The Rural Voice, 1980-08, Page 21VOICE OF A FARMER
Corporate farms going broke in Europe
BY ADRIAN VOS
In Europe the big corporate farms are going broke. Be it in
France, Holland or Germany, one after the other has to close its
doors because they can't compete with the family farm.
If we look around us, we see family farms that grow bigger to
accommodate sons and their families, only last for about two
generations. When the so-called family corporation comes into
the hands of the cousins, the harmony is usually over, or one or
more of the participating partners leaves for the city. The
remaining families can't make ends meet with hired labor, and
they either sell or sell off enough to satisfy those leaving, thereby
returning to the real family farm.
If corporate farms were the only threat to the family farm, one
could easily say: "Why not let them come and hang themselves
on their own corporate rope?" But it is not that simple any more
in Canada. There is a real danger that vertically integrated farms
and processors create a monopoly, denying family farms an
outlet for their products.
In a way it is a sad commentary on farm income in Canada that
the family farm must compete with their corporate competitors
by working longer hours and thus take a lower income per hour.
When the corporation can't make money, he closes the shop.
When the farmer can't make money, he doesn't take holidays.
He works longer hours to avoid hiring help; drives the old family
buggy another year or two, and eats of the capital invested in the
farm over the years.
The reason that the big farms in Europe are closing is
apparently the fact that both the owners, who are actually
working on the farms, and the hired help don't work more than
40 hours a week. The true family farm is estimated to work 60
hours a week.
But one of the reasons that more and more family farms are
having trouble surviving is the massive capital investment
required on the modern farm. Where in former times reasonably
priced labor was available, or even poorly laid labor, today all
farm labor is scarce or not available at all. This necessitates the
replacement of labor with machinery.
While labor formerly could be replaced by family labor and
long hours, the machines have to be paid for regardless of the
hours they are used, and be replaced when they wear out.
Farming is rapidly becoming what it should have been all
along, a business, where capital is written off in a certain time
and then replaced. The write-off is calculated in the price of the
product. If that price is inadequate, the business closes.
What such a scenario would mean to the consumers is not hard
to understand. Food prices would be figured just as our supply
management marketing boards do, with the added cost of
impersonal production.
Farming is not comparable, by and Targe, with the production
of manufactured goods. A widget can be produced with the cost
calculated for material and labor and overhead before the factory
is even built. But it's not so with farm products, be it plants or
livestock. Every step in working with living organisms must be
done with tender loving care. A pig that is not treated right will
grow slower. A cow that is handled roughly or even indifferently
gives less milk. A plant that is sprayed according to the calendar
instead of according to the personal experience of the farmer,
may get burned leaves or even get killed. This works right
through the system.
The cost of barn and equipment cannot be replaced with labor.
Just as in the manufacturing industry, only the innovative and
super efficient farmer will survive. The hog farmer MUST get
large litters per sow every year. He MUST get pigs with a low
feed conversion. He MUST get pigs with low fat and high lean.
He must build up a calamity reserve to survive disease and the
onslaught of competition. He MUST still be willing to give up his
holiday and work long hours to avoid buying a labor saving
machine.
Yes, independence has its price. It's the same price that any
small independent businessman pays for his independence.
The dairyman MUST get the best cows available so he saves
the maximum on feed. He MUST produce as close to his quota as
possible, even if he runs the risk of some overquota. Only in this
way can he get more quota for his province, which benefits him
in the end.
Any budding farmer MUST understand that to begin a farm
takes knowledge; that he will be up against other new farmers
who have studied his business at university; that he will have to
make up for that by doing his homework and by keeping
informed on what is new in his area of farming.
What used to be good enough even 1S years ago is not good
enough any more. The investment is too great. To want a
marketing board that protects the moderately efficient farmer is
tempting, but it's no substitute for businesslike behavior.
Every farm sector has its super efficient people. They are the
true competitors of the family farmer, not the corporations. The
sooner both the farmer and the consumer understand that, the
family farm can survive, but no one will say that it will be easy.
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THE RURAL VOICE/AUGUST 1980 PG. 19