Scythe & Spade Blog

Red Tape

by Chas Bonner

We all whine and cry about the red tape that inundates our businesses, but if you need something to really whine about, let’s look at statistics that illustrate the true and frightening picture.

The Office of Information and Regulatory Affairs (an office of the U.S. government) printed a bar chart that highlights the staggering growth of government regulation. It was a 10 year chart from 2001 to 2011, indicates a relatively steady number of “significant” new regulations per annum through 2006 (an average of 72 new “significant” regulations per year), but the number begins to sky-rocket in 2007 to an average of 140 per year in 2011. According to the Competitive Enterprise Institute there are 4000 new regulations in the pipeline (most of which may never be enacted), and 81,000 pages of new rules actually created in 2010.

There were many causes of the escalation in new rules, primary among them the 2011 terrorist attacks, the Enron disaster, the real estate crisis, new health care laws, and an over-active Congress. The cost to American business of all federal regulations, according to the Small Business Administration, is $1.75 TRILLION, or 12% of GDP. By contrast, in 1950 regulations were 4% of a much smaller GDP. To the federal rules, add state and local for the true picture.

While these astounding regulations may be “doable” by large business, they will “do in” small businesses and virtually any farmer. Over 60% of all jobs are created by small organizations, and it appears that government is killing the Golden Goose.

The one ray of hope: Virtually all Americans are becoming aware of the dysfunction of government and looking for massive changes; they cannot come too soon.

And one recommendation: Call, write, email, or visit your Congressmen. They are especially attentive today, knowing the revulsion of their constituents.

How Lucky Are We?

by Chas Bonner

Because Brett MacNeil, president of Scythe & Spade is issuing a very timely article on water this week, we are suspending our normal blog, and encouraging you to check out his article, water being such an important component of agriculture.

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I am forever thankful for living in this country despite its shortcomings---government?

If you want a reminder of that, check out the August 6th edition of The Economist. There is an article entitled “Dreaming of a Caliphate,” discussing the dominant beliefs in many Muslim countries. The shock to me was that in both Egypt and Pakistan, almost 80% of the adult public believes in 1.) stoning those who commit adultery; 2.) flogging or cutting off hands for theft; 3.) death penalty for people abandoning Islam. Majorities in other Muslim countries share those sentiments.

Again, how lucky are we?

Farmer's Markets

by Chas Bonner

We recently had guests from California, and upon hearing that Boise had a vibrant Farmer’s Market, that became a “must do.” After spending a few hours in the Saturday morning market, we decided to research the subject, and how it impacts agriculture.

What an interesting phenomenon. Although farmer’s markets have been in existence since the beginning of time, their growth and importance have exploded in just the past decade. There are now over 7000 farmer’s markets across the United States, and in just the past year, that number increased 17%. Furthermore, they introduce new concepts and new fresh products to countless people, consumers who now attend as much for the social interaction as for the food. By selling locally, far fewer inputs are used, especially transportation costs; it is now estimated that growing, processing, and transport of food uses 17% of the total energy consumption of the country. Finally, it was noted that many of the market attendees were young people, much more so than in the average supermarket (although this was just a casual observation).

As a human interest story, one of the long-time farmer’s market stall occupants is the Rice Family Farm. Lee Rice and his father were both plumbers, but the father always enjoyed his small vegetable garden on the one acre plot at his home. That one acre soon became 3 acres when the father retired from plumbing, and the bulk of the food was sold to the Boise Co-op as organically grown. Soon Lee Rice also realized that farming was in his blood, so he quit plumbing. Now he and his family farm 28 acres, and sell all as certified organically grown, both to the Boise Co-op and in several area farmers’ markets.

Importantly, Lee Rice stated “The consumer is driving a movement toward knowing more about where their food comes from and how it was produced…” In short, there is more interest in food, in local growing, in clean, safe food, and in the farm economy.

As farmers, we are in good times.

Planning for Agriculture

by Chas Bonner

Planning in any business is tough, but in agriculture it might be worse. In most businesses, weather and water are not real factors, but in farming, they are critical. Generally, we can predict long-term demand for products and even worldwide or regional supply, but for a specific farm, there are many variables.

At least the worldwide prediction for farming is excellent in the long run, primarily because of continued population explosions, reduced acreage in many parts of the world, and slowing productivity gains. Furthermore, the International Fund for Agricultural Development, an agency of the United Nations, is predicting continued high pricing for agricultural commodities because of years of under-investment in agriculture. In 1979, of all UN aid distributed to nations around the world, 18% went to agriculture to improve production; by 2010 that aid declined to 4.3% for agriculture. Most aid is in the form of low interest loans and grants to developing countries to improve farm output.

With population expectations increasing another 50% by 2050, and with larger and larger urban focus, rural development (farming) loses out. Because middle classes in those urban areas are fast-growing, the UN expects food production must increase 70% while population increases 50% because that middle class urban population will be demanding more protein---meat and dairy, both big users of farm inputs.

Given the expected worldwide demand for food, it is safe to assume prices must rise and remain relatively high. Compounding the problem is farming input costs---water, fertilizer, labor, and changing weather patterns.

The worldwide planning exercise is fairly simple, although the solutions are not. Now our readers must proceed to the plans of what will affect your specific acreage, and what can you do to maximize the positive, minimize the negative? At least you can project strong food demand well into the future.