Denial, denial, denial

[jensend]

free markets are one thing; the type of capitalism in north america now is another. confusing the two leads to invalid assumptions and conclusions. maybe the type of capitalism in the usa now is why it is weakening.

[charliep]

Perhaps you could post the NFU study for everyone to
look at. Would interested in their results.

Found the following. Is this what you are referring?

[URL="http://www.nfu.ca/"]nfu[/URL]

[oneoff]

Thankyou charliep. I admit I didn't do my research as I ran across that "750 billion and no return except government subsidies" in the Western Producer front page story a couple of weeks ago.
Here is what I,ve found so far:



Statistics Canada data shows that despite farm production totalling $722 billion in value over the
past 25 years (nearly three-quarters of a trillion dollars), Canadian farmers’ net income from the
markets (with farm support payments subtracted out) has totalled less than zero. Due to a
grinding farm income crisis, over the past 25 years, 100% of farm families’ net income has come
from farm support programs, off-farm jobs, and loans.


Here is a bit more of where it came from and the authors analysis: quote

"How a Corporate Farmland Buy-up,
Rising Farm Debt,
and Agribusiness Financing of Inputs
Threaten Family Farms and Food Sovereignty
(or, “Serfdom 2.0”)
A report by Canada’s National Farmers Union
June 7, 2010
Outline of a problem
The land on which our food is grown is, to a significant extent, owned by local citizens and
the families who work that land. This family farm model is widely supported—by farmers
and non-farmers alike. But this model is under serious threat of extinction. And the issue
goes beyond mere land ownership: the core issue is one of autonomy and control—ensuring
that the men and women who produce our food have stable, resilient bases from which to
make good, long-term decisions for their farms and for our food systems. This stability and
long-term thinking can lead to superior environmental outcomes, more prosperous
communities, and the inter-generational transfer crucial to our family-farm model. In
working to ensure autonomy and control, the aim is not farmer “independence,” but rather
healthy interdependence—the farmer as an integral part of his or her family, community,
region, and nation. Our farmers are stewards who need to be free to react to the needs of
their soils, animals, families, and neighbours as much as to the dictates of markets, bankers,
or agribusiness. If corporations or wealthy investors take control of our land and farms, our
food systems and ecosystems will be seriously damaged.
Our traditional model of farmer autonomy and control and local land ownership (and the
national food sovereignty it supports) is currently threatened on at least three fronts:
1. Non-farmer foodland buy-up, a.k.a. “land grabbing.” In countries around the
world, including Canada, investors, corporations, and foreign entities are buying up
farmland. Canadian farmers, financially weakened by an ongoing farm income crisis,
are easily outbid for land by corporations and by investors looking for safe financial
havens in uncertain economic times.
2. Farm debt. Current Canadian farm debt is massive, and rising. For each net income
dollar farmers earn, they must shoulder, on average, 23 dollars in debt. Burdensome
debt distorts the way farmers make decisions—forcing many to focus less on the soil,
Losing
Our Grip:
Page 2
the future, and nature, and more on short-term cash flow. While farmers may retain
the titles to their farms, as debt snowballs, they cede control and autonomy.
3. Input financing by agribusinesses and investors. Corporations are financing an
increasing share of farmers’ seed, chemical, and fertilizer purchases. In one version
of this arrangement, it appears that some grain companies are financing crop inputs,
and also requesting (or requiring) contracts that bind farmers to deliver their crops in
the fall to the company that supplied the inputs and financing. In another version,
investors “participate” with the farmer by providing operating capital, then taking a
portion of the crop at the end of the year.
As farmers owe more and more and own less and less, and as farmers are forced more into
the arms of corporations and investors, farmers lose control of Canada’s farms and foodland.
And as autonomy and ownership are taken from our farmer citizens, Canadians lose their grip
on their food system. This report examines exactly who is taking control of our land and our
food system, and it explores policy options to retain citizen control and food sovereignty." unquote

My opinion is that few people will have read this far because they noticed the word NFU. Pity. and petty too. Unless and until we can all learn to tolerate both sides of a debate (and especially the truth and shades thereof) we will never grow and prosper without predatory feeding off one another's mistakes and misfortunes.
Personally I can't see what is wrong with the NFU view on this subject. And no I am not an NFU member; but I can't see where they are wrong on this issue.

