Archive for September 1st, 2009

In the Long Term, Small and Local Wins. In the Short Term, Not So Much

Sharon September 1st, 2009

Several people have noted that in _A Nation of Farmers_ we spend a lot of time talking about very small-scale agriculture – home gardening, farms spread across multiple yards, very small home farms – and less time talking about farming for a living – and this isn’t an accident.  One of my standing bits of advice to people who want to become farmers is this – do it.  But make sure someone in your household keeps a job with a paycheck.

This, of course, limits the scale on which anyone can do this work – if you have to farm around your night-shift at Walmart or substitute teaching, or driving deliveries, this cuts into your time for the farm.  If you have to watch the kids and farm at the same time, because your partner is off earning the health insurance and mortgage, you are going to spend a lot more time taking people potty and getting snacks than you would if you could farm full time without kids.  So why aren’t I advising more people to farm full time?

 Don’t get me wrong – I want to see more full-time farmers.  But while in the longer term, I think that small scale agriculture is going to win, in the shorter term, Walmart and the economy are going to devour a lot of small farmers.  The trick, as you are planning your course of adaptation, is to learn the skills now, maybe obtain the land if you can get it, but hold in reserve for the time when you can make a living doing the work.  Don’t get me wrong – if you are already trying it, or called to do the work, I encourage you.  But have a backup plan – we need you, but you need to make a living.  With less than 1% of the US population involved in agriculture, the average age of farmers at 59 years old and the average age of small farmers at 65, we need, waiting in the wings, a relief force.  But we can’t pay them yet.

Had oil prices continued to rise without affecting the economy, we might have seen the gradual evolution of a local farm economy as local providers were increasingly able to compete with industrial ones.  But that, as we all know, didn’t happen.  Instead, volatlity is the name of the game – and that means that most Americans will never know, from year to year, how much basic needs like their utility bills and groceries are going to cost them.  And when price rise and jobs are lost – people stop paying premiums for their food.  That $7 gallon raw milk stops being a necessity for your family’s health and starts being a luxury, easily replaced by $4 gallon milk at WalMart.  The CSA share cost seems more and more onerous.  The grassfed meat may taste better, and be better for you, but, well….

We’re already seeing this – organic and raw milk dairy farmers are struggling just like everyone else – organic milk sales are expected to drop by 15%.  Organic food sales slowed to a 6% year over year growth last year, up from 26% the year before – still growing as of January, but expected to decline overall this year.   The truth is that people are committed to organic and local – but only so far.  And small and niche producers just plain can’t compete with larger farms with contracts.  They depend on affluent consumers who care about good food to keep going – they need people to be able to afford their food,  and to care enough to buy it.

Meanwhile Target and WalMart and the rest of the industrial producers are pulling out all the stops to convince us that their organics, their faux-local food is just about the same at half the price.  Never mind that for this food we pay twice – in agricultural and corporate subsidies, in health costs, in welfare and food stamp payments for the farmers and the WalMart employees.  The vast majority of people will, for a while, probably go back to WalMart and the rest’s milk and vegetables because they are trying desperately to get by. 

In the very long term – local food is likely to win this battle – the larger scale industrial middlemen can’t succeed in an era of high energy prices in proportion to buying power.  Their margins are tight, and higher energy costs and other factors are likely to drive them out of business – eventually.  But we’re not there yet, and their death throes are likely to be long and painful, as they devour market shares of small farmers. 

In the longer term, there will be a shift to paying more of our limited incomes for food – we’ve never paid less.  Toby Hemenway and I once discussed this, and despite some differences, we both agree we’re headed rapidly (over the next decade or so) to a life where people in the US and other rich nations spend 30% of their income on food.  But that’s a long and painful shift – one in which other costs decline proportionally, and in which a lot of people are ground between the stones of declining budgets, not enough food to go to the end of the month, and their desire for decent health and good food.

This is why I don’t spend more time exhorting people to take up full time agriculture for a living – I wish I could, since it is so desperately needed.  But my own view of the future is that a lot of farmers will be driven from their land and run out of business – we are down to less than 1% of our population farming – but my own estimate is that the crash in farmers is going to come down further still – and that believe it or no, we’ve got a ways to go.  I suspect we’ll lose as many as a half million farmers in the next few years – and I say this with great sorrow and fear.  The combination of one more economic straw on the camel’s back, aging and foolish agricultural policies are going to bring us to the brink of disaster – without the people we need most to pull us back.

So please, grow that garden, start that little farm as a side income, begin your retirement agricultural venture, and please, if you can, buy local, buy from the good guys, not the huge industrial organic farmer, but the little guy who still raising grains in your neighborhood.  Train your kids to grow food.  Learn as much as you can.  Talk to the old farmers, get to know them, help them out if you can.  Because in the end, we will need you all.  The time is coming, but it isn’t yet, and there’s hard stuff in the middle.

