The Farm Crisis (60.63 kB)

Glamorous excess is a staple of the mainstream media, even in its economic reporting. Stories about soaring corporate profits, exorbitant CEO salaries, improbably high stock prices, and the billions made by obscure dot-com start-ups so dominate the news that one could easily believe the globalised economy is making everyone (else) rich. But high-flying winners are the exception in today’s economic casino, and no-one is losing out more than small farmers.

In country after country, farmers are said to be in ‘crisis’, a word that only hints at the devastation besetting rural communities. In Europe 200,000 farmers and 600,000 beef producers gave up agriculture in 1999. UK farm income has dropped by as much as 75 percent over the past two years, driving more than 20,000 farmers from the land. British farmgate prices for virtually every commodity — including beef, lamb, milk, pork, chicken, eggs, oilseed rape, fruit and vegetables — are so low that farmers are getting less for them than they cost to produce.

American farmers are doing no better. Farm income declined by nearly half between 1996 and 1999, with farmgate prices so low at the end of 1998 that pork was selling for barely one-quarter of the farmer’s break-even price. The US Department of Agriculture (USDA) estimates that this year’s price for major commodities like cotton and soybeans will be the lowest in more than 25 years. With elections looming, even politicians are taking notice: Vice President Al Gore admits it’s “the worst crisis our farmers have ever experienced…. The whole farm sector of our economy is on the verge of absolute bankruptcy.” This economic disaster is translating directly into human suffering: suicide is now the leading cause of death among American farmers, occurring at a rate three times higher than in the general population.

Since farmers and farm workers are the economic linchpins of their communities, entire rural economies are in decline. In the UK, for instance, 90 percent of rural businesses were forced to lay off staff last year. Rural economies in the US also depend heavily on farmers: when 235,000 farms failed during America’s mid-1980s farm crisis, 60,000 other rural businesses went down with them.

Statistics like these represent an acceleration of trends that have been underway for generations. In the North, where rural populations have been declining since the end of World War II, villages and small towns are being sapped of vitality, and many of their social and economic institutions are simply disappearing. Today, four out of ten parishes in rural England have no shop or post office, six out of ten no primary school, and three-quarters no bus service or health clinic. In the US, where only 1.5 percent of the population still lives on farms or ranches, it is not unusual to find places like McPherson County in Nebraska, which has lost two-thirds of its population — as well as 19 post offices, 58 school districts, and three entire towns — since 1920.

If rural communities in the industrialised world are under siege, their counterparts in the South may be even worse off. In China, for example, the modernisation of agriculture has already led to the uprooting of more than half the rural population in the last two decades. In the coming years, economic forces will pull so many Chinese from their villages that 600 new cities will be required to handle the rural exodus, according to China’s Vice Minister of Construction.

The global economy has been equally ruthless with farmers in other parts of the South. Pastoralists in West Africa have been displaced by cheap meat imports from Europe, while Indian farmers that grow traditional oilseeds like sesame, linseed, and mustard are being driven under by soya imported from America. Mexican beef producers are losing ground to US producers, whose inroads into Mexico’s markets have tripled since NAFTA was ratified. In Ladakh, a region in which 90 percent of the population is in agriculture, traditional barley staples are being displaced by Punjabi wheat and rice trucked over the Himalayas. One Ladakhi farmer wondered “what will happen in the future, now things are changing so much? Will we need farmers or won’t we?”

It is not surprising that farmers, connected as they are to an immobile landscape, suffer in a globalised economy that subsidises mobility and rewards those with no allegiance to place. Today’s economic ‘winners’ include investors who scour the planet for the highest return, moving capital from country to country at electronic speeds; corporate middlemen who make use of subsidies, currency swings, and ‘free trade’ agreements to profit by transporting everyday needs — including food — many thousands of miles; and transnational corporations that locate wherever they are offered tax breaks, cheap labour, and lax environmental and workplace rules — and then move on when a better deal is offered elsewhere.

