Farmers hemorage money despite inflation...why?

[WillJ8787]

Source:
https://www.farmaid.org/blog/fact-sheet/understanding-economic-crisis-family-farms-are-facing/

What is wrong with this capitalist model in agriculture?

 

[Fuzzy1975]

Source:
https://www.farmaid.org/blog/fact-sheet/understanding-economic-crisis-family-farms-are-facing/

What is wrong with this capitalist model in agriculture?

It is not a problem that is only American. Canadian farmers face many similar issues.

Though, it does seem harder for farmers south of the border.

Up here, we have kind of left the Corporate farms to supply the commodity market, and small family farms are targeting the niche food market.

 

[CornusKousa]

What is wrong with this capitalist model in agriculture?

That most of it isn't very capitalist.

 

[WillJ8787]

That most of it isn't very capitalist.

Why? Can you elaborate? I can, but I'd like to here what others think.

 

[pecksniff]

That most of it isn't very capitalist.

Most of it is corporate. Is that not capitalist?

 

[CornusKousa]

Why? Can you elaborate? I can, but I'd like to here what others think.

Most of the agricultural industry (as measured by volume of wealth and market share) is owned by "big Ag", just like your article says.

And they are heavily subsidized, coddled and given that green privilege by the government. And as also stated there are a lot of reasons for this, among them making more food more affordable for more people, It's come with it's price, namely that a dozen corporations own nearly the entire industry and have become a cartel of sorts that with all that money has solidified their control over the agricultural industry/markets. With a whole lot of "rules for thee not for mee!!" buu shit along the way I might add.

That's not capitalism. It's some new thing. A bizzare fusion of fascistic mechanics, corporate organization and socialistic intent and promotion... likely a result of globalization. Notice the inverse in China, they have left old isolationist communism for a nationalistic-socialist system that has more fascistic mechanics than communist ones. If you participate in international level economics you almost have to adopt a hybrid system that has these features to one degree or another. Maybe it's transitory, maybe it's the new model of globalization, idk. But what I am almost certain of is that future scholars will look back at this with hindsight and decades of study, give it an appropriate label, and everyone will go "ahhhh makes sense", but I don't think we currently have one that is truly appropriate for what you call what we've become.

But it's not capitalism.

Most of it is corporate. Is that not capitalist?

All corporate means is that a person or group of people working in a some endeavor can exist as a legal entity separate from the individual people themselves. More of a legal/social structural term than an economic one.

What makes them capitalist or not is what are they doing and how do they operate in that endeavor.

Capitalism is an economic system where the exchange of goods and services are voluntary, means of production are privately owned and prices are determined by a free or open market competition.

 

[LupusDei]

Indeed, it is no capitalism.

What far capitalism is... those handful oversised corporations is the logical result; their privileged status is not (and yes, that's fascism, basically). But the point is, family farm lifestyle is expensive relic that can only exist as hobby with side or specialty income or in heavily subsidized form.

Governments of all colors around the world choose to do just that, subsidie peasants ridiculously. However, not everyone understands why they do it, and what the relevant goals are, and thus it goes insanely messy. It's treated as social problem although it is not entirely, it's cultural and strategic. That it results in cheaper food for everyone is incidental.

All through human history since and where it was introduced agriculture had been the single largest employer. Until that changed. From some whatever 80% 50% of total workforce whenever it went down to some 15% 10% by the introduction of internal combustion engine already, and was at something more like 2% by the last quarter of twenty century. Since then? It's another order of magnitude decrease, if not yet then judt about. I mean, that's the number of people genuinely necessary in the industry in direct on the field jobs to feed all the rest.

In perfect capitalism there would be 99% urbanization already, everywhere.

Nobody wants that. No, not even darnest commies. Actually read darn commies absolutely LOVE peasantry, at least by declaration (how delusional they are about it is whole another can of worms), and they totally go off on forcing all those "useless" city intelligentsia types to go out on the field and spread shit by hand till death. That sickle in the flag is not for a joke, it's the pillar of politics.

And so it is in any kind of democracy. Everyone loves peasants, or should. Because they are the bearers of the traditional culture and national code, right? Wrong. I mean, they are of course, and they are extremely gullible and predictable voters to boot, but even that's incidental.

