I will admit to having started that thread a couple of days ago when things were slow. I placed it in this category "General Chit-Chat" for a reason. Somehow it was moved into "Business, Finance and Legal". That was not my intent. Now for the explanation as to why it was placed where it was.
The client that stiffed you 20 percent of the agreed upon amount was the US Government. They have invented a cute little thing known as "sequestration". Basically, what that means is that they do not have to meet their commitments in full if they do not have the money left in the overall budget.
In the story I started I never said it was a surveying client, just a client. What I was describing is what has been happening to the vast majority of crop-based agricultural producers in recent years. This year's number is supposed to be 6.8 percent. It has been significantly higher. Nearly all full time crop production farms are controlled by the Government programs for which they are eligible. Many years ago this was primarily aimed at getting farms to balance planting to correspond to perceived future needs for each type of crop and not overproduce specific crops. Starting in the 1970's, or thereabout, environmental goals started to be inserted as pre-requisites to eligibility. Numerous new special interests keep getting added. One of the more recent additions is the demand that crops must be covered by what is known as a crop insurance policy. Supposedly, something like 70 percent of the payments going to the insurance companies are direct from the Government. However, what used to be 100 percent of the charge is now less than 30 percent of the total fee because the cost to farmers went up instead of down when this happened. This gets compounded when certain things must be done whether or not the full payment ever is made. For example, major soil and water expenses such as building soil-saving terraces and waterways that take 20 or more years to pay for themselves are subsidized routinely by the Government. But, if a plan is in place saying a certain installation is to be made by a certain date and the Government doesn't put in their share on time then the farmer ends up paying the full amount without refund once the Government has their funding back in place.
Sequestration is what can reduce the total amount paid for the services provided and it's a one-sided deal. You can't sue, you can't file a lien and all the nasty letters in the world will have no effect.
The above is how it works for crop production and to a very minor extent for livestock production. A very minor portion of the available signups are related to livestock production of any kind and are normally tied to disaster declarations by the Government.
For the record, less than 20 percent of my farm land is enrolled, so this is an exceptionally minor issue for me personally. In the year of the highest sequestration rate the shortage in the annual check was less than $40. I'm what you might call a moonlighter when it comes to crop production. For farm families that are full time and fully committed to crop production for nearly their entire income that shortage maxed out at nearly $20,000 that year.
Very few of the participants here have any kind of direct stake in agricultural production so this is provided as information only. It's a minor issue for me personally. But, we are all consumers. Learning more about how things work is generally beneficial.
Thank you for listening to one of the most minor of minorities, the American farmer. Something like 1.5 percent of the population.
Holy Cow, post: 356324, member: 50 wrote: Thank you for listening to one of the most minor of minorities, the American farmer. Something like 1.5 percent of the population.
Not near as minor as surveyors -- we're around 0.014 percent of the population.
So that makes me something like 0.00021 percent.
Got my taste of the Feds intervention into our farm starting back in the 50s
Dad placed 1/4 of our farm into a program that would pay for the improvement of raw land into productive land, in this case, to reclaim weed infested crop land into a hay production.
They paid for the disc and fuel and sprigs and fertilizer and we supplied the labor.
Riding on a sprig rig behind a tractor is about like riding a shovel down a ski slope except there was a cloud of dirt and an occasional critter landing in your lap.
It provided a "meager amount" to live on afterwards, except for 10 years no livestock could be allowed on that land and no crop could be harvested.
It takes a darned good fence to keep herds of cattle out of some prime grazing lands. Our herd and all the neighboring herds.
That was when I learned that a Santa Gertrudis bull weighing over 2k pounds can sail over a fence like a deer when they get the desire and walk thru that same fence messing up 4 posts worth wire when they get that desire.
That "meager amount" was a drop in a bucket of what time, effort and expense was spent towards fence and wrangling.
So that makes me something like 0.00021 percent.
You can bump that up a little - I know of several local surveyors that farm as well. Not as rare as one would think, here at least.
Interesting and informative post, thank you.
