Farm bankruptcies increased 96 percent in 2018 from a decade ago in the 8th Circuit Court of appeals, which covers Minnesota, Iowa, South Dakota, North Dakota and Arkansas. The numbers aren’t any better in the other circuit courts across the nation.
Farmers are the first and worst harmed in the economic downturn, but won’t be the last to suffer from it. On-farm losses will challenge the profitability of thousands of small banks across the nation. Eventually the large banks will struggle to maintain their strong financial performances. A looming recession threatens the general economy.
The doom and gloom evident in agriculture was lifted somewhat by the news that America’s farms remain production marvels even when the weather throws up roadblocks.
The U.S. Department of Agriculture’s crop report released this month surprised market experts and farmers because corn production remains vibrant. USDA estimates the corn harvest will yield 13.9 billion bushels with an average of 169.5 bushels an acre. The good was offset by the bad in the market’s immediate response. Most corn futures contracts dropped by the daily maximum of 25 cents per bushel when the report was released.
Soybean production expectations were off only a little at 3.6 billion bushels with an average yield of 48.5 bushels.
Farmers have proven yet again that they can surmount obstacles. However, they cannot seem to find the solution to a problem that has existed since colonial times.
How can farmers gain for themselves commodity prices that provide a reasonable profit in return for their work and risks? The “give me what you think it’s worth’’ marketing philosophy that exists only benefits processors and consumers. The increased discretionary spending money that results helps fuel the general economy while farming income and the rural communities that depend on farmers continue to stagnate.
Extreme poverty is not limited to inner cities. Rural America suffers from a massive income gap and the problems associated with people who live in poverty. Rural communities struggle, hospitals, schools and other essential institutions close. The opium crisis has struck hard in rural areas while physical and mental health care options are limited and inconvenient. Meanwhile, the federal government has not responded in any effective manner.
What can and should be done, short of additional government programs and expenditures? The answer is simple: farmers must take the power of production away from commodity buyers who have a vested interested in keeping commodity prices down.
Independent producers have a right to collectively market their goods for a fair price. A new commodity marketing system that would put power where it belongs would bring an end to the need for government involvement.
Taxpayers would be off the hook and farm policy would be freed from the iron grip of well-paid lobbyists who claim to speak for farmers. Farmers would use their own voices in the marketplace to achieve their fair share of profits.
If this became reality, the continued exodus of rural people would end, rural institutions would be revived and the great divide between the people who have much and those who have little would shrink.
In an ideal world, government would not be involved in agriculture. Farm programs with roots in the Great Depression have no place in modern America. None would be necessary, if farmers would use the power that is theirs.