|Tuesday, May 13, 2003
This chart shows a picture of how the money works in farming on PEI for 50 years. I suspect that it shows the picture for all of industrial agriculture.
Here is how to “see” the picture. The heavy blue line along the bottom is net farm income. You will note that until about 1972 it hardly moved. Since then volatility is the rule. The lightblue line is farm debt. You will see that debt has broken free from net income. Farm capital is the brwon line. Here’s the problem. Farm capital has risen becuase the banks need it to rise to keep the loan valid. But net income has not kept pace with debt. When the system has 3 bad years the house of cards has to fall down. Like the fishery – farming has become grossly over capitalized. The difference has to come out of the foundation resource – the natural capital – so rotation is reduced and sloped land is tilled.
It is only a matter of time
This is the reality of some of our farming in the spring. When you grow Russet Burbanks (the main fry potato) for processing, you have to harvest in late October too late for a cover crop. The result – devastation. Is this because many of our farmers are evil or stupid? No – they are trapped. They have been suckered into a very capital intensive business where there are only two buyers. As the years go by, the farmer drifts more into the hole and can only keep afloat by taking it out on the land. Our rivers are silting up. Our water is becomiong contaminated. Our farmers are going broke.
What can you do? Stop buying fries.