THE EVISCERATION OF RURAL AMERICA

By Jim Miller

The evisceration of rural America over the past 100 years or so has proceeded on several fronts, some simultaneously. There is light at the end of the tunnel and it isn’t a train. Skip to No. 13 below.

1. Industrial Drain:

Over the past 100 years, the youth of the town have gone to college or moved to the industrial cities in search of “a better life”. This “cheap” labor has been expropriated to build the Industrial Machine. http://www.ruraleship.org/content/pdf/ordeval.pdf “Cheap labor” remains the family members supplemented by legal and illegal migrants from Mexico and other impoverished countries.

2. Generational Shift of Assets

As the farmers and ranchers die, their assets are most often distributed to the next generation who have moved away, established themselves in jobs and a family elsewhere and have no need or intention of continuing the farming or ranching enterprise of their parents. Those lands often pass in to the hands of residential developers or other buyers who change the use of the land. http://www.ruraleship.org/content/pdf/ordeval.pdf

3. Tax Bite

Typically, the farm passes to the next generation at a time when the circumstances require that it be sold to pay the federal and state estate taxes. The tax bite removes assets from the control of the next generation even if that generation continues the farming or ranching enterprise. Because of the cash requirement, land is sold at less than current value and the continued farm enterprise is strapped for cash for years to come. The replacement cost of adding new farm land later after the tax bite, is typically much more expensive than what was sold, thus making such purchases uneconomic or, if bought, severally impacts profitability.

4. Consolidation

Farming has not been profitable since WWII, for most family farms. Retirement, bankruptcy, divorce, crop failure, drought, and death have all speeded the transfer of assets to large, Agri-corporations, managed from the polished desks in our major cities. The mega-agribusiness operators do not typically support local enterprises in a town. Due to the size and sophistication, the corporate owner buys direct from the factory and uses low paid, hired manager and farm works to produce the crops.

5. Mining the Soil

The use of industrial chemicals to foster high production fits well with the mentality of the mega-agribusinesses. Industrial Insecticides, pesticides, herbicides, fungicides all destroy the viability of the soil by killing the soil savers – the micro-organisms which feed the plants.
The focus of much corporate farming is in the production of comedies where large crops are produced by large, expensive machines operated by few workers. Bio-dynamic farming has been around for centuries, but only in the past 30 years has it “taken root”. The clamor for quick results and quick profits has kept bio-dynamic farm management on the periphery of food and fiber production.
Walters, Charles, Weeds – Control Without Poisons; Acres, U.S.A., Austin, TX, [ed. 1999] Sheaffer, C. Edgar, V.M.D., Homeopathy for the Herd - A Farmer’s Guide to Low-Cost, Non-Toxic Veterinary Care of Cattle; Acres, U.S.A., Austin, TX [ed. 2003] Kinsey, Neal & Walters, Charles; Hands-on Agronomy; Acres, U.S.A., Austin, TX [ed. 1999] Salatin, Joel; Pastured Poultry Profit$; Polyface, Inc., Swoope, VA [ed/ 1999]

6. Shift in Labor Force

As the small towns wither on the vine, and farm production decreases, often the major employers are government agencies – health, welfare, power generation, road departments and social service agencies. The need for more health and welfare is often a function of the descent into poverty of the inhabitants of many rural towns. In an effort to avoid benefit costs and to lower wage costs, many employers resort to having many, part-time works. This works to the disadvantage of the labor force, members of which are then forced to take two or three jobs in order to survive. http://www.ruraleship.org/content/pdf/ordeval.pdf
The effect of the enlarged presents of government is to shift the labor force from independent and semi-independent farm and ranch enterprises, to the more information intensive and technical government jobs. Thus, the farming and ranching skills in the local workforce erode.

7. Lack of Small Enterprise Leadership

As the older generation retires, sells the farm and moves to Florida or California, the leadership built upon the foundation of private farm and small business enterprises evaporates and is not replaced by the college educated, younger generation. Leadership is then drawn from the ranks of the corporate farmer, from government sources and from the ill-informed. The focus changes and is skewed away from farming and toward “bigness” and “professional management”.

