Problems that farmers are facing (especially Canadian farmers)

joyfulguyMarch 7, 2007

I have asked city folks how they'd like to work for 50 cents per hour sometimes, maybe a dollar, sometimes two or five dollars, occasionally ten - or sometimes have to pay a couple of dollars per hour for the privilege of going to work!

Most consider such a situation impossible, untenable.

That's about the hourly rate of pay that the farmer gets, if s/he claims a decent rate of return on his/her invested assets, usually having invested part of his income in most earlier years, to build them.

Or - if he takes decent pay rate, he gets peanuts rate of return on his invested assets.

Most/many city folks have almost nil investment in their work.

Plus, for farmers keeping animals, working 7 days a week, with no thought of any possibility of extra income for overtime work or working over 5 days per week.

And, if one of those farmers wants a vacation, having to pay a skilled replacement heavy-duty dollars to come in to look after the chores related to the animals while they go away for a short while.

And usually coming back to find that the volume of milk produced daily had gone down, or some animals sick, etc. ... do you have any idea what one has to pay a vet to visit a sick animal?

I've asked a number of town folks what they'd do if they worked at a bank/savings loan/trust co./credit union and had half a million to a million to two million invested there.

At the end of the year, the manager called them into the office, and, with a very long face (maybe even a tear or two in her/his eye) told them that the bank was having a terrible year.(1)

Anyway, the manager continued, telling the employee that in the light of the bad year for the bank, that they couldn't afford to pay the employee both his/her wages for the year and the interest on her/his money invested there.

They wanted to be as fair/generous/considerate as possible - they'd let the employee decide which that s/he'd choose to receive: their wages ... or their interest.

So - which did the employee wish to choose?

Did s/he want some time to consider?

If you happened to be the goat in such a situation - what would be your response?

Many town folk get rather upset, and say, with some vehemence in their reply, that they'd, " ... move their *^%)*& money down the street!!".

To which I reply that, yes, ... exactly ...

... and that many farmers feel the same ... so choose to sell their farm, and invest the money.

That asset usually used to be enough for the income that it produced, ...

... after paying necessary tax to every income earner's partner in crime, the income tax folks ...

... and, for the part of their asset invested in dollar-denominated asset, adding some of the current income to the asset in order to maintain purchasing power (which usually pretty well meant that there was almost nothing left to add to current living expense from that part of the invested asset) ...

... had enough income from their invested asset that they could live quite comfortably.

But many farmes have been drawing down some of their asset in recent years in order to operate the farm, and have enough to live on, meaning that they have lower assets than they had a few years ago.

Like a city person who, not making enough to live on, chewed through one of the rooms of his/her home from time to time, in order to keep alive. That is - take out a mortgage, or increase a current one, to add to current income.

In recent years, after the basic asset being eroded like that, when the farmer invests the proceeds of selling his farm, animals, equipment, etc., that he's laboured so hard to put together over the years, the income from the invested asset isn't enough to live on ...

... so he has to go to work, after retiring from the farm.

That's mainly for Canadian farmers.

European and U.S. farmers regularly receive masssive subsidies, and their governments offer export subsidies on agricultural products which enables a good portion of them to be exported, to avoid building surpluses locally ... and keep food prices low to consumers.

But the Canadian farmers have had trouble in recent years, for their government offers no such regular subsidies - just a occasional stop-gap.

Which has resulted in many of them cannibalizing their assets in order to continue to farm.

Most city folks say that such a situation would make them sick.

Some farmers are getting sick.

Some are even committing suicide.

'Nuff for now.

Have a great week - and remember - you're not the only person living in society.

Give a thought to others who share it with you, please.

ole joyful

1. Not like our current ones, who recently reported record profits: it wasn't so long ago that profit of a billion a year was a red letter year ... now it may be a billion a quarter).

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krustytopp

I worry about the future of a country that treats agriculture like any other business. We all need food to survive, and I would prefer not to have to import food from California, Chile or China when Canada has perfectly good agricultural land.

Consumers can help a bit by shopping at farmers' markets and co-ops whenever possible.

I used to work on farms as a general labourer and I know that farmers in general work very, very hard.

    Bookmark   March 7, 2007 at 6:09PM
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quirkyquercus

Now if only our cars and heaters ran on corn. Hmmpmph.

    Bookmark   March 13, 2007 at 9:59PM
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joyfulguy

It costs a lot of energy to raise a bushel of corn.

Not so smart to then process it - more energy required - into fuel for autos, homes.

Not so bad for farmers, as it may raise the prices of corn, wheat, etc.

But we need to use those foodstuffs as food.

