Some time ago Mr. Romney tried to score points during a debate telling a story about his “friend” who was a baker. For now we will just skip over the fact that any friend of Mr. Romney’s who could bet $10,000 on a whim the way the rest of us would bet a can of soda or a $5 bill probably wasn’t doing any baking themselves. We will also skip over the fact those bakeries probably had a significant number of workers with highly questionable paper authorizing them to work. What we really want to talk about here is why ag insurance exists.
Years ago, long before I was born, the bulk of this country had some direct tie to agriculture. Even during the horrible days when “Coal Miner’s Daughter” was a reality long before it became a song, people grew many of their own vegetables, raised chickens, and bartered with local farmers for other goods. When older farmers wanted to cash in and they didn’t have children to take over the land, they would enter 50/50 rental agreements with one or more of their neighbors so they knew the land would be well tended.
Around 40 years ago, that changed in a big way. People with the most worthless degree in the world, an MBA, started getting involved with agriculture. Trust funds, hedge funds, and life insurance companies actually passed the tipping point before I was old enough to drive. Back when Mutual of Omaha was putting “Wild Kingdom” on the air, they were documented to be the largest single owner of farmland in the United States.
With the MBAs came worthless management tactics, the most common of which was killing off your future to get a pay day now. We call it the Visa/MasterCard mentality. They went to the zero risk model of charging cash rent and not caring about how the land was tended as long as they got paid $300-$400 per acre each year. The fact that even the best farm land couldn’t survive even five years of that kind of strip mining didn’t matter to them, they were only worried about the numbers for this quarter.
All of the other areas of agriculture started getting these same worthless tactics applied as the pressure to please Wall Street this quarter became far more important than being alive next quarter. It should come as no surprise to anyone reading this that the family farm is being forced into extinction by people who will gladly sell you eggs with diseases and tainted meat rather than disappoint Wall Street.
What will surprise you is that the lifestyle of the Mitt Romney’s of the world is why we have the farm safety net insurance. If anything dimples the crop even a little bit, Mitt Romney, his hedge fund, trust funds companies he may hold interest in, insurance companies he may own stock in along with the shares of John Deere, DOW, Bayer, and countless other corporations with ag divisions won’t make their numbers next year. Why? Because all of the farmers who were paying $300-$400/acre just for the right to farm on top of all the exorbitant prices John Deere charges for equipment, Pioneer charges for seed, DOW charges for chemicals, etc.
You see Mr. Romney, your baker friend who can bet $10,000 on a whim with you doesn’t have 3/4 of the world reaching their hand into his pocket like the American farmer. Instead, both you and your baker friend are reaching your hand into the same pocket everybody else is so you had best watch what you say about taking away this insurance lest you end up actually having to work for a living.
“Let them eat cake!” didn’t prove to be a good policy for the last ruling class associated with the statement.
Those who refuse to learn from history are doomed to repeat it.