Emptying out of the countryside has real strategic and technical consequences. For all the unproportional cost of sustaining those low density countryside populations, not having them around at all is more expensive even before strategic risks are considered. You can't quite get rid of everyone there anyway, and as thinner the population becomes as more expensive it gets to maintain.

You want a certain minimum density. With incidentally is far above what modern agriculture can directly employ. But that's still is what romantic people what to do regardless how unprofitable it becomes. And that useless activity is what support the local communities and whole heap of people from the cop to the teacher and barber.

The whole food industry is huge volume, high risk, extreme small margins endeavour that's extremely fragile. Because crops fail. Because storms, floods, draughts, frosts, locusts, etc, including human own stupidity and negligence or outright malice. And it's food. God wont save you if there's ever a true monopoly.

So yes, you want those small, objectively economically unviable traditional family farms around, but not because they make direct economic sense. No, you want the cultural value, you want vital spread out communities, you want spare people with some nominal knowledge and skills around (just in case of great shit), you want the niche artisan foods, including alll the "biological" and "whole" foods bullshit for rich people, and you want your beloved gullible voters that are dependent of your whims.

But surprisingly few politicians seem to clearly understand that supporting farmers has nothing to do with real economy directly, or capitalism in any case, instead they believe their own bullshit. That leads to support mechanisms that not only are inadequate, but also directly or indirectly benefit the corporation more. Well, truth to be said, from politican perspective it's a feature not a bug because the kickbacks would come from the corporations and the farmers would remain dependent and gullible anyway.

Thus a fair and honest museum lifestyle support mechanism is so difficult, because there's little incentive to admit that's what's desired and needed. And that's definitely not capitalism.

 

[WillJ8787]

Most of the agricultural industry (as measured by volume of wealth and market share) is owned by "big Ag", just like your article says.

And they are heavily subsidized, coddled and given that green privilege by the government. And as also stated there are a lot of reasons for this, among them making more food more affordable for more people, It's come with it's price, namely that a dozen corporations own nearly the entire industry and have become a cartel of sorts that with all that money has solidified their control over the agricultural industry/markets. With a whole lot of "rules for thee not for mee!!" buu shit along the way I might add.

That's not capitalism. It's some new thing. A bizzare fusion of fascistic mechanics, corporate organization and socialistic intent and promotion... likely a result of globalization. Notice the inverse in China, they have left old isolationist communism for a nationalistic-socialist system that has more fascistic mechanics than communist ones. If you participate in international level economics you almost have to adopt a hybrid system that has these features to one degree or another. Maybe it's transitory, maybe it's the new model of globalization, idk. But what I am almost certain of is that future scholars will look back at this with hindsight and decades of study, give it an appropriate label, and everyone will go "ahhhh makes sense", but I don't think we currently have one that is truly appropriate for what you call what we've become.

But it's not capitalism.



All corporate means is that a person or group of people working in a some endeavor can exist as a legal entity separate from the individual people themselves. More of a legal/social structural term than an economic one.

What makes them capitalist or not is what are they doing and how do they operate in that endeavor.

Capitalism is an economic system where the exchange of goods and services are voluntary, means of production are privately owned and prices are determined by a free or open market competition.

Well put...I'm gonna think about what you said here for a bit.

 

[WillJ8787]

Indeed, it is no capitalism.

What far capitalism is... those handful oversised corporations is the logical result; their privileged status is not (and yes, that's fascism, basically). But the point is, family farm lifestyle is expensive relic that can only exist as hobby with side or specialty income or in heavily subsidized form.

Governments of all colors around the world choose to do just that, subsidie peasants ridiculously. However, not everyone understands why they do it, and what the relevant goals are, and thus it goes insanely messy. It's treated as social problem although it is not entirely, it's cultural and strategic. That it results in cheaper food for everyone is incidental.

All through human history since and where it was introduced agriculture had been the single largest employer. Until that changed. From some whatever 80% 50% of total workforce whenever it went down to some 15% 10% by the introduction of internal combustion engine already, and was at something more like 2% by the last quarter of twenty century. Since then? It's another order of magnitude decrease, if not yet then judt about. I mean, that's the number of people genuinely necessary in the industry in direct on the field jobs to feed all the rest.

