happen by themselves. Farmers can’t just plow and plant, take their products to market, and hope everything works out. They’ll need to work together, in the marketplace and in Congress, and recruit allies to check the failings of the free market and win the parity prices that will keep them up on the farm.
That, and maybe fusion-powered tractors.
Sounds like farmers need a union.
glad they let you into the meeting. I remember last time you wanted to attend a Farmers Union meeting in Aberdeen, Sombke wouldn’t let you or Keloland TV attend. I wonder if additional meetings will be held throughout the state and in a more centrally located area, like Huron at the state office.
In related news, farmers are buying software from Ukrainian hackers to break into their John Deere CPUs and do their own repairs. John Deere is making tractor buyers sign user agreements forbidding such do-it-yourself work in an attempt to monopolize tractor service.
Mary D, this meeting was advertised in the paper, open to the public. The meeting in Aberdeen that excluded media was an organizational meeting.
I know that.. but, it was the first time in the 100 year history of the organization that the press was denied entrance to a meeting. I felt bad that you couldn’t stay because historically they would have welcomed you and your fight for truth and honesty with open arms and made you feel welcome. Now, we’ll just leave it at that only very few feel welcome. I’m glad you went to this meeting and appreciate your report in getting the word out about what farmers need to do.
PRESIDENT TRUMP WANTS TO REVIVE THE `AMERICAN SYSTEM OF ECONOMY’:
– DO YOU KNOW WHAT THAT MEANS? –
-THE PRESIDENT SOUNDS MORE LIKE LAROUCHE ALL THE TIME-
In his speeches Monday at a Kentucky rally and Tuesday
to Republican Party gatherings, President Donald Trump stressed
that he intends to lead the country to return to “the American
System” of economy. In the estimation of very qualified
observers, the President “really meant it” both times — he wants
to return to the actual economic policies of Alexander Hamilton
and George Washington, Henry Clay, Abraham Lincoln, the “American
System.”
Is Trump the President who can return us to the American
System of economy? That remains to be determined, and depends on
the country as well — on us, on you. Should we return to it?
Absolutely.
With some exceptions, most Americans and citizens of other
nations no longer know what the American System of economy was.
It was defined by Abraham Lincoln’s economist Henry C. Carey, for
example, as the American System {directly opposed to the “British
System” of free trade.}
Those are the same British who for the past year, have been
driving the McCarthyite campaign to discredit Donald Trump and
drive him from the White House.
The “get Trump” McCarthyism is British, because Trump wants
to return — after decades of disastrous “globalization” and
deindustrialization” — to the American System of economy. And he
appreciates the benefits of peace, of stopping Bush’s and Obama’s
endless wars and collaborating with Russia and China to do so.
Thus a British intelligence “dossier” produced for Hillary
Clinton on Donald Trump, was the start of turning the Democratic
Party’s leadership into a McCarthyite mob looking for “Russians”
lurking behind every White House column.
The pillars of the American System of economy were: 1)
protecting and supporting American production so that the United
States would become the great manufacturing nation it became; 2)
constantly promoting and building the most modern national
infrastructure, for the same reason — the transcontinental
railroads, the national highway system, the Apollo Moon project;
and 3) a credit system based on national banking invented by the
great Treasury Secretary Alexander Hamilton.
Today it means taking down Wall Street’s mega-casinos by
restoring the Glass-Steagall Act; establishing a Hamiltonian
national bank for infrastructure and manufacturing; investing
trillions in the highest-technology new infrastructure;
developing fusion power, returning to the Moon and to deep space
with human colonization and development.
This is what {EIR} Founding Editor, American System
economist Lyndon LaRouche, developed recently as “Four Laws” to
save the U.S. economy.
The American System also meant the Monroe Doctrine — that
the young United States would do everything possible to keep the
British and French financial empires out of the Americas, so that
all our nations could develop their economies and make reciprocal
trade agreements to mutual benefit.
Today, the American System means linking up with China’s New
Silk Road initiative, where 60 nations are making such agreements
in a “win-win” paradigm.
The Schiller Institute and {EIR} are building a major
international conference next month in New York City to bring
Trump’s United States into that new paradigm, where the “American
System” can flourish.
President Trump’s understanding of the American System today
is rudimentary, but seriously meant. The more Americans who know
what it {should mean}, and act on that, the better chance that
the British System era of “globalization” will end during his
Presidency.
American System = Mercantilism Lite
Time to dust off the history books https://www.gilderlehrman.org/history-by-era/populism-and-agrarian-discontent/resources/grange-movement-1875
Maybe even to modernize it further, look to the East to Minnesota to see their political DFL as a start. Clearly in South Dakota for one, a one party system does no good in dealing with the issues we have at hand.
Seems like we had that isolationism prior to World War Uno, did not work out so good for us. Then we had a real global war and that formed the trades where we are now. That Americanism horse left the barn a long time ago. Trump wants to return us to the three bottom plow drawn by old Bessie and Margaret. Smelling mule farts all day long should not be the plight of the American farmer.