[p2p-research] The one thing depleting faster than oil is the credibility of those measurin...

[J. Andrew Rogers]

On Wed, Nov 18, 2009 at 6:27 PM, Paul D. Fernhout
<pdfernhout at kurtz-fernhout.com> wrote:
> As I suggested, try paying the equivalent of US$100K a year for 9-5 work,
> and see if you still have an agricultural labor shortage. :-)


Yeah, but it isn't 9-5 work. You can make good money though,
especially with the rising cost of food driving up profits to a
comfortable level these days.

The bigger problem is depopulation.  Everyone wants to live in the
city, and no one wants to spend several hours a day commuting.  How do
you get people used to living in a city to move out to a place that
has none of the amenities they are used to?


> Think of the logic of that. If twice as many people did the work, it would
> be easier.


Remember, they can't find enough people to begin with. Most farming
communities are ghost towns now.


> Also, the fact that US agriculture is often in monocultures that all fruit
> at the same time is another problem. A diversified organic production system
> can distribute labor load in an area better throughout the year.


This is only true to a point.  They tend to grow the best crops in an
area that will have the highest market demand. I've never lived in any
farm community where they only grew one or two things, most farmers
diversify their portfolio.

It is even less true today, mostly because there are mechanisms now
for buyers to order specific oddball or specialized crops from farmers
thanks to the Internet. The proliferation of types and varieties of
grains available in stores now is a result of that.


> Except that, if you put twice as many people on the problem, the work can be
> regularized into first shift and second shift, or it can just be 9-5 with
> more equipment.


Yeah, except for that whole labor shortage thing.


> OK, you seem to be trying to create a circular argument. You say there is a
> labor shortage. I say, fine, if there is, pay people five times more or
> whatever. Then you say, most of agriculture is not a high skill job, and so
> by implication should not be paid well. Is this a country where supply and
> demand matter or not? If there is inadequate supply of labor, and close to
> 20% of the US workforce is now unemployed or underemployed, then just pay
> more and people will almost certainly work.


You don't seem to understand.  The wages *are* good, the problem is
that the jobs are located in the middle of nowhere.  You can't commute
to these jobs, you basically have to be local as a practical matter
and no one wants to do that.  The population is urbanizing and they
are not interested in going back.

In many areas, the commute from a decent city -- where people want to
live -- would be 2 hours *each way*.  Sure, you could make great money
living in a one-horse farming town, but you would have nothing to
spend it on.


> The fact is, in the USA, US$30K a year is not much, whatever you say about
> cost of living in rural areas (if that, and ignoring occupational hazards
> that could be minimized in an organic setting like pesticides or otherwise
> minimized with safer but more expensive production equipment). Is the price
> of a distant college much less if you live in a rural area? Is the cost of
> health insurance much less in a rural area? Is food that much cheaper? Is
> fuel that much cheaper? Are big TVs that much cheaper?


That cost of living differential exists between US *cities*, never
mind rural areas.  And yes, the cost of living is dirt cheap in most
farming communities.  Whenever I move, I always check the income and
cost of living parity charts. You would be surprised how big the
deltas are.

Housing is extremely cheap (not more than a few hundred dollars per
month), food is super-cheap because it is local and widely bartered,
utilities are much cheaper than in the city in many cases (in part
because they are more limited), and all of this impacts local prices
for things like restaurants. Regrettably most people have so much cash
leftover that they spend it on ostentatious consumption like
ridiculously large TVs and luxury SUVs that they upgrade every year.
It is what passes as a hobby if you live in those places since there
isn't much else to do.

Housing in many rural areas is asymptotically approaching "free" due
to the several decade long population decline with no prospect of
people moving back. In many small farming towns, the cost to buy a
house is a few tens of thousands (I've seen them as low as $10k in
towns that were in the advanced stages of becoming ghost towns), and
rent is next to nothing.


> Organic methods are generally less risky because they produce a more
> consistent yield, even if a lower one than the best years of conventional
> methods. One way they do this is by planting varieties that are more
> diverse. Another way they do this is by planting many different species of
> plants in one farm. They also are less exposed to some variable costs
> related to fuel.


This is a source of risk, but far from the biggest one most farmers
have to worry about. Agricultural economics are considerably more
complicated than this.  Unfortunately, agriculture is becoming much
riskier concurrent with the decreasing effectiveness of traditional
risk mitigation strategies.


>> Part of the reason this is the case is that many agricultural
>> production inputs such as diesel fuel are not taxed whereas their
>> equivalents in the rest of the economy are taxed at relatively high
>> rates.
>
> Again, organic methods change the nature of some of that.


I don't see how. One of the things that always puzzles people is that
in most years there are crops that are simply left to rot, giant piles
of vegetables and grain, because it costs more to move them than they
are even worth. This often-times holds true even if you are right next
door to a large city.

The economics of agricultural is complicated.


> Well, you seem to be talking a lot about conventional agriculture. I am
> talking about organic agriculture, as well as what could be.


I lived on an organic farm before most people had even heard of
organic. You are attributing far more to organic farming than is
realistic.


