Agri News, MN
03/21/06
Productivity doubled, farm earnings didn't
By Jean Caspers-Simmet
Agri News staff writer
CALMAR, Iowa -- A year ago, Brenda Ranum and other county ag leaders
heard a presentation by economist Ken Meter of the Crossroads Resource
Center in Minneapolis on building a local food system in northeast Iowa.
What Ranum, the Extension director in Winneshiek County, heard disturbed
her.
Meter said Bureau of Economic Analysis data adjusted for inflation shows
farmers in northeast Iowa and the Midwest are earning less money producing
crops and livestock than they did in 1969 despite the fact they doubled their
productivity.
The data doesn't include federal farm payments.
It is the first region Meter has studied where farms showed a positive cash
balance for the period 1969 to 2002. The region's farmers earned $1.8 billion
more selling commodities (in 2002 dollars) than they spent producing crops and
livestock. However, Allamakee County farmers bring in $44 million less and
Winneshiek $65 million less today than in 1969.
The main factor driving declining cash receipts is the loss of revenue from selling
livestock and related products.
"Nationally, farm cash receipts have plummeted steadily since the 'grain-for oil'
era in the 1970s,'' Meter said. "Farmers took on more debt than they could
handle, bought equipment their community could not afford to finance for itself
and became far more dependent on distant suppliers and larger distribution
infrastructure. Someone else got the benefits of their productivity."
Government payments accounted for at least 50 percent, and at times more than
100 percent, of net farm income each year since 1999.
"At first I wanted to ignore what Ken had to say,'' Ranum said.
Instead she joined with others to do something about it. They obtained a grant
from the Leopold Center for Sustainable Agriculture to develop a plan to build
a local food system. They also shared Meter's information with other people to
generate discussion.
The United States, which produces an overabundance of corn and soybeans, is
close to becoming a net food importer, Meter said. Nationally, 49 percent of the
country's groceries are sold by five chains and 10 percent of the nation's families
are considered food insecure.
Farmers can't build local food systems alone, Meter said. Urban and rural
partnerships are essential. Consumers must co-invest in food systems and not
be concerned with buying at the cheapest price. Meter prefers a food industry
where farmers and consumers share risk and rewards.
"We need to talk about a U.S. food bill, not a farm bill, and rural policies that
support communities, not commodities,'' Meter said.