In perfect capitalism there would be 99% urbanization already, everywhere.

Nobody wants that. No, not even darnest commies. Actually read darn commies absolutely LOVE peasantry, at least by declaration (how delusional they are about it is whole another can of worms), and they totally go off on forcing all those "useless" city intelligentsia types to go out on the field and spread shit by hand till death. That sickle in the flag is not for a joke, it's the pillar of politics.

And so it is in any kind of democracy. Everyone loves peasants, or should. Because they are the bearers of the traditional culture and national code, right? Wrong. I mean, they are of course, and they are extremely gullible and predictable voters to boot, but even that's incidental.

Emptying out of the countryside has real strategic and technical consequences. For all the unproportional cost of sustaining those low density countryside populations, not having them around at all is more expensive even before strategic risks are considered. You can't quite get rid of everyone there anyway, and as thinner the population becomes as more expensive it gets to maintain.

You want a certain minimum density. With incidentally is far above what modern agriculture can directly employ. But that's still is what romantic people what to do regardless how unprofitable it becomes. And that useless activity is what support the local communities and whole heap of people from the cop to the teacher and barber.

The whole food industry is huge volume, high risk, extreme small margins endeavour that's extremely fragile. Because crops fail. Because storms, floods, draughts, frosts, locusts, etc, including human own stupidity and negligence or outright malice. And it's food. God wont save you if there's ever a true monopoly.

So yes, you want those small, objectively economically unviable traditional family farms around, but not because they make direct economic sense. No, you want the cultural value, you want vital spread out communities, you want spare people with some nominal knowledge and skills around (just in case of great shit), you want the niche artisan foods, including alll the "biological" and "whole" foods bullshit for rich people, and you want your beloved gullible voters that are dependent of your whims.

But surprisingly few politicians seem to clearly understand that supporting farmers has nothing to do with real economy directly, or capitalism in any case, instead they believe their own bullshit. That leads to support mechanisms that not only are inadequate, but also directly or indirectly benefit the corporation more. Well, truth to be said, from politican perspective it's a feature not a bug because the kickbacks would come from the corporations and the farmers would remain dependent and gullible anyway.

Thus a fair and honest museum lifestyle support mechanism is so difficult, because there's little incentive to admit that's what's desired and needed. And that's definitely not capitalism.

Also, well put....I need to digest my Thanksgiving dinner before I'm able to think again on this.

 

[ishtat]

Most of the agricultural industry (as measured by volume of wealth and market share) is owned by "big Ag", just like your article says.

And they are heavily subsidized, coddled and given that green privilege by the government. And as also stated there are a lot of reasons for this, among them making more food more affordable for more people, It's come with it's price, namely that a dozen corporations own nearly the entire industry and have become a cartel of sorts that with all that money has solidified their control over the agricultural industry/markets. With a whole lot of "rules for thee not for mee!!" buu shit along the way I might add.

I knew that if I hung around long enough that you would eventually say something I agree with entirely.

The family farm barely exists now, where they do, they are being squeezed out by Big Ag. The same applies in the US, Canada, the EU. and Japan. Subsidies from governments have killed competition and they are backed up by substantial import tariffs and regulations. These factors have in turn, crippled numerous third world economies which cannot afford to pay their own farmers subsidies and they cannot sell profitably in the artificially subsidised market of the first world.

Food subsidies need to be reduced drastically but politicians everwhere in the world don't have the courage to even talk about it let alone do anything.

I don't want to get into an argument about the various 'isms' but it is worth noting that the Roman empire was brought to ruin by grain subsidies and the French revolution was preceded by Bread riots. Deja Vu all over again?

I have to declare an interest. I was brought up on a family farm of about 400 acres in UK. Still well run by my sister, but if she had sold up and invested in conservative stocks 20 years ago she would be worth 3 times as much as she actually is today.

 

[LupusDei]

Food subsidies need to be reduced drastically but politicians everwhere in the world don't have the courage to even talk about it let alone do anything.

