ECONOMIC MYTHS & MISCONCEPTIONS ON FARMING 27 MAY 2016

The spark of inspiration for this short post was my final test today in economics class. It hit me today, that there are a great of deal of misperceptions all around about farming, for the farmer, the consumer, and politicians. I grew up around these misperceptions. Had there been good money in farming, I probably would be farming today, not because of the money, but for the values & lifestyle that it demands. The Amish, Mennonites and Hutterites maintain their rural lifestyle for the positive values of the lifestyle, not for the money it provides. The farm lifestyle keeps them close to nature, reality & God.

FARMERS & BANKERS. Farm people have enjoyed jokes about city slickers & banksters for centuries, and bankers & city slickers have enjoyed their jokes about country bumpkins who were simple minded & knew nothing of worldly sophistication. I had a big city girlfriend once which helped me comprehend that big city people think farmers are rich & stupid. The family farm is not run by stupid people. They have to be jack of all trades and be quite intelligent to successfully make decisions in the entire scope of technology—mechanics, biology, chemistry, ecology, book keeping, as well as the ability to get out of bed every morning before sunrise and work hard until after the sun departs. Even wearing hats they develop tans along with rock solid strength. For their efforts, they are derogatory called “rednecks” along with other outside manual laborers. It was farmers who were relatives of mine, who were trying to understand why farmers can’t make a decent wage for their hard work and intelligent farming, who discovered & introduced me to how the financial elite and world order operated.

ECONOMIC THEORY. Economic theory is treated as a science—like its ideas are “laws”, and decisions are based on these standard economic ideas. However, for farming there is often no relationship between price, profit & productivity. And due to the family farmer’s value system, he & his family often do many ecologically beneficial improvement to land (after all its family property), and other acts of good care & godly stewardship that have nothing to do with profits. The conundrum of farming is where does the profit come from? I have asked a number of farmers who are barely eking out a living & they said, “I don’t know”. Interesting, part of the world is starving and farmers cannot make enough money to make it worthwhile to raise food. I’ve seen orchards destroyed because they were unprofitable. What is wrong with this world? One uncle slopped (drilled) his seeds into the ground in haste less deep than recommended at a time after the other farmers had done the recommended planting. Due to weather, he got a bumper crop, the others lost theirs. My cousin is now farming dryland on formerly irrigated land. The productivity is drastically less, but so is the overhead, which has allowed some financial gain. So economics is an inexact science at best, especially for farmers.

THE BOOKS SAY THEY SHOULD MAKE NO PROFIT. So let’s look at something the banker would learn in Economics. The farmer’s crops & productivity is rated as a “perfect competition” by the books. It is rated that because any one can grow wheat or corn or produce milk and sell all that he produces. Industry, that means for instance a corporation producing a radio, is rated a “monopolistic competition”. “What,” you say?? Let me quote an economics book: “Monopolistic competition is a hybrid market structure, with features of both monopoly and perfect competition. The term may seem like an oxymoron—a pair of contradictory words—similar to “act naturally” and “tight slacks.” However, the term actually conveys…features of the market: • Each firm in the market produces a good that is slightly different from the goods of other firms, so each firm has a narrowly defined monopoly.” (O’Sullivan, et al. Survey of Economics, 2012, p. 173) The big capitalists who run these factories can make profit. “Monopolistic competition” makes profit. However, the farmer who does an “industry” (farming) which is perfect competition will not. You can look this up for yourself…in economic “science”… a perfect competition does NOT make profit. I quote: “Economic profit does not occur in perfect competition in long run equilibrium; if it did, there would be an incentive for new firms [read new farms] to enter the industry [farming], aided by a lack of barriers to entry until there was no longer any economic profit.” (Lipsey, Economics 1975. p. 217). I wonder how many farmers realize their farming according to economic theory IS NOT to make a profit. Can you see why the banker takes it in stride that the farmer does not make any profit, only enough to pay him back? Look what he has been taught at the university!

Have a blessed day in the Lord my friend.