8. Grants and Loans to the “rescue” – Not

After the worst has set-in, the remaining town councils race to obtain grants from State and Federal agencies. The grants are usually of the “spot remover” type, that is, are single purpose – build a fire station, improve drinking water, build a levee against floods, and low income (apartment) housing. Few, if any grants are available from government and private funders, to make fundamental changes in the productivity of the farm lands of the entire community or region.
Loan programs still require assets having a 30% value greater than the real property. The borrower must demonstrate that the gross return will pay the mortgage or rent, the operational costs, the debt service and return sufficient profit to support the personal and family needs of the borrower. Even if the farmer obtains the loan, one or two bad crop years will often result in foreclosure of the loan. The public agency or bank then has land which it does and cannot farm or ranch. Again the likely cash-rich buyer is the corporate wealth controlled by the polished desk boys and girls.

9. “FREE TRADE” AINT FREE

1. The best argument against free trade I have read yet:

“Dena Hoff is a farmer in Glendive, Montana. She chairs the Free Trade Task Force for the National Family Farm Coalition.

The National Family Farm Coalition was founded in 1986 to bring
together farmers and others to strengthen family farms and rural
communities. NFFC organizes national projects focused on preserving and strengthening family farms and serves as a network for groups opposing corporate agriculture. Membership consists of 33 grassroots farm, resource conservation, and rural advocacy groups from 33 states.

The following essay is from Shafted: Free Trade and America's Working Poor, a new book by FoodFirst Books.

’I am a family farmer from eastern Montana and a member of the
National Family Farm Coalition, which was founded to bring together farmers and others to strengthen family farms and rural communities.

Free trade is no longer about an exchange of commodities between
countries -- wheat for coffee or bananas. What free trade is really about is procuring the unregulated movement of unlimited amounts of capital anywhere in the world. To this end, farm families have become pawns in a dangerous game played by powerful people who trade away the futures of the next generations of farm families, who neither understand nor consent to the rules of the game.

When Congress gives up the right to debate and amend trade
agreements, they stop any meaningful participation by the American people in decisions that will affect every facet of their lives, as well as the lives of every person on this planet.

Free trade is no longer an economic issue. It is a moral issue.
Valuing trade over all, including citizens' right to participate in trade decisions and to hope that free trade can be fair trade, is wrong.

Will U.S. trade policy mean that farm prices will be above the cost of production for all farmers worldwide? Will countries have the right to determine domestic food and farm policies to benefit their own citizens? Will there be family farms for my own children and other farm children who want to farm? Will countries have the right to protect the public health and welfare of their citizens if their regulations deny a profit to a corporation?

Unless you can answer an unequivocal "yes" to each question,
something is morally wrong with our current trade policy.

In the nearly 10 years since NAFTA, the facts show that the impacts to family farmers and ranchers in the United States, Canada and Mexico have been disastrous. Yet we stand ready to export this disaster to the rest of the Western Hemisphere.

I urge you, for the sake of a healthy rural America, to finally lift up your voices and say what family farmers have known for nearly 10 years of NAFTA -- the emperor has no clothes!

A trade policy that is secret and undemocratic and that ignores the impacts on family farms, workers and the environment is a slap in the face to every American who believes he or she lives in a country that proclaims liberty and justice for all.

Please take a hard look at all we stand to lose as a people and as a nation. Review the broken promises of NAFTA and pledge to work for fair trade agreements negotiated for the good of all. Our future depends on your commitment to making all trade fair trade.’”

Published: Sep 08 2003; http://www.tompaine.com/feature2.cfm/ID/8800

2. Mexico has one of the worst environmental records in the western hemisphere. Leaking battery acid from an old U. S. owned battery factory flows through residential neighborhoods. The few environmental laws on the Mexican statute books are simply not enforced. Wages and working conditions are abysmal. How can the family farmer or local business compete against low cost Mexican labor? How can the U.S. workers, farm owners and businesses adhere to our very demanding environmental laws at great cost to us, yet try to compete with production taking place in Mexico and other countries which have no environmental policy and no enforcement? We are at severe disadvantage. NAFA has translated poor working conditions and environmental disaster in Mexico into economic disaster for U. S. citizens in all walks of life. The U. S. needs to pull the plug on NAFTA and GATT.