Not only that, they objectively can't do anything unilaterally anymore for exactly the same economic reasons. In this game, who pay most subsidies wins, everyone suffers. And reducing subsidies is no option, because that would make domestic products uncompetitive against imports. It would have to be backed up by large import tariffs, but even if we ignore political price on that, it's not always an option at all. Else, good luck to get everyone to cut subsidies at once, and accept double or triple or more price increases on all food overnight. Talk about economic collapse and political suicide, and doing it gradually requires long term commitment and coordination that's practically impossible.

 

[CornusKousa]

I knew that if I hung around long enough that you would eventually say something I agree with entirely.

The family farm barely exists now, where they do, they are being squeezed out by Big Ag. The same applies in the US, Canada, the EU. and Japan. Subsidies from governments have killed competition and they are backed up by substantial import tariffs and regulations. These factors have in turn, crippled numerous third world economies which cannot afford to pay their own farmers subsidies and they cannot sell profitably in the artificially subsidised market of the first world.

Food subsidies need to be reduced drastically but politicians everwhere in the world don't have the courage to even talk about it let alone do anything.

I don't want to get into an argument about the various 'isms' but it is worth noting that the Roman empire was brought to ruin by grain subsidies and the French revolution was preceded by Bread riots. Deja Vu all over again?

I have to declare an interest. I was brought up on a family farm of about 400 acres in UK. Still well run by my sister, but if she had sold up and invested in conservative stocks 20 years ago she would be worth 3 times as much as she actually is today.

Food issues are historically a very dangerous things indeed.

People were fighting and in a few cases seriously hurting each other over toilet paper not long ago, imagine what happens in the cities when people haven't eaten in days.

The family farm can be done as evidenced by the many who do it, but it's very different looking than it used to. You can't compete in the generic and industrial scale stuff. Big ag owns all that, and that older model just isn't viable anymore.
You have to find/build your niche market, you have to do something special and be good at it. Which isn't always easy obviously but that's a key part of what it takes to make decent to good money in todays ag-biz landscape as an independent/family ag-biz.

The folks who just want to drive their tractors/combines around and do corn/wheat/soy same as ever because that's all they know and can't be bothered to adapt, create a new game plan for the farm?? They're out, those days are absolutely gone, you have to specialize... create a unique value added product...something extra to get that extra. Or big ag is going to grind you down.

 

[CornusKousa]

Not only that, they objectively can't do anything unilaterally anymore for exactly the same economic reasons. In this game, who pay most subsidies wins, everyone suffers. And reducing subsidies is no option, because that would make domestic products uncompetitive against imports. It would have to be backed up by large import tariffs, but even if we ignore political price on that, it's not always an option at all. Else, good luck to get everyone to cut subsidies at once, and accept double or triple or more price increases on all food overnight. Talk about economic collapse and political suicide, and doing it gradually requires long term commitment and coordination that's practically impossible.

Back to my point about globalism...this is an issue for the ag sector of pretty much every "modern" first world economy regardless of it's isms and ocracy types and background.

So how what would "fixing it" look like and how would you go about doing it??

Being related directly to the industry I can't help but see that as a very complex issue with a minefield of unforeseen and potentially very severe consequences for a lot of people. I understand the big ag scene to some extent and realize we need it.

But I also think it needs to have it's ability to just snuff out family/inde farms with their army of lawyers. We need to protect small time joints ability to do their thing because they bring a lot of value to our society/culture. I like having craft stuffed olives, beer, heirloom veggies and delicious foods available... most people do. But maybe that's just my bias.

 

[CuttingEdge]

Listening to people discuss agriculture is like a virgin describing sex...people talking about what they really don't understand because they do not live it.

For starters, farming is very unique in that we buy almost everything at retail prices, and then must sell what we produce at wholesale prices. That is a very inverted business model.

Another issue is government setting commodity prices. They do so six months in advance! I do not know what the price of fuel will be in six months, yet we are told what we will be getting paid for milk six months ahead of time, but even then, have our milk carted off, processed, consumed, and then two weeks after that date, are given a check for what the creameries THINK that milk was worth. Pretty had to argue the price when its down American's necks already!

