4 ms·

It's pretty simple: JD and Monsanto have extracted the high margin economic value into their products, leaving the farmer as an employee managing low margin ope

by asah 5y ago

It's pretty simple: JD and Monsanto have extracted the high margin economic value into their products, leaving the farmer as an employee managing low margin operational work and carrying the burden of weather risk. JD weather risk is spread across 1000s of farms. Same story with ASML, Siemens and other industrial tools companies. Things get interesting when the cost (economic value) of the tool is a largest percentage of the total $ of goods produced.

navaati 5y ago
Something something owning the means of production, hahaha. In the 20th century that phrase was written about workers, as in employees, but if even the business owners don't really own the means of production... are they really business owners ? It seems history repeats itself, just one echelon higher in the society.
josu 5y ago
If this is true why aren't farmers using other less extractive brands? Has JD used anticompetitive practices to hinder competition? Or did JD increase farming productivity in a pareto efficient way, so the farmers are still better off buying JD, even though JD gets to keep most of the newly created surplus? Or is it just a race to the bottom where farmers that don't buy JD get priced out, even though buying JD makes the farmers worse off as a collective?
- arbitrary_name 5y ago
  There is intense concentration within the industrial agriculture 'toolchain'. John Deere, CNH Industrial and AGCO, the next largest competitors, sell 75-85%+ of combine harvesters in the US. Plus, there are things like tie-ins with Bayer/Monsantos data science platforms that smaller vendors can't or don't offer. Tom Philpott describes this really well in 'Perilous Bounty': there are lots of farmers who are price takers. Their only way forward is to hope to survive weather and price cycles by producing more, more efficiently. This ironically leads to overproduction and poor returns. Whereas JD are price makers who can use their consolidated power to set terms and prices within the market. Farmers don't really stand a chance.
  - daniel-cussen 5y ago
    Funny I was reading a book about US-North Korea relations wherein they talk about the effect of trade sanctions on North Korea. They didn't work, basically, and one reason why was because Korean agriculture was not very mechanized, so lack of imports of parts didn't really matter.
JamisonM 5y ago
Grain farmers are doing just fine, they are not being ground to dust by the system. But it is certainly true that production subsidies serve to make landlords and suppliers rich just as they serve to make farmers rich - your tax dollars at work!
- throwaway894345 5y ago
  Are farmers “rich”? I grew up in a big farming family in a big farming community and I don’t think anyone is rich. My grandpa probably has a few million dollars in assets, but he saved aggressively his whole life and probably worked 40% more than the average non-farmer over the same time span (longer hours, fewer/shorter vacations, retired in his late 70s, etc). Yes, farmers have a lot of capital invested in their businesses, but their incomes (i.e., what they take home rather than reinvesting in their businesses) still seem pretty modest. Compared to my cousins who farm, I’m pretty sure I’m wealthier than they are as a software engineer, certainly with respect to income and perhaps also with respect to total asset value.
  - seanmcdirmid 5y ago
    If they scale up, buy out other farmers, basically go corporate, they can be rich. It also feels like there are huge regional differences (eg a California walnut farmer is going to be a lot richer than an Illinois corn farmer).
    - throwaway894345 5y ago
      Sure, farmers can be rich, but I was responding to the general statement (or implication) that farmers en masse are becoming rich.
      - seanmcdirmid 5y ago
        If small land holding farmers are leaving the profession en masse, leaving only the bigger farm operations, then “farmers” are becoming richer simply because the poorer ones are dropping out. It’s bound to happen eventually, but we probably haven’t crossed that threshold yet.
specialist 5y ago
> leaving the farmer as an employee Modern sharecroppers. Usury, rent seeking, monopsony, wealth transfer. Institutionalized power imbalances which eventually lead to abrupt disruptions. aka Revolutions. This story is as old as history. I've been reading more about the Progressive Era during the apocalypse. (Currently chewing thru Caro's Master of the Senate, which covers New Deal thru Great Society.) Same challenges, rhetoric, social fault lines. Only the cast of characters have changed. Don't worry, though. The more I learn, the more optimistic I become. We've been here before. Countless times. And somehow, humanity stumbles forward. Though the stakes are quite high for this iteration. If there's anything "exceptional" about American Exceptionalism, my nomination is that our transfers of power have been relatively more peaceful than most. I'm not saying things will necessarily work out. Only that it's possible we'll reach the next equilibrium. Kick the can down the road a few more decades. Potentially giving our grandkids the opportunity to revisit this never-ending argument again, on their own terms. Right now, just knowing it's possible is hope enough for me.

