Surviving 2001

[cowman]

For many of us 2001 has been a struggle. Prices for grain are up but volume is way down. It cost a lot of money to grow this crop and the profits are poor or non existent. The same goes for hay and although cattle prices were fairly good, feed costs will eat up most of that. I think a lot of cows are going to have to go down the road this year. This drought has been brutal and a lot of people aren't going to make it. My question is Where is our government? Is there anything they can do? Do they even care?

[sasse]

Did you see where the Western Producer has obtained a draft of the presentation of Ekos Research Associates regarding its poll of the Canadian public? When asked to decide whether to support or ignore farmers in trouble, 69% said government should do "whatever it has to in order to ensure the survival of the family farm in Canada, even if this means that we will all have to pay a little more in income tax." ... The government has not made the poll results public, although earlier this summer officials were telling some journalists that there was evidence of declining public support for farm subsidies. (Oct 11/ 01)

[cakadu]

Hi Cowman. I have just received the Western Producer that sasse referred to so as yet have not read the article in it's entirety, although it did catch my eye. What concerns me about these polls is that people will say one thing and then react in a totally different way, especially if it costs them out of their pocketbook. Numerous research studies have shown that while people say they are willing to pay more for food that is grown, processed etc. a certain way, that is not borne out in the grocery store.

It's hard to say just exactly where this government is at, but it doesn't seem like it is too willing to help producers out of what could be the beginning of a worsening nightmare. Too many of our elected representatives have no ties to the rural community and some are generations removed from being on the farm.

If you had some way to convince government to help producers, what would the help be and how would you like to see it implemented?

[ValueChainFX]

I do believe the government and or the (cough, cough) association are going to have to put some seed moneys up to change many things in the agri-industry. The key word in that statement is "CHANGE".

If a group does not get together soon and put together a system that is free of the government and associations, we shall , I predict see agriculture in Canada hit the lowest point in our history within the next five years. I believe this to be a conservative estimate in time and given the fact that no major disaster strikes, like we have seen overseas or something even worse as in the WTC disaster!

If you think I am out to lunch on this, I would be interested to know why, so I can rest easy that I was wrong in my thoughts! If you think I am right, I would like to see some of you with the experience you have (which I believe from reading your posting is great) step up and throw some ideas around!

Kick my bottom..... dollar, privately if you like .... valuechain@home.com

[cowman]

First of all: I don't have all the answers! I also believe food prices are high enough! The North American economy is based on a cheap food policy and this has made us a very robust economy. The problem is the INPUTS not the out put! What I would like to see the government do is protect us from the gouging we take from the oil, chemical, machinery and fertilizer companys. Of course a lot of the gouging is also done by the government! High taxes on everything we use, land taxes based on overinflated prices that in no way reflect the production of that land. The list could go on and on!
How about a real insurance plan that lets us make a profit? Why should everyone else get a raise every year while we get to exist with a lower income every year?
These are some ideas for the long term solution, but right now we are in a crisis due to the drought! We NEED a large cash injection NOW! Or else for a lot of people there will be no tommorrow. Where will they go? Maybe we need some help like the east coast fishermen got when their industry was ruined...maybe some help leaving the industry?
Take a look around your area...how many young people are taking up farming? In not too many years the family farm, as we know it, will cease to exist. We're like the Indians of the 1800's. The last generation of a free system!

[ianben]

Hi Cowman.
Things are bad over here in UK too.
Latest figures estimate 01 farmers income will be 97% down on 95 figure.
Profit is almost none existant and farmers are surviving by living from their capital.
I do not see government intervention as a solution. Low food prices are not low if subsidised by taxes.

We cannot operate on a different plane to other industries. There has to be some corrilation between food prices and everything else we buy.

Perhaps farmers should learn to price their goods in relation to other products.

So many Big-macs equal one steer or feedercalf. 3tonnes of wheat has the same energy value as 1000 litres of oil.

Why do we sell for less?

I am sorry but the only way I see us attracting young enthusiastic people to our industry is to find a way to regulate ourselves and provide reward for hard work.

No-one likes to work hard for a handout given at the whim of a polititian.

I am sure farmers are not the only people who have suffered because of your drought. Our suppliers suffer too.