Another aspect people do not understand is "subsidies". That is a carryover from a bygone era and its not in use much anymore. In place are price guarantees that ensure the survival of farms. Basically the government concludes what a survivable price is for any commodity, whether it be wool or milk. Anything. When the price is above that threshold, no money is given because the farmer is making money. However, if the price drops below that price, then a price guarantee is in place to ensure farmers are not going to go out of business. It is not really a subsidy...more of an insurance thing.

80% of the USDA budget goes to welfare. This really burns my carcass because there is a watch dog that lists every dollar I have ever been given for farm money by the government online, like I should be ashamed ($43,000 dollars so far), but I have yet to see welfare recipient's shamed by having their names and monies given posted for everyone to see. Kind of tough to own hundreds of acres of land, be required to manage it with specific environmental laws, and yet work in such an inverted business model that farming is. Yep, I need a little help abiding by all the rules. There is not enough profit in farming to do that on my own.

Spoiled people complain, and that is so true of American people. They complain about farmers and a "corrupt system" and yet only half a percent in this country are farmers. That means for every one of us, we feed 199 other people. That does not seem broken to me, that seems pretty damn efficient. This is especially sad when you realize just how obese we are in this nation.

Sad...

 

[ishtat]

Spoiled people complain, and that is so true of American people. They complain about farmers and a "corrupt system" and yet only half a percent in this country are farmers. That means for every one of us, we feed 199 other people. That does not seem broken to me, that seems pretty damn efficient. This is especially sad when you realize just how obese we are in this nation.

Sad...

Productivity of Farmers is not just pretty damn efficient it is extra-ordinary. The way price guarantees/subsidies/Guaranteed farm income (an EU concept) work is that they all encourage increased production which has been delivered every year for the last 50 at least. But there is no commensurate reward for that increased production. The consumer is having his/her cake and eating it. The productivity has been delivered but the market is stuffed for the primary producer.

Specialization may be a local or smaller scale solution but I cannot see any way at present out of the price/income support/subsidies syndrome because politicians with a 2/4 year focus will not take the risk of un-gluing their backsides from the legislative bench. America, Canada, UK, Europe, Japan, the same everywhere.

 

[JohnnySavage]

Farming is a hard life. In my area most of the farms are Amish and Mennonite. They aren't part of BigAg, but they have a local growers coop that sell directly to locals. Beef, Lamb, goat, dairy, corn, beans... and everyone grows garden veggies.

I try to buy farm to table as much as I can because those guys work there ass off and I'm happy to pay a bit more to support them, and I like knowing where my food came from.

 

[bellisarius]

Listening to people discuss agriculture is like a virgin describing sex...people talking about what they really don't understand because they do not live it.

For starters, farming is very unique in that we buy almost everything at retail prices, and then must sell what we produce at wholesale prices. That is a very inverted business model.

Another issue is government setting commodity prices. They do so six months in advance! I do not know what the price of fuel will be in six months, yet we are told what we will be getting paid for milk six months ahead of time, but even then, have our milk carted off, processed, consumed, and then two weeks after that date, are given a check for what the creameries THINK that milk was worth. Pretty had to argue the price when its down American's necks already!

Another aspect people do not understand is "subsidies". That is a carryover from a bygone era and its not in use much anymore. In place are price guarantees that ensure the survival of farms. Basically the government concludes what a survivable price is for any commodity, whether it be wool or milk. Anything. When the price is above that threshold, no money is given because the farmer is making money. However, if the price drops below that price, then a price guarantee is in place to ensure farmers are not going to go out of business. It is not really a subsidy...more of an insurance thing.

80% of the USDA budget goes to welfare. This really burns my carcass because there is a watch dog that lists every dollar I have ever been given for farm money by the government online, like I should be ashamed ($43,000 dollars so far), but I have yet to see welfare recipient's shamed by having their names and monies given posted for everyone to see. Kind of tough to own hundreds of acres of land, be required to manage it with specific environmental laws, and yet work in such an inverted business model that farming is. Yep, I need a little help abiding by all the rules. There is not enough profit in farming to do that on my own.

Spoiled people complain, and that is so true of American people. They complain about farmers and a "corrupt system" and yet only half a percent in this country are farmers. That means for every one of us, we feed 199 other people. That does not seem broken to me, that seems pretty damn efficient. This is especially sad when you realize just how obese we are in this nation.

