News Agricultural policy
American farmer also feels duped
American farmers are facing the worst crisis in decades. Tens of thousands of farmers have quit or are bankrupt. More than 12.000 farmers stopped working between 2017 and 2018. The farmers feel duped by the government, among other things.
That writes the influential Timemagazine. In the period from July 2018 to June 2019, the number of so-called Chapter 12 bankruptcies increased by 12%, while in the Northwest it was even 50%. Although these are bankruptcies with the aim of a restart, this nevertheless points to major problems.
Tens of thousands of farmers stopped because they know that a restart is useless. More than 100.000 farmers stopped working between 2011 and 2018. Between 2017 and 2018 alone, this number rose to 12.000. The total debt of farmers in the US has risen to $416 billion. A record. As a result, more than half of farmers have suffered losses year-on-year since 2013.
Stop family histories
The number of suicides among American farmers is also on the rise. Often this has to do with the fact that they have to stop and the pressure that an entire family history also comes to an end. “Farmers are not the only ones being replaced by technology, but they also have to leave their homes and land, which have often been in the family for generations,” writes Alana Semuels in Time.
Small farmers are particularly hard hit. In 1990 they still accounted for half of the food production in the US, now it is only 10%. As a result, the US countryside is rapidly emptying. According to farmers, government policy is aimed at increasing scale. 'Get big or stop' is the vision of various government agencies, they say.
Scaling up and globalization
The causes of the great crisis are diverse. Among other things, farmers point to globalization, which means that they have to compete with other producers who have a lower cost price. The prices for products have also fallen sharply since 2013. This includes the prices for maize and soybeans. The milk price has also been under pressure recently, partly due to the policy of President Donald Trump.
The reason for the lower prices is, among other things, the increase in scale due to technical developments† The scaling up is immense in the US. While more than 1948 million farmers stopped working in the US between 2015 and 4, total production doubled. Besides the fact that many smaller farmers are disappearing from the countryside as a result, local suppliers and buyers are also disappearing, making the situation even more difficult. It is not for nothing that there is a lot of antipathy among smaller American farmers towards the so-called 'bigag', or large agriculture.
The trade war with China is also not doing much good for the time being, because of the 25% tariffs on agricultural products from the US. As a result, soybean prices, among other things, fell sharply (as can be seen in the graph above) in the course of 2018. This has recently changed, because the Chinese government has promised to take away rates.
Help is not enough
Also government aid, worth $16 billion, is not helping enough. According to the farmers, this mainly helps large companies. Incidentally, the $16 billion isn't the only income stream that doesn't come from crop yields. About 40% of the $88 billion that farmers receive each year comes from insurance revenues and other subsidies.
This year also the weather conditions do not count† Large parts of Iowa, Nebraska and Minnesota experienced record flooding from the Mississippi as 200% more rain and snow fell than usual. Other states also had to deal with large amounts of rain and snow. This ensures, among other things, lower potato stocks and delayed sowing of winter cereals.
Anne-Jan Doorn
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