Farmers, however, can’t simply pull up stakes and move their farm. (The exception, of course, is the factory farm: more factory than farm, it is in no way rooted to the soil.) Once they are hooked into the global economy, farmers are easily victimised by an economic and technological juggernaut that systematically destroys the smallest and most localised enterprises. Nonetheless, the precise aim of agricultural policy almost everywhere is to pull farmers into an export-led global economy that is likely to be their undoing.

Expressions of concern over the plight of farmers notwithstanding, most policymakers are so wedded to their economic assumptions that they are unable to acknowledge how disastrous the globalisation of food has been for rural communities. US Agriculture Secretary Dan Glickman, for example, casts about for some ‘natural’ explanation for the plight of farmers: “It’s almost like all the plagues of the world have hit these people…. natural disasters, floods, droughts… a fungus, a disease…”. UK Agriculture Minister Nick Brown, on the other hand, blamed farmers themselves for a price drop last year that left lambs so valueless that some producers were abandoning them at animal shelters.

Even when the negative impact of the global economy is acknowledged, policymakers perversely prescribe more of the same as a remedy: they call for expanded export markets, lower trade barriers (particularly in other countries), improved ‘productivity’ through higher technology, and — in a rare moment of honesty — fewer farmers.

What the framers of farm policy must know, however, is that the very structure of today’s global economy is fatal for the small farmer. Not so long ago, each region offered numerous economic niches for small, diversified farms, which provided the wide range of products nearby consumers needed. The globalisation of food, on the other hand, impels every region to specialise in whichever commodity its farmers can produce most cheaply, and to offer those products on global markets. All foods consumed locally, meanwhile, must be brought in from elsewhere.

The highly specialised farms this system favours are most ‘efficient’ when they are large, monocultural, and employ heavy machinery. Attaining the scale needed and the equipment required can drain the capital reserves of all but the biggest farmers, saddling the rest with a debt burden few can escape. Eventually, small farms are driven under, their lands consolidated into those of the largest and wealthiest farmers.

What’s more, monocultural production leaves crops highly prone to devastation by pests and diseases. In 1970, for example, a blight spread quickly through America’s vast maize monocultures, destroying more than 10 million acres of corn. To keep unstable monocultures like that alive, massive inputs of chemicals pesticides and herbicides must be deployed. Along with their environmental and human health effects, these off-farm inputs siphon away a large portion of the farmer’s income.

The continual need to purchase the latest equipment, the most potent chemical inputs, and the highest-yielding seeds places farmers firmly on the ‘technological treadmill’. Advances in technology may raise single-crop yields, but it often lowers the farmer’s net income: capital expenses, debt service, and production costs eat up a higher proportion of the farmer’s proceeds, while overall increases in output merely cause the price of global commodities to drop. In the US, for example, factory farming techniques — including carefully controlled heating and lighting, specially-formulated feed, and heavy doses of antibiotics — enable the average poultry producer to raise 240,000 birds each year; but after expenses this prodigious (and inhumane) production earns the farmer only $12,000, or five cents per bird. Such technological ‘advances’ typically do nothing to help farmers, but are boon to the manufacturers and marketers of the technologies.

Meanwhile, the global economy’s emphasis on ‘free trade’ often forces farmers into competition with producers in countries where costs are lower due to more favourable climate and geography, lower labour costs, or less stringent environmental standards. Farmers are pressured to become still more ‘efficient’ by increasing the size of their farms, becoming more narrowly specialised, and adopting newer technologies. The treadmill speeds up, and farmers inevitably fall further behind.

Dependence on international export markets also leaves farmers vulnerable to losses from exchange rate fluctuations and economic slowdowns in distant parts of the world. The immediate causes of Britain’s current farm crisis, for example, include the relatively strong pound, which allowed imports to flood the country at prices below the British farmer’s cost of production, while diminishing the foreign demand for British agricultural products. And in the United States, nearly one billion bushels of grain — half the nation’s harvest — found no market in 1999, largely because the Asian economic slowdown reduced the demand for US farm exports.