10. DEADLY EMBRACE

USDA has a “Beginning Farmer” program. Universities and colleges have agricultural departments dedicated to teaching ourselves how to farm and what to farm. Extension agents and other state-sponsored programs focus on commodity farming – how to get the most out of the land, as quickly as possible and at the lowed unit cost. This is good?
The mega agri-corps have this focus in mind also – huge farms, huge tractors, huge quantities of industrial chemicals to kill critters and grow food and fiber. Because of the “economy of scale” (read oligopoly), these mega-agri-corps are vertically integrated and control prices to a large extent, on both ends of the chain – the producing and the retail.
So, if the mega-agri-corps want more profit, they lower the price of the raw materials – the commodities to the point of no profit or even a loss. This approach allows the commodity market to be filled by commodities produced by, guess who, -- the poverty level family farmer. Whether the small commodity farmer knows it or not, he/she is a wage slave to the mega-agri-corps even though he/she does not sell to them. Selling into the commodity market under these circumstances is a deadly embrace for the small farmer, especially when one considers that the risk of crop failure as always there and “belongs” to the small farmer.

11. DEATH SPIRAL

The more the small farmer grows, the greater the supply nationally which drives prices down, creating a short fall in revenue for the farmer. To make up for this short fall, the farmer redoubles his/her efforts to grow more commodities. However, bigger is not better – it only leads, on a large scale – to lower prices and less return to the farmer.
Soil bank programs have attempted to reduce supply by taking land out of commodity production. Farmers get paid for not farming -- a novel idea. I wish I could have been paid for not practicing law. I’m just thinking of all those cases I would not have tried. Or extend to the welfare system – pay mothers on welfare not to have anymore babies. How about paying government workers not to work; that would probably not work since they are not productively working now.
It is true that most of the soil bank payments by the Feds go to the mega-agri-corps. These tax dollars allow them to buy more foreclosed family farms, thus adding to their “bigness” – Shades of “Grapes of Wrath”. Because they bought the land “cheap”, their return is greater than for the farmer who had to pay market price for the farmland.

12. FARM SUBSIDIES FOR THE RICH

”Biggest growers pocket 71 percent of U.S. farm subsidies

Tuesday, September 09, 2003

By Charles Abbott, Reuters
WASHINGTON - The biggest American farmers received 71 percent of U.S. farm subsidies since 1995, environmentalists said Tuesday in a report that could fuel the fight in Congress for tighter limits on farm supports.

Activists say mammoth payments to large operators gives them the cash to out-bid their smaller neighbors for land and equipment. The result is higher operating costs but no improvement in farm income.

According to the Environmental Working Group, the top 10 percent of
U.S. growers collected an average $278,932 a year. Their share of
payments steadily grew from 1995, when the elite group of farmers got 55 percent of government payments.

Billions of dollars are funneled to American grain, cotton, and
soybean growers each year. Farmers and ranchers also receive federal
money to idle environmentally sensitive land or to control manure
run-off from fields and feedlots.

"The ability of the family farmer to survive and make a living is
plummeting," said Chuck Hassebrook of the Center for Rural Affairs in Walthill, Neb. "Farm programs are doing as much to subsidize large farmers as to drive smaller farmers out of business."

Iowa Republican Charles Grassley planned to ask for a Senate vote in
coming weeks for a "hard" cap on farm subsidies, now set at $360,000
a year but easily circumvented. An aide said Grassley wanted a limit
in the range of $275,000-$300,000 that would end ways to exceed the
limit.

"It's not surprising to me that concentration is increasing," said
Grassley. "Hopefully this information will prove it's time to act and enact legitimate, reasonable payment limits."

The Environmental Working Group, a Washington-based activist
organization, released its report as the World Trade Organization was meeting in Mexico to discuss how to cut farm subsidies in rich
nations, which spend a combined $300 billion annually on their
growers.
MORE: http://www.enn.com/news/2003-09-09/s_8208.asp


Environmental Working Group said it would make available on the
Internet its figures, based on U.S. Agriculture Department records,
at http://www.ewg.org/farm2/home.php.”

