Wednesday, November 5, 2014

Factory Farm Fiasco

When all goes well, factory farms might be the low cost producer.  However, what happens when things go badly, as they often do?  What then?
Canada's Agriculture Hourglass.  This is a dynamic, unstable system,
that will naturally and continuously get worse and worse unless
somebody steps in and changes the system.

Who will make the necessary changes, and when will they start?

There is no substitute for boot on the ground.  Small farms owned & taken care of by dedicated people who will stop at nothing when bad goes to worse, have an advantage in troubled times.

For example, one farmer has 10,000 acres under his ownership and/or rental.  When the weather is good, and the super efficient (and super expensive) farm machinery works well, that one farmer and his regular helpers can easily achieve what needs to be done.

However, we see the risks better this year.  The window is quickly closing in this very wet Fall.  Thousands of acres of corn, oats, soybeans might soon be rotting in the field if the weather refuses to co-operate.

Crop insurance will only partially compensate.  The government cannot (or more correctly, should not) be offering insurance so that people purposefully step into harms way.  That's called moral hazard.  Nobody can afford the cumulative consequences that would result.  In many ways, that is what it seems we are doing as small farms disappear, and large farms grow bigger and bigger, and the associated risk climbs exponentially

Climate Change makes for less predictable weather.  If bad weather hits, the neighbour is likely similarly at risk, and therefore has his hands full too at exactly the same time, and is unlikely available to help.

Changing climate also raises the possibility of viruses and bacteria attacking and quickly spreading through the flock.  What farmer is adequately staffed to handle a sudden outbreak with huge mortality levels?  Who is willing to wade into a known outbreak as a neighbour helping neighbour, and possibly transport that disease back to his home farm?

It is government's role to set proper policy.  Does government not recognize the risk associated with putting all the eggs into just a few baskets.  No matter how carefully you watch those few baskets, there are things beyond anybody's control, accidents happen, mistakes are made, and we end up with a huge unmitigated disaster for which we all pay.

Some farmers are willing to take these risks, for in good times they make a fortune, and in bad times there is government sponsored insurance.  The question is whether it's good government policy to encourage those who speculate and gamble with other people's money (ie. taxpayer's money).

The farm size and risk pendulum has swung way too far under Supply Management and agriculture in general.

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