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THE SOURCE OF THE FARM CRISIS
By Darrell Rankin, Manitoba leader, Communist Party of Canada
(This article is from the April 1-15/2000 issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, 706 Clark Drive, Vancouver, Canada, V5L 3J1.)
FARM INCOMES ARE sliding below Depression-era levels despite the overall growth of the economy in the last five years, says a major study by the National Farmers Union. The rural population, already worse off than those who live in the cities, is getting poorer.
So far, the crisis is centred almost entirely in Saskatchewan and Manitoba, where tens of thousands of small farm owners face imminent ruin.
"If markets work, how do elected and corporate leaders explain the economic carnage on family farms?" asks the study. The Liberals, Reform, and NDP, and the pro-corporate media, blame the $362 billion (US) spent on farm aid, mainly by the USA, European Union and Japan, for the sharp drop in farm commodity prices.
But the real source of the crisis, the NFU study finds, is "the direct result of dramatic market power imbalances between agri-food industry multinational corporations and the family farm that must do business with these firms."
The study proves there is no relation between farm subsidies and the agricultural over-production that is lowering farm commodity prices and income. Subsidies to farmers are not the cause of over-production; this is a regular feature of capitalism in all industries, including those which are not subsidized.
The crisis has, however, brought out some differences of agrarian policy among pro-corporate political parties.
Comments by federal agriculture minister Lyle Vanclief make it clear that the Liberal government is trying to eliminate small-scale farm production. Likening his government's policy to "tough love," Vanclief says that if farmers don't like the pay, they should look for another line of work.
The Liberals argue that the huge scale of farm exports related to the size of Canada's economy make farm aid a drain on an otherwise efficient economy. They have cut farm aid by more than half in the last decade.
Canada's ruling circles know they have lost the support of the small farm owners. In the last year, prairie farmers have blocked highways, organized large rallies, and occupied the Saskatchewan legislature. Farmers have organized at least ten new protest groups.
The Liberals are trying to help the minority of large farmers grab the land left by ruined, small farmers, and to find allies among these rich farmers. Already most farm commodities are supplied by the agricultural capitalist elite, the small numbers of very large farms. Smaller farms are in desperate need of aid; larger farms are less needful.
The NFU study explains the futility of providing subsidies if such aid simply ends up in the pockets of the few corporations that dominate and manipulate the farm economy.
In 1998, the total gross farm income in Canada was $29 billion. The small number of corporations that dominate farm inputs and markets have revenues vastly larger than gross farm income. Agribusiness corporations earn high rates of profit; their "return on equity" ranges from 5 to 20 per cent. According to the NFU, Canadian farms in the last five years had an average return on equity of just 0.7 per cent.
Last fall, the six parties in the Manitoba and Saskatchewan legislatures had a common position for emergency farm aid from Ottawa. The Saskatchewan Party broke the common front by shifting its call for aid to the Saskatchewan treasury, saying the federal government has responsibility only for the subsidy "trade" issue.
Rather than challenging corporate power, the non-working class parties are relying entirely on money subsidies to "solve" the farm crisis. As well, they are playing up to western separatist ideas by presenting themselves as defenders of "rural" Western Canada against the eastern "urban" enemy.
These "solutions" will backfire on farmers. The rural/urban and Western/Eastern "split" is a sham created to hide corporate exploitation of both farmers and the working class, and to create divisions between them.
The corporations want farmers to believe that "more aid," working harder, and greater efficiency will end the crisis in the rural economy. They want farmers to place their hopes in becoming rich, not in uniting with the rural and city workers. They want workers and farmers to believe foreign government subsidies are to blame for their misery.
The real benefactors of this division are the transnational corporations. If Western Canada separated, these corporations would intensify their exploitation of the workers and farmers of the region. This "balkanization" strategy is backed by the most reactionary sections of U.S. transnational capital, such as the oil monopolies, and represented in Canada through the Reform Party.
The NFU study should help to clarify the real source of the farm income crisis for Prairie farmers. In fact, many farmers are aware of the corporate plundering of the farm economy. More and more, farmers have to find earnings off the farm as wage workers. The 1996 census reports that out of every $100 declared farm family income, $69 is earned from off-farm jobs.
More farmers are in a relation of direct dependency on large corporations through production contracts. Industrial farms are rapidly expanding the rural working class that is not organized or covered by the most elementary labour laws. Rural labour relations in Canada are changing rapidly.
The ruin of tens of thousands of farmers will have serious consequences for Canadian sovereignty. Pressures on Canada to rely on foreign food imports will increase. Countries that produce cheap food for export, such as the United States, would have more influence on our economy.
The use of food as a weapon and the basis for a strong imperialist economy is well understood in the US, Europe and Japan, which are responsible for the bulk of global farm aid. In fact, farmers pay the price when food is used as a weapon, for example, against Iraq. An independent foreign policy for Canada should include total opposition to the use of food as a weapon; in fact, Canada should export food to countries facing such embargoes.
Farmer-Labour unity is needed to end the poverty and misery of farm families and rural workers. New policies are needed to ensure full production and all-round development of agriculture. Small farm owners need to combine the demand for immediate aid with the demand to end the domination of the farm economy by big business.
The interests of the large majority of the rural and urban population require a comprehensive agrarian program that puts working people before profit, and to satisfy the real needs of Canadians.
In the short term, such a program should include: price subsidies and strengthened farm income stabilization programs; restored regulation of grain delivery in the interests of farmers; extending labour laws to the rural working class; strong anti-dumping laws; restoration and strengthening of farm commodity marketing boards. A labour-farmer program also needs to raise the demand to nationalize banks and the agri-business corporations.
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