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,