My husband Jerry and I are farmers in Corvallis, Oregon. We started with ten acres of strawberries on rented ground in 1961. We now own and farm 1,500 acres of riverbottom land along the Willamette River. We have grown green beans, carrots, cauliflower, table beets, black-berries, alfalfa, barley, sweet corn, wheat, and peppermint for oil. We have made our entire living farming. We love the challenge of producing farm products for consumers in the marketplace.
We do not, as a matter of principle, participate in any government farm programs. We made that decision years ago, and we have never regretted it. We have never accepted a subsidy payment (and we do grow wheat). We have never accepted a crop-disaster payment (we lost our berry field to frost damage one year). We have always spent our own money protecting our riverbottom land from being washed away during winter floods.
When Jerry and I started farming, everyone told us we were crazy (in much nicer words, of course) and that we would never make it. Neither one of us had come from farming families. Jerry’s dad worked in the woods and plywood mills in Cottage Grove, Oregon. My dad was an optician in an eye, ear, nose and throat clinic in Salem. Neither of us had taken any agriculture courses in school, and neither of us had had any farming experience.
Both of us had a strong work ethic. We understood the difference between “spending money” and “working capital” (money that was invested back into the farm). We had an excellent banker who gave us sound advice and insisted on a detailed budget (we have always borrowed our money from a commercial bank as opposed to a government lending institution). We had good neighbors who gave us lots of help and advice. We learned from our mistakes.
We have raised two children and provided jobs for them on the farm, as well as summer jobs for children of relatives and friends. The jobs included hoeing weeds, changing irrigation pipe, and picking berries. It was an opportunity to teach our children a work ethic, to be responsible, and to feel that they were an important part of our family.
Government programs that guarantee farmers a “fair price” in the marketplace involve only ten commodities feed grains, wheat, field corn, soybeans, rice, tobacco, sugar, peanuts, cotton, and dairy products. Since these are the most commonly produced commodities and since their production involves the majority of farmers in the U.S. people naturally assume that all farmers are subsidized by the national government.
Over two hundred other crops do not receive any direct government support. These crops include fruits, vegetables, essential oils, herbs, meats, poultry, grass seed, Christmas trees, and flowers. Unlike so many farmers who produce the top ten commodities, the farmers who produce these crops do not spend their time traveling to Washington and asking for special favors, privileges, and subsidies. They take care of their own land, water, and produce without Washington’s assistance.
Government programs create far more problems than they solve. As Ludwig von Mises said: “Government intervention always breeds economic dislocations that necessitate more government intervention.” For example, the government guarantees dairy farmers a certain price for their milk. As a result, huge stockpiles of milk and cheese developed during the early 1980s, creating enormous storage costs to taxpayers.
Another example: The United States Department of Agriculture (USDA) implemented a dairy-herd buyout program to decrease the amount of milk produced. They bought entire dairy herds and sold them for meat in direct competition with livestock producers. This flooded the livestock market. Meat prices dropped below the cost of production. Many livestock producers went out of business.
Another example (and there are many!) of government-caused economic dislocation are the target prices government sets for feed grain and wheat. The target price is what “farm-policy experts” say is necessary to cover production costs. If market prices drop below the government target price, the government pays the difference in a direct subsidy (cash payment).
Thus, when the price of wheat fell, wheat farmers increased production rather than reduce it. What happened? They produced a surplus too much wheat! This surplus was a new problem that the government now had to “solve.”
The government created a Conservation Reserve Program (CRP) similar to the Soil Bank years ago to take land out of production land that probably would not even had been plowed in the first place in the absence of the initial government subsidy! The government now pays these farmers “rent” for CRP land. This has created additional economic dislocations. Many younger farmers looking for land to rent could not find it because it was enrolled in this “set-aside.”
Many dairy farmers claim that the government-guaranteed price for milk they produce is necessary because of the large investment they have in cows and dairy equipment. But berry growers, orchardists, and vintners are able to make the same argument. In fact, in some cases, these growers wait five years before they can harvest a crop, while a dairy cow will produce milk the first year. The government does not guarantee farmers a minimum price for their berries, fruits, nuts, and grapes. Why should we continue price supports and subsidies for dairy products?
One of the crops we grow is an excellent example of the market process. We grow peppermint for oil. We harvest the leaves and stems and distill the oil. We have competition from other areas within Oregon, other states, and foreign countries. We compete with artificial flavorings. The price of peppermint oil is not guaranteed by the government. The price will vary from $8.00 to $20.00 a pound for oil. When prices are low, we produce less; when prices are high, we produce more. The key to our success in growing peppermint for the market (and we have been doing so for twenty-one years) is quality as well as our ability to grow above-average yields per acre for less cost. When we sell our oil, it is delivered to the buyer and we receive our money. Many fruit, vegetable, seed, and specialty crops, as well as livestock, are grown the same way.
A free market one free from government subsidies and interventions would work equally well for dairy, wheat, tobacco, peanuts, and so forth. Unfortunately, farmers who grow these crops have been “protected” from direct market competition for so long they have no understanding of, appreciation for, or confidence in a market economy. Moreover, they have lost or have never discovered all sense of individual responsibility, self-reliance, self-worth, and independence.
By refusing to look to government to solve our problems, we are definitely a minority in the farm community. We have decided it is time to speak out. For example, at a recent national farming convention, Jerry and I actively opposed all farm subsidies. As you can imagine, this does not make us very popular with those who participate in the government largess.
Government payments, no matter how they are rationalized, are welfare checks for farmers. They eliminate the responsibility on the part of the farmer to be efficient, accountable, responsible, and flexible. Government intervention eliminates the voluntary exchanges between consenting parties. A free market is more unpredictable there is more of a personal risk (we can always fail) but the rewards of self-determination and self-respect are worth it.
Some say that farm programs are in drastic need of reform. They are wrong. Subsidies, price supports, mandates, and all other forms of government intervention in agriculture must be ended, not reformed.
There are generations of farm families who have cared for their land, their crops, their animals, and each other without government help and government interference. Farm families who work together and worship together without government help and interference develop a dignity that is characterized by honesty, self-respect, determination, and hard work. Government programs only destroy these values. They should all be abolished.