IN the autumn of 1981 Vince Romanelli, a beef farmer in southern Ontario, dumped a truckload of dead Charolais cattle on the doorstep of his bank manager in protest against crippling interest rates and the bank’s threat to repossess his farm. He had been unable to afford feed for his prize herd and the cattle were slowly starving to death.
Vince Romanelli is just one isolated case of a farmer having to close the farm gate permanently, creditors snapping at his heels. In fact farmers in most Western countries have been leaving the land in droves over the past four decades. In the US alone, half the farmers have gone bust during that time at the rate of nearly 2,000 per week. That same trend holds true everywhere in the developed world.
The era of the small farmer is coming to an end. In its place has emerged a different kind of food production - agribusiness - an industrial-style agriculture where expansion is the watchword of success and profit the overriding concern.
Making a decent income has always been as important for farmers as anyone else. But despite rising food prices it has become increasingly difficult for small and medium-scale farmers to break even in recent years. In fact that very problem is at the heart of the increasing concentration of farm land in fewer and fewer hands. Farmers are being squeezed constantly between rising costs of production and falling prices for farm products. This classic cost/price squeeze is a motor driving farmers out of business and consumers into a corner.
The image of the independent, self-reliant tiller-of-the-soil is slowly receding into myth. Most farmers today are little more than waged workers in a corporate food factory. And most are deeply in debt from buying the raw materials needed to keep the factory running. Britain’s farm debt is growing at the rate of $3.6 million a day and total UK farm debt is over $7,000 million.
Farmers pay constantly escalating prices for ‘inputs’ fuel, seeds, fertilizers, pesticides and farm machinery. But when it comes to passing on these costs, they are stymied. They have to take whatever they can get in the market where competition from thousands of others keep prices low.
Small is efficient
But not too low. If that were the case, nobody would be in the fields and we would soon all be out of food. So there is some money to be made — especially if you are a large landowner. Then you can make up in volume what you lose in price. It doesn’t really matter how efficient you are in terms of actual production. In fact, most agriculture experts now agree that small operations of a few dozen acres are more efficient than vast farms of hundreds or even thousands of acres.
With profit margins per acre declining the only way to stay afloat is to produce more. That means expanding acreage. But producing more inevitably puts a damper on the price a farmer receives for his crop, which in turn forces him to increase production. The result is a strong surge of farm cannibalism.
As small or medium-sized farmers give up in frustration or bankruptcy their neighbours gobble up their land. To do this they load themselves to the gunwales with debt, cross their fingers and pray. As the case of Vince Romanelli makes clear it doesn’t usually work. American farm analyst Jim High-tower puts it another way: ‘Farmers today,’ he comments, ‘produce themselves right out of business'.
The cost/price treadmill also has tremendous implications for our environment. All farmers live with a certain sense of desperation. But a desperation driven by the will to survive at all costs is playing havoc with the ecological base of our food-producing system. The economic need to increase yields reinforces the use of more fertilizers, more pesticides, more and bigger machinery and more irrigation. It also means less crop rotation and more monoculture — since uniform planting lowers production costs by standardizing chemicals, sowing and harvesting.
Mining the soil
The effect has been what some farmers call mining the soil— turning over the earth yearly, lacing it with chemicals and watching the ground harden and crack. Commenting on his own practices Canadian farmer Jim Sheldon says, ’Growing high fructose corn gives me the best return. It’s an easy way to farm, but I don’t feel comfortable doing it. After every heavy rain, the ditch through our place is a thick brown colour, soil washing off from people upstream doing the same thing.’
His neighbour Allan Verbrugge has the same sense of unease. ‘I’ve been forced into mining my land because of economics. I’ve grown corn and beans year after year and I know the land needs more green manure. Since I started it has got harder and harder and I know soon I’m going to have to do something about it.’
Although North America has lead the way in this modern, high-technology farming Europe has not been far behind. The small, peasant agriculture typical of the last three centuries is disappearing. Even in France, considered the last bastion of the small farmer, the active farm population has fallen from 33 per cent to 9 per cent since 1945.
Mixed farming of livestock, grain and vegetables is giving way to vast fields of single crops. In the Heshaye area of southern Belgium it is sugar beet. According to Belgian environmentalist Colette Mann, ‘Machines of all kinds have taken oven tractors, ploughs, gigantic harrows, sowing machines, fertilizer distributors, harvesting machines. The flat ground with no hedges or trees suffers badly from erosion. The layer of arable land gets steadily thinner, carried as making sugar.’
Continuously high yields require massive and regular doses of chemical fertilizers — many of them derived from petroleum. The major oil companies are all deeply involved in the agrochemical business. In the US the use of farming chemicals rose by nearly 60 per cent from 1970 to 1979. The University of California’s Institute of Rural Studies estimates 300 million pounds of pesticides are sprayed every year in California alone.
Many people believe the system is inherently dead-ended. Says author and agriculture critic David Weir, ‘This approach to agriculture has no future and I mean that literally. There will be no future in that direction, you pollute the water, you pollute the air, you pollute the soil, you pollute the plants, you contaminate the people.'
