The Dangerous Siren Song of Socialism and Agriculture

Disclaimer: This post is rather longer than my usual content, but I wanted to give justice to the depth and breadth of this issue. Thanks for sticking with me!

Not too long ago, Politico’s Morning Ag people reported on a phenomenon taking place in the dairy industry. It explores the idea of federal supply management. On its face, this sounds like a reasonable proposal. If supply is managed, the peaks and valleys that we’re so familiar with in agriculture would flatten out, meaning only enough milk to meet demand would be produced, thereby stabilizing the price, and making it easier to forecast a farm’s income long term. That’s the theory.

In practice, this could be a dangerous program with disastrous effects. Short term, it would work. Long term, consider what happened when the Soviet Union and satellite countries implemented communism/socialism during the Cold War. They couldn’t feed themselves. Innovation was stifled, and no one had any reason to try or care to do better because there was no incentive to (not more money, not a better product, better working conditions, nothing).  After the Soviet Union was dissolved, Russia completely turned itself around in terms of agricultural production. They went from being unable to feed their own population to becoming a net exporter, and finally moved on to become a net exporter of quality. They got so good at this that they decided invading another country for their warm water port was a good idea.

Don’t get me wrong here, if individual co-ops or processors or industry organizations want to create supply management for their membership or region, have at it. However, getting the government involved will only lead to increased red tape and bureaucracy run amok. Many people will point to other countries such as Canada who do have a national supply management program in place, and hail it as a success. What they don’t tell you is the quota system has stalled growth and stifled dairy product innovation in that country, leading to an industry unable to grow much and not being economically viable for multi-family farms. It’s also one of the most expensive places to produce milk in the world, second only to Switzerland. One observer of the program even notes that it has led to “a sense of institutionalized entitlement. The words "consumer" and "customer" have no meaning.”

This is hard to argue with when looking back upon previous attempts at managing agriculture production through socialism. Why try when you know you’ll get paid, no matter how high the cost of production?In the Politico article, the Wisconsin Farmers Union and National Farm Organization are highlighted as bringers of change. These two well-known left leaning organizations have proposed a national, two-tiered pricing program that would “pay dairy farmers a $4 premium on their first one million pounds of milk each month, and a lower price for any production more than that. The organization said the method would stabilize the market and benefit smaller producers.”Do you see what I see in those words? I see punishment for dairymen who have dared to get larger, increase their efficiencies, and figure out ways to make their margins work for them.

My parents started out on the East Coast with 70 cows. Knowing that they wanted to make the business a viable option long term for their offspring, they moved West with the cows and me and my brothers in tow to expand and become better dairymen.

Let’s put one million pounds of milk per month in perspective. The average pizza uses about 10 ounces of cheese on it. Broken down, that would be enough cheese for about 3,000 pizzas. Americans eat 8,219,178 pizzas per DAY.  A million pounds of milk by itself is not a huge amount.Guess how many pounds of milk we ship per month? 13,750,000.Yes, thirteen million. We’re still a family farm, 100% owned and operated by my parents and siblings. Our business supports more than 80 other families, and we’re one of the larger employers in our county.  If this pricing system were implemented,we’d be getting penalized for 60% of our milk production simply because we took the risks, and put in the blood, sweat, and tears of nearly 40 years to rise to the challenge of expanding our operation to be a sustainable source of stable income not just for my own family, but of those who work for us as well. We want this to be a viable option for generations to come, and we’ve put in the work to make it so.  I can foresee hateful comments about being too big for our britches and being the cause of oversupply in the country but let me stop you right there. The only thing we’ve taken advantage of is opportunity. 100% of our milk has a home, and we’re getting asked by our processor to grow again. They wouldn’t ask if there wasn’t demand.

Those two “progressive” organizations also propose that the money deducted from larger production dairies would then be redistributed among those who didn’t go over production limits. Does this sound like wealth redistribution to you? Dick Bylsma, national milk sales director at National Farmers Organization said in the article, “We are hearing two arguments: that it’s a wealth transfer, and it’s socialism…” and “Well, socialism is when a few people make decisions for the rest of us. We’re headed for a situation where a few players will control the market.”While that statement may sound naive, Mr. Bylsma knows exactly what he’s saying. His attempt to twist the phrasing only serves to imply that we as dairymen, and you the consumer are not smart enough to see that he’s aiming at the exact same thing: a few players controlling the market. His aim is to pit all of us against each other to produce his desired outcome. Small versus big, consumer versus producer, producers versus processors. Divide and conquer, and control the entire market while collecting an easy paycheck on the backs of those who dared to be entrepreneurial and take a swing at the American dream.

If you’re unhappy with the current situation, by all means work on meaningful change. That’s the beauty of the republic we live in. Don’t, however, force change upon those who aren’t interested and don’t necessarily meet your demographic or audience. Just because your change would work for you, does not mean that it would work for everyone. Many failed governments have proven time and again that socialism does not work. It’s a scary time in agriculture, filled with low prices and a lot of uncertainty.

Times are changing, and the American ag industry doesn’t look at all like it did fifty years ago. It won’t look at all the same five years from now either. People are turning to any solution that sounds reasonable, desperate to retain their way of life, but I implore you to dig deeper than what the press releases promise. Don’t take us down a path that will lead to our destruction. Now is the time to come together and implement real change led by actual agricultural producers, not someone in an industry or government organization eager to make their own paycheck larger and easier to obtain. Don’t fall prey to socialism’s siren song.