OT Latest on Farm Crisis

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From The Capital Press http://www.capitalpress.com/westerntext.html

Crisis not likely to end soon By Ed Merriman

"After two consecutive years of the lowest crop prices since the Great Depression, 1999 is shaping up to be another disastrous year for most American farmers and ranchers.

"With this harvest season nearing an end, U.S. Agriculture Secretary Dan Glickman made an announcement that farmers such as Eastern Oregon wheat grower Clinton Reeder had been both expecting and dreading for weeks.

"In testimony before the House Agriculture Committee, Glickman said crop prices received by American farmers are expected to range from 30- to 50- percent below the five-year average for commodities such as wheat, rice and hogs, and, for corn and soybeans, could hit the lowest levels since the last major farm crisis of the mid-1980s.

"Reeder, who holds a degree in agricultural economics from Purdue University, said Glickman's announcement means many farmers who were holding on by a thin financial thread after enduring two years of near record low crop prices, may be too far in debt to meet bank requirements for renewing their farm loans this winter.

"Glickman said flaws in the 1996 Farm Bill, which has been coming under fire from some growers and national farm organizations, are only partly responsible for what is shaping up to be the worst farm risis since the 1930s.

"That view is shared by most farmers, ranchers and other agricultural industry leaders, government officials and economists interviewed by the Capital Press for a weekly series of articles on the farm crisis beginning this week.

"After providing consumers in America and around the world with the most abundant, highest quality, safest and most affordable food supply in the world throughout the 20th Century, many U.S. ag producers face a shaky future. The overriding concern of those interviewed is that a combination of factors may be driving family farms and ranches out of America's commercial agriculture industry.

"Factors cited by those interviewed include the following:

"Deregulation and consolidation of the U.S. banking industry and financial institutions and the ensuing demise of local savings and loan banks that once kept a share of local dollars invested in local businesses and industries, including farms, ranches and food processing firms.

"Lack of regulation over sudden transfers of large sums of money by financial institutions or others from one country or region to another (such as Asia to the United States). Such transfers can depress or inflate nations' currency values and disrupt international trade.

"Record global production of many crops, coupled with weak demand in America's export markets due to depressed economic conditions in many importing countries.

"Lax government enforcement of anti-trust laws that allow giant ag companies to merge with one another, reducing competition. The resulting consolidation within the food processing, meat packing, retail grocery and other segments of the agricultural industry has reduced the bargaining power of farmers and ranchers in the marketplace.

"The farm value of each dollar spent by consumers on food has shrunk from 37 cents in 1980 to as little as 20 cents this year. Despite that decline, prices supermarkets charge consumers have soared during same period.

"Weak trade treaties that have allowed other countries to move in on America's agricultural export markets while opening the nation's borders to a flood of crop imports.

"Flaws in the 1996 Farm Bill that left farmers with little government protection against unfair trade practices and less research funding and other assistance needed to successfully compete in the global marketplace.

"Rapid spread of U.S.-developed advances in ag production and biotech in the computer/internet age, allowing countries that once imported U.S. crops to grow their own food plus enough surplus to become competitors for export markets.

"Higher costs borne by the U.S. agricultural industry to comply with environmental, chemical and safety regulations, as well as put farmers at a competitive disadvantage, higher wages and other costs borne by American farmers, ranchers and processors compared to foreign competitors."

-- marsh (siskfarm@snowcrest.net), October 12, 1999


Thanks for posting this, Marsh. So many Americans live in cities and suburbs nowadays that the farm crisis has been very underreported and ignored by the media that cater to us, the non-farm majority. We need to be reminded that most of the folks that feed us are hurting very badly right now. It is also important to note that the depression in the 30's showed up first in the farm communities in the 20's. The same pattern repeated when farm commodity prices fell far behind inflation in 1980 and the Volker Recession followed soon after, in 1981. We may all be hurtin' with the farmers next year.

-- Brian McLaughlin (brianm@ims.com), October 12, 1999.

(1) I am not at all sure that this is off track. A collapse of the farm sector of the economy was one of the leading indicators of the great depression of 1929...

(2) Preps are cheaper...

(3) By preparing, we bolster the farm prices (albeit slightly!)... Support your local farmers...

-- Mad Monk (madmonk@hawaiian.net), October 12, 1999.

Farmers...??? Who need's farmers...??? I buy my food at the supermarket. Don't you...???

-- STFrancis (STFrancis@heaven.com), October 13, 1999.

Y2k is a pipeline issue. If we'd been stocking up last year, farmers would have been planting more and prices would be up. We would have been strengthening the system, like exercising before the IronMan run. Instead we let the system drift, leaderless, lulled by John K and the like. So farmers are weaker, and we are weaker as a nation.

When people finally understand the high level malfeasances, there will be hell to pay.

-- bw (home@puget.sound), October 13, 1999.

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