Post by Farmer Nestor on Aug 31, 2010 1:41:32 GMT -8
Agriculture versus Agribusiness
By: Engr. Winfried Scheewe
The use of farm inputs has totally changed the way of farming. For a long time, the main purpose of crop production and animal husbandry was the achievement of self-sufficiency in food. The peasants had an intuitive knowledge and were guided by the experience of many generations. They considered nature as a whole. The necessary inputs came mainly from the farm itself.
Until only a few decades ago, most agricultural activities in the Philippines, as in many other Third World countries, aimed to support the various needs of the rural families. Farmers allotted only a small portion of their land to cash crops. The government and some corporations supported self-sufficiency in the countryside. However, during the last decades, the basic character of plant cultivation and animal husbandry has changed from subsistence-oriented agriculture to an industrial type of agriculture or agribusiness, that is the production of cash, often for export, as the main source of rural livelihood.
Many farmers are still aware that the increasing dependence on the market economy caused a tremendous shift in their communities. Where there was a mutual aid and cooperation in work (Bayanihan or alayon), there is now paid labor. Today people are paying with money for nearly everything and for every service. The orientation for cash, of course, undermines the community spirit; and it undermines self-reliance as well. As the community ties become weak, the