But for some, of course, this agribusiness model of food production is not so disastrous. In fact, for large multinational corporations that dominate the production and sale of farming ‘inputs’ and for those large companies that control the processing and sale of food, agribusiness is good business. So good that Western corporations are doing their best to sell the same approach to the Third World. And not without some success.
Modern farming techniques (super seeds, improved fertilizers, irrigation and sophisticated farm machinery) were the backbone of the ’Green Revolution’. The problem was the revolution was mostly about technology and not at all about social relations and inequalities of power. With hindsight the results were predictable: greatly improved yields, increased income for large landowners and expanded markets for Western corporations.
Unfortunately, agribusiness has had almost no success in reducing hunger. We may be able to buy Kenyan eggplants, Mexican strawberries, Chilean grapes, Honduran bananas and Philippine pineapple. But stocking the larder of the rich world hasn’t helped the average Third World peasant feed his family.
Coffee and cut flowers
As agribusiness expands in the developing world landlessness and hunger are actually increasing. More and more land has been removed from growing subsistence food and put into cash-crop exports. In Latin America, between 1964 and 1974 the production of subsistence food like maize and beans decreased by ten per cent, while production of export crops like cotton, coffee, cut flowers and soybeans increased by over 25 per cent.
In the process small farmers have been squeezed off their land and dragooned into a growing army of landless farm workers dependent on seasonal wage labour on large estates. In Mexico for example the number of landless peasants exploded from 1.5 million in 1950 to over 14 million by 1980.
In Africa, dependency on cash crops established during the colonial period has actually grown worse. Since 1960 tea production has increased six-fold, coffee four-fold and sugar cane three-fold. Yet on average Africans are eating 15 per cent less now than in 1970 and 20 per cent less than in 1960.
Part of the blame for increasing hunger lies with Third World governments. Most have put more energy into making sure their urban supporters get cheap food than into making sure small farmers get a fair deal. Farm prices have been kept low and urban elites courted with subsidized food imports (mostly grains) from the West.
Food for the affluent
As a result wheat is now a status food in much of Africa and has made a major impact in parts of Asia and the Andean region of Latin America. According to the UN Food and Agricultural Organization, Third World cereal imports ballooned by 75 percent from 1970 to 1978 to 50 million tons.
North American and European farmers continue to believe their surplus grain helps feed the hungry. Often it does just the opposite. Cheap food imports benefit relatively affluent Third World city dwellers and put local farmers out of business.
The major benefactors of increased grain trade with the Third World are the five family-run multinational corporations that have a stranglehold over the world’s grain trading system: Cargill, Continental, Louis Dreyfus, Bunge and Andre. Little is known about the extensive holdings of these companies. They are private concerns that publish no financial statements and are notoriously uncommunicative. It is estimated these five control about 80 per cent of US grain exports and 90 per cent of the Common Market trade in wheat and corn. The Minneapolis-based Cargill Corporation is reputed to be the second largest food conglomerate in the world.
However, the grain merchants are not the only culprits in the hunger game. Equally important are Western-based multinationals that control the marketing of Third World exports. Over the last two decades Western companies have moved away from producing cash crops, finding it more profitable to trade in commodities rather than grow them. That way the risk of fluctuating market prices and poor harvests can be shifted to Third World farmers. Agribusiness in the person of Massey-Ferguson, Shell, Tenneco. W.R. Grace, Nestlé’s, ICI, John Deere and a host of others can still supply the necessary 'inputs’ and sell the final products.
According to United Nations figures one company, Gill and Duffus, controls 40 per cent of the world cocoa market; Unilever dominates the world trade in palm oil; Brooke Bond Liebig and Finlays the tea trade and General Foods the coffee trade. Three firms share 61 per cent of the world banana market. As a result, says the UN Centre on Transnational Corporations. developing countries run into stiff opposition if they try to elbow their way into these ‘downstream’ areas where ‘the greatest part of the value added is generated.’
The FAO stresses that ‘marketing costs and margins already represent one third to one half of the consumer price for food and are likely to expand over the next two decades’.
Corporate control over the price poor nations receive for their agriculture exports makes it hard to get off the cash-crop treadmill. Third World countries find themselves in much the same position as Western farmers. To increase income to pay for agribusiness ‘inputs’ developing countries have to increase production, which in turn puts a downward pressure on prices. Like their First World counterparts, small farmers in the Third World are caught in a cleft stick.
Industrial agriculture in the Third World has an even greater potential for human and ecological destruction. The $7 billion pesticide industry already does 20 per cent of its trade with the Third World and business is booming.
The World Health Organization estimates one person in the developing world is poisoned by pesticides every minute. And is most cases the agribusiness ‘inputs’ which soak up valuable foreign exchange are used to grow more cash crops. So the treadmill keeps turning.
The transformation of the world’s food producing system into an integrated global factory is well on its way. It may be some time before all the kinks are ironed out but the framework is in place. Food self-reliance no longer figures in the agriculture policy of most Western nations. It may soon be a chimera in Third World nations too — at least in the short-run. In the long run something has to give. Vince Romanelli will tell you that.
This special report appeared in the feast, famine and farming - agribusiness and the control of food issue of New Internationalist. You can buy this magazine or, to get stories like this one through your door every month, subscribe.