I think thats only a minority of cases where land grows arid and is sold and this arid land is also valuable enough where homes can be built and immediately sold. I've lived in areas on the suburban/rural boundary and its not really like that. The farms are very productive, its just a suburban tract with homes starting at 400k makes a lot more money than a soybean harvest so when a developer comes a knocking farms are eager to sell. The children don't want to be farmers like their parents, they want capital for investment in other ventures and are happy to exit the farm business. Around these new housing tracts fields are still being plowed and harvested because the soil is still productive.
Plus with modern agriculture its hard to get arid land unless you are broke and cant afford fertilizer. Plants need nitrogen, phosphorus, and potassium. they will grow in a cup with some inorganic gravel or on a pile of rusty screws or in some pocket lint if you put these three things in water.
Is that because they didn't know what they were doing or because they saw the writing on the wall and planned their exit?
Low margin industries tend to have a lot of things that are done "wrong" by the calculations of the clipboard warriors that dominate online discourse because said calculations tend to assume constants for things that should are variable (like the regulatory situation, state of technology in an industry or rate of progression therof) and assume amortization timelines that are unrealistic. When your margin is razor thin it often makes the most sense to do things in a manner that's non-optimal on paper but yields guaranteed returns today. Do that every day and you stay in business. You might make less money in the long run but you aren't taking on risky capital investments or boxing yourself into a risky corner with inflexible business practices.
There are two metal recycling yards local to me.
One is part of a chain, run by a subsidiary of a public company. All they do is scrap metal and they are highly efficient at it. Things are clean and run by the book. The facilities are orderly. The machines are new. You can't scrap a car, a street sign, or anything else that's suspect without giving them all sorts of ID. On paper, they do everything right.
The other one is a 150yo family own business. They do scrap metal but have a handful of other income streams using the same facility (everything is for sale, basically). I don't think they have a single tool or piece of equipment that was made this century. The facility is always overflowing with piles of various materials that come and go in no apparent order. Their workplace safety is fine, but absolutely rife with tiny things they could get fined for. They pay their employees crap and make up for it with perks (free lunch every day, free fuel oil in the winter, can use company trucks and facilities for personal projects with permission, etc). I'm pretty sure you could scrap a stolen cop car there if you brought it in the same day that the full train cars of processed material go out. On paper all this is wrong. The clipboard warriors would have a field day making it "better"
Guess who weathered the pandemic with nary a slowdown and guess who couldn't retain staff or keep their machines running and cut back hours?
What builds the resiliency in the latter compared to the former?
If it's "turning a blind eye to regulations" that leads to follow-up questions. Is the intent of the regulations that are not appropriate? (i.e., the requirements are wrong?) Or is it that the former is inefficient about implementing the requirement? (i.e., the process is bad). Both of those have fixes that are outside of the dichotomy proposed in your post.
The by the book business isn't hiring young people and teaching them how to drive heavy equipment. If their employees felt exploited they'd have problems retaining them.
I think their employees care more about the perks and the fairly laid back work environment than they care about all the fire extinguishers on the property having an up to date tag. I know I did back when I worked those kinds of jobs.
>fire extinguishers on the property having an up to date tag. I know I did back when I worked those kinds of jobs.
This is a problem with how you're thinking about low probability events. Yes, rules only matter when the low probability event occurs. Do you, for example, not care about up-to-date A&P logs on the aircraft you fly in as well?
I'll be the first to admit that regulations can go beyond what should be considered an acceptable risk, but we have to at least acknowledge the risk they are meant to mitigate before determining if it's a reasonable regulation. That often involves understanding the consequences of low probability events, something we're usually not good at thinking about very well on a day-to-day basis.
> If their employees felt exploited they'd have problems retaining them.
That is not usually true. Lots and lots of people feel exploited by their employers, yet stay in their jobs. Generally, they have financial obligations, need money and benefits, and jobs aren't so easy to replace.
The family scrap yard is hiring able bodied young men and training them to drive heavy equipment (which they then presumably slap on their resumes). I know they get free lunch and (used/questionable) fuel oil/diesel because I've discussed it with an employee (last July/August or thereabouts). Based on the demeanor of everyone there it seems like a great place to work if you don't mind working outside and a fair amount of physical labor. I don't know what they're paid but all things considered it's probably crap. They wouldn't be hiring highschoolers if the pay was good. Considering how permanent some of their employees have been over the years despite being at an age where one is typically "leveling up" quickly.
