GENE LOGSDON: Farm Success Brings Farm Failure

 

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From GENE LOGSDON
The Contrary Farmer

After years of belittling organic farming, some chemical farmers are exploring the possibilities of getting into it. Can’t blame them. Conventional grain is selling around $3.60 a bushel and in some cases even lower because of the glut. Alan Guebert, in his excellent national column, Farm and Food File, suggests there is enough corn and soybeans in the bin right now to last us through next year. At the same time organic grain is selling around $8.00 a bushel and some 40% of it is imported. I was talking recently to John Bobbe,  the executive director of the Organic Farmers Agency for Relationship Marketing (OFARM) and author of Marketing Organic Grain about all this. “I am getting several calls every week from farmers looking to get into organic grain farming,” he says. “Some are calling it the ‘rush to gold’.”

So we should all be rejoicing at organic farming’s success, right? Afraid not. The worry now is first of all that farmers wanting into the gold rush don’t really appreciate what they will have to do. Almost all organic certification requires specific rotations that include small grains and legumes that have to be marketed too if the operation is going to be profitable. Most conventional farmers don’t want to go that route (which is partly why there is a glut of corn and soybeans right now). As has been the case so often, farmers who try to transition to organic when prices are high don’t have the commitment that it takes and want to go back to conventional when conventional market prices rise.

But even where that is not the case, oversupply in organic markets is definitely a possibility and I heard the concern voiced more than once at the last conference of the Ohio Ecological Food and Farm Association. “Right now, with so much of our grain imported, the concern is not immediate, but it happened a few years ago and could happen again,” says Mr. Bobbe. “I studied under Harold Briemyer, [the famous economist at the University of Missouri], and I remember him saying how farmers have a non-instinct for self-preservation. Because of their independent nature, they invariably fail to do what would help them the most. They would gain far more if they would cooperate with each other in marketing.”

But farmers would rather go it alone. Historically, they always, always, overproduce. Success in producing abundance means failure in selling it at a profitable price. The irony of the situation is that what we hear mostly in the news is how American farmers must produce more to feed the starving millions and, as “sundancer55” replied to last week’s blog, trying to do that is a good way to go broke and we can’t feed the whole world anyway. All this kind of talk about feeding the world only benefits the agribusiness suppliers and leads to surpluses. Historically, farmers have formed cooperatives whose purpose is to keep supply in line with demand. But effective cooperatives rarely last long. The Burley Tobacco Growers Cooperative Association was very effective in keeping lots of member farmers in business by limiting the amount of tobacco they were allowed to grow. But eventually newer farmers decided to take advantage of the good prices the Burley Cooperative achieved and grow more than their allotments. They refused to join and cooperate. That spelled in the end of the cooperative.

OFARM is an attempt to sell organic grain cooperatively. It represents six coops, each with a professional organic grain marketer who is buying and selling every day  and understands how the market operates. So far so good. A study by Iowa State’s Aldo Leopold Center says  that members of these cooperatives are netting 22% to 40% more for their grain than those going it alone.

“It comes down to whether farmers looking to organic for salvation decide to do the right things working with their neighbors or go the route of ‘non-extinct for self preservation’,” says Mr. Bobbe. “If they choose the latter, it will mean big trouble in the future for all organic farmers.”

I am not very hopeful. Humans almost always go for competition rather than cooperation. Someone puts up a stand to sell strawberries along the road. The stand makes money. Soon stands blossom all up and down the road and none of them make any money.  A publisher comes out with a book on how to grow strawberries and it sells very well. Soon every publisher from here to the nearest black hole comes out with a similar book, none of which are profitable. It is an impossible situation because everyone should be free to grow whatever they please. The consumer is supposed to benefit but that results in a nation grossly overweight.