Why is the soil disappearing from the farms

Farm death the American way - small farms in need

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Dr. Olaf Zinke, agricultural today
on Wednesday, June 24th, 2020 - 6:07 pm (comment now)

Not only in Germany are the small farms struggling to survive. In the US, a third of small independent farms could go bankrupt this year because COVID-19 makes their lives even more difficult.

This is according to a survey by the Stone Barns Center for Food and Agriculture in New York. The survey found that more than 35 percent of small farmers recorded an average decline in sales of over 51 percent in March and April compared to the by no means good previous year, as no sales were possible at restaurants or at farmers' markets.

But even before Corona, the small US farmers were under massive economic pressure. Because: Big is obviously beautiful in America. When US Agriculture Secretary Sonny Perdue spoke to affected farmers about tariffs and low prices at the World Dairy Expo in Madison, Wisconsin last fall, he said, "What we are seeing now are economies of scale in America - big farms are getting bigger and bigger small ones go out. "

And Perdue adds: "With high capital requirements and all environmental regulations, it's very difficult to survive milking 40, 50, 60 or even 100 cows, and we've seen it."

The big ones swallow the little ones

Even before the outbreak of the coronavirus, farmers in the US were affected by falling food prices, bad weather and the trade war with China. "We've had a record number of farm bankruptcies and total debt is $ 425 billion - a record high. At the same time, farmer incomes have fallen by about half since 2013," said Eric Deeble, political director for National Sustainable Agriculture Coalition (NSAC), an organization that supports small and medium-sized family businesses.

Apparently, a "perfect storm" of factors led to the recent crisis in US agriculture. After the boom years at the beginning of the new millennium, prices for raw materials such as corn, soybeans, milk and meat began to fall massively from 2013 onwards. Responsible for these falling prices are, according to the NSCA, the same forces that burden most of the rest of the American economy: new technologies and globalization.

New technologies have made farms more and more efficient. However, economies of scale meant that most of the benefits went to farmers who built larger and larger holdings with the purchase of smaller farms. Although four million US farms disappeared between 1948 and 2015, total agricultural output more than doubled.

In addition, globalization made farmers dependent on exports and flooded the market with growing supplies at falling prices, criticize the farmers' organizations. According to John Newton, chief economist at the American Farm Bureau (NFB), global food production has increased 30 percent in the past decade. "If this is a good thing for feeding the world, it also reduces what comes back to farmers because their costs do not come with prices," it continues.

Farmer: With your back to the wall

What do you do when you stand against the wall and just don't know which direction to turn? "Says John Rieckmann, a dairy farmer from Wisconsin with 45 cows. He's been through all kinds of ups and downs - droughts, Floods, oversupply of milk that caused prices to fall, but he has never seen a crisis like this.

The dairy farmer owes roughly $ 300,000 to keep the farm going. There are weeks when the entire milk check needs to be used towards the monthly mortgage payment. According to the Americans, the family farm still exists like on holiday greeting cards. But these farms have been taking for years, says Riekmann.

Farm bankruptcies rose 12 percent in the Midwest from July 2018 to June 2019. In the northwest they have increased by 50 percent. Tens of thousands have simply given up farming knowing that bankruptcy restructuring will not save them.

The country lost more than 100,000 farms between 2011 and 2018. Around 12,000 of those between 2017 and 2018 alone.Farmers aren't the only ones in the American economy displaced by technology, but when they lose their jobs they are also displaced from their homes and the land that has been in their families for generations .

"It hits hard when you feel like you are losing the legacy your great-grandparents started," said Randy Roecker, a Wisconsin dairy farmer.

Agricultural policy mainly helps the big ones

Smallholder supporters say this development is also due to agricultural policies, which have encouraged farmers to set up bigger and bigger farms if they want to stay in business. But while 91 percent of U.S. farms are small - defined by the federal government as having a gross income of less than $ 250,000 - the large farms generate 85 percent of the country's agricultural output.

The corona crisis has already had a devastating impact on agriculture in the United States. In a report released by the NSAC in mid-March, it was estimated that small farms saw a $ 689 million decline in sales from March to May this year due to Covid-19.

Under pressure from the NSAC and the National Farmers Union (NFU), Congress has worked to alleviate the plight of smallholders under the $ 2 trillion Coronavirus Aid Act (CARES). The amount was to go to "producers who supply local food systems, including farmers markets, restaurants and schools." However, small farmers struggled to gain access to facilities as they appeared to be ineligible for the Small Business Administration's emergency loans.

"Rescue funds mainly go to the big farms that produce soy and grain and sell them in commodity markets," said John Peck, managing director of Family Farm Defenders, an organization that supports smaller farms. "All of this is part of our country's agricultural policy, in which we generally subsidize capital-intensive, large-scale industrial agriculture."