Ag Policy Promotes Overproduction
Tim Hammerich
News Reporter
For decades, farm policy has pushed farmers to produce as much as possible to increase their profits and the volume of available commodities to be traded. That approach comes with its own consequences. Johnathan Coppess, Associate Professor and Director of the Gardner Agriculture Policy Program at the University of Illinois, says history proves when production gets too high, market prices always inevitably fall.
Coppess… “ History gives us a really, I don't wanna say great set of lessons, but lessons that we should be paying attention to. Because every time we push overproduction, there is a collapse. And so some of the biggest examples are that we pushed wheat to win World War I in the teens, nineteen-teens. Then we overproduced wheat and then markets collapsed in the twenties. And then the Great Depression makes it all worse. Right? And that's the sort of origin story of how we start paying farmers direct assistance. Then you're trying all these mechanisms within it to say, we don't want the payment, the support program, to encourage you to produce what the market doesn't want. And so you're constantly wrestling with that, so we've seen this sort of up and down. Your point is exactly right. It's one of the fears, one of the concerns I have is anytime you see a policy pushing farmers into an overproduction state. One of the challenges we've always recognized in policy but have struggled to deal with is each farmer is an individual decision maker.”
Coppess indicated the current struggling farm economy is largely a result of overproduction.
