Freeman

ARTICLE

A New Agricultural Revolution

MAY 01, 1972 by GEORGE MUELLER

Mr. Mueller, of Clifton Springs, New York, owns and operates a family farm specializing in dairying and cash crops.

Every American school boy and girl is familiar with the agricultural revolution. It was this revolution that enabled American workers to leave the farm and build a great nation. The modern techniques and tools used on our present-day, family operated, commercial farms are the envy of the world. Even Premier Krushchev came over to take a first-hand look at our tremendous agricultural productivity. Our family farms, bigger and more efficient than ever, are putting food on the typical American’s table for less than 17 per cent of his wages. Certainly, if there ever was a success story, it is America’s family farm.

As farmers, we are presently investing twice the amount industry averages in capital tools per man. Because of this heavy capital investment, and the fact that most farmers still put in a full day of productive work, our American farm products remain competitive in world markets. In contrast, each year that passes, we see more and more of our industries failing to meet competition abroad. The shelves in our stores are increasingly stocked with products "Made in Japan" and elsewhere.

In spite of nearly nine billion dollars of agricultural products exported last year, the United States experienced a minus balance of trade for the first time in 83 years. To make matters worse, dock worker strikes have seriously curbed agricultural feed grain exports, threatening a permanent loss of markets that took years to develop. Thus, agriculture, one of our few industries still able to compete, has been partially shut off from world markets. Our family-based agriculture, the strongest in the world, has a tremendous ability to compete if only permitted to do so.

"The Farm Problem"

Agriculture is over-crowded, as are most other businesses in the United States. We have too many drug stores, too many hardware stores, too many grocery stores, too many insurance salesmen, too many barber shops, and so on. This is the American way. Businessmen are supposed to be free to enter any field of production and trade in which they think they can make a profit. The result is keen competition in most businesses. The consumer benefits from competition by getting better service and lower prices. Competition also has resulted in numerous business failures. The typical business earns a slim profit, if any. Only the best managed firms (those that serve the consumer best), reap a substantial profit. Such is the nature of our cherished system of competitive enterprise.

The agricultural business is especially crowded because it was the original and only way of life for many Americans. The movement of workers out of agriculture has not been rapid enough to prevent this over-crowding. Farming generally is a wholesome, healthy, and satisfying work, and many people are willing to accept a lower standard of living rather than give up such a way of life. Farming, because of its appeal, will always be crowded, and profit margins for the "average" farmer will always be low. Only the well-managed farm, operated with a judicious amount of modern tools and the latest know-how, will yield a good profit. This is as it should be, for this type of farm operation is serving the consumer best.

Time and again we hear dire predictions of the take-over of farming by corporations. It is true that the family farm has changed and tends to look more like a factory every day. My neighbor used to be one of the largest poultry farmers in the county with 3,000 layers — and quite successful. But progress has left him behind. Those in the vicinity who intend to stay with chickens are building 500-foot-long houses to hold 43,000 birds in wire cages, wall-to-wall. These are still family-owned and -operated farms, but they are large and efficient. Likewise, the dairy farms of 30 years ago with 12 cows are now either out of business or meant of its owner is still very corn have grown much larger. They, too, are still family-owned and -operated. The only corporate agriculture in my county consists of a few acres of vineyards owned by a winery. The United States Department of Agriculture reports that corporations account for only 1 per cent of our farms, 7 per cent of our farm land and 8 per cent of our agricultural production. A closer look reveals that ninety per cent of these are actually family farms that have incorporated to ease the transfer to the next generation. It is apparent that the family farm that has mechanized and is under the skillful manage competitive. Corporations, with their high fixed costs, have found it almost impossible to compete with the American family farm.

I think we do not have a "farm problem." In fact, agriculture, because of the private research by feed, seed, building supply, chemical, machinery, and fertilizer companies, has kept up with modern methods as well as has any U.S. industry. The development of hybrid seed corn is an excellent example of how private researchers, competing for a profit, benefit all of us — especially the consumer. The research by Land Grant Colleges and by the U.S.D.A. has supplemented and stimulated this private research. Agribusiness salesmen, farm catalogs, advertising folders, and numerous farm publications, in addition to government-sponsored agricultural extension service (county agents), have made this valuable research available to all American farmers — big and small. Use of this modern knowledge has made the American family farm the most efficient in the world. Rather than looking upon agriculture as a serious problem, we should consider it our biggest success story.

