The Farm Crisis & Corporate Profits

Compared to our family farms, the profit picture for the other links in the chain could not be more different. For the agribusiness corporations dominant in Canada, 2004 was the best year in history; overall, profits hit record highs. Of the 75 companies profiled in the following pages and for which profit data is available, 41 posted record profits, and another 16 had near-record profits or their second- or third-best year ever. Thus, 57 of 75 companies - 76% - had their best year, or nearly their best………………………………………………… Corporations continue to expand into new areas of the farm input business - colonizing new biological and economic terrain—creating “inputs” where none existed before. Their most recent foray is into the area of seeds. Until recently, farmers were largely self-sufficient in seeds for most crops - they saved and re-used part of their harvest (corn and canola are exceptions). The new varieties farmers needed were provided by publicly funded breeding. As recently as the mid-1980s, the public sector still accounted for over 95% of plant breeding in Canada, and 100% of cereal and oilseed breeding.8 The past two decades, however, have seen the rise of global seed corporations and the decimation of public seed development. Seeds have become big business………………………………… The dominant agri-business corporations work to destroy cooperatives and farmers’ collective-marketing agencies. Such destruction yields corporations a triple benefit: . Allowing them to capture profits previously returned to farmers through co-ops and marketing boards; . Reducing farmers’ market power by destroying collective-marketing agencies (this reduction in market power further enhances corporate profits because reduced market power leads to reduced farmgate prices); and . Destroying the functioning counter-models to corporate-dominated, profit-extracting agribusiness. In the late-1990s, co-operatives processed 2/3 of Canadian milk; today, co-ops process 42%.11 In the early-1990s, nearly all Western grain moved through farmer-owned and -controlled elevator cooperatives. Those co-ops are gone: bankrupted, privatized, or bought up by the dominant grain companies. Until recently, Ontario farmers marketed all their wheat through an agency they controlled: that collective marketing agency, the Ontario Wheat Producers Marketing Board, is gone. Until recently, Prairie farmers marketed their hogs through provincial marketing boards: those boards are gone - destroyed largely to appease the biggest packers and corporate hog producers……………………………………………………. Farmers’ relative returns There is no need to make again the point that farmers are suffering while others prosper. But it is illuminating to see just how lush corporate profits are when compared to those of farmers. One way to highlight this disparity is to ask the question: What would our farms and rural areas look like if the profits within the agri-food chain were allocated more equitably? What if farmers’ Return on Equity (ROE) rates approached those enjoyed by agribusiness?................................................ Full article at http://www.freewebs.com/westernclarion/corporate_profits.html For more farm crisis reports google the following • The Honourable Wayne Easter, Parliamentary Secretary to the former Minister of Agriculture and Agri-Food in the Liberal government produced “Empowering Canadian Farmers in the Marketplace” last July. • The National Farmers Union wrote “The Farm Crisis: Its Causes and Solutions,” also last July. • The Agriculture Institute of Canada commissioned a discussion paper, “Big Farms, Small Farms: Strategies in Sustainable Agriculture to fit All Sizes,” last September. • The Canadian Federation of Agriculture wrote “Agricultural Policy Framework II: A Canadian Farm Bill” last November. [Proofreader's note: this article was edited for spelling and typos on March 10, 2006]

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