Sad...

And then there's the taxes, especially when the landowner dies. Some relief had been given there but not a lot. Compare that to the corporate land holdings, a corporation never dies so there is never a taxable event.

 

[Champakian]

In an inflation, those closest to it are the first (and usually the only) ones to benefit.

The "farmers" [sic] are not the first to benefit from inflation, but rather the last.
They had to pay on old dollars and get paid in dollars of less value
and cannot drastically raise prices because their customers
are usually even farther down the line of inflation
"beneficiaries."

Now, who is closest to the inflation?
The investor class?
Banking?

 

[colddiesel]

Farming is a hard life. In my area most of the farms are Amish and Mennonite. They aren't part of BigAg, but they have a local growers coop that sell directly to locals. Beef, Lamb, goat, dairy, corn, beans... and everyone grows garden veggies.

I try to buy farm to table as much as I can because those guys work there ass off and I'm happy to pay a bit more to support them, and I like knowing where my food came from.

Those folks have a neat specialization: the product and the co-op are both owned by the church (a charity which pays no tax) They then give the producers a living allowance and retain any untaxed funds under the charity umbrella. Don't suppose they are paying proportionately less tax than the big guys. It's a sort of mini scale communism but it works for them.

 

[CornusKousa]

Listening to people discuss agriculture is like a virgin describing sex...people talking about what they really don't understand because they do not live it.

Says the soft handed city boy who's never spent a day on the farm in his whole life.......

 

[JohnnySavage]

Those folks have a neat specialization: the product and the co-op are both owned by the church (a charity which pays no tax) They then give the producers a living allowance and retain any untaxed funds under the charity umbrella. Don't suppose they are paying proportionately less tax than the big guys. It's a sort of mini scale communism but it works for them.

They also own construction companies and the subcontracting companies. The tax thing is a bit of a scam, but they do great work and they do it fast.

My peeve is that they drive tractors all over the county with no tags, no registration, no insurance. The whole family stuffed in the cab with no seat belts... But all in all, they are good neighbors.

 

[HisArpy]

Why is it no one can read the tax code?

It has these things called deductions and business expenses. If you have them, you can shelter profits and claim that you actually "lost money" and owe no taxes.

Smart companies use the tax code to reduce their tax burden. Stupid people think that paying more in taxes is "smart" and wonder why farmers hemorrhage money.

 

[pecksniff]

Governments of all colors around the world choose to do just that, subsidie peasants ridiculously. However, not everyone understands why they do it, and what the relevant goals are, and thus it goes insanely messy.

Thomas Jefferson's idea was that only a nation of yeoman farmers could be truly free -- because such are independent, even of the market economy, because they can produce their own food.

There's something to it. My mother grew up on a farm, and even during the Great Depression, her family never went hungry.

 

[Comshaw]

And then there's the taxes, especially when the landowner dies. Some relief had been given there but not a lot. Compare that to the corporate land holdings, a corporation never dies so there is never a taxable event.

You do realize that you just made a very good argument that corporations should pay more taxes don't you? Your argument highlights the fact that tax laws are constructed for the most part to benefit corporations and those who have the money to play the game of "hide the profits" when it comes tax time. Most family farms don't have enough loose capital to play that game, while corporations do.

As far as the "death" (oh my god! For shame!) tax, congress could if they wanted exempt farms from it. So far even the Democrats, although they decry the loss of family farms, haven't taken steps to do that.

And no, before you say it, we DO NOT need to do away with the inheritance tax entirely. Most of those who are subject to that tax have plenty of capital on hand to pay their fair share and not be hurt by it. And "fair share" doesn't mean proportionate to one another either, nor should it be weighed that way. It should be judged by how much each benefits from public services. A retail business that uses the roads, sewers, water and electrical infrastructure should pay more than a farmer who uses only a small part of what the retail business does.

Comshaw

 

[BidudeinWi]

It is not a problem that is only American. Canadian farmers face many similar issues.

Though, it does seem harder for farmers south of the border.

Up here, we have kind of left the Corporate farms to supply the commodity market, and small family farms are targeting the niche food market.

Nobody gives AF what happens in Rocky and Bullwinkle land. Third world country at best, eh!