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Article: Farm Income Crisis
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Farm Income Crisis - Jon Radojkovic
Even though gross farm incomes have steadily increased since the 1950's, unfortunately the average farmer's net income, the money in hand, has been dropping dramatically to the point where now, farmers are losing, on average, about $16,000 per year.
"Without improved stability for farm returns, rural economies are destined to continue their downward spiral - it's a message we repeat on a regular basis," said an Ontario Federation of Agriculture article in December.
So how are farm families surviving? Well, for the past 20 plus years, according to Agriculture and Agri-Food Canada, 100 percent of farm family households income has come from off-farm sources, including government subsidies and off-farm employment. In other words, most farmers have not made a penny farming in the past 20 years except from outside jobs and taxpayer subsidies. This is worth repeating: Farmers have not made a penny farming in the last 20 years.
"This is not the way we want to farm," has been said over and over again by many farm organizations, most recently by National Farmers Union of Ontario president, Don Mills.
It's not as if farmers are not contributing to the economy, being the second largest business in Ontario after the automakers while furnishing $686 billion in food supplies over the last 20 years across Canada.
What is disturbing to some farm organizations is that Ag Canada is not acknowledging the farm income crisis, even to the point of denying it.
"There is no farm income crisis: that's the view of Minister of Agriculture Chuck Strahl and his Agriculture and Agri-Food Canada (AAFC) staff," said the Winter edition newsletter of the NFU. "This is both bizarre and shameful in its disconnect from reality," the newsletter surmised.
But recently, without really pointing to a farm income crisis, a standing committee of the AAFC has begun to recognize rural poverty. "The rural poor are, in many ways, invisible. They don't beg for change. They don't congregate in downtown cores. They rarely line up at homeless shelters because, with few exceptions, there are none.... Canada's rural poor have rarely been the subject of political attention," wrote the Federal Government's Standing Senate Committee on Agriculture and Forestry last month in their interim report.
There are currently 2,834 farms in Grey County and 2,345 farms in Bruce. The average government subsidy brings farmers income to about $5,000 above the loss line plus another $12,000 in off farm work puts a farm family's average income to about $17,000. Still well below the poverty line and this with two jobs (the farm and off-farm).
The farm income crisis can be called by another name now: the rural poor.
Geri Kamenz, OFA's president, says his farm organization has been working on having rural poverty recognized by Ontario politicians and is trying to link agriculture's deep demise as an urban problem as well, since farming contributes so much to the Ontario economy. "We have detailed the impact of rural poverty on the entire economy - that agriculture is also an urban issue," Kamenz said.
But where is the average gross farming income of $140,000 going?
"Ontario agriculture continues to suffer an income crisis due to international subsidies, border closures, corporate concentration, rising costs and commodity dumping," said the OFA newsletter.
The USA and European Union continue to subsidize their farmers creating low world commodity prices which Canadian farmers have to deal with, as our subsidies are only 20 percent on average of the other two.
Border closures affected beef farmers, especially locally during the BSE crisis, which saw cattle prices fall by more than 50 percent, resulting in a huge loss of equity for farmers, because they were subsidizing their own farms by borrowing against their property and equipment values. The border closure still continues for Canadian cattle over 30 months of age.
Meanwhile corporate and banking profits have soared in the past 20 years and especially recently. Imperial Oil posted a record $2 billion profit in 2004, nitrogen fertilizer giant Agnium Inc. had a $359 million profit, chemical giant Dow Chemicals posted an astounding $3.6 billion profit, DuPont, owner of Pioneer Seeds had a $2.3 billion profit, veterinarian drug leader Pfizer showed an incredible $14 billion profit, farm machinery leader Deere & Company had a $1.8 billion profit, and every major Canadian bank had a t least a $2.2 billion profit for 2004. Even though this was one of the worst income years for farmers across Canada, and especially beef farmers.
Of course the rising costs of inputs, such as what the above corporations provide, accounts for some of the massive profits as well. Finally commodity dumping is a known factor in Canada, such as wiping out garlic growers a few years ago because of absurdly low priced Chinese garlic, and recently even apples. A senior Ministry of Agriculture official was recently quoted as saying, "if you can't compete with imported apples, should you be growing apples?"
And if Canadian farmers shouldn't be growing apples, or corn or many other commodities because they can't compete with world prices then the NFUO president Mills may have the last word. "Much of Ontario's picturesque countryside may take on a new appearance this year. The usually orderly-looking fields with rows of corn and other crops may become barren or weed-infested because farmers have no money to plant crops and no desire to keep losing money when they do plant crops."
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