Tuesday, June 20, 2006

Farmers mess up illegal immigration!

Well, not the farmers themselves, of course.

I had an interesting and very educational discussion with a friend this last weekend about the illegal immigration issue. He asked me a simple question, "What about the farmers?"

He wasn't talking about the low wage jobs that "no American wants." He was talking about the economics of farming.

As an independent software developer, I can raise and lower my rates whenever I want. Construction companies can do the same. In fact, most businesses can do that. The consumer market is such that some clients might go somewhere else, others (most) will pay the higher fees to stay with the company they are used to. Understandable, really.

But then, we get to the farmers. Or more generally, producers of raw materials such as mineral ore (mining), food and livestock (farming and ranching), and timber (which is more like farming every day) to just name a few.

These businesses can't set their own prices. The prices are what they are on the day they sell them. The products are sold on the commodities markets, and therin lies the problem.

Farmers can't organize to raise prices. This has been tried in Utah and Arizona (and probably other places), and the buyers simply bought from other states. Since the commodities markets are becoming more and more international, not even countries can try to set prices.

So, the farmers can only do one thing to increase profits - lower their cost of production. And to do that, there is only one option: wages.

Of course, we could subsidize the farmers, but that is the last solution I want.

Unfortunately, I don't have any idea how to fix this - yet. It seems that farmers (and other commodity producers) require exceptions that other business don't need.

Any ideas?

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