Kevorkian Economics- long

[Peggy Adams <adams@pcei.org>]

If you are not interested in rural or farm economic issues hit the delete
key now.

For those of you still interested, the article below is provacative and
might be worth taking the time to read.  It is from a a presentation given
to the Minnesota state legislature by by Dr. Richard A Levins, professor of
applied economics at the University of Minnesota.  The issues are relevant
here, also.

P.


One of the things I enjoy most about Minnesota is its longstanding support
for family farming. Lately, however, we are challenged with a very
different kind of economic thinking, one I call "Kervorkian economics."
The New Kervorkianists see that many of our family farms are in trouble.
Rather than   search for ways to help them, these theorists devise
"transition" programs that get farmers out of agriculture. It is as if Dr.
Jack walked into the room and said we are all going to die sooner or later,
so we might as well let him help us get it over with tonight. Such thinking
may bring about cheap
grain, but only at a cost of losing family farming as the economic backbone
of rural Minnesota. This is simply too high a price to pay.

This year I have been working with a wonderful group of Swift County
leaders to find ways to strengthen farming in the county. In doing  the
background  research for the project, I learned that we are much farther
down the road to  losing farming as a foundation for rural Minnesota than
I would ever have guessed.  Farm sales and government payments for Swift
County  were $112 million in 1995. They rose to $135 million in 1996.
Judging  by these numbers alone, farmer income would appear to be a very
important  part of the local  economy. In the past, it was. For example, in
1975 farmers accounted for slightly over 30 percent of total county
personal income. Today, things are
much different.  In 1995, the contribution of farmer and farm employee
income to total  personal income in the county was 1.63 percent. Granted,
farm income bounces around more than most other types from year to year,
but that is a shockingly  low number. The three-year average for 1995 to
1997 was a bit higher at 7.29  percent. On the other hand, the farming
contribution to  personal income in the county was negative in 1993. The
corresponding numbers for other southwestern Minnesota counties are much
the same.  There is, of course, more to the story than farm income.
Farmers pay land rents, buy supplies, pay property taxes, and affect the
economy in many ways
that are not reflected in farmer and farm employee personal income.
Nonetheless, the income and well being of farmers is the crux of the matter
when we speak of rural economies. Agriculture has changed  so much that we
can no longer use the words "agriculture" and "farming" interchangeably.
Agriculture includes all sorts of agribusiness activities and landlord
income that certainly benefit someone. They don't, however, always benefit
rural areas.

We looked closely at land rents and ownership in our Swift County project.
Ninety percent of the tillable acres are planted to corn and soybeans. A
survey we did of 62 Swift County farmers showed that about 60 percent of
the  tillable acres in the county are rented, while 40 percent are owned by

farmer/operators. The trend is toward more, not less, rented land. Rented
acres grew by 29 percent between 1993 and 1998. Furthermore,  the older
farmers we surveyed talked most often of renting out their land when they
retired. The survey also showed that there are many more  landlords than
farmers associated with the land in Swift County: the 62 farmers rented
from 198 landlords.

Absentee landlords
Records kept by the University of Minnesota's Southwest Farm Business
Management Association show returns for corn and soybean  production on
rented land during 1983-1997. For corn, the farmer never once  made as much
as the  landlord. For soybeans, farmers made as much as the landlord  in
two years and  less in every other year. With so many of the farming
dollars going to  landlords, it is of obvious importance that those
landlords live in the county. Otherwise, the only local benefit is likely
to
be the cost of a stamp to mail a rent check to Arizona! But one out of
three landlords in the Swift  County survey did not live in the county, and
this number is likely to increase as farmers will their land to children
who have long since left the county.

Something else that surprised me in the Swift County survey was that one
out  of three farmers think that large agribusiness interests "don't care
at all"  about farmers' survival. Only five percent rated agribusiness  as
"very concerned" on this question. In my 25 years in farm management, I
have thought farmers viewed themselves as in partnership with agribusiness.
But  with a flood of mergers, acquisitions, patent fights, contracting, and
other heavy-handed moves, agribusiness is losing its favored status among
farmers  in a big way. Farmers are in the best position of all to see that
what
benefits agriculture does not necessarily benefit farming!

Should we all be worried about bigness in agribusiness? I went to Professor
Willard Cochrane, President Kennedy's chief agricultural economist, now
widely regarded as one of our greatest proponents of family farming. He
asked me to imagine that a giant elephant had walked into my  living room.
"It doesn't matter if it is a good elephant or a bad elephant, it's still
going  to break something," he said. Size brings about economic power, and
that power will be used to foster the ends of global agribusiness,  not
farmers and the rural economy.

Agribusiness booms
He has a point. The size of modern agribusiness giants defies
comprehension.   For example, last year Cargill, DuPont, ConAgra, ADM, and
Monsanto all had   gross sales greater (often much greater) than all 87,000
Minnesota farms put together. DuPont paid more to buy Pioneer than all
87,000 Minnesota farmers combined have ever spent on production costs for
any year. And for those who   think that there is no money in agriculture,
I again remind  you that agriculture and farming are not the same thing.
Farmers are in a staggering crisis, but the agribusiness story is very
different. As  pork producers suffered under the lowest prices in a
generation, the nation's two largest  pork processors found $14 million to
reward their CEOs. That's peanuts compared to the $51.8 million
compensation package Robert Shapiro, CEO of Monsanto, hauled in for 1997.
Meanwhile, the average farmer in Minnesota made less than $15,000 last
year.

In all of this, it has become fashionable to blame the  farm crisis on
failed government policies. Then, in the best tradition of Dr. Kervorkian,
we try to  abandon public programs altogether. I hope you will not  think
that way. The public has every right to decide how its food will be
produced and who will  do it. The Minnesota Legislature has already made a
wonderful  statement on the value of family farming, and the leaders of
Swift County are among the many citizens who have not given up on our
family farm  tradition. We must continue in that tradition-our rural
economy is at stake.


Peggy Adams

===================================================================
Palouse-Clearwater Environmental Institute
P O Box 8596; 112 West 4th St; Suite #1
Moscow ID 83843-1096
Phone (208)882-1444; Fax (208)882-8029
url:  http://www.moscow.com/pcei

Please Note our individual staff email addresses below:

Thomas C. Lamar, Executive Director: lamar@pcei.org
Peggy Adams, Watersheds/Food Systems: adams@pcei.org
Jon Barrett, Idaho Smart Growth:  smartgro@micron.net
Elaine Clegg, Idaho Smart Growth:  eclegg@micron.net
Anita Grover, Watersheds: grover@pcei.org
Laurie Guardes, Financial Manager:  gardes@pcei.org
Ashley Martens, Environmental Education:  martens@pcei.org
Lisabeth Edlund, Americorp/Youth at Risk edlund@pcei.org

Celebrating thirteen years of connecting people, place and community.
===================================================================