Friday, July 22, 2011

Plight of the Dairy Farmer

The issue before us is “Why can’t the dairy farmer price his own milk?” or “The plight of the dairy farmer”.


  The simple answer to this question is that things are set up that way.  To attempt to explain how things came to be as they are we can begin by looking at how farm produce was priced in 1946.  At that time farmers were receiving 100% parity for their products.  In other words, the price of farm goods was proportionate to that of non-farm goods being produced and sold in this country.  Then laws were passed concerning agricultural products, and the farmer gradually went from receiving 100% parity just  after WWII to receiving less than 50% parity today.  The money that the farmer doesn't see now shows up in the economy in such forms as taxes, interest, insurance premiums and government jobs.  At full parity, everyone benefits; when the producers of new wealth, be it corn, natural gas or milk, receive fair compensation for their products, the money runs through the whole economy.  This is how everyone gets paid, from the farmer or the miner, through the processing, manufacturing and marketing operations, all the way to the distributors and vendors of the final products.  It is not a matter of bargaining; if the money doesn't enter the system at the raw materials level, it simply won't be there as capital for the rest of the economy to use.  There is a direct relation between the price the farmer is paid and the price the average worker is paid; an increase in earnings for the first means an increase in earnings for the second, so that the plight of the farmer is in fact identical to the plight of the city dweller.  When the farmer and the average worker are cheated,  when businessmen steal the new wealth and hire foreign labor to process it, the money remains at the top of the economic ladder to be doled out as the bankers, politicians and businessmen see fit.  The reason for our high level of debt is that since consumers cannot consume production from their earnings they must borrow to do it, thus profiting bankers and businessmen even further.  It seems inevitable that as more and more of the nation's money is controlled by fewer and fewer people, the middle class will start to collapse, forcing more and more of the people to live at poverty level.

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