Crop supports help the rich more than the poor farmers.
“ Montana farm profits fell by 36 percent in 2002, to the lowest level in more than a decade. Plus, the industry would have seen no profits at all without government subsidies.”
“ The state’s roughly 16,000 farmers and ranchers earned a profit of $215.6 million during the year. They took direct government payments of $256.1 million, according to an annual report from the Montana Agricultural Statistic Service. That means without the subsidies, farmers would have lost $43.5 million.
****
“ Even with subsidies, lots of farmers have a hard time making a living, Griffith said, noting that 40 percent of household income on commercial farms comes from non-farm sources.
****
“ In Montana, about 10 percent of farmers gather about 55 percent of subsidies. The other 45 percent of the money is spread among the remaining 90 percent of farmers.
“ Bitter Harvest”, Bozeman Daily Chronicle, Monday, December 24, 2003, Pg. A1, by Scott McMillion.

13. Solutions abound, but there are few takers

1. The Hyperactive Community Development Organization http://www.ruraleship.org/content/pdf/ordeval.pdf

2. Change the economic base from farming and ranching to IT, manufacturing and/or conservation or some combination thereof.

Become a “smart community”. See: Smart Winnipeg. http://www.smartwinnipeg.mb.ca/SMARTcommunity_dev.html. Or Google it at: http://www.google.com/search?as_q=&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=smart+community+development&as_oq=&as_eq=&lr=lang_en&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images

3. Farm and ranch for niche markets and “value added” production. For example see: http://www.uaex.edu/depts/OSLD/Focus_Programs/Animal_Ag.asp Google the subject at: http://www.google.com/search?as_q=&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=farm+value+added+production&as_oq=&as_eq=&lr=lang_en&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images

4. Fight Fire with Fire.

Farmers, through cooperatives and other business combinations, can vertically integrate and cut out the middlemen. While some members of the farming community decry the concept of vertical integration – they really are decrying the use of this economic tool by the mega-agri-corps. The tool as such, has no morality – any more than a tractor or truck. One of the solutions to maintaining the profitability of the family farm is for it to integrate vertically.
What? Integrate? Lose my “independence”? We hear many similar responses by the independent minded farmer/rancher. Those who insist on “doing my own thing” can do so in splendid isolation –and—suffer the consequences of low or no profit from such independent efforts.
The ONLY way farmers can beat the mega-agri-corps is to fight fire with fire. The farmers must join and become part of professionally managed coops or other businesses forms which provide the muscle to compete with the Con-Agra’s of the world. This approach will work wonders for the small farmer. For example, see:
Anyone interested in this approach can Google the subject and find out how this approach has been very successful for a large numbers of farmer dairymen and ranchers. See: http://www.google.com/search?as_q=&num=100&hl=en&ie=UTF-8&oe=UTF-8&btnG=Google+Search&as_epq=farm+cooperative&as_oq=&as_eq=&lr=lang_en&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images
The only problem with most of these coop is that they are still focused on one or a handful of commodities and they deal mostly with the producer-to-wholesaler part of the food chain. I have yet to see any of them fully vertically integrate to and including the retail level. Having said that, there is one company in Montana which provides one of the best examples of producer to consumer. See Wheat Montana: http://www.wheatmontana.com/. My reservation about Wheat Montana is that it basically deals with only grain crops.
Many retail mercantile stores, such as Sears, Home Depot, Costco and other big boxes, have vertically integrated by purchasing their suppliers who are manufacturers. Why the food and fiber industry has not followed this lead is a mystery. The “Fire” with which the small farmer must fight is the same fire used by the mega-agri-corps to burn down the family farm = vertical integration. Only ours will be a “back-fire”.
Waiting for Congress to “do something” is nearly useless. We and our grandchildren will have died waiting for Congress to act.

We must DO IT OURSELVES.1

We must provide the leadership. As General Patton said, “Lead, follow or get out of the way.” We need not sacrifice our economic lives and those of our children to the gasping clutches of special interest, Congress members on the take, and monster combinations of mega-agri-business. Again Patton: “I don’t want to die for my country; I want that other son-of-a-bitch over there to die for his country.”

