NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in theAdvice on Publications Available.
Don Paarlberg, at the First National Symposium on New Crops* at Indianapolis, Indiana, in 1988 related the following story of the 'launching' of Jerusalem artichoke :
'........Beginning in 1981, the American Energy Farming Systems of Marshall, Minnesota began promoting this crop as a source of fuel alcohol, a feed, a food, and a sugar crop. Fantastic profits were indicated, up to $36,000 per acre. A thousand farmers attended a promotional meeting in Marshall........
........Farmers participated by signing a binding contract to purchase, from the company, 1000 pounds of seed stock per acre at the fantastic cost of $1.20 per pound, making an outlay of $1,200 per acre for seed alone. The company signed a non-binding contract to buy the crop, intended for seed stock, to sell to yet more farmers to plant yet more acres. There was no market for Jerusalem artichokes, except for seed stock to be sold to new participants. Nationwide, 450 farmers paid $19 million to get into the deal. In Indiana alone, 89 farmers paid in $884,000.
It was a pyramiding scheme........as long as new participants so increased in number that they paid in more money than was needed to pay off the old participants, all went well. When the number of new participants fell off, as it had to, the scheme blew up. The Jerusalem artichoke venture lasted three years - three cycles - before it perished. Fred Henderson, former vice-president and secretary of the company that marketed Jerusalem artichokes as a 'wonder crop', was sentenced to a year in jail and fined $20,000. Farmers did not receive restitution for their losses.
Perhaps some day the Jerusalem artichoke will become a profitable crop. If so, there will have to be a concerted program of research, processing, and market-building, as the Canadians have done with canola. The lesson here is that promotion alone is not enough for a new crop to succeed........'
(*Extract from Paarlberg, D. (1990) The economics of new crops. In 'Advances in New Crops' Proceedings of the First National Symposium NEW CROPS: Research, Development, Economics. Janick, J., and Simon, J.E. (Eds), Indianapolis, Indiana, October 23-26,1988, 4. Paragraph formatting added).
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Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:firstname.lastname@example.org
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originally created by:GK; latest update 6 June 1999 by: RF