> There are a few other deeper issues here. Everyone expects illegal
> immigrants to do farm work, so no one looks into it. Everyone expects
> illegal immigrants to accept dangerous working conditions and low wages, so
> no one wants to change.


In many regions, the illegal immigrants are working alongside the
locals. It isn't a plantation, it is just needed labor. Even the
illegal immigrants tend to avoid going too far from civilization even
though the wages on those farms are better.


>> But again, you are assuming that raising
>> wages will magically increase the labor pool. It is like fishing in
>> the boonies of Alaska; you can make a $100k/month, but the work sucks,
>> is dangerous, and requires you to live in the middle of nowhere such
>> that they have a hard time finding people willing to do it.
>
> Got any links to a job posting like that? And how many are there?


It isn't a pleasant job. You can find the work if you want it, there
are a lot of jobs in Alaska like that due to the remoteness. My
parents lived in a tiny Alaskan fishing community for awhile.  It was
basically a trailer park, culturally and to some extent visually,
which was completely incongruous with the fact that most households
made hundreds of thousands of dollars. They spend the off-season
getting wasted and going on expensive gambling trips to exotic
locales.


> Enough money can create cities in the middle of nowhere if you
> really want to.


This is not really true, and there are a lot of examples of it.  It
takes more than people and money to have a robust city society.


> Would you loan the average twenty year old a few million dollars? Maybe we
> should. :-)


I'm bullish on agriculture, but the extent to which governments
interferes in the agricultural markets is pretty destructive and
increases the cost of business for everyone.


> The diesel power is only "inexpensive" because farmers are not paying the
> true cost of oil. That's what this thread started with, that there are
> systemic risks that are not priced in.


Most of those costs are nonsense, basically very creative and dubious
accounting.  Some of those costs are even self-inflicted i.e. they are
not true costs, just unnecessary costs that we have invented for
ourselves.


> Also, if you think US agriculture is the best, well, have you looked at
> Europe, especially the Netherlands and their greenhouse technology?


One of the recurring political arguments that comes up in Europe is
that they are far too dependent on US agricultural technology and they
need to develop more of their own. The obvious disadvantage of the
current situation is that US agriculture technology is optimized for
agriculture in the US, and is therefore mismatched to the local
conditions of many other parts of the world.  We spend a lot of money
on agricultural R&D that primarily serves the needs of American
farmers.  Nonetheless, the US is still a major exporter of
agricultural equipment and technology.

I'm not sure what is special about Netherlands greenhouse technology,
the US has had vast greenhouse regions for decades that have only been
getting larger.  Greenhouses have a lot of advantages for some types
of crops so I am a big fan when they make sense.


> "Economically productive" by passing the negative externalities to whom?
> What about the salmon who can't spawn anymore because their rivers have been
> run almost dry, diverted to grow lettuce in the desert?


That is a situation special to places like California, thanks to
several decades of gross incompetence on the part of the State
government.  In most places, the growing methods and crops are adapted
to local conditions.

There are crops that grow well in the high desert, and in some cases
(e.g. onions and potatoes), the high desert produces a superior
quality product that commands a higher price than what you can produce
in more conventional farming areas.


> What about the
> Native Americans who can no longer practice ancient customs catching those
> salmon?


Their ability to catch salmon in the river is worth as much as anyone else's.


>> You mistakenly assume that all of this has not been tried and studied
>> in great detail.  Where it makes sense, it *is* being used.  American
>> agriculture is technologically pretty far ahead of where you think it
>> is. One of the reasons Americans can aggressively compete on price
>> against third-world labor in things like the rice market is due to a
>> high degree of computerization and clever automation. Robotics are
>> rapidly becoming a part of farms *where it makes sense*, and have been
>> for some time but the implementation might look different than what
>> you are imagining because there are real-world issues you are
>> ignoring.
>
> Citations, please. :-)


Which part?  Farm automation has slowly and inexorably moving forward.
 It is quite efficient if you can make it reliable at a low enough
cost.  USians do crazy things like seeding the fields by plane in
carefully controlled patterns.  More and more farms do targeted,
automated watering driven by sensors and the like to save money.
Pretty cool stuff.


> So, sure, efficient use of "finite natural resources" is important in
> agriculture (ignoring that we can have effectively endless fertilizer by
> grinding up rocks...


Grinding up rock is pretty energy intensive. In some places, like the
Pacific Northwest, the volcanoes provide it for free.


> That site looks so bad as to feel scammy. :-) But there is a lot going on:
>  http://en.wikipedia.org/wiki/Fuel_cell#Types_of_fuel_cells


Fuel cells have some significant technical issues for long-term
reliability. Pretty much the same issues they've always had, but
people are working on it.


> So, there we have again to weigh different issues that may be hard to
> compare. How important is quiet to someone living in a rural area?


Not very.  The background levels are already much lower than populated
areas during many parts of the year (though it gets quite noisy the
rest of the time). It is like the farm smell, you get used to it.


-- 
J. Andrew Rogers
realityminer.blogspot.com