ÛÏBut, if a plan is in place saying a certain installation is to be made by a certain date and the Government doesn't put in their share on time then the farmer ends up paying the full amount without refund once the Government has their funding back in place.Û
IÛªm getting a headache trying to figure out the above quote. (particularly "once the Government has their funding back in place")
You realize I am elderly, as you frequently reference, so forgive me in advance. 😉
Here is how it kinda/sorta works. Say a farm owner wants to build some terraces and a waterway at the bottom of them all to prevent sheet erosion of cropland on a fairly steep slope (you'll have to leave Florida to find some of that). First the waterway is constructed and planted to a mixture of grasses that will slow runoff water to a non-erosive velocity once the grasses grow to maturity. Then, perhaps a year later, the terraces are built to further slow runoff and divert it at a more gentle slope to the grassy waterway. Let's say that is a $40,000 investment and the Government will subsidize 70 percent of the cost, leaving $12,000 of out-of-pocket money from the farm owner Such installations have a theoretical breakeven at 20 years of use, which is why they would probably not get built with some level of subsidy.
But, first, the farmer must be enrolled in the basic Government programs that dictate many things. Then, once the plan is approved, there is a time table set up of when each step must be completed or the Government will pull out their share of the cost. So the construction crews go about doing what they are supposed to do on the set schedule. The farmer makes sure to find a way to set aside his $12,000 so he can pay his share of the construction invoice. Then, BAMMMMM, the Government is broke and institutes sequestration as described earlier. The contractor needs the other $28,000.....now, not six months from now. The farmer somehow comes up with the other $28,000. A few weeks or months later the Government has a new budget and money falls from the sky. Except that there is no refund to the farmer who was forced to find the critical $28,000.
Not sure exactly the program you are referring to. Any I've been involved with were either signed up with a specific percentage of cost guaranteed, or they used money from the tobacco buyout (this is Ky., money was paid by tobacco companies) which you could request with the knowledge there were limited funds and everybody might not get anything. Of course you have to meet the requirements first.
I have some acres signed up in CRP (conservation reserve program) which is tied up for 10 years at a time with an annual payment to keep it out of production. I installed a shallow water waterfowl refuge where NRCS paid a percentage. Have also received small percentages from the tobacco funds for grain storage facilities and pivot irrigation.
Crop insurance is the most effective program for saving small farms when there is a drought or flooding or some other disaster. It allows a farmer to sell crops, hopefully at a profit, at any time of the year, without the worry the crop will not be there because of some disaster.
Farming is something you can't just get into or get out of based on a single year's production. Most people probably don't realize what a long term commitment it is. A few other bits of info for the non farmers.
eddycreek,
Crop insurance can be a really good thing to have when things go bad. It can also be a complete waste of money. Different areas experience different frequencies for when it pays and when it doesn't. The fact that it is now mandatory in order to be in the program is the big problem. It should be the operator's decision, not anyone else's. The one farm where I am enrolled in the program has cost far more in insurance than it has paid me back in losses. I refuse to participate on all of my other land. Yes, I've had years where crop insurance would have been very nice but I've had more years where it would have been a total waste.
I am a very anti-insurance person at heart. You are betting that your luck will be worse than what the statistics suggest. How pessimistic can a person get?
It would be wonderful to have back all the money I've wasted on auto insurance in the past 45 years.
It would be wonderful to have back all the money I've wasted on auto insurance in the past 45 years.
You are probably required to have that car insurance too.
I started an R.I.P thread in general chit chat. Later there was a note "this thread was moved from Rest in Peace to general chit chat" what? I think maybe the software sees R.I.P. In the title and automatically puts it in R.I.P.? Not sure, but I know I started that thread in general chit chat.
eddycreek,
Yes, the vast majority of auto insurance that I've paid has been required. As a rule I haven't had a lot of high dollar vehicles over the years. The problem is that I've had up to 11 vehicles insured at the same time. Can only drive one at a time. There should be a way to pay a single fee for auto coverage and have it cover you in any vehicle you are operating. It is relatively rare that the vehicle is at fault, although it can happen.
[USER=50]@Holy Cow[/USER]
"A few weeks or months later the Government has a new budget and money falls from the sky. Except that there is no refund to the farmer who was forced to find the critical $28,000."
How convenient! Almost sounds like the "gov" sorta kinda knows when it's about to "run out of money" prior to approval of the project. Sounds like a roll of the dice to me, no wonder small farmers can hardly make it. Why don't all the farmers get together and double food prices, by God that would get some attention! 😉
Again, thanks for the post I learned something about agriculture I never new existed.