When we don't buy they don't sell.
In the UK it is the machinery dealers livestock auctions even farming newspapers which are ceasing trading, due to farmers lack of income.

Who is to blame for their problems?

The drought/low prices or our inability to fix a higher price.
Should they get handouts too??

Our tourist industry claims it has suffered more than agriculture due to foot and mouth with no sign of government help. Why?
Tricky question definatly needs a political answer.

Regards Ian

[nakodo]

I would suggest the UK government has spoken to agriculture and tourism with their contributions.

The small amount of compensation to beef farmers and agriculture means less farms for farming and more farms for tourism and B&B outlets. Simply put tourism may mean more $ in the bank for the landowner than farming.

Secondly the use of extreme culling measures, farm and regional isolation combined with immunization. (confirm for me my beleif the government decided to use FMD immunization for the cattle, which means no more exports of beef).

If so this speaks to the desire to restore tourism $ short term versus agriculture exports in the long term.

Curious in Canada.

[ianben]

Hi nakodo
UK has not used vaccination to control FMD.
On infected farms all livestock is destroyed and they recieve value of stock.
No compensation for loss of income while without business.
Due to the severity of this outbreak after couple of months all livestock within 3miles of an outbreak was destroyed with farmers again payed value of stock only.
We have not had a case since 30Sept,fingers crossed it is nearly over.
Tourism has suffered due to the bad publicity and movment restrictions placed on the public, footpaths closed any contact with animals to be avoided.
This has meant our urban cousins have not come to counrty for holidays and weekends.
As you rightly say a double whammy for the farmer who diversified into B&B.

Regards Ian

[pandiana]

Yes! Everything you said Ianben.

[cowman]

I was talking to a farmer from eastern Alta. the other day who was selling all his cows. A fourth generation farm, a fourth generation herd. He was bitter but resigned to his fate. His son had come home ten years ago to farm. He walked away with little to show for ten years lost. Now he's back on the rigs making $100,000/yr. He'll never be back. The older farmer was going to break up his land and try to rent it out. He said his grandfather and father had made it through the dirty thirties and kept the cow herd but this was worse. In the end he will sell out and one more old time family will be gone. And Van Clief says there is no crisis?

[ianben]

Ditto here Cowman!!!
The guy who de-stones before we plant potatoes has a son,about 30 now,was real keen would make a great farmer.
Gone driving a truck,very bitter that farming could not pay his morgage and not willing to let his kids miss out.
He will not be back.
Who can blame him?

Regards Ian

[pandiana]

I was reading an article a few years back. The subject had something to do with the strategy of retaining ownership on calves I think, I can't remember the details. However, I do remember the take home lesson. Depending on the strategy, you could make a profit 8 of 10 years, 6 of 10 years of 4 of 10 years.
I can't help but wonder how many store clerks, truck drivers, business executive or lawyers would accept going without an income even two years out of ten?

[ValueChainFX]

NONE!!!! But then they do not have the generations of family behind them, the life style, and the many traits it takes to be in the agriculture business do they! That is why they are not farmers???

[nakodo]

As an economist I have a bit of a problem with saying farmers go "without income" for a period of time. As asset rich, cash poor some may be they still obtain income, at the negative impact on their asset base or against operating lines of credit or against unpaid bills whatever. I put it to you MANY independent business people go "without income" under similar circumstances and they do it with less assets using credit cards and mom and dads money at much higher interest rates and with considerably more guilt.

Lets not get too victimized here, 80 % of new business startups fail after the first few years. It is not purely a "farmers problem".

[cowman]

Nakodo: You are definitely right! And a whole lot of businesses are going to go down due to this drought. I was talking to a local machinery dealer and he says it is bad. Nobody buying because they don't have any money to buy. I suspect a lot of rural towns are going to feel the pain. I do remember him telling me once that when farmers get money(I believe it was when the feds gave out the big bucks in the 80's) they spend it. So it goes right back into the economy.
I don't know if there is a solution. I don't think governments have enough money to solve this problem. I suspect farms are going to be decimated like they were in the thirties, especially if we don't get some rain. And along with them are going to go a lot of small business people. It is a tradgedy in the making.