The Winds of Change

A fundamental change is taking place in the thinking of the American farmer. We have long been singled out by politicians as a group of people to be pitied. Farm publications keep telling us how much we suffer. Our farm leaders are especially sympathetic to our "sad" plight and pledge all sorts of programs to bring us aid. We farmers have heard this so long and so often that we are beginning to believe it.

The independent, self-reliant, self-thinking farmer is wavering. So often told that we must cooperate with others and "set our own price," we are beginning to move in this direction. The appeal of collective bargaining is gaining momentum among farm people.

Farm editors and farm leaders would not dare suggest that competitors in any other business get together to set prices; yet, they boldly advocate a monopoly control over supply by farmers, using such terms as "disciplined marketing" or "supply management." When examined closely, their object is a monopoly control over the total supply. The result is presumed to be higher prices and returns for the farmer at the expense of the consumer. But let us look at how this will affect the family farm.

The family farm is dominant in America today because it is a strong competitor. It is dominant because of its ability to survive in periods of low prices. The family farmer can let the hired man go and work harder himself in periods of low prices. The farmer’s wife can even take a job in town in order to help save the farm. These are options not available to the larger, more heavily capitalized corporate farms.

Interestingly enough, many of the farmers working the hardest for collective bargaining — and the security that the higher and more stable prices will bring — are the large operators. Through careful management and hard work, they have built large efficient enterprises which they now wish to protect. In periods of high prices, they prosper. But low prices put the large farms to the test, causing many to fail. Fluctuating farm prices thus tend to even the score, so that the little fellow has an opportunity to compete. What will happen to the small family farm when collective bargaining assures stable high prices for the large farmer? Won’t this be the opening corporations are looking for and won’t they come pouring into agriculture once we assure a higher profit margin?

To limit "over-production" when bargaining achieves a better price for farmers, there will have to be some kind of a quota system. Just as laborers wait in line to work on union jobs, so shall young farmers wait in line to farm. In good growing years we will be forced to let a portion of the crop rot to insure higher prices from the consumer. It will be an entirely new ball game for the self-reliant, independent, competitive farmer. But he will adjust, once he tastes the fruits of collective action.

As time goes on, I anticipate that these quotas will be purchased by the larger growers; and the larger growers will merge and form even larger corporations. Once we establish "rights" as to who can farm and how much, we are opening the door to big business in farming. Just as truckers "rights" are soon purchased by the larger trucking firms, the farmers "rights" will also flow toward where the money is. By turning to collective bargaining, we may be dooming the family farm.

We already have legislation to prevent buyers from discriminating against us when we sell cooperatively — The Agricultural Fair Practice Act. The National Agricultural Marketing and Bargaining Act (Sisk Bill) is about to be passed in Congress. It would force the buyer of farm products to negotiate in good faith with his regular suppliers and prevent him from buying from other sources during these negotiations. The next logical legislative step will be a requirement for compulsory arbitration if negotiations fail. Along with this will have to come a limit on entry and quotas for all existing farmers.

In summary, we are witnessing in a few short years the coming of a monopolistic type of collective bargaining for agriculture. Farmers are accomplishing this through strong and efficient lobbies in Washington. Farmers may soon have the collective bargaining powers that it took labor a century of bloodshed to obtain. Even the U.S.D.A., after 35 years of all sorts of farm programs that have failed, now suggests that we try farm bargaining. The collective bargaining juggernaut is rolling in high gear and is on a collision course with the family farm. There is definitely an agricultural revolution in progress.

The Consumer Is Still King

The first principle of business is that the customer is king. To prosper over a period of years, a business must serve the customer well. Now, as farmers, we find ourselves looking at our customers as adversaries from whom we should demand better prices rather than earn them. Like many unionized wage earners in our society, we foolishly believe we can raise our standard of living by demanding more for doing less.

The time has come for the American consumer to remind the farmer that he is a businessman, expected to compete as he produces the food and fiber that our nation needs. Farmers are no more justified in getting together to manipulate prices than are oil companies, or auto companies, or drug companies, or any other business competitors. It is time to remind the farmer that competition is still the foundation of free enterprise. True, farmers have more votes and, therefore, more power in Washington than have other businesses. But does this justify a war against consumers? The consumer, if alerted, has more power — economic or political — than any conceivable combination of producers. Perhaps it is time for consumers to take a hand in steering a course for agriculture.  

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May 1972

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