I feel very comfortable saying they're not exploited.
I don't have the same visibility into the "corporate" yard because I only go there when I have to (they are only closed Sundays and federal holidays) and they have organized their workflow to keep their customers at arms length.
What do you conclude? How does one person's perception of one example impact the overall issue?
> Based on the demeanor of everyone there it seems like a great place to work
If you mean it is your family scrapyard, I will suggest that many employers have formed that impression - often mistakenly (myself included!). I've heard it many times. My favorite was someone who told me how people loved working there and they didn't have the absurdities so common in business. Then we were walking around the cubicals, and it was observed how many Dilbert cartoons were posted.
I meant it is a family business, not my family business. Like their website has a picture of their ancestor hauling a boiler on a cart pulled by a team of oxen and it's currently run by two brothers of the same last name and the same name as the business (so I think it's a safe bet it's still in the same family). The point was to contrast it with BigCo that has MBAs writing the rules and shareholders it's accountable to.
I do a substantial amount of business with that yard (and less of the corporate one, because they won't sell material and are generally way higher friction to do business with) and it looks like a very fine place to work. But this is also coming from someone who has worked in adjacent low margin industries so I have no delusions of ping pong tables in the break room.
To reiterate what I said before, they're taking young able bodied men who are willing to do physical labor (this is a demographic that can basically find new jobs at will, you can't really trap them in a shit job) and teaching them marketable skill. The fact that those employees don't just turn around and get a different job with that skill says something about the value proposition of working there.
Is it really so unbelievable to you that a business can not follow the letter of the law and not treat people like crap at the same time?
I find it completely believable, and I suspect that such practices make up some kind of norm for generational family businesses. I've known many California restaurateurs that behave this way.
Farms fail all the time for a variety of reasons, but even successful farms can be less valuable than suburban residential subdivisions. If the farms in question were further from the city, better farmers would buy/rent them and the land would be productive again.
If the farms in question were further from the city, better farmers would buy/rent them and the land would be productive again.
1. You are assuming "better farms" have the capital and will available to purchase the land.
2. Just because a competent farmer purchases the land does not make the land arable. It could take decades to undo the damage from improperly cared for land.
I am assuming a functioning market for farmland. As I have observed over several decades, and my father and grandfather observed for much longer, the market for farmland is brutally efficient. (Insufficiently-regulated monopsonies arrange society so that their inputs are as cheap as possible.) Lots of rural land lies fallow, and much of that has ruined some poor farmer who tried to grow or graze ground that wouldn't pay him back. My point is just that while we can draw that conclusion about empty fallow ground, we can't draw it about ground that currently sees more remunerative use than farming.
I don't think we can really know anything for sure about point 2 for hypothetical internet discussion agricultural ground. It is probably true that some land has been so damaged, but it is also possible for farmer B to have better results than farmer A on the same land. This is possible even if they are in some sense equally skilled and capitalized. It doesn't rain the same every year...
When someone wants to sell a field the real estate agent will ask for copies of the forms you submitted for government insurance, and other forms of proof of that it yielded. you don't have to give this, but it is a red flag to most farmers (not all farms collect this data, they are not worth as much). Giving incorrect information is fraud.
Of course there is always information asymmetry, but farm buyers are aware of it. In most cases the buyer already lives in the area, so they know just be driving by over the years what really happens.
He may also just be working the land of let's say Bill gates and not care much for it's longterm potential. I feel like a lot of us in this thread are just throwing guesses out there.
One of the problems goes back to the reason cities are where they are to begin with. People settled where the farming was best. More people came to join them, the farms became settlements, the settlements towns, and the towns cities. Now all our best land has been paved and farmers are out trying to grow stuff on land that previous generations passed over as not sufficient.
Cities cannot be supported by the farms nearby and must be located near an easy place to ship goods. That was water for most of human history, until the train happened.
Small towns happen all over because of farming reasons, but even then access to trade was a consideration, but only secondary to close to farms. (which is to say if there was good farm land far from any way to trade there will still be a town someplace - you see this more with mines as mineral often are in places that are difficult to get to by trade, while farm countries implies enough water which implies rivers)
Much of their formerly-arable land became un-arable and is today made entirely of sprawling tract homes.