Government's Social Engineering Cost to the Farm Industry & the Public

E-Mail to Congress:

From your previous newsletters, I have concluded that you are a friend of the farmer and agribusiness in general.

I normally don't like to use anecdotal references, when I am trying to make a point. As a scientist, I rather prefer to use statistical data with an assumption that the reader or listener will be able to combine it with his own common sense.

With this present communication, I am making an exception, because the anecdotal reference actually applies to a whole industry, rather than the single business described. The message comes from a friend of mine who has been in the agribusiness for many years. In his operation, he supplies a tangible product to the public and employs a number of people in so doing. This is in contrast to most federal jobs, which provide nothing tangible but rather involve restrictions on improving a tangible way of life for most Americans.

This is what my friend has to say:

"I am in an interesting situation that I thought you might find may be a tool for the dismantling of some of the ridiculous tax subsidies and abatements used by the government for social engineering.

In 2008, my Company sold corn to an ethanol plant. (Verisun) At the end of the contract period they for filed bankruptcy. I got a letter the other day asking for the return of $1.1 M that they paid my company for corn. The payments were made within 90 days of their filing. Of course we will fight it in both Federal court (Bankruptcy – Maryland) and in Michigan court.

The issue is that the ethanol companies still receive a subsidy by the use of the Blending payment of $.50 / gallon. Also in the State of Michigan the ethanol plants do not pay property taxes which are used to educate our children. Because of the subsidies and grants thrown at these facilities, business men expanded faster than the industry could afford and became part of the economic bubble fueled by the housing debacle. As you know, the housing debacle was caused by subsidizing the mortgage business and spurred on by risky lending practices through government guarantee of the housing debt. In turn, the undercapitalized expansion of the ethanol business led to ethanol plants being faced with covering margin calls on an inflated commodity market fueled largely by hedge funds owned by banks and insurance companies. Those banks and insurance companies were later bailed out by TARP monies provided by the feds.

What is left is thousands of farmers and agribusiness men, who are asked to donate once again for government subsidies and social planning gone haywire. It should be noted that our business has never been given a tax subsidy or abatement. We have grown and survived by using good business sense and hard work. We are the ones expected to pay off the 13T debt.

Our government is out of control and over its head in both debt and management skills. Government officials need to be punished for their part in destroying the foundation of our economic success. There are unforeseen costs when social engineering fails. When a bleeding heart takes from one and gives to another, there is no way a government can measure the cost to all parties. That’s why free markets must be able to work. Without them there is no creation of incentive to create.

Art: you are a far clearer voice than I am. This story and the many like it need to be told to Congress and the people."



Randy, I hope you will take this to heart as the "will of the people" and do your duty as a Representative to bring the "will of the people" into government.