Ag is a high risk business

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BRYAN, Tex. (KBTX) - The risk that farmers take every year is something that most of us can’t comprehend but it’s something that farm families must confront every day. One of the goals of the Farm Bill is to mitigate some of that risk. Bart Fischer is the Deputy Staff Director and Chief Economist for the Committee on Agriculture in the U.S. House of Representatives.

“When I drive into work at the capital to earn the salary that I’m paid for by the taxpayers, I don’t really have to put anything at risk to do that, other than the risk of driving in traffic in D.C. For a farmer, even a mid-sized family farming operation, they may end up putting a million dollars at risk to make a crop that nets them less than one hundred thousand dollars at the end of the year.”

Fischer says bankers would be more than a little nervous about lending money if there was no safety net for farmers.

“You’ve got to convince your bank to lend you a million dollars to go this. If there’s not some of assurance that it can be repaid if things fall apart, it’s tough for the bank to go out and lend that money. So the system all kind of works in consult to make sure that producers an stay out there doing what they’re doing, but it’s all predicated on the notion that it’s an incredibly risky business. It’s really unlike any other business in the world.”

Fischer says that U.S. farmers also must compete globally where there’s not a level playing field.

“We actually filed a case against China in the WTO over the subsidies that they were providing their producers and on three crops in just one year alone, they went over their legal limits by one hundred billion dollars. And we don’t go over our limits. We actually say in law that if we’re in danger of going over them we have to reduce our spending. Between the risks that they face and the fact that it’s an unfair playing field the farm bill does try to come in and level that playing field to some degree.”

Fischer also points out that a farmer can lose his entire income for a year in one night.

“The goal isn’t to use the safety net to make money and frankly it’s not even to make them whole. It’s to help enough that they can stay in business and put in another crop the following year because when they go out, increasingly, there’s not folks waiting in the wings to take over if that producer goes out of business.”