Farmers in the South face similar problems. Those still embedded in a local economy can feed their families with their diversified production, selling the remainder in local markets. But those who have been drawn into the global food system must specialise their production for export, using the income to buy food. A farmer in South America or Africa can easily be destroyed by a recession in Europe or a bigger-than-expected harvest in Asia — events over which they have absolutely no control. Meanwhile an increasing proportion of the newly-‘modernised’ farmer’s proceeds must be used to pay for equipment and inputs, placing them, as well, on the technological treadmill. The smallest, least capitalised farmers cannot afford those inputs, and are eventually pushed out of agriculture altogether.

Another detrimental effect of the globalisation of food is the immense power global corporations have accumulated. The marketing of food to consumers, for example, has increasingly shifted from independent shopkeepers rooted in a community, to huge supermarket chains whose virtually identical outlets colonise rural economies. In the UK, each out-of-town retail development built by 1992 corresponded with the closing of roughly 10 independent shops in villages and high streets. During the 1990s, some 1,000 locally-owned food shops — grocers, bakers, butchers and fishmongers — closed each year. In Italy, the story has been the same: the arrival of superstores known as ipermarcati have resulted in the demise of 370,000 small, family-run businesses — including half of the country’s corner groceries — since 1991.

Overall, food corporations are taking an ever-increasing share of the price people pay for food, while the farmers’ share keeps shrinking. In the UK, for instance, the food and catering retail price index has risen 50 percent since 1987, while the price that farmers receive has actually dropped by 3 percent. In the US, only 21 cents of every dollar spent on domestically produced food goes to farmers, while the remaining 79 cents goes to corporate middlemen and marketers.

Vertically-integrated corporations now monopolise almost every aspect of farm production and distribution — from seeds, fertilisers, and equipment, to processing, transporting, and marketing. Through its ownership of grain elevators, rail links, terminals, and the barges and ships needed to move grain around the world, one company, Cargill, controls 80% percent of global grain distribution. Four other companies control 87% of American beef, and another four control 84% of American cereal. Five agribusinesses (AstraZeneca, DuPont, Monsanto, Novartis and Aventis) account for nearly two-thirds of the global pesticide market, almost one-quarter of the global seed market, and virtually 100% of the transgenic seed market. Control over food has become so concentrated that in the US, 10 cents out of every food dollar now goes to one corporation, Philip Morris; another 6 cents goes to Cargill.

With corporations firmly in control, farmers hooked to the global economy have been reduced to little more than serfs in a corporate feudal system. This metaphor is nowhere more appropriate than in the US hog and poultry industries, where Continental, ConAgra, and Tyson effectively dictate the prices farmers will receive. According to Joel Dyer, author of Harvest of Rage, farmers find it impossible to raise hogs or poultry without agreeing to “terms that are the equivalent of the farmer becoming a hired hand on his own land”:

“Many hog and poultry farmers no longer own any animals. The farmers get the chicks and hogs from the multinationals. Even the grain the animals are fed is provided by the company. At the end of the season, the full-grown animals are trucked to the company’s processing plants where they’re weighed. After rating each farmer’s performance in pounds, the company deducts its charges for the chicks or hogs, feed, transportation, and any other services or products it supplied, such as propane to heat the buildings. If there’s anything left over, the farmer is compensated. The only thing that the company allows the farmer to own are the heavily-indebted buildings and land where the company raises ‘its’ animals.”

The US government’s own figures show how costly this monopolistic control is to farmers: the USDA estimates that corporate concentration in the beef-packing business alone costs the nation’s cattle producers $10 billion a year in revenues. With only a small fraction of the price of food going to farmers, a season of hard work can easily leave them with just enough to pay for inputs, farm labour, machinery, rent, and interest on their loans. Those that don’t earn enough to pay those costs soon lose their farms.

Many dispossessed rural people are coming to understand the broad systemic forces that are undermining economies and entire cultures the world over. But the mix of hopelessness and anger, particularly in America’s economically-broken heartland, has made others susceptible to right-wing conspiracy theories that blame rural woes on racial minorities, Catholics, immigrants, a ‘Jewish banking conspiracy’, or a world government run by the UN and policed by swarms of black helicopters. Like the high rate of suicide among farmers, tragic incidents of violence in Waco, Oklahoma City, and elsewhere should be counted among the costs of agricultural ‘progress’.

