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Suspend Government Credit for Hog Expansion
10/26/2009
As a hog farmer, I am hearing a lot right now about how hog farmers have to reduce our numbers, because there are too many hogs being produced and prices are so low. But now we’re hearing that lenders are saying that the mega hog operations are “too big to fail,” that they are going to carry them through these low prices. This statement was made by a major lender at a meeting I recently attended. Although I was not surprised to hear that, it was very disappointing to realize that they are going to repeat the mistakes from the 1980s farm crisis. As an independent hog producer, why should I help finance the megafarms, which is what I’m doing when lenders won’t let them fail?
One thing is for sure. Since we need to cut back on hog numbers, then the federal government should stop subsidizing the construction of new hog production facilities with either direct government loans or federal loan guarantees through the Farm Services Agency (FSA). That’s bad policy, and bad business.
When similar over-supply circumstances existed in 1999, the USDA suspended issuing federal direct and guaranteed loans for hog operations, saying “It is inconsistent with USDA policies for FSA to continue to finance construction of additional production facilities through direct loans and loan guarantees while other agencies within USDA expend resources to ameliorate oversupply conditions.”
It is just common sense that lending practices should be fair. Lenders should not give the big operations undue advantages, and we should have smart public policy that doesn’t spur further overproduction when prices are down.
Sincerely,
Joel Penner
Butterfield, Minn.
Friday, October 30, 2009 10:46 PM by: Anonymous
should not* sorry typo. Anon 5:29, your statement shows your greed because you ignore your own subsidies while criticizes others for having them, by agreeing with the above article, and generalizing it on other sectors of ag, but yet still accept your own subsidies, so basically if it affects your pocket it is good, but if it affects others it is not.
Friday, October 30, 2009 10:42 PM by: Anonymous
But ethanol is govt. subsidized, if you believe subsidies should be stopped, then you need to believe that the govt. should be subsidizing ethanol plants and mandating ethanol production.
Monday, October 26, 2009 5:30 PM by: Anonymous
You are both correct . Hog ( &dairy &chicken &beef producers ) should quite whining about ethanol pricing thier feed inputs too high and look in thier mirrors to see whom is really @ fault !
Could greed & over production be the major problem ?
A (very) few years back I dont recall any corn buyers saying "THNX, Sucker" when I trucked $1.77 bu corn in !
Monday, October 26, 2009 5:29 PM by: Anonymous
You are both correct . Hog ( &dairy &chicken &beef producers ) should quite whining about ethanol pricing thier feed inputs too high and look in thier mirrors to see whom is really @ fault !
Could greed & over production be the major problem ?
A (very) few years back I dont recall any corn buyers saying "THNX, Sucker" when I trucked $1.77 bu corn in !
Monday, October 26, 2009 1:55 PM by: Anonymous
Joel, It's the same no matter what farming industry you are in. They'll subsidize the guy farming 10K acres so that he can improve (read lower) his storage and drying cost allowing him to bid up acres to even more greedy landlords, etc etc. Who could better afford to improve anything? I am guilty too, we should get rid of all subsidized farming including direct payments, all they do is raise the bar for anyone farming <2000 acres.
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