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Amo

Farm subsidy programs

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49 minutes ago, Deerefarmer said:

All the large farms in my area are ran by families of many generations who were able to manage the 80s farm crisis

Its just the other way in my àrea 

All the mega farmers went broke in the 80s because of bad management. PCA FLB and other banks forgave their debit and they restarted farming as big as before debit free. Mean while the smaller guy got sold out or paid their debit to the bank. I paid every dime back i owed with interest.  Dont want to hear about mega farms being better mànagers.  Several mega farms owe me a lot of money 

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14 minutes ago, RKO said:

Its just the other way in my àrea 

All the mega farmers went broke in the 80s because of bad management. PCA FLB and other banks forgave their debit and they restarted farming as big as before debit free. Mean while the smaller guy got sold out or paid their debit to the bank. I paid every dime back i owed with interest.  Dont want to hear about mega farms being better mànagers.  Several mega farms owe me a lot of money 

Not saying better everywhere and my family is by no means a mega farm we did things right and don't owe anyone anything today

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The key is getting "too big to fail".  The banks won't call in their debt because it's too much, usually tens of millions.  Instead, they appoint a manager to handle the finances and the farms keep farming.  I'm not saying it's right or that I agree with it, it's just how it seems to work.   Then there are the dishonest and outright crooks...  look at the Boersen farms case now.

     I didn't get into farming to become wealthy, I chose the lifestyle.  I want my kids to grow up learning about real life, not life as portrayed by movies, tv and video games.  The burden of keeping a farm profitable doesn't belong to the government, it's on my shoulders and if I can't hack it it's my problem, not the general public's.  On the other hand, they are completely ignorant to how the vast majority of their food is produced, and we all know ignorance is bliss!  Let's all picture a small mom and pop operation with a couple cows, some chickens and pigs.  Nostalgia sells!  Reality bites

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2 hours ago, oldtech said:

As for subsidies, I took an insurance course a while back because I was being recruited to open an office here.

What I learned about programs like Federal crop and flood insurance is that it is not so much subsidized as backed up in the event of a major loss.  Private insurance companies would not be able to withstand the losses if we have a major drought or flood, especially the more regional ones so the Feds step in and agree to absorb the losses.  So regular agents write the policies and draw a small commission but the policies are actually backed by the government in the event of catastrophic loss.  I dont have a problem with that.

Other subsidies are another matter.

Well that's how the AIP's (approved insurance providers, insurance companies)spin it.  Ya, in a disaster disaster I suppose there wouldn't be enough to go around.  I'm an adjuster.  When we get a claim we have to set a reserve weather it hasn't been worked yet or deferred. So they take money out of what's invested to cover pending indemnity (loss). The AIP's also have reinsurance.  Which they carry for catastrophic events.  IMHO it's not subsidised incase of a catastrophe, but the farmer wouldn't be able to afford the premium without it.  Personally I think other imputs would have to and would adjust if crop insurance wasn't subsidised.  Plus you take production hail, that type of policy even though expensive pays like a slots machine.  The point of insurance is to make you whole after a loss.  Not help you to be profitable.

Here's what kinda burns me.  A fellow adjuster told me this, so strictly going off his information.  AIP's can tell RMA (risk management agency, government) which policies they want the risk in and how much.  They can insure a farmer.  Take the liability of the good ground and tell RMA we don't want to be responsible for the indemnity on the farmers high risk ground.  Which in some areas, there's not much if any high risk.  Other places there's a lot of high risk.  Which is where most of the losses are.  Yup, we are paying for that, not rain and hail or NAU!

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3 hours ago, oldtech said:

Ive actually made that point in a slightly different way.

Consider this...  If nobody used all the chemicals and GMOs yield would be less, right?  Well, wouldnt that then raise prices?  What is the cost of oversupply with these things?  Whats the point of producing more and enjoying it less?

Who really benefits from all of that? 

That makes logical sense, but you'll never get anyone to go along to produce less.  Yup you shoot yourself in the foot aiming for higher yields, but you have to out grow your expenses.

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10 minutes ago, Amo said:

That makes logical sense, but you'll never get anyone to go along to produce less.  Yup you shoot yourself in the foot aiming for higher yields, but you have to out grow your expenses.

There is such a thing as producing less but wider profit margins. Less inputs in time, labor, wear and tear, fertilizer, spray, seed costs, etc...There's a big difference between gross and net profit.

Of course if someone is so far behind they have to chase yields just to tread water and reset their debt annually, they aren't going to be able to wean away from that without an act of God. Sooner or later that's going to collapse anyway, one bad year and they'll lose that struggle. That's not necessarily because of gross overproduction from others making thin margins, that's from over reaching and getting themselves in a bad position...probably trying to chase yields to compete with their neighbors in the first place. It's a trap that's harder to avoid than it is to fall for. No one wants to be the guy at the table with the lowest yield even if it's more profitable for him.

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17 hours ago, iowaboy1965 said:

Why do we subsidize the oil industry? Or any thing else we do.....

OK, I've seen the claim about oil being subsidized but have yet to be able to find what would be described as an actual subsidy. So just what is the subsidy? I'd really like to know.

Rick

 

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