Michael Mackey’s column about the dairy industry points out the problems repeatedly, but his solution is only for government and business to sit down with dairy farmers.
I’m sure Mr. Mackey has the best of intentions with the National Farmer’s Organization but in that fact lies the root of the problem. Business associations ultimately turn into begging groups and to get these groups off their backs, government officials “hand them a bone.” This results in a floor for profitability but also a ceiling.
Producers end up producing to fulfill eligibility requirements instead of a market that is driven by consumer needs. When consumers’ aggregate demand is replaced by these arbitrary standards, consumers are left with limited choices and sustainability is not a priority compared to silencing the whining of commodity groups.
It is not a surprise that Mr. Mackey doesn’t offer a solution because a real solution would not involve the National Farmer’s Organization (or government). It would involve pure capitalism where each producer and each buyer are free to find a relationship that meets their needs. Stealing the resources and limiting the choices of taxpayers in order to prop up inefficient businesses is morally wrong.
It is a sad fact that efficiency of scale is changing agriculture. There is great joy in personal care of the land and livestock. But that is not to say the same thing cannot be found in a modern system that increases wealth for everyone purely through voluntary relationships.