Sharon

Waiting for the Next Wave of Farm Bankruptcies

Sharon September 1st, 2009

Here’s something we definitely can’t afford – more farmers driven out of business.  And we’re about to get it.  The USDA projects that net farm incomes will drop 38% over last year, and 15% over the 10 year average.  While costs will drop over last year, mostly because of the decline in oil and oil-based input costs, they are still 5% higher than in 2007 – so incomes have dropped like a stone, while costs have risen overall.  This is not a recipe for good things.

These are particularly disastrous numbers for dairy farmers – who never really benefitted from the grain price boom, since so many of them were dependent on grain feeds anyway, on people who overplanted corn and wheat in response to meteoric price rises a year and a half ago,  and livestock farmers.  Where I live, a heavily dairy area, farmers are going out of business rapidly – and this follows decades of gradually losing dairy farmers. 

All over the world, Dairy farmers are facing disaster – they demonstrated in London and Brussels over falling milk prices.  In my own region, up to 20% of existing dairy farmers will face bankruptcy or foreclosure if these conditions persist.

From the Wall Street Journal, comes a painful echo of times past:

Gene Gourley, who raises 60,000 hogs every year on his farm in Webster City, Iowa, is losing as much as $30 on each hog he sells. He said Thursday that he is rethinking plans to buy a trailer for hauling feed to his livestock. “With hogs losing so much money, you’re basically burning up anything you could have saved,” said Mr. Gourley. “You just don’t have the equity to go buy new upgrades.”

In a bad year, farmers with a cushion or an understanding bank can endure disastrous prices.  In a bad decade, farmers disappear rapidly.  And we can’t afford to lose them – the idea that we can replace our agriculture with shadow farmers in other countries doesn’t add up with the reality of energy dependency, with the future of many of those regions under climate change, or with the disaster that globalization has been for everyone.

Moreover, this is how we end up in my personal nightmare – back into the disaster of the Great Depression, in which farmers overproduce, but cannot afford to sell their food, and lose their land, while people go hungry.  Think it couldn’t happen?  I wouldn’t hold my breath.  I’ve quoted this passage before, but it bears repeating – it comes from David Shannon’s collection of primary sources _The Great Depression_  – Consider this testimony given by Oscar Ameringer before Congress in 1932.

“During the last three months I have visited…some 20 states….In the state of Washington I was told that the forest fires raging in that region all summer and fall were caused by unemployed timber workers and bankrupt farmers in an endeavor to earn a few honest dollars as firefighters. The last thing I saw on the night I left Seattle was numbers of women searching for scraps of food in the refuse piles of the principal markets of that scity.  A number of Montana citizens told me of thousands of bushels of wheat left in the fields uncut on account of its low price that hardly paid for the harvesting.  In Oregon I saw thousands of bushels of apples rotting in the orchards because of the cost of transporting them to market. …At the same time there are millions of children who, on account of the poverty of their parents, will not eat one apple this winter.

While I was in Oregon, the Portland Oregonian bemoaned the fact that thousands of ewes were killed by sheep raisers because they did not bring enough in the market to pay the freight on them.  And while Oregon sheep raisers fed mutton to the buzzards, I saw men picking for meat scraps in the garbage cans of New York and Chicago.  I talked to one man in a restaurant in Chicago. He told me of his experience in raising sheep.  He said he had killed 3,000 sheep this fall and thrown them down the canyon, because it cost $1.10 to ship a sheep to market and then he would get less than a dollar for it.  He said he could not afford to feed the sheep and he would not let them starve, so he just cut their throats and threw them in the canyon.

The roads of the West and Southwest teem with hungry hitchhikers.  The camp fires of the homeless are seen along every railroad track.  I saw men, women and children walking voer the hard roads.  Most of them were tenant farmers who had lost their land and been foreclosed.  Between Clarksville and Russellville, Ark., I picked up a family.  The woman was hugging a dead chicken under her ragged coat.  When I asked her where she had procured the fowl, first she told me she had found it dead in the road, and then added in grim humor, ‘They promised me a chicken in every pot, and now I got mine.’

In Oklahoma, Texas and Arkansas I saw untold bales of cotton rotting in the fields because the cotton pickers could not keep body and soul together on 35 cents for picking 100lbs.  The farmers cooperatives who loaned the money to make the crop require $5 a bale in payment. That means 70 cents a day for a picker who can pick 200lbs, and that doesn’t provide enough pork and beans to keep the picker alive in the field, so that there is fine staple cotton rotting down there by the hundreds and thousands of tons.

AS a result of this appalling overproduction on one side and the staggering underconsumption on the other side, 70 percent of the farmers of Oklahoma were unable to pay the interest on their mortgages.  Last week one of the largest and oldest mortgage companies in that state went into the hands of the reciever.  In that and other states we have now the interesting spectacle of farmers losing their farms by foreclosure and mortgage companies losing thier recouped holdings by tax sales that could never meet the value of the land.

The farmers are being pauperized by the poverty of the industrial population and the industrial population is being pauperized by the poverty of the farmers.  Neither has the money to buy the product of the other.” (David Shannon, _The Great Depression_ 26-28)

Think farm incomes don’t affect you?  Think again.

 Sharon