- Jun 6, 2007
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One fallout of the Ukrainian/Russian war is that it has diminished the amount of agricultural products available in the world market. The Wall Street Journal this past Tuesday published an article saying that "Russia and Ukraine combined typically account for more than a quarter of global wheat exports" and "nearly fifty countries depend on Russia and Ukraine for more than thirty percent of their required wheat imports". Americans must remember that in many countries throughout the world people spend a much larger portion of their income on food than we do and they have no SNAP like (Supplemental Nutrition Assistance Program) government assistance program when the prices of food go dramatically up these people buy less of it and this often means they and their families go hungry. America is rich in farmland and should use this asset to come through for the world to ramp up grain production to insure there is ample and affordable supplies of these commodities for the world!
The Biden Administration has made an effort to address this problem but I don't think this effort should give anyone a high level of confidence that the world isn't going to face significant agricultural commodity shortages for the foreseeable futures. What the Biden plan is that in the $33 billion aid package for Ukraine the Biden administration is requesting $500 million to increase loans to farmers and lower the cost of crop insurance for farmers. Those are great steps and Congress should approve the funds but one is hard pressed to see the connection that these steps will bring about U.S. farmers planting crops on dramatically more land than it has in the past which is what the world needs.
I am sure that U.S. farmers are thinking I cannot be sure how long the Ukrainian/Russian war will last, next year it could be over and Ukrainian wheat and other commodities could be pouring into the market and the price of agricultural commodities in the U.S. could tank and I am stuck selling my crops at a loss. I am not taking that chance and risking my farm on unpredictable variables. This thinking is not out of line; experts tell us that the Ukrainian front lines will begin seeing significant numbers of the heavy weapons committed to Ukraine at the front lines in the Donbas region by the end of May and the bulk of these weapons by the end of June and its seems like countries throughout the world are stepping up and will give Ukraine the tanks they need to go on the offensive and take back their land the Russian forces are occupying and the retired U.S. Generals that qualify as experts here and that the American public often sees on news programs are saying that Russia has a reserve forces problem and Russia cannot make it up by just increasing conscription and training these drafted soldiers for three months and sending them into battle war today is too complicated these forces won't be reliably effective. So a responsible analysis could conclude that this war could end by late this year early next year time frame.
Congress and the President should address this legitimate concern of farmers and put a floor on commodity prices for "four" years that is agricultural commodities sold in the U.S.. Select a floor price that covers the costs of farming and allows a profit to the farmers, be reasonable, like for wheat pick the lowest price that this commodity sold for last year $6.0175 a bushel and raise it buy the inflation index (CPI) for each year. Critics will probably get all upset that the government is price fixing and say that never works but the appropriate response for this is that it is not price fixing it is only putting a floor on pricing so farmers won't lose money by trying to help the population throughout the world by planting more crops and get blind sided by the world's farmers doing the same which causes an over supply and the prices of commodities to tank plus and this is most important this price support only last for "four" years and then it is over things go back to normal; it is only being done to get American farmers past this unpredictable period caused by this Ukrainian/Russian war.
Congress and the President could also incentivize farm production by having a four year program for farmers where if you plant more land than over the past three years let's say over ten acres for the additional acres that the farmer plants from the earnings from the crop sales for this additional planting the farmer only has to declare on the farmer's taxes half the additional earnings which amounts to a big tax break for the farmer and therefore a good incentive. I am not a farmer but I suspect if a farmer was scheming here it could be policed through receipts for seeds (if you plant more land you need more seeds which you have to buy) and with computer and satellites I am pretty sure that the government could get images for the taxpayers farm for prior years to see how much land the farmer planted, to determine if the farmer was telling the truth.