[charliep]

I would be extremely cautious in aggregated data. Does this
include dairy programs? How is a farm defined? Does it include
lifestyle farmers? Farmers with significant outside income and
no intention of full time farming. Perhaps increasing debt levels
is a outcome of an industry in transition as older farmers exit
and new businesses enter or existing ones expand.

No doubt farming is an extremely difficult and challenging
business as demonstrated in full life this year. I would argue
that farming has provided many families a good living and
opportunity to prosper. Many I am willing to bet participate in
this website. Not every farmer has lost money ever year in the
last 25 years. Not every farmer is going broke today.

[charliep]

For what it is worth, StatsCan is presenting to ARD this week on farm
financial structure. Not sure if the same study. Can include some of the
key points in a posting later in the week.

[FarmRanger]

I used to read NFU press releases when I was younger and wanting to learn everything about farming I could. Exposing all the 1/2 truths, propaganda and flat out lies was fun at first, but it got tiresome after a while.

Charlie is right about aggregated data, a lot can be hidden in there, and conclusions drawn that don't follow the what real data says. If they still operate the same way, that's probably the case with this release too. A healthy dose of skepticism would be in order at any rate.

[LWeber]

http://www.oecd.org/document/27/0,3343,en_2649_33773_45538523_1_1_1_37401,00.html

OECD report.

[checking]

Unless you are only interested in your own personal situation; it is the aggregated data that gives the best glimpse of the overall big picture. You can not extrapolate individual circumstances to detemine estimates of overall averages; but you can combines large numbers of unselected examples to get some idea of how the majority are doing.
It is a great disservice to all those doing their best; but doomed due to a variety of factors; as well as those who have failed and wisely moved on to; to say that things are pretty good. They are for me; may be for you; but neither of us are any help to the many who are struggling with current problems; let alone the future problems that will be even greater challenges for every last farmer.
Charliep I ask you to think about your valid comment about supply management subsidies possibly being included. Thats a very valid point; but when you think about it; if these subsidies are distorting the Western Canada situation; it means that not only Western farmers didn't make anything from their farming production in 25 years; they must have been well in the hole; on average.
To repeat if you are analying the economic health of farming you must look at aggregated data. To do otherwise is to distract from the big picture by dwelling on relatively easy isolated examples of extremes that don't fit anywhere near the average levels.

My guess is that farmers are in debt up to their ying yang. Some of those old debts got paid off in the past; and those assets are what makes those persons relatively financially secure. Combined with those that didn't get caught with 24% interest rates (a generation ago or those financianing with unpaid credit card balances today); those who had grain and production to sell the couple or three times it was worth a killing in the last 25 years; those who may have inherited assets and money; those whose wife provided the income at crucial times; those who though management and good luck managed to avoid the majority of major blunders and mistakes that are in the farming minefield; those who timed their expansions and changes though a combination of good luck and management decisions; and those who who worked with their neighbors and families for the overall benefit of all parties...... all these can certainly contribute to building a prosperous farming operation. But if no new people want to carry it on in the next generation..... THEN MAYBE THERE REALLY IS A PROBLEM (S).

[charliep]

Here is a website with Statcan financial data. The study referred to seems to be a pay for data one.

[URL="http://www.statcan.gc.ca/subject-sujet/result-resultat.action?pid=920&id=3953&lang=eng&type=CST& pageNum=1&more=0"]farm financial statistics[/URL]

I note the average farmer (2009) has about $1.58 mln of assets, $300,000 of debt and $1.28 of equity.

[oneoff]

Larry Webers link shows that 17% of Canadian farmer's gross receipts from 2007-2009 came as "producer support".
Unfortunately; as charliep has pointed out; this is aggregated data and should be viewed with great skepticism. Another poster hints that readers should be wary of what anyone says (I guess the NFU in particular).
Nevertheless there is such a thing as corroborating evidence. Seventeen percent of Gross farm receipts is a substancial figure. The accountants among us should be able to determine if this equates pretty closely to a conclusion that any profit in farming comes from such things as government subsidies.
Then the next step is for some crow eating.