On how the NFU approached the UT economists about doing the study…

“We’ve been talking about doing it for at least a year. We got more specific early this year when funding was discussed and the kind of issues that would be put under study.

“We had to do some work on the modeling side. Over the years, the modeling system has been used for number of things. The policy tools that the NFU wanted to put under study hadn’t been used in for many years. So, we had to do some work to ensure everything was (in order).

“Darryl (Ray, head of the UT Agricultural Policy Analysis Center) and I speak to various NFU groups every year. For instance, last January, I met with farmers in Texas to look at policy options including the elimination of direct payments, basically the elimination of LDPs, and the issue of where to set the loan rate so it provides a stable situation for farmers but isn’t capitalized into land and Monsanto profits.”

Why Monsanto is a concern in such a scenario…

“Monsanto has been clear that they take some large percentage of the gain their technology provides and leaves a smaller amount of gain for the farmer. It their technology increases the farmer’s yield by five bushels per acre, they figure out what the value of that is. They then capture what they believe is their rightful share of that gain.

“Obviously, the greater the commodity price, the more valuable that five bushels per acre will be and the greater Monsanto’s charge. That can end up not helping the farmer but means more money transferred to a supplier.

“What we want to do is stabilize farm income without increasing land or supplier costs. That involves a delicate issue of determining, in this policy, what the loan rate should be.”