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  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] Banks Profit While Our Farmers Fail
  • Date: Mon, 14 Jun 2010 21:56:16 -0600


[there is an alternative solution]


Banks Profit While Our Farmers Fail
When banks call in farm loans at the first opportunity, it destroys families,
communities, and regional economies.

by Lisa Griffith Monday, June 14, 2010 by OtherWords
http://www.commondreams.org/view/2010/06/14-4

Bruce Drinkman is a successful organic dairy farmer who milks 50 cows with
his wife, Mari, near Glenwood City, Wisconsin.

Despite his 34 years of experience, the two-year drop in milk prices and four
years of drought have meant no profits or savings. Last fall they were denied
credit from their bank to purchase seeds to plant 55 acres in grains and corn
this spring. To continue farming they cashed in Mari's retirement account but
the farm was placed into foreclosure around Christmas. After repeated
attempts to refinance the farm with other banks, farm credit services and
Farm Service Agency (a division of the U.S. Department of Agriculture, or
USDA) they were turned down by all, and did not even attempt to obtain bank
credit this spring. Fortunately Bruce was able to obtain credit from a vendor
to buy seed, and at the end of April he and Mari filed reorganization
bankruptcy, the only means they knew to preserve their farm, home and
livelihood.

A recent survey by the Federal Reserve Bank of Chicago indicated that 11
percent of Wisconsin farmers with existing lines of credit may not have
credit extended next year; this is especially significant because of the a 56
percent decline in net farm income in 2009. Dairy farmers have received
prices far below their costs of production for nearly two years. With eroding
equity, many are in immediate danger of losing their farms.

Farmland is so valuable that local (but often not locally owned) banks call
in farm loans at the first opportunity, destroying families, communities, and
regional economies. Farms entering foreclosure are listed publicly, further
devastating owners while notifying speculators and investors of chances to
take advantage of distraught landowners.

Something is askew. As the number of unemployed nationwide remains around 10
percent and the USDA holds summits on revitalizing rural America, why are
experienced, efficient farmers receiving ridiculously low prices for their
products, forcing family members to seek scarce off-farm jobs to support
them? Why are banks and USDA denying them access to credit to continue their
operations? Are these institutions conspiring to close farming operations in
order to give investors the opportunity to purchase their land for a fraction
of its worth?

A posting on Farmland Forecast, read by farmers, agribusinesses, investors
and speculators interested in agricultural land, stated that "Midwestern U.S.
farmland provides investors the best opportunity...Farmland may be [cheaper]
in other regions of the world, but...may not have the same soil quality,
transportation infrastructure, or government that supports property rights."
When an elderly couple with no heirs interested in or able to afford the farm
decides to sell; when a younger farmer sells after incurring too much debt
from low prices and rising input costs, there's probably a corporate investor
ready to buy. The land may be flipped to developers when enough profit can be
made or planted in commodity crops (such as soybeans and corn) used primarily
for livestock feed or ethanol production.

Sadly, many people who would like to engage in farming remain landless but
are forced to rent or accept tenuous land use arrangements with no guaranteed
long-term security. Speculators and investors only make matters worse by
driving the price of farmland out of their reach, making less land available
for the profitable production of fresh, local, and sustainable produce, eggs,
milk, grains, and meat.

It appears that the people who depend on their land for survival and provide
us with food--farmers, ranchers, fishers and laborers--are more expendable
than people sitting behind a desk trading stocks, land, and communities'
futures. The solution to this situation is two-fold. First, restructure the
pricing system to be fair and just for people producing or harvesting our
food. Second, require banks that received Troubled Asset Relief Funds (TARP)
to supply credit to and work with small businesses (including farms) in their
communities. Demand this from your government. Otherwise, when farmers are
forced off their land because they can't profit from their labor or access
credit for annual inputs, who will provide us the wonderful bounty of
summer--watermelon, sweet corn, BLTs, and strawberries with whipped cream?

Lisa Griffith is membership coordinator of the National Family Farm
Coalition, where she also works on local food issues. www.nffc.net.






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