by asah 5y ago

navaati 5y ago

Something something owning the means of production, hahaha. In the 20th century that phrase was written about workers, as in employees, but if even the business owners don't really own the means of production... are they really business owners ? It seems history repeats itself, just one echelon higher in the society.

josu 5y ago

If this is true why aren't farmers using other less extractive brands? Has JD used anticompetitive practices to hinder competition? Or did JD increase farming productivity in a pareto efficient way, so the farmers are still better off buying JD, even though JD gets to keep most of the newly created surplus? Or is it just a race to the bottom where farmers that don't buy JD get priced out, even though buying JD makes the farmers worse off as a collective?

arbitrary_name 5y ago
There is intense concentration within the industrial agriculture 'toolchain'. John Deere, CNH Industrial and AGCO, the next largest competitors, sell 75-85%+ of combine harvesters in the US. Plus, there are things like tie-ins with Bayer/Monsantos data science platforms that smaller vendors can't or don't offer. Tom Philpott describes this really well in 'Perilous Bounty': there are lots of farmers who are price takers. Their only way forward is to hope to survive weather and price cycles by producing more, more efficiently. This ironically leads to overproduction and poor returns. Whereas JD are price makers who can use their consolidated power to set terms and prices within the market. Farmers don't really stand a chance.
- daniel-cussen 5y ago
  Funny I was reading a book about US-North Korea relations wherein they talk about the effect of trade sanctions on North Korea. They didn't work, basically, and one reason why was because Korean agriculture was not very mechanized, so lack of imports of parts didn't really matter.

JamisonM 5y ago

Grain farmers are doing just fine, they are not being ground to dust by the system. But it is certainly true that production subsidies serve to make landlords and suppliers rich just as they serve to make farmers rich - your tax dollars at work!

throwaway894345 5y ago
Are farmers “rich”? I grew up in a big farming family in a big farming community and I don’t think anyone is rich. My grandpa probably has a few million dollars in assets, but he saved aggressively his whole life and probably worked 40% more than the average non-farmer over the same time span (longer hours, fewer/shorter vacations, retired in his late 70s, etc). Yes, farmers have a lot of capital invested in their businesses, but their incomes (i.e., what they take home rather than reinvesting in their businesses) still seem pretty modest. Compared to my cousins who farm, I’m pretty sure I’m wealthier than they are as a software engineer, certainly with respect to income and perhaps also with respect to total asset value.
- seanmcdirmid 5y ago
  If they scale up, buy out other farmers, basically go corporate, they can be rich. It also feels like there are huge regional differences (eg a California walnut farmer is going to be a lot richer than an Illinois corn farmer).
  - throwaway894345 5y ago
    Sure, farmers can be rich, but I was responding to the general statement (or implication) that farmers en masse are becoming rich.
    - seanmcdirmid 5y ago
      If small land holding farmers are leaving the profession en masse, leaving only the bigger farm operations, then “farmers” are becoming richer simply because the poorer ones are dropping out. It’s bound to happen eventually, but we probably haven’t crossed that threshold yet.

specialist 5y ago

> leaving the farmer as an employee Modern sharecroppers. Usury, rent seeking, monopsony, wealth transfer. Institutionalized power imbalances which eventually lead to abrupt disruptions. aka Revolutions. This story is as old as history. I've been reading more about the Progressive Era during the apocalypse. (Currently chewing thru Caro's Master of the Senate, which covers New Deal thru Great Society.) Same challenges, rhetoric, social fault lines. Only the cast of characters have changed. Don't worry, though. The more I learn, the more optimistic I become. We've been here before. Countless times. And somehow, humanity stumbles forward. Though the stakes are quite high for this iteration. If there's anything "exceptional" about American Exceptionalism, my nomination is that our transfers of power have been relatively more peaceful than most. I'm not saying things will necessarily work out. Only that it's possible we'll reach the next equilibrium. Kick the can down the road a few more decades. Potentially giving our grandkids the opportunity to revisit this never-ending argument again, on their own terms. Right now, just knowing it's possible is hope enough for me.