The farm crisis has little to do with free market capitalism per se. The
crisis is partly produced by free markets in many farm products. However
even here, at least in Canada, there remain elements of supply mangement in
poultry, eggs, milk etc. that are not free market. Also, the system is not
free market in that everywhere there are substantial subsidies. Complaints
about subsidies are really complaints that someone else has too many
subsidies as in the prattle of the Cairns group and the US about the EU.
Everyone pretends to want a level subsidy field so to speak, and ideally no
subsidies so the miracle of market efficiency can work, but this is hogwash.
Everyone wants a competitive advantage.
Cattle prices are high and cattle production is profitable just now at
least in Canada. What are the figures on profits in cattle production in the
US? It is grain farming in particular that is suffering from depressed
market prices. While there is certainly a trend in some sectors towards
making the farmer something like a sharecropper or franchisee it is not
clear that this makes the farmer more subservient or is a hedge against the
market. For example, grains are now often grown on contract with the grain
companies offering to purchase at a set price for x amount of acreage. Is
this a case of subservience or protection from the vagaries of the market?
Similarly a hog producer may sign an agreement with a packer to sell at a
set price rather than at auction.
Many of the new corporate farms, at least around here, are family farms
that have incorporated. On the other hand there are many unincorporated
family farms that are as large as or larger than these corporate farms.
There are no figures on the profits of those corporations that provide
inputs into the farming process. Some may have increased profits but I
expect others have not. Companies involved in the much criticised GM seed
and pesticide area are in a mad rush to diversify and I gather that some
large conglomerates that has obtained GM producers are considering selling
them off as a liability but Doug probably knows more about this. In any
event where there are great profits it is often the result of ensuring that
the free market cannot operate. Monopoly power produced by seed patents, GM
technology, etc. are generators of profits. But even here I expect that the
situation is mixed. THe reaction against GM food etc. has caused problems
for many firms and there are contradictory aspects involved. For example,
Roundup was a great profit maker while Monsanto held a patent but once it
has run out competition is fierce and profits will be much thinner if they
exist at all. The development of Roundup (glyphosate) resistant plants, Bt
corn, cotton, potatoes, etc. has cut down on the sale of specific herbicides
also manufactured by firms such as Monsanto. In fact pesticide use is going
down not up.
What are the profit figures on farm machinery manufacturers? When
farmers are not making money they make do with their old machinery and
implement sales fall and presumably profits as well. Or is there evidence of
price collusion?
Cheers, Ken Hanly
----- Original Message -----
From: Lisa & Ian Murray <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Friday, November 03, 2000 4:19 PM
Subject: [PEN-L:3930] The farm crisis or collectivization by monopsony
> would this be a case of corporate syndicalism?
>
> full article http://thenation.com
>
>
>
> FEATURE STORY | November 20, 2000
>
> The Last Farm Crisis
> by WILLIAM GREIDER
>
> The contemporary triumph of free-market capitalism has revealed to
farmers,
> if not to other Americans, the bitter last act in this drama. Farmers can
> see themselves being reduced from their mythological status as independent
> producers to a subservient and vulnerable role as sharecroppers or
> franchisees. The control of food production, both livestock and crops, is
> being consolidated not by the government but by a handful of giant
> corporations. While farmers and ranchers suffered three years of severely
> depressed prices at the close of the 1990s, the corporations enjoyed
soaring
> profits from the same line of goods. Growers are surrounded now on both
> sides--facing concentrated market power not only from the companies that
buy
> their crops and animals but also from the firms that sell them essential
> inputs like seeds and fertilizer. In the final act of unfettered
capitalism,
> the free market itself is destroyed.
>
> In farm country these developments are often described, with irony, as
> America's top-down version of collectivization. "It's interesting," said
> James Horne, who leads an Oklahoma center for sustainable agriculture.
"Our
> system of support payments for the farmers survived about as long as the
> Soviet system did, around seventy years. Now, here in the United States
> we're doing exactly what the Russians are undoing in their agriculture.
> They're decentralizing and we're centralizing."
>
> Farmers tend to express the point more pungently. "We're in a death
struggle
> out here, and we're getting our butts kicked," said Fred Stokes, a former
> career Army officer who retired to raise cattle in his home state of
> Mississippi. Stokes calls himself a Reagan Republican, but frequently
begins
> a statement by saying, "Now, I'm not a socialist but..."
>
> "The thing that bothers me most is the Big Brother aspect of this deal,"
he
> said. "It's clear the government is more concerned with mining big profits
> for these corporations than it is with food security or family farmers.
It's
> all about more money for a handful of guys who will be the elites. The
rest
> of us wind up swinging machetes. You talk about feudalism. This thing
makes
> farmers indentured on their own land; they're going to be the new serfs."
>
>
>
> The media's usual take on this new farm crisis is a tearjerk feature story
> that begins with a worried farm couple poring over bills at the kitchen
> table, children crying in the background; and it closes with a romantic
> elegy for Jefferson's doomed yeomanry. Too bad, but that's the price of
> progress, end of story. I intend to skip over the pathos of farm families,
> widespread though it is, and focus instead on the intricate economics of
> monopoly power and why collectivized agriculture promises ruinous social
> consequences for the rest of us. Farming, as an industry, is inescapably
> different from other sectors--since weather is always a big wild card in
> production--but the patterns of concentration and control in food
production
> provide a visible primer for what's also been under way in the larger
> economy. The same great shifts in structure and market domination are fast
> forming in finance and banking, telecommunications, media and other
sectors.
> The much-celebrated entrepreneurial spirit is steadily
> neutered--"rationalized," the players would say--by the same rush of
> mergers, acquisitions and "strategic alliances" among supposed rivals.
(See
> Adam Smith on how businessmen always yearn to escape from price
competition
> through collusion.)
>
