One of the oldest truisms in agriculture noted that “when farmers make money, everybody in town makes money.”
“Noted,” as in past tense because, if you’ve passed through almost any farm town in any farm state lately, few businesses – outside a coffee shop, a convenience store and a pub or two – exist anymore.
Facing the facts. The reasons for rural America’s empty storefronts are as many as they are irreversible: fewer farmers, more mobility, the rise (and domination) of chain retailers, the Internet, loyalties pegged to dollars rather than neighbors. These are cold facts, not nostalgic laments.
Yet the dollars that once were spent locally, and then pinballed through local businesses five or so times before moving on, are still being spent.
In fact, according to November 2007 USDA estimates, farmers and ranchers spent a record $254 billion last year to grow our food and fiber. Those same farmers and ranchers also pocketed a record net farm income, $87.5 billion, or nearly $30 billion more than 2006.
Follow the money. So where did – does – the money go? The usual places, mostly into the pockets of giant, American-based transnational businesses, only now it gets there more directly instead of the local zigging and zagging of 30 years ago.
And, too, once it gets into the international pipeline, it’s deposited everywhere – but only rarely in rural America.
Reinvested abroad. For example, Deere & Co. made a $1.8 billion profit on sales of $24 billion in its 2007 fiscal year; $85 million of which then went to purchase Nihgbo Benye Tractor and Automobile Manufacturing, the largest tractor maker in southern China.
Likewise, CHS, Inc., formerly known as Cenex Harvest States cooperative, achieved record sales, $17.2 billion, and a record profit, $750 million, for its 350,000 members in 2007. The money quickly moved to, among other things, generous patronage to co-op members, increased investment in its domestic petroleum and biofuel businesses and a new grain trading office in Switzerland.
Some of it – CHS is not saying how much – was added to cash from a new Japanese partner, Mitsui & Co., and a current Brazilian partner, Multigrain AG, to buy 247,000 acres, or 386 square miles, of Brazilian farmland in early November to “strengthen the ability of Multigrain and its owners to originate commodities for global customers.”
Monsanto resurrected. Monsanto, too, had a smashing 2007. Left for dead (by me, among others) just five years ago, the global biotech leader saw its net income soar 44 percent, to nearly $1 billion, on sales of $8.5 billion last year.
The company, noted BusinessWeek in early December, “is minting money,” most of which will be spent in 2008 on perfecting, then marketing, new seeds for American, Indian, Chinese and Brazilian farmers.
Ignoring pennies. How far-flung ag giants and big box retailers make and spend their (formerly your) money is, of course, their and their shareholders’ business. That most of it leaves the local community never to return, however, once was everyone’s business.
Truth be told, few in rural America even worry about our vanishing local economies now and even fewer have the skills to do something about it.
A generation or so ago, we stopped bending over to pick up a penny and began driving 20 miles to save a nickel. Those choices, like all those nickels, carried value; value that now ends up elsewhere.
In the 23 years I have lived in central Illinois, arguably the dead center of the richest farmland in the world, Wal-Mart has built five, ever-bigger “super” centers in the two county seats equi-distant from my home.
Well, Wal-Mart didn’t build ’em; we – our nickels – did.
And that, too, is a simple, cold fact.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at email@example.com.)
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