let Freedom to Farm kills incentive
The Freedom to Farm Act passed in 1996 and still in effect is a failure.
It breeds production and is the costliest farm program in history. Most of my life has been in banking, dealing with and financing farm operations. Rural areas are fast declining and there is no relief in sight.
Farmers cannot produce corn and soybeans fencerow to fencerow and expect a fair market price; especially when two grain merchandisers, Cargill and Archer Daniels Midland, own nearly 80 percent of all delivery sites for the Chicago Board of Trade's corn and soybeans futures contracts and they handle more than 50 percent of all U.S. grain exports.
Cargill is heavy in the production and processing of livestock and cheap feed is profitable for them.
Producing 10 billion bushels of corn every year is ridiculous and this week it was reported there will be a 4 percent increase in plantings.
No business can ignore inventory control and expect the price to cover the cost of operating. A farmer from South Dakota has appeared before the House Agriculture Committee suggesting they support a voluntary "flexible fallow'' program whereby farmers would receive an accelerated loan rate based on idling acres.
This will increase the market price and result in good conservation. It would eliminate the present government loan deficiency payments most of which now end up with the large operations.
It is disturbing to know that 80 percent of the net farm income comes from government subsidies. This has been a drag on the economy and farmers have lost their purchasing power. It is destroying their incentive to continue or start farming.
-- Alvin C. Peterson, Mankato, Minn.