national
farmers union
national
farmers unionSASKATOON, Sask.-The National Farmers Union released a report today that demonstrates that the current net farm income crisis is not caused by European Union (EU) subsidies. The crisis is, instead, caused by excess profit-taking by agri-business corporations.
"There's long been talk that Monsanto, John Deere, Maple Leaf, and Safeway are making huge profits at the expense of farmers. But this is the first report that lays out the facts and the numbers," said NFU Vice-President Fred Tait.
Agriculture Ministers have tried to blame the farm income crisis on EU subsidies. They argue that those subsidies lead to increased production, over supply, declining prices, and falling incomes. This explanation seems logical until you look at the numbers and find that production rose just as fast in countries which were not subsidizing their farmers.
The NFU report demonstrates that while production did increase in the EU, production in non-subsidized countries such as Argentina, Australia, and even Canada increased at similar rates. "There is no evidence that EU production would be lower today or that the farm crisis would be less severe if the EU had not supported its farmers," said Tait.
Cereal companies continue to earn huge profits even as the farmers growing cereal grains go broke. In 1998, cereal companies Kellogg's, Quaker Oats, and General Mills earned $1.8 billion in profits and an average return on equity of 147%-farmers earned 0.3%. The cereal companies were almost 500 times more profitable than the farms. "Maybe farmers are making too little because corporations are taking too much," said Tait.
The NFU report contains comparisons of revenue, profit, and return on equity for most of the major agribusiness corporations operating in Canada.
Tait concluded: "The farm income crisis is a crisis only on the farms. While there is little money in farming, there are vast fortunes to be made in food. It's not just that farmers are going broke and agribusiness corporations are reaping huge profits: it may be that farmers are going broke because corporations are reaping huge profits. This new report demonstrates that."
The NFU released its report in a presentation before the Senate Standing Committee on Agriculture and at news conferences in Ottawa, Saskatoon, and Winnipeg. The complete report is available by calling (306) 652-9465 and the brief is available on the internet at www.nfu.ca
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