Commentary: The Law of Unintended Consequences

It is one of those universal laws that, when you start tinkering with something you really don’t fully understand, the unintended consequences will be worse than the problem you were trying to fix. This happened to me last week when I was trying to fix a computer problem my wife was having, and I ended up wiping out all her bookmarks.  Not a good thing.  Lawmakers in Washington are in danger of doing the same thing as they tinker with the Farm Bill.

The federal crop insurance program is a program that works well and, for most farmers, is the key to their risk management program.  Yet folks who have never used crop insurance in a farming operation think they know how to improve upon it. One suggestion made recently is to do away with the harvest price option. Since close to 80% of farmers who use the program use the harvest price option, this would have some major unintended consequences.  This is especially true in years of drought, which tends to occur in the summer after the crop has been planted. The lack of a harvest price option would not allow a producer to sell his reduced crop at the higher fall price that would be the result of a drought and production cut.

Another idea under consideration in Washington is not allowing landlords to receive crop insurance benefits. As Don Villwock, former Indiana Farm Bureau President explained at a Farm Foundation Forum recently, such a move would force landowners to move to cash only deals and eliminate crop share arrangements. This would be devastating for young farmers who do not have the kind of cash resources needed to afford such rental agreements.

As Cody Gault with Farm Credit Mid-America told me, crop insurance is not only a safety net for farmers but also for their lenders. The ideological thinktanks in Washington, that love to disparage farm programs and produce white papers pointing out what boondoggles they are, have no idea about the unintended consequences that would result.

A similar situation is occurring with the immigration issue. Both sides are so polarized and dug in that any reason deviation is rejected out of hand. Agriculture is facing a labor crisis and needs a reliable and legal workforce. While a workable program has been proposed for farm workers, it cannot be heard above the shrill ranting of the extremists. The unintended consequences here are that crops are being left in the field to rot because there is literally no one to harvest them.

If I had bothered to do a little research or talked to someone who knew that they were doing before I started tinkering with my wife’s computer, things might have turned out differently. If Congress would do the same, perhaps we could solve some of these problems instead of making things worse with unintended consequences.

By Gary Truitt

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