FOS denied a display booth at Crop Production show in Saskatoon

[cowman]

Steve: When auto sales are down what does General Motors do? Do they store their cars in Oshawa? Do they cut prices? What does OPEC do when prices fall? They cut production, just like GM! Now I don't say I have any idea behind what the organizers Of FOS have in the way of morals or motives or whatever, but isn't that what they are proposing? Cut production? And with the laws of supply and demand wouldn't this work?
I guess in the really big picture this wouldn't really solve the problem of world hunger but it would put some cash into our pockets. And maybe then we could be in a position where we could help the needy? I guess what the bottom line is...how can we help others when we are broke? You have to realize we need all segments of society to contribute.
TOM 4 CWB: You've got it right!

[ianben]

I must admit the FOS idea would not be my pefered solution and I don't think it could ever be got to work in practice.

Now the grow and store idea of Steves,I believe could be hammered into a workable solution if we all had the confidence that prices were stable.

Pity confidence doesn't come in cans.

Higher prices here, more food left in third world countries with people able to afford to buy it is all it would take

Charity is a hard thing to accept.
Lets find away to to reward people their work. We must not give them food but the money to pay for it.

Find a way to reduce those dollar debts
Carbon credits call them what you like but dont ruin their markets by giving food.

[fosman]

Hi Bob
Thanks for the heads up on this thread. Yes FOS did apply for a both in plenty of time and both times we applied we got a letter stating that the idea our group is promoting does not fit the criteria of the show.
There has been some excellent discussion on our group and goals and I would like to respond to some of it. As "Cowman" has said, no industry can survive producing full out indefinitely. Supply and demand rules every other industry, but somehow farmers think that they are exempt. In every other industry, when the market says by low prices or lack of sales, "you are producing too much", the industry or producer listens to those market signals and curbs production. But every farmer knows that if he cuts back his own production it will make no difference in the big picture. That is the reason for FOS's existence - to give farmers the ability to corporately listen to and respond to market signals to keep their farms and industry viable.
FOS is a very reasonable plan having farmers in at least 5 major exporting nations cut their production by 1/3 for one year for a total of approximately 8 billion bushels. This scale is important - it must be big enough to affect price for 2 years (including the previous year) yet not so big as to adversely affect consumers. We are concerned with the poor, but as someone has said low prices don't help the poor. Our research out of poorer countries actually shows that higher prices would greatly benefit their farmers and their economies.
We believe that you must cut production because increased prices do two things: curb consumption and increase production. If you just withhold selling to increase price you will cause these things to happen as well - only you will have a huge inventory to dispose of and when you do, you will push prices even lower than they were. (eg. Brazil with coffee, Australia with wool, NFO's holdbacks)
We certainly appreciate input and even criticism with this organization. We just hope that farmers get all the facts before you pass judgement.

[fosman]

PS because we weren't accepted into the Crop production show, we decided to have an open forum on solutions for agriculture at the Travelodge in Saskatoon on Wed Jan 9 at 2:00, for farmers to come out and hear more about FOS's and others' solutions to the ag problem. We are also hosting a presentation by Al Weishar from Lexington, Il. on how Brazil's production expansion vs. US subsidies will adversely affect grain and livestock prices for the long term unless we do something about it. Al has toured Brazil extensively over the last 25 years. This presentation will be given at the Travelodge in Saskatoon on Wed Jan 9 @ 7:00, Thurs Jan 10 at the Capri in Red Deer @ 1:30, and Monday Jan 14 at the Community Hall in Oak Bluff (Winnipeg) at 1:00.

[Steve]

The FOS’s idea is based on farmers working together to increase the price of grain but the biggest reason it will not work, because they are asking farmers to pay money up front. They also want to pool the money to buy grain on the commodity market worth billions and there may be a fox handling the account.

Here is a much better way to increase the price of grain to a profitable level, if we can get the farmers to unite and there is no money to be paid up front or any other time.

All the farmers should use these marketing practices;

Grain Pricing Orders.

Only Sell on the Futures market if the price is right.

Hedge only if the price is right.

Do not buy bases contracts because you still have un-priced grain on the market.

Store some grain if the price is not profitable.

If you have too much grain in storage you cut back on productions on your own.

All farmers have to cooperate for this system to work and it is not any different than the FOS’s idea about unity.

The big difference in my theory is we don’t need the fox watching our money buying large blocks of grain to resell at a later date.

I would rather store grain in my bin, than take my land out of production and trust the other guy to give me some when I have none to sell.

[fosman]

Steve
Thanks for your input. It is only because of input like yours that we have been able to make improvements to this program getting it to where it is today.

But let me make it clear that FOS is not run by any one person but is a non-profit organization run by duly elected farmer directors in each country that it is operating in.

As far as collecting money up front - if farmers are waiting for someone else to pay to turn around their industry and make their farms more viable (ie. governments, input companies, grain companies, magic genie) they are sadly mistaken. FOS has a one time membership of $250 to do two things: pay for the costs of researching and promotion of the idea, and to measure the commitment of farmers.

As far as the second step goes, it is hard for anyone to argue the idea that we must reduce production to see an increase in prices (especially with Brazil's expansion of 1-2 million acres of new land each year and US subsidies encouraging American overproduction.

But, for farmers to cut even 1/3 of their production - they cannot afford to do so unless they get paid upfront. We know that if we are well organized we should be able to move the markets the year in advance of the cut if they know it is coming. This would make the previous years harvest tremendously valuable. The $15/ acre that would need to be collected up front would be used for two purposes: like you said to buy futures contracts and physical grain to make farmers extra return to make up for the cut but more importantly as a compliance mechanism. If farmers commit to cutting production the following year and prices double the fall before, you must have some way of guaranteeing that they keep their word. So farmers that cheat would lose that money that they put up.

A voluntary program cannot work because no one would have the confidence in it to get involved. But a program where there is reward for complying and a penalty for cheating will work. See our website at focusonsabbatical.com for more info.

Thanks