Vicious Cycle

Despite numerous attempts over the years to reduce agriculture’s dependence on government assistance, farmers once again find themselves calling on Congress for help.  They are certainly not alone as COVID 19’s impact on the economy continues to be felt.

The pork industry is projected to lose as much as $5 billion and the ethanol industry as much as $9 billion by next year.  Both are among the many seeking federal aid in the next round of COVID related payments even as already approved CFAP payments are still being made.  Of course, the ethanol industry was left out of CFAP which adds to its case for help this time.  A strong case can certainly be made that if EPA had not granted so many waivers to the RFS and by doing so undermining demand then the economic situation the industry finds itself in would not be so dire.  Farmers prefer to produce for the market but they continue to have their markets altered by events beyond their control.  Last year it was weather and a trade war and of course this year it’s a pandemic.

The path leading to Congress and the U.S. Treasury is more crowded than ever.  As Congress debates another package of assistance our national debt continues to grow.  It remains to be seen how much longer the government can write these checks because at some point the bills will come due.  For now, the checks will keep coming not only because of the need but because of the politics.  Both parties are guilty of trying to buy votes and this election year is no exception.  Both sides want to show their concern in a political game of trying to outdo the other.  The Senate is now trying to hold the next bill’s price tag to only a TRILLION dollars!  What happens when the checks are no longer in the mail?

For agriculture, we are already hearing about the likelihood of more consolidation in the pork industry and there is growing discussion about the need for a crop set aside program.  We’ve been down those roads before and they seem to lead us back to the same place.  The more things change the more they stay the same.  Most of us want less government in our lives but that’s not going to happen anytime soon if ever.  No matter how much government aid is given more will be needed.  In a time when so many things are broken, unfortunately, that cycle remains intact.