These days, high land prices and high (although falling) commodity prices have most landowners thinking short-term. And, as I like to say, "Who can blame them?" If you are a landowner who has busted your back to make ends meet and the sky suddenly opens and the stuff that you are good at growing increases in value...there is a good chance you are going to think, "I should make more of this stuff."
And, that is the rub. Not only are landowners in danger of changing the landscape (something that I care about) in this situation, but they are also prone to making personal financial mistakes (something that they should care about). That is, they often over-extend themselves during these times. They buy bigger machinery that plants and harvests "stuff". They buy more land to grow "stuff"--the land costs more, but the high commodity prices will make it pay. Right? Well, maybe in the short-term. Probably not for the long-term.
I've done an analysis of the historic trends for land values in Nebraska, and it is clear that we will see some kind of dramatic lowering, or correction (another nice term for "crash"?) of farm land values in the next 2-3 years. In fact, these crashes are occurring every 30 years. Start with the Dust Bowl. Then go to the recession of the 50's. Then, you have the 1980's Farm Crisis. And, that brings us to our impending change in valuation.
That is not good if you are a farmer. It may be an opening for conservation--because it is hard for conservation efforts to compete (think "CRP") with high-dollar commodities.
It turns out that North American farmers and conservationists are not alone in their angst with thinking 'long-term'. The BBC recently reported that the current ag subsidies in the EU, which were supposed to include efforts to "GREEN" the farm landscape, became so diluted (read: "easy for farmers to skirt around") that they were meaningless. It's a problem in short-term versus long-term thinking.
I'll quote directly from the article, which you can read here:
"A lead author, Lynn Dicks from the department of zoology at the University of Cambridge, told BBC News: "Politicians are talking about the greening of the Common Agricultural Policy - it's a nonsense. If a firm made these sort of claims it would be stopped by advertising standards.
" "It was a good idea to make greening compulsory for farmers to get their grants but the trouble is that the plan was so diluted in the negotiations that it's completely ineffectual."
"Ariel Brunner from Birdlife is angry that the greening, according to the report, will do little or nothing to help species like farmland birds which have been in freefall because of intensive farm methods. "EU citizens were promised a green reform but handed a 'greenwash'. Dramatic loss of biodiversity in the countryside must be addressed," he said.
"The Commission's original greening plan came under attack from farmers and farm ministries in member states. Even the authors of the Science paper admit it is extremely hard to impose a blanket environmental policy across the diverse landscapes in Europe.
"The Secretary-General of the EU farm union, Copa-Cogeca, Pekka Pesonen, told BBC News: "We do not believe the measures initially proposed by the Commission would have had any real beneficial effect on the environment.
" "It also makes no sense to take land out of production when food demand is on the rise, and estimated to increase by 60% by 2050.
"That is why Copa-Cogeca advocates green growth measures: measures which benefit the environment at the same time as maintaining production capacity, efficiency and employment. The final agreement on CAP reform is more realistic and practical to apply than the original proposal."
"The authors of today's paper argue that is short-sighted. They say: "Intensification clearly provides some short-term economic gains for farmers and the food industry [emphasis: mine]. But these have to be weighed against the loss of public goods such as climate stability, landscape quality and biodiversity. The EU has lost a chance to improve agricultural sustainability." "The bottom-line is that we're never going to make the world a better place if we only use the "We must feed the world" tag-line as the focus for every decision. We've got to think long-term--which includes feeding ourselves and living good lives. Will we want to live in the world that exists in 50 years, if we only think about food production as a viable use for land?
Exactly. Thank you!
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