Rural America Is Back in Business
Tom Vilsack
352

It is quite absurd for Secretary of Agriculture Vilsack to suggest that “rural America is back in business” in September of 2016. We’ve had a tremendous crash in prices, with Iowa corn prices falling below $3.00 for weeks, (below 23% of parity). The crash in prices has been going on for a couple of years, with about all of the major crop prices falling below full costs for 2015. He touts production, but for many of the crops, farmers were usually paid less for the increased production, (i.e. for 3 times greater production of wheat,) than they were paid in the 1940s. The recent 7 year period of higher prices, (2007–2013) put only 3 crops, (corn, soybeans and rice,) above full costs, not the other major crops, (wheat, cotton, barley, oats, sorghum). And it was especially hard on dairy, as milk prices have been above full costs every year since 1993 (except 2007 by a few pennies per gallon). He’s also wrong about net farm income. From 1942–1952, Net farm income averaged $124 billion in today’s dollars, while from 2007–2013 it averaged only $95 billion ($29 billion less, even with greatly increased yields). In the 60+ years in between those two NFI was only $73 billion, and it’s projected to average only $56 billion trough 2025. The fact is, nothing has been done to restore fair prices. Farm prices don’t self correct in “free” markets, on either the supply or the demand sides, so minimum price floors are needed, (similar to minimum wage). The Democrats fixed that in the New Deal, but starting with Eisenhower, Price Floors were lowered, more and more, (1953–1995) and then eliminated (1996–2018). To simply write everyone in the market a check that ony very partially compensates for the reductions, (“safety net,”) even as we lose money on farm exports for decades, is incredibly absurd. Progressive farm state Democrats fought against this for years, but lost out to agribusiness. This was also used as a model economic stimulus, (fair farm prices in the private sector, not government spending) to bring us out of the Great Depression and up to strength for World War II. This article gives a long list of token (relative to the big issues I’ve outlined,) actions, (and the Democrats of today are better at that,) but offers nothing fundamental.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.