Trouble is - millions over the face of the earth are hungry. But they don't have money - so, sorry, they don't eat.

The market rules, remember?

Takes care of all of the issues.

We could reduce the impact of HIV in Africa - or malaria, for that matter, which kills large numbers annually, mostly kids.

But many of them have almost nil money, so the drug cos. have little incentive, spend little time or assets on developing medicines for them.

For the price of a bomber or two, or a few missiles, we could develop clean and abundant water supplies for everyone ... but as it is, many rural Afican women have to walk several kilometres to collect dirty/polluted water for their familiy's use ... when their work could be more productively used, elsewhere.

It seems to me that helping people find some hope for them, remaining where they are, holds a greater possibility of reducing the numbers of people willing to become suicide bombers than does building walls, searching people massively at airports and huge other security measures - at huge cost, and of limited efficacy.

ole joyful

    Bookmark   March 14, 2007 at 5:23AM
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jrdwyer

Well said ole joyful!

I always wondered if resourceful farmers with grain and trees/wood ever set up their own stills to make alcohol to use as a fuel. Alcohol is very stable, whereas biodiesel is perishable. Many vehicles in Brazil can run on 100% alcohol. I'm sure there are farmers doing it. The government might not like the avoidance of fuel taxes.

Sadly, many high rates of return on capital come at the expense of people and the environment.

Put your money in Fund A that invests in Company B. Company B builds a factory in a third world nation with no worker protection laws and minimal pollution laws. Company B buys 'below cost' raw material from traders who source from nearby corrupt governments that pilfer their countries' natural resources at the expense of the local people. Company B makes the widget, ships it across the ocean using unregulated or dirty diesel engines, and then sells it for a nice profit. Company B's income goes up, share price goes up, and dividends go up. You achieve a 'high' rate of return on capital invested.

I believe the lower rates of return on farmland come with a much greater peace of mind.

    Bookmark   March 14, 2007 at 1:08PM
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joyfulguy

quirkyquercus,

You've heard of the space heaters, at least 18 year history, using kernels of corn, dropped a few at a time intermittently into a 5" firebox, using forced draft, that'll heat a 2,000 sq. ft. home (open concept, with good circulation and insulation) using about 150 - 200 bus. of corn (Great Lakes region) per heating season? Vented through any exterior wall - don't need a chimney. www.grainstovesinc.com
______________________________

jr dwyer

When I was a kid, local farmer had wind blow, flip part of barn roof over on to another part. My Dad and other neighbours helped get things back in shape. Later, when he was down to nil capital, bought a cow ... she died.

Sued for the money, on the morning that he was to go to court, he took his heavy deer rifle, shot two dear teen-age kids, mother-in-law, wife and self.

Peace of mind works till the capital runs out - then some put a shotgun in the mouth ...

... and put a piece of their mind on the wall of the home.

Tough life these days for many family farmers. Have you talked to any whose offspring want to farm? Or who'd recommend it to the kid?

Neighbour has had farm for sale about 3 years, a few lookers, no reasonable offers, despite several reductions in price.

Many farms for sale - few buying.

ole joyful

    Bookmark   March 17, 2007 at 7:15AM
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jrdwyer

The family farmers in my area are doing quite well right now. Most farm 750-2000+ acres of corn/soybeans and have extremely high levels of production per worker. With the price of grains being strong, there is a high level of optimism even with high fertilizer and fuel costs. There are even farmers clearing suitable forestland or buying/renting additional acreage to increase tillable acreage due to the high prices.

The level of sophistication used today by family farmers is quite amazing. One successful family farmer I have talked to sells 1/2 of his grain via futures contracts and even buys and sells machinery via the internet. He watches the grain markets all the time and knows what is going on.

That said, the smaller traditional farms without diversification have generally not been able to support a family without at least one member working a non-farm job. Plus, our government does give price supports during times of low grain prices which keeps many afloat. We also pay many landowners to not plant anything on erodible ground.

It sounds like farmers in Canada get less support than in the USA.

    Bookmark   March 18, 2007 at 12:14PM
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sharon_sd

Canadian farmers have also gone further into debt to support their "farming habit."

In the US, the average farm debt could be paid off in 4 years, if all the net farm income went into debt repayment. In Canada, it would take 25 years of slugging all farm income into debt repayment. This gap has dramatically increased over the past 10 years. Part of it is due to marketing disasters such as BSE, in other cases, it is just because farmers have felt pressured to "spend more to make more" or to spend to keep what they have.

It means that the big guys in Canada will have an easier time gobbling up smaller farm holdings that cannot hold out against their debt load.

    Bookmark   March 20, 2007 at 8:10AM
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