Milton Friedman, in his book Free to Choose, detailed the four ways you spend money:
- You spend your own money on yourself.
- You spend your own money on someone else.
- You spend someone else’s money on yourself.
- You spend someone else’s money on someone else.
The first method, spending your own money on yourself, is the most efficient. The fourth method, spending someone else’s money on someone else, is the least efficient.
Most farmers identify with the first method, while most governments are notorious for the fourth.
But, in talking with farmers lately, there’s a corollary out there that is highly inefficient and cruel, and that’s the burden of unnecessary spending. This unnecessary spending is caused by regulations that may be noble in intent, but the people who make them never bear the burden of meeting them.
Take emissions regulations, for example. I worked with companies trying to develop diesel systems that would meet the emissions standards of Tier 4. Millions were spent, but who had to pay more for these machines? You guessed it.
That would be burden enough, but these systems don’t really work like they are supposed to, so there’s the added cost of downtime caused not by a failure of the machine but by that of an added system preventing the operation of the machine. The costs can be overwhelming in terms of poor crop quality, lost time, and added repair expense. One farmer told me he spent $30,000 last year repairing emission systems alone! There’s no benefit to him in spending that money; it’s a sink hole.
These days, harvest looks like a rerun of The Running Man, as farmers race valiantly to overcome the obstacles of nature, regulations, supply chain issues, and poor service to bring in the best and most productive crop they can.
Farmers love what they do, and hopefully this year, they will get compensated well for it.
But always remember, when you bring them a new idea, they are always spending their own money on themselves. They are going to demand the best solution for the least amount of money. They will do whatever it takes to keep going and finish their job. Suppliers that treat the farmer’s money like it was their own money will be rewarded.
As the planting itch starts, let’s hope that everyone stays safe and healthy, and that the crops get in with minimal frustration.