As with other aspects of the global economy, the trends cited above are neither ‘natural’ phenomena nor inevitable, but follow directly from the policies enacted by governments:

• Global trade in food has been greatly facilitated by ‘free trade’ agreements, which treat efforts to protect small, local producers as ‘barriers to trade’ which must be eliminated. These treaties benefit only the transnational corporations that have come to dominate world production and trade.
• Massive taxpayer-funded subsidies for transport infrastructures — including multi-lane motorways, bridges and tunnels, high-speed rail lines, harbours, shipping facilities, and airports — make long-distance trade in food seem artifically ‘cheap’. In the US, where the transport infrastructure is as extensive and sophisticated as anywhere in the world, the federal government is earmarking another $175 billion for ground transportation projects aimed at “improving access to markets worldwide”. Other infrastructure requirements for industrial production and global trade in food — like instantaneous global communications facilities and centralised energy infrastructures — are similarly subsidised. One estimate of the benefits received by US corporations alone from subsidies and externalised costs is $2.4 trillion annually.
• Government-sponsored agricultural research and development rarely addresses the needs of small farmers for local markets, but instead focuses on technologies that benefit the largest farmers and corporate agribusinesses. A mechanical tomato picker developed at public expense by researchers at the University of California, for instance, greatly reduced labour costs for the large farms that could afford the machine’s initial cost. This one technology helped to consolidate California’s 4,000 tomato farms into just 600 in about a decade. And the deservedly maligned ‘Terminator’ technology — which renders seeds infertile in the second generation — was developed by a private corporation in partnership with the US Department of Agriculture.
• Ignored environmental and health costs — from the air pollution and greenhouse gases that accompany fossil fuel burning for transport, to the cancers and birth defects from pesticide use on industrial farms — similarly deflate the price of food from the global system. In the US, for example, 80 percent of adults and 90 percent of children have measurable concentrations of pesticides in their urine — just one of many indications of the long-term health costs of a system of agriculture hailed for its ability to produce ‘cheap’ food.
• Subsidies to farmers, which are routinely attacked as a trade barrier when provided by another country, generally support the largest farms — including corporate farms — far more than small family farms. Roughly 80% of the farm subsidies given by the UK government goes to the biggest 20% of its farmers, a ratio that describes EU and US farm subsidies as well. In any case, a high proportion of government support comes in the form of export subsidies, which does nothing to help farmers that sell to local markets.
• Regulatory regimes — particularly those that aim at protecting public health — are needed largely because of the hazards of industrially-produced foods and long-distance transport, but place a disproportionately heavy burden on small producers for local markets. One small abbatoir operator in Britain, for example, recently had six health inspectors on hand while attempting to slaughter forty sheep. Six inspectors may be necessary to oversee the huge industrial meat-packing plants which are the source of most bacterially-contaminated meat, but they can make it virtually impossible for a small processor to operate. Another typical example is the regulatory obstacle to selling raw milk in the US. Such sales are illegal or highly limited in most states, meaning that dairy farmers have no choice but to sell their milk to processors at whatever price they are offered.
• While health regulations severely limit the viability of small farmers and producers, governments routinely give industrial practices with potentially catastrophic health implications the green light. In the US, numerous pesticides known to be carginogenic are permitted to be used on food crops, and genetically-engineered foods were allowed to permeate the US food supply even though serious questions about their health impacts remain unanswered. Government support for this particular corporate-controlled food technology is so pervasive that the US Senate designated January 2000 as ‘National Biotechnology Month’. The vote was unanimous.
• The monopolistic control of food — though patently illegal — is largely ignored by regulators, often in the belief that large scale is a necessary prerequisite to ‘competitiveness’ in the global economy. For example, the US Justice Department’s anti-trust review of the pending purchase of Continental Grain’s commodity merchandising division by Cargill, the world’s largest grain trader, has elicited loud objections from individual farmers and a wide range of public interest groups concerned about Cargill’s monopoly power. Those comments were summarily dismissed by the government, and the sale is being moved forward.
• Government policies actively encourage a reduction in the number of farmers in the name of ‘efficiency’, a policy summed up in the US Secretary of Agriculture’s famous call to farmers to ‘get big or get out’ of farming. Farms are still being consolidated in America today, even though close to 4 million small farms have disappeared since 1935.

