America’s agricultural crisis
America is in the eye of the storm at the moment, literally and figuratively, and they have been dealt a blow to the belly, particularly when it comes to their agricultural industry. It is collapsing as farmers go bankrupt in the thousands in all commodity sectors, including grains, dairy and cattle.
The two basic reasons are the climate disasters on one hand and the Trump trade war on the other. This double blow may be too much for many of the farmers involved and the American agricultural industry is on the edge of a tipping point that is one year away from snowballing into something that could be a catalyst for something worse, if you see where I’m going with this open ended statement. Already it is part of something bigger, and that is the global food production vulnerability, particularly in grains, due to the same issues, namely climate crisis and trade wars. Both of these are global issues and individual countries are just feeling it closer to home in varying ways.
The fact that the biggest economies in the world are all feeling it, suggests that it could affect us all, directly or indirectly. America is not alone in taking strain among its farmers and food producers this year. China also experiences climate and obviously tariff difficulties at the moment, as does Russia and Argentina. Grains crops have been adversely affected all around the world, and food security, or at least inflation, may be affected too.
According to sources, American farmers are experiencing some of their toughest conditions since their big crisis back in the 1980s. Bankrupt farmers are on the rise, driven by the trade war and its subsequent tariffs on commodities. US agricultural exports are plunging, which is affecting already struggling farmers. Crop production has been successful and bountiful apparently in recent months, but the trade of the supply has been blocked by Trump’s trade tariffs or sanctions. Old buyers have simply gone elsewhere, and America sits with massive amounts of excess crops like soya and wheat, but nobody to sell it to.
As a result the price has dropped, affecting the entire industry. This year they may just make it through, but next year could see many more farmers default on their bank loans, and add to the growing bankruptcy list, particularly in the Mid-west area of the US, Trump’s support base. This could all backfire on Trump if his voters feel the pinch too much and are forced to vote against his policies.
Trump has, to his credit, released some funding in the form of aid to struggling farmers, totalling $16 billion but will it be enough? Farmers are seeing their profits cut by half since prices have tanked. And to top it off the perfect storm has arrived in the form of tornadoes and floods of massive proportion. Fields are too flooded to plant the next season’s crop, which could be the last straw on the camel’s back, so to speak.
Things are not as bad as the 1980s yet, where farmers went bust and then whole communities turned to ghost towns, but it is approaching that level if things don’t change for the better. This blow to the belly of America has left it vulnerable. This may become the trigger of another financial crisis, accompanied by climate crisis and in some places political crisis. Even the UK and EU are struggling about Brexit. The entire EU is being fought over through this current stalemate.
It’s starting to look messy on multiple levels. What will the black swan event be that starts the domino effect that pushed the global balance over the edge. Contagion in the banking sector will ripple through the globe at the slightest trigger too. Add to that the cultural clashes as Islam seeps into every crack of Europe now.
One of these multiple powder kegs is waiting to ignite and the explosion will have the masses out on the streets rioting against their governments, their neighbors and themselves, all te time forgetting that there is no us and them. It’s all we. We are all in this together as a human race. Let’s hope we remember that when it really counts.
Interest rates may be down compared to the eighties, and the last great agricultural crisis, but farm debt is approaching those eighties levels, and expenses are rising, thanks to the squeeze from big agri like Monsanto and their toxic pesticides.
The curious thing is that this current farm crisis in America is not new. In 2017 a report referenced below says that farmers have been weathering a slump since 2013 already, with a 45% drop in income over those years. In fact they saw the largest three-year drop in profit since the Great Depression of 1929.
So for the past five years or more crop prices have been in a slump and profits have been scarce for farmers in America. This is not a new thing. With the industrial sector in America slowing down as manufacturing is outsourced to China, and now agriculture taking a huge blow, it won’t be long before the great American depression becomes a reality. And we may not see it in the stock market which is so inflated and artificially propped up, but we do see it in the urban decay and infrastructure collapse nationally.
Literal standard of living is dropping in America among the masses as the money moves to the richer, while the poor get poorer. As the rural farming sector is also hit by economic collapse we will see the rise in suicides. You can see the same thing in India, by the way. In 2016 the Centre for Disease Control released a report that showed how the national suicide rate for people working in the agricultural sector is more than 50% higher that it was during the 1980s farm crisis. Wheat and diary farmers are the worst hit economically in recent years. And what is worse is that loans for farmers are seen to be excluding people of color or Latino descent in favor of whites. This racist policy ultimately results in a lot more of the disenfranchised people losing their land to ruthless bankers.
Ref: https://www.politico.com/story/2019/02/06/farm-crisis-trump-trade-policies-1147987
https://www.farmaid.org/issues/farm-economy-in-crisis/looming-crisis-american-farms/
