I used to think that if Congress ever did away with the federal farm program, the sky would fall, and civilization as we know it on the American plains would come to an end. Nowadays I think differently, which is a good thing, since the so-called Freedom to Farm bill says the farm program will end after a few years. (Stay tuned.)
I object to the political name of the new farm act, though. There's always been freedom to farm. Every year a bunch of guys lined up on bar stools talk about how this year they're going to tell the government to take a hike and pull out of the program, but they never do. Things look different in the clear morning light.
It seems to me that in a country as farm-focused as the plains, it would
make sense to inquire what happens when you pull the farm program. And I don't
mean just ask some economist to yank some numbers through a computer. There is
a place where a country with a heavily subsidized agricultural economy has
converted, cold turkey, to the free market. That country is
The export boom had been fueled by government subsidy--bounties to develop land for production, subsidies to buy imports, and price supports administered through marketing boards. By the mid-1980s the public debt was too heavy to sustain. In 1984 a new Labour government began a comprehensive effort to cut down government through privatization and to expose the economy to market forces. Agriculture was the first sector affected. With minimal phase-out, the subsidies ended. Later governments, led by the other, more conservative party, sustained and extended the new economic policies.
What happened then? It depends on whom you ask. The story told by the
To summarize the effects of the end of subsidies: farm income was halved; property values also were halved; farmers stopped spending for inputs or improvements, and so rural communities suffered heavily; but not as many farms failed as was expected, because refinancing took place. (Bankers really don't want to be farmers.) Subsequently, farmers operated on the basis of lower inputs and diversified, going into horticulture, deer farming, and other specialties. In the past few years, I've noticed property values coming back up. This is not necessarily because of profitability in farming, however. Much agricultural land has been diverted to tree culture, and so the value of land for forestry has placed a floor under land values.
Government analyses of the situation place emphasis on entrepreneurial attitudes and management skills for farmers who have weathered the transition. I'm suspicious of these papers. I think whenever you assign economists to study farm problems, they will conclude that management skills are crucial, whereas I suspect that things like self-sacrifice and stubborn character may be key.
Looking down the road, these are things plains folk will learn more about.