Though policymakers go to great lengths to support and promote the global model of food production and distribution, a fundamental shift in direction would bring significant environmental and economic benefits. Rather than specialise their production for export, farmers could instead be encouraged to diversify their production for local and regional markets. More localised food production and marketing systems would be far more diverse than today’s homogenised global system, and would more closely reflect the geographical, climatic, and cultural diversity of the places where food is produced and consumed. Since a greater proportion of the food people eat would be locally produced, ecological niches for food production would be matched by the economic niches farmers need to survive.

While the ideal ‘local food system’ may consist of small, diversified farms selling directly to consumers, the reality is that most often a mix of local, regional, national, and international production would still be available. The goal would not be to put an end to all trade in food, but to avoid transporting food thousands of miles when it could instead be produced next door.

Such a shift would help revitalise rural economies decimated by the global economy. Less money would be skimmed off the price of food by corporate middlemen, and far more would remain in the hands of farmers. This would be particularly the case with the direct marketing of food via farmers markets and farm stands, box schemes and other forms of community supported agriculture.

If farmers were not impelled to specialise their production in a few global commodities, the trend towards ever larger and more highly mechanised farms would abate. Since small farms use a proportionally higher amount of human labour than mechanised inputs — UK farms under 40 hectares, for example, provide five times more per-hectare employment than those over 200 hectares — a return to smaller farms would help bring back some of the 700,000 farm jobs the UK has lost during the last half-century of agricultural ‘progress’.

Small shopkeepers in turn would be more able to survive if corporate supermarket chains selling the homogenised products of the global food system were not so heavily subsidised. Just as small farms create jobs, small shops provide more employment for the same amount of goods sold than do their corporate competitors.

Localised food systems would also be far better for the environment, in large measure because the ecological toll of needless food transport would be eliminated. Within the global food system, ‘food miles’ are immense: today, the food on the typical American family’s dinner table has traveled some 1,500 miles on average, and is thus ’embedded’ with significant amounts of transport energy, pollution, and greenhouse gases.

Not all this transport can be explained away by the greater availability of ‘exotic’ foods, since countries are often both importers and exporters of the same product. In 1996, for instance, Britain imported 47 million kilogrammes of butter, while exporting 49 million kilogrammes. Unnecessary trade of this sort benefits only the speculators and agribusiness corporations that take their cut every time food changes hands.

If policies encouraged farms to serve local, rather than global, markets, their production would be more diversified. A region with nothing but monocultures — like the many-thousand acre wheat fields of Kansas — can produce huge amounts of a single crop for global markets, but people need more than one or two foods. Diversified production is inherently more stable than monocultural production, and would reduce the need for herbicides, fungicides, and pesticides, thereby lessening the health and environmental damage they cause.

Perhaps the most fundamental ecological cost of the global food system arises from the way it systematically induces people to abandon diverse local goods — including their food — for the narrow range of monocultural products marketed by transnational corporations. There is no better example of this than the effort by Nestlé and other food corporations to convince Third World mothers that breast milk — the most ubiquitous and healthy of local foods — is inferior to the powdered version those companies sell. The same principle is being applied to virtually every other product, as people are made to believe that “imported equals good, local equals crap”, in the words of an advertising executive in China.

Manipulating people around the world to prefer the homogenised products of the global food system may be good for fast-food corporations and agribusinesses like Archer-Daniels Midland — the self-proclaimed ‘Supermarket to the World’ — but for the planet as a whole it is an unmitigated disaster. It should be clear by now that the earth can neither supply the resources for nor absorb the wastes from even a small percentage of the world’s people eating frozen TV dinners in their suburban homes, or driving their sports utility vehicles to McDonald’s. Promising the rest of the world’s population that they can and should do likewise — the implicit message of economic globalisation — is little short of criminal.

More sensible and responsible by far would be to promote patterns of food distribution that reduce food miles, that facilitate smaller-scale, decentralised markets, and that encourage greater dependence on locally-available foods.

Originally published in the June 2000 issue of The Ecologist magazine.

By Steven Gorelick