5. Vote into Congress, Senators and Congress members who will vote out NAFTA, end farm subsidies to the giant agribusinesses, and go after the combinations in restraint of trade (read, global companies). Vote out of Congress those to “go along to get along.” Read about Paul Steckle and some of his fellow MP’s voting against the party line when it came to gun control issues in Canada.

“Steckle and a handful of other rural Liberals extended their version of the political finger and voted with the Opposition.” A Liberal who bucks the party line http://www.agpub.on.ca/iss/99/apr/leabop5.htm

6. Bigger isn’t better.

"Bigger is good, even if it don't work" -- the Archie Bunker mindset.

The race for “bigger” which started in the 50’s has created its own nightmare. Anna Barns, Moderator of the CSA forum at http://www.prairienet.org/discussion/ She comments:
“ Think about how much corn got dumped on the ground this fall because elevators didn't have a place for it and how many small farms have gone out of business in the last 20 years. Do we need to grow more corn? What if we put all those farmers back on the land with a couple of hundred turkeys, a few pigs, and a few cattle?” **** “Farm management research shows that diversified operations are the most successful in the long run. So why wouldn't it make the most sense instead of paying people to grow corn we don't really have markets for and absorbing farm bankruptcy debt from farmers who got wiped out in the last pork price bust, etc., to keep people on the farms in diversified operations in the first place?”

7. Intellectual property resources.

The World Wide Web abounds with enormous tidbits of information and mis-information. The use of Google is how you find and get to tidbits very quickly. I used Google so much that its Advance Search page is now my home page: http://www.google.com/advanced_search?hl=en
There are hundreds of thousands of searchable databases, usually multiple databases on any given subject. Governments, especially the Federal, have a fixation on housing information – this is good.

1. For instance, the Congressional Record for the years 1983 through 2002 is searchable: http://www.gpoaccess.gov/cri/index.html. As an example, go to: http://frwebgate1.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=39895011032+0+0+0&WAISaction=retrieve and then down to “Articles and editorials” which have been inserted into the Congressional Record by a member of Congress. Here are just a few of the articles – you get the idea. Hunting down relevant tidbits is fun and rewarding – if you have the time and interest:

Ag Crisis Kills Faith--The American Dream Suffers, 3009 [21FE] Agriculture Focus, 32242 [18NO] Agriculture Is My Bread and Butter, and Yours Too, 5737 [20MR] Aid Money Easier To Get Than To Spend, 32376 [19NO] Alexander Nunn--A Nobel Man, 1892 [6FE] Alien Farm Workers Fear Immigration Law Change, 29300 [28OC] America's Farmers Down the Tubes?, 1729 [5FE] Ancient Task Reaffirms Rich New Mexican Past, 12665 [20MY] Another Critical Season for Sugar, 3579 [26FE] Are You Ready for $2.40 Wheat and $2 Corn?, 2459 [19FE] Argentina's New Breed of Farmers Are Paring U.S. Grower's Markets, 3639 [26FE] As Farms Grow Few, Towns Go To Seed, 36115 [11DE] Axing Farm Exports, 8131 [17AP] Banker Blames Government Inaction, Debt, 37581 [18DE]
Too bad these articles are not clickable [hyperlinked]. You can read them in the Congressional Record at the central library in most major cities (federal repository).

8. The Library of Congress has gone digital for several years: http://www.loc.gov/. Try searching using the keyword search engine from the home page [upper right-hand corner]. Using “farm vertical integration” the search returned the following document count: farm(4256) vertical(1125) integration(3850) farm vertical...(71) Unfortunately, most of the entries digitize only the table of contents and are very cryptic. Not a good, quick research tool, but the depth is awesome.
9. More to come as I have time and come across more good websites. Your suggestions, additions, editing and critical (but well thought-out) comments are welcome.

Contact Jim Miller, 530 NW 13th St., Corvallis, OR 97330; Wired: 541-757-9797; wireless: 541-971-003; email: JimMiller5417@yahoo.com

1 “You’re gonna make it on your own!” Jessie Ventura’s Vision for Minnesota. http://www.mainserver.state.mn.us/governor/self_sufficient.html