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August 30, 2007

Doing Right And Wrong. Do We Practice What We Preach?

We were all raised to know right from wrong. We were all raised to “do the right thing.” If we misbehaved, there may have been the pony whip or being sent to bed without supper. Those childhood lessons are supposed to carry over to adulthood, but do they always when we are confronted with some of the financial stresses that frequent rural America?

Farmers are the salt of the Earth. But sometimes our ethical attitudes may be challenged with perceived economic pressures, say ag economist Harvey James and rural sociologist Mary Hendrickson of the University of Missouri after surveying 3,000 Missouri farmers. They say the recent problems of melamine in pet foods imported from China and E. coli tainted spinach from California show the need to keep the public trust in food production. With the consolidation occurring in agriculture, the researchers believe some farmers may engage in unethical behavior in order to survive; despite the general public’s view of farming as a virtuous activity and rural life more conducive to family life than city life.

The researchers referred to a Farm Futures survey of farmer ethics, but one taken in 1991, and not the more recent one published a year ago. In that 1991 survey, one farmer responded, “Ethics have always been hard to maintain when profit and loss become a matter of survival or going broke.” The characteristics of the Farm Futures subscribers who responded to the survey may be different than the 3,000 random farmers surveyed by the Missouri researchers. In their report they used the responses of 400 farmers. “The average respondent in our sample farmed approximately 940 acres, had 31 years of farming experience, and had sales in 2005 of between $50,000 and $250,000.”

After asking for responses to more than a dozen scenarios, the researchers grouped the scenarios into ones that would be harmful to people, ones that would be unlawful, and ones that were just bad form.

Examples of harmful conduct include:
1. A farmer plants only a part of a field and later suffers crop damage, but he files a crop insurance claim on the entire field.
2. A farmer tells buyers his crops are organic even though some chemical fertilizers and pesticides were used.
3. A farmer continues using an herbicide, even though traces of it have begun to show up in wells in his community.

Examples of unlawful conduct include:
1. A farmer disposes of pesticide containers without rinsing them as required by law
2. A farmer growing a genetically-modified crop retains part of his harvest as seed in violation of the licensing requirements of the seed supplier.
3. A rancher claims business depreciation on a pickup truck used primarily by other members of his family

Examples of bad form include:
1. A bank forecloses on a farm loan without first offering to reduce the interest or principal owed
2. A farmer outbids a second farmer on rental farmland, even though the second farmer has farmed that land for years.
3. A grain elevator forces a farmer to fulfill a forward contract by buying grain from the market at a loss, even though drought caused the farmer’s yields to be low


They found a “relatively strong consensus among respondents that situations resulting in harm are more unacceptable than those that are wrong because they are defined so by law or contract or because they are socially inappropriate. Not surprisingly, this suggests that farmers recognize that not all ethical problems are the same and that some are more serious (i.e., unacceptable) than others.” They also found that perceived economic pressures are related to the greater willingness of farmers to tolerate unethical conduct, and if the practice is widespread in his community, he will be more likely to do the same. On the other hand, the researchers found a greater potential for harmful or unlawful conduct when there are economic pressures than for unethical conduct.

Summary:
The general public holds farmers to a higher standard because of the respect for the industry, but also because of the trust given to the US food supply. However, in times of economic stress, farmers told researchers there is a potential for increased levels of conduct and behavior that might be harmful, unlawful, or in bad form. And in some cases, when the improper practice is widespread in the community, they will join in, despite knowing of the impropriety.

Stu Ellis

Posted by Stu Ellis at August 30, 2007 12:27 AM | Permalink

Comments

re: filing crop insurance claim on whole field--"Harmful". Last I knew filing a false crop insurance claim was fraud, punishable by time in the slammer. It's called cheating the government.

I wouldn't be surprised if the other two lies in the "harmful" category weren't also violations of law.

Posted by: Bill Harshaw at August 30, 2007 7:55 AM

Are you getting “Walmarted”?


Competition for rental land has come up several times on the blog and is a hot topic in the countryside. The farmer that is renting the land out from under others is not a “bad guy” he is “Wal-Mart”. This farmer is acting as a business in a global market. Just like Wal-Mart. This should not be surprising to those that view farming as a business. (A good summary of globalization with links are available on the May 15, 2007 posting of this blog.)

What is an operation that is getting “Walmarted” to do? Some general lessons can be learned from the retailers that have had a Wal-Mart move into their area (I will leave the specifics to the university / extension people.). They reduced cost, find a niche and/or go higher end or exit.
-Cost reductions are achieved by spread fixed cost over more units and/or reduce variable cost.
-Niches in farming have been explored for many years and include specialty crops and livestock.
-Higher end many include special service to landlords and or buyers of products and services.
-Exiting the industry is almost taboo to talk about but the globalization of agriculture mandates less farmers. So the issue should be talked about. Start with the end in mind is the second habit of The 7 Habits of Highly Effective People by Stephen R. Covey. Farmers may want to envision the end of their farming career, if they do not like that picture they can that action to make it as palatable as possible.

Sorry for the news but we all will see the changes that occur when farmers are “Walmarted”.

Posted by: Freeport IL at August 30, 2007 2:17 PM

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