Desperate U.S. Cotton Farmers
Adopt Free Market Solutions
By
Vin Suprynowicz
toogoodreports.com
Under a tentative deal reached last month, Congress agreed to increase domestic cotton subsidies by 70 percent over the next decade.
But the farm bill is now stuck in negotiations between the House and Senate, which can't decide how to apportion the $170 billion set aside under last year's congressional budget agreement for use over the next decade. Meantime, planting season has arrived, and California farmers "can't rely on promises," according to farm reporter Kim Baca, writing out of Fresno for The Associated Press. "They need a firm federal commitment, and until they get one, some aren't planting."
Or, to be a little more accurate - hold onto your armchairs, now - they're planting crops other than the heavily subsidized cotton.
"Wary cotton farmers who used to watch the weather before planting are awaiting word from Washington to see if subsidies for their money-losing crop will make it worthwhile to sow their seeds," The AP explains. "They are farmers such as Brad Coburn of Dos Palos, who once planted 2,500 acres
of cotton each year but this season will plant just 1,110 acres."
This year "We have moved some of the crops over because of the uncertainties of the farm bill," farmer Coburn explains. "In place of
cotton, we're growing some wheat, alfalfa and corn for feed."
Cotton farmer Craig Pedersen of King County says he's growing about 200 acres of cotton this year - compared to 1,500 just a few years ago. Instead, he's relying on revenue from hay, corn and alfalfa.
You see, for the 2,000 California farmers who grow the stuff, there's no profit in cotton without the government subsidies and price supports. Supply so far outstrips demand that actual, market cotton prices have dropped from $1.17 per pound in 1995 to roughly 37 cents a pound today. At that price (and without the tax subsidies, which totaled $719.1 million in California alone for the years 1996 through 2001), California cotton farmers could lose $50 to $200 on each acre they grow.
Last week, California agriculture officials reported that farmers intend to plant 590,000 acres of Upland cotton in 2002 - a decrease of 8 percent from 2001. But "Many growers have not been able to secure their funding because the bill has gone back and forth," warned Loron Hodge, executive director of the Kern County Farm Bureau.
What's bizarre about this "reporting from the front" of the ongoing (and ever-worsening) farm subsidy mess is that the actions it tends to characterize as desperation in the face of congressional inaction are, in fact ... the solution.
Faced with uncertainties over federal subsidies, banks are unwilling to loan farmers money to grow crops which cost more to grow than they're worth. Unable to obtain commercial loans and uncertain about what Congress will do, farmers therefore are switching to other, more profitable crops.
And this is a bad thing?
Duh.
This is precisely how the free market is supposed to work - customers indicating to producers that supply exceeds demand, by dropping the price they're willing to pay until many producers switch to other product lines.
No one hates America's farmers, or wants to see the bulk of them go out of business - though if real, market irrigation costs mean that arid California turns out to be a poorly chosen place to grow water-hungry cotton and rice, and a little more farmland in a state with famously outrageous housing prices were thus to be subdivided for residential use (turning those retiring farmers into instant millionaires), it's fair to ask why Congress thinks it has any mission to prevent such perfectly routine and sensible progress.
The efficiency of American farms improves yearly, with the result that we can feed ever more people with ever less farmland. Doesn't it make sense that the farmland in use should thus gradually contract and be shifted to other uses? Shouldn't the solution envision a rapid end to this misuse of real estate and tax dollars, rather than the endless extension of these rewards for market inefficiency?
It's not as though the farm subsidy mess can any longer be portrayed as a "temporary measure" needed to relieve a short-term farm depression by "keeping crop prices at wartime levels" - the rationale that gave birth to this whole constitutionally unauthorized boondoggle in the years immediately following the First - yes, the First - World War.
Quite the contrary. Given the low prices of cotton textiles imported from overseas, "We're becoming less competitive every day," admits farmer Craig Pedersen of King County.
The irony is, even if they've found it by accident, Congress has finally stumbled on the correct solution:
Do nothing. Authorize no more subsidies. Leave the market to sort itself out. The Constitution never envisioned a central "farm policy" set in Washington, for all the world like the five-year plans of Soviet Russia. These modern-day redistributionists have been looting money from the paychecks of the working poor to postpone the inevitable market adjustment since 1918, and the bill continues to grow higher every year.
If not now, when do they propose to stop? |
