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What if Agriculture Shut Down?
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Sometime over the last year or so, one of these columns was supposed to focus on the new Farm Bill. Needless to say, that hasn’t happened and likely won’t for some time to come. One of the casualties of the impasse in Washington going largely unnoticed isn’t just the lack of a Farm Bill but as of October 1 there is no authority to continue under the previous one. Adding to the mess for agriculture is the closure of Farm Service Agency offices and most USDA functions. Instead of dwelling on Washington, let’s shift the focus to agriculture.
Instead of “what if’ it might be more appropriate to ask “could or would” agriculture shut down? The easiest method of looking at this would be to compare the agriculture industry to the political “industry.” And the biggest difference exists between the markets these industries exist in. It is fairly accurate to say producers of food, fiber, and fuel operate under something close to “perfect competition” which has four main assumptions:
1. Numerous buyers and sellers. The result is no one or a few producers and consumers can influence prices. They essentially have to take the price offered to sell.
2. Homogenous product. The result is, in simple terms, com is com and beef is beef. A consumer can’t readily distinguish between products produced by different parts of the industry.
3. Freedom of entry and exit. There are no major barriers such as regulations or extreme costs to entering or exiting the industry. While no totally true in agriculture, it pretty much holds.
4. Perfect information. Everyone has equal access to all the necessary information for an industry. They may not take advantage of it but no one is keeping information secret to gain an advantage. Overall, this is quite true of agriculture. Look at the Cooperative Extension Service, all the various producer groups, and meetings. These are all designed to allow each member of the industry the opportunity to benefit from helpful information so everyone can produce the best product at an optimal level.
All this means an industry, agricultural production, which benefits from working together and finding common solutions to problems to benefit all. And probably most importantly, if farmers shut down they can’t produce a product or revenue and will still have to handle their fixed costs.
So while they might scale back, they won’t shut down for the above reasons. That and the fact that many love what they do and view their profession as important to the country.
Based on the above information and to save space, examine the four assumptions in terms of the political “industry”:
1. Are there numerous buyers and sellers?
2. Is there a homogenous product?
3. Is there freedom of entry and exit?
4. Is there perfect information?
So this column isn’t leading, based on the answers to the above questions, what type of industry is politics?