[blind-democracy] Working farmers face bankruptcy, record debt

  • From: "Roger Loran Bailey" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "rogerbailey81" for DMARC)
  • To: blind-democracy <blind-democracy@xxxxxxxxxxxxx>
  • Date: Thu, 28 Nov 2019 13:08:25 -0500

https://themilitant.com/2019/11/23/working-farmers-face-bankruptcy-record-debt/


Working farmers face bankruptcy, record debt




 By Janet Post

Vol. 83/No. 44

December 2, 2019


Because of the nature of farming under the lash of capitalist competition, almost all working farmers are forced to take out loans to keep farming. As prices for farm produce are falling today, farmers face greater difficulty getting loans as interest rates are soaring. They are “debt slaves” to the banks and other, more cutthroat, financial institutions.

Farm debt, default payments and bankruptcies are all rising. In the 12-month period ending in September there was a 24% increase in farmers filing for bankruptcy compared with the previous year, the American Farm Bureau Federation reported.

Farm debt is predicted to hit a record $416 billion this year, up nearly 40% since 2012. This year record spring rains meant nearly 464,000 acres were left unplanted and the fall harvest has been slowed by sub-freezing temperatures and snow. The U.S. Department of Agriculture estimates that median farm income was a negative $1,548 in 2018.

As banks back away from lending, especially to smaller family farmers, many are being forced to turn to alternative lending sources outside of traditional banks, such as financial service firms Ag Resource Management, Fora Financial and FarmOp Capital. They profit from charging interest rates double that of the banks and put more stringent monitors on farmers’ production.

One way these vulture financial services companies try to guarantee getting paid is to use crop sales or insurance policies as collateral, rather than land or equipment. They extract hefty payments through automatic withdrawals from farmers’ accounts and put liens on each bushel of grain.

FarmOp Capital tracks crop growth with satellites and has production data transmitted to them from farmers’ machinery to monitor potential problems.

One Arkansas farmer, 32-year-old Heath Jobe, borrowed $118,000 at 9% interest from ARM for seed, chemicals and fuel. But after his rice, beans and corn were hurt by a year of dry weather, ARM turned him down for a new loan and he ended up in bankruptcy. “If you don’t make a crop and you have a bad year, they’ll clean your clock,” Jobe told the Wall Street Journal.

Dean Foods bankruptcy

Dairy farmers have been especially hard hit financially. The number of dairy farms has dropped by more than 93% since 1970 — from more than 640,000 to some 40,000 today.

Dean Foods, the largest milk processor in the country, declared bankruptcy Nov. 12. The Dallas-based company has some 60 dairy processing plants in 29 states and employs 15,000 workers.

“Overproduction” of milk — an essential food stuff badly needed by millions of people worldwide — is used to drive down the price farmers receive on the market. Dairy farmers’ income is below their costs of production. “One of the most pressing issues posed by Dean Food’s bankruptcy is the possibility that farmers won’t be able to find anywhere else to sell their product,” the New Food Economy website said the next day.

Retailers like Walmart, Kroger and Albertsons have opened their own in-house milk processing plants, cutting out middlemen like Dean Foods. They buy mostly from larger, capitalist farmers to lower their costs.













In This Issue

Front Page Articles •Back CN rail workers, Asarco strikers fights!
•Asarco strikers fight for union, first raise in 10 years
•Bolivia protests demand end to rightists’ ouster of Morales gov’t
•Step up pace to make fall books, fund, Militant drive
•Protests win stay of execution, new hearing for Rodney Reed
•Democrats’ impeachment drive targets working people
•‘For recognition of Israel and of a Palestinian state’

Feature Articles •International conference in Havana says ‘US hands off Cuba!’

Also In This Issue •Hundreds protest in London, demand ‘No more Grenfells!’
•Bakery owner who won victory against college dies
•Working farmers face bankruptcy, record debt
•Hong Kong workers back students against police attacks
•Contribute to the 2019 Socialist Workers Party fund
•Fall Campaign to sell Militant subscriptions and books Oct. 5 – Dec. 10 (Week 6)
•Socialist Workers Party Fund Drive Oct. 5 – Dec. 10 (Week 6)

Editorials •Support Canadian rail workers strike!

On the Picket Line •Rail workers speak out against job cuts, threats to safety
•Washington paraeducators gain teachers support, wage raise
•Meatpackers in Quebec strike for higher wages







25, 50 and 75 years ago








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David Hume
“ In our reasonings concerning matter of fact, there are all imaginable degrees 
of assurance, from the highest certainty to the lowest species of moral 
evidence. A wise man, therefore, proportions his belief to the evidence. ”
―  David Hume,


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