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Editorial

The "New" Farm Crisis
by Frederick Kirschenmann

If anyone was still in doubt about the fact that farmers are reeling from economic stresses, the New York Times assured everyone on its front page (Sunday, July 19, 1998) that there was indeed a "new" farm crisis. But to date there has been little enlightenment about the true nature of the crisis from the media, politicians or even farm groups. Mostly pundits and politicians point to the current low commodity prices, the collapse of the Asian and Russian economies or the fact that the administration is not aggressively pushing farm commodity exports (Republicans) or that the "Freedom the Farm Act" is the culprit (Democrats). A few are even blaming the whole problem on Canadian farmers for dumping their commodities South of the Canadian border. And USA Today resorted to the tired old argument that we still had "too many farmers". (July 23, 1998 editorial page)

All of this misses a fundamental point. The current farm crisis is in fact not "new" at all. In 1993 Calvin Beal, the eminent rural sociologist with USDA pointed out that there has been a steady decline in farm numbers since the 1930's. The decline from 1930 to 1990 was from 30 million farms to 4.5 million, and the hemorrhage has not abated since. Furthermore, he pointed out that in each decade since 1950 farms have declined from between 3% to 5% per decade. Beal calls this a "free fall". Interestingly farm numbers decreased more during the decade of the 70's (wasn't that suppose to be one of the "boom" decades?) than they did in the decade of the '80's (another "crisis" decade). According to Beal farm numbers decreased by 3.1% during the '70's and 2.7% during the '80's.

Why is it important to understand this in the light of the current farm "crisis" debate? Well, the current view is that the farm economy is just fine, all farmers need to do is recognize that they are in a "global economy", learn to compete in that new arena, and they will be successful---except that farmers occasionally experience these little downturns, and so we have to either supply a "safety net" or we have to have more aggressive export activity (and/or make sure other countries play by the global economy rules) and then everything will be just fine.

Beal's statistics tell another story. Beal's picture suggests that something is fundamentally wrong with the agricultural economy. His analysis suggests that the current farm crisis is not "new" at all, but simply a symptom of a more fundamental and pervasive set of problems. In other words the problem is systemic (inherent in today's system of farming) not sporadic.

A few of the systemic problems are:
1. Our current "global" farm economic system has turned farmers into raw materials suppliers of a few specialized cheap commodities. Inherently the system is designed to oversupply these raw materials. It is the only way to insure that raw materials stay "cheap". Cheap raw materials is one of the crucial demands of the global economy. As raw materials suppliers, farmers will always have relatively low incomes, compared to the rest of the food and agriculture economy. Stewart Smith, agricultural economist at the University of Maine, made this very clear back in 1992 when he pointed out that the farm sector's share of the agricultural economy declined from 44% in 1910 to just 9% in 1990. During that same time the input sector's share increased from 12% to 23% and the market sector's share increased from 44% to 67%.

"Plant Diversity Task Force" of the University of Minnesota put its finger on the problem this past summer. They concluded that given the wheat/barley monocropping system in the Red River Valley, diseases and pest cycles are now so revved up that there is no way researchers can stay ahead of the curve, no matter how much money we throw at the problems of scab and/or other disease and pest problems. They noted at the end of the report that if this is true of wheat and barley can corn and soybeans be far behind?

2. Farmer's have been taught that yield equals success in farming. In fact Paul Thompson at Purdue University argues that farmers today operate by a single ethic--"produce as much as possible regardless of the cost". I learned my most important agricultural economic lesson from my father who always said "its not what you make, but what you spend and what you keep that counts". Unfortunately not many of today's farmers have had the benefit of that counsel. We acknowledge the highest yield producing farmers, not the highest value retaining farmers. The Corn Producers Association regularly recognizes the farmer with the highest corn yield.

Seed companies compete on the basis of the highest yielding varieties, etc. etc. Only recently has Extension begun to point out that one of the best ways to stay in business is for farmers to "contain their costs". A little late, but better than never.

3. Farmers have been taught to define efficiency purely in terms of labor efficiency. No one would argue that the industrial farms of the global economy are among the most labor efficient in the world. The problem is that labor efficiency is only one of three critical efficiency measures. Energy and capital efficiencies are at least as important to economic survival. Numerous studies have pointed out that when all three efficiencies are calculated, the industrial farms of the global economy are among the most inefficient. Most studies, in fact, show that on average the modern industrial food system consumes 10 calories of energy for every calorie of food on the table of the global economy's consumers. And of course any farmer who has recently reviewed his capital investment just to be in farming knows the system is not very capital efficient. Until we design farming systems to be capital and energy efficient farms will continue to go out of business, no matter how labor efficient they are.

4. Farmers have become specialists. The global economy operates on the basis of industrialization. Consequently to survive in the global economy farms have to industrialize. Industrialization is based on three principles---specialization, standardization and centralization. While that may work for factories it does not work for farms. Farms are not factories, they are living organisms that exist in living ecosystems. Those ecosystems are complex and farms operate most efficiently when they mirror the diversity and variety of the ecosystems in which they exist, Specialization means monocropping and large concentrations of single species animals. That invites pests and diseases that sustain high rates of loss and require expensive inputs to fight them off. The "Plant Diversity Task Force" of the University of Minnesota put its finger on the problem this past summer. They concluded that given the wheat/barley monocropping system in the Red River Valley, diseases and pest cycles are now so revved up that there is no way researchers can stay ahead of the curve, no matter how much money we throw at the problems of scab and/or other disease and pest problems. They noted at the end of the report that if this is true of wheat and barley can corn and soybeans be far behind?

All of this is not to argue that politicians should abandon their current efforts to "save" some of the few remaining farmers or that researchers should abandon the task of finding a scab resistant wheat. It is simply to warn that once they have done whatever they are going to do in this regard, they will still not have solved the problem---they will only have dealt with one of its symptoms. What is needed now, is a long term effort to identify some of the more fundamental problems and to craft long term, systems solutions. Since few politicians will line up for that task, farmers will probably have to take on the task themselves.

But lest we become too cynical, it is important to remember that Roger Johnson, ND's Commissioner of Agriculture did initiate just such a long-term systemic review of the future of agriculture in North Dakota this past winter. The results have now been published by the REC Magazine. While the document represents many political compromises, the future it proposes is worth studying very carefully.

NPSAS has been in the lead in identifying the root of some of the problems. It is also helping to determine how to implement a sustainable future. The environmental problems that led many of us to farm organically provided an opportunity to get off the industrial farming treadmill. The current economic problems challenge us to even more innovative solutions. Are we up to the challenge? I believe we are.

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