Democrats I would expect to see the merits of this program because of the humanitarian viewpoint lack of food causes real suffering and a prosperous America should not allow this to happen. To hesitant Republicans, I would suggest they consider that many people in the Middle East fall into this category where they need to spend an inordinate amount of their income on food and skyrocketing food prices result in a deprivation of food and severe poverty and experts tell us that it is from areas in the Middle East where there is extreme poverty that such areas are breeding grounds for Islamic terrorists. That individuals that experience the hardship of poverty are more open to perpetuate violence and to sacrifice their life to promulgate this terroristic ideology; so actually promoting stable and fair food prices and ample supply throughout the world is an important national security objective!
The Biden Administration has made an effort to address this problem but I don't think this effort should give anyone a high level of confidence that the world isn't going to face significant agricultural commodity shortages for the foreseeable futures. What the Biden plan is that in the $33 billion aid package for Ukraine the Biden administration is requesting $500 million to increase loans to farmers and lower the cost of crop insurance for farmers. Those are great steps and Congress should approve the funds but one is hard pressed to see the connection that these steps will bring about U.S. farmers planting crops on dramatically more land than it has in the past which is what the world needs.
I am sure that U.S. farmers are thinking I cannot be sure how long the Ukrainian/Russian war will last, next year it could be over and Ukrainian wheat and other commodities could be pouring into the market and the price of agricultural commodities in the U.S. could tank and I am stuck selling my crops at a loss. I am not taking that chance and risking my farm on unpredictable variables. This thinking is not out of line; experts tell us that the Ukrainian front lines will begin seeing significant numbers of the heavy weapons committed to Ukraine at the front lines in the Donbas region by the end of May and the bulk of these weapons by the end of June and its seems like countries throughout the world are stepping up and will give Ukraine the tanks they need to go on the offensive and take back their land the Russian forces are occupying and the retired U.S. Generals that qualify as experts here and that the American public often sees on news programs are saying that Russia has a reserve forces problem and Russia cannot make it up by just increasing conscription and training these drafted soldiers for three months and sending them into battle war today is too complicated these forces won't be reliably effective. So a responsible analysis could conclude that this war could end by late this year early next year time frame.
Congress and the President should address this legitimate concern of farmers and put a floor on commodity prices for "four" years that is agricultural commodities sold in the U.S.. Select a floor price that covers the costs of farming and allows a profit to the farmers, be reasonable, like for wheat pick the lowest price that this commodity sold for last year $6.0175 a bushel and raise it buy the inflation index (CPI) for each year. Critics will probably get all upset that the government is price fixing and say that never works but the appropriate response for this is that it is not price fixing it is only putting a floor on pricing so farmers won't lose money by trying to help the population throughout the world by planting more crops and get blind sided by the world's farmers doing the same which causes an over supply and the prices of commodities to tank plus and this is most important this price support only last for "four" years and then it is over things go back to normal; it is only being done to get American farmers past this unpredictable period caused by this Ukrainian/Russian war.
Congress and the President could also incentivize farm production by having a four year program for farmers where if you plant more land than over the past three years let's say over ten acres for the additional acres that the farmer plants from the earnings from the crop sales for this additional planting the farmer only has to declare on the farmer's taxes half the additional earnings which amounts to a big tax break for the farmer and therefore a good incentive. I am not a farmer but I suspect if a farmer was scheming here it could be policed through receipts for seeds (if you plant more land you need more seeds which you have to buy) and with computer and satellites I am pretty sure that the government could get images for the taxpayers farm for prior years to see how much land the farmer planted, to determine if the farmer was telling the truth.
Democrats I would expect to see the merits of this program because of the humanitarian viewpoint lack of food causes real suffering and a prosperous America should not allow this to happen. To hesitant Republicans, I would suggest they consider that many people in the Middle East fall into this category where they need to spend an inordinate amount of their income on food and skyrocketing food prices result in a deprivation of food and severe poverty and experts tell us that it is from areas in the Middle East where there is extreme poverty that such areas are breeding grounds for Islamic terrorists. That individuals that experience the hardship of poverty are more open to perpetuate violence and to sacrifice their life to promulgate this terroristic ideology; so actually promoting stable and fair food prices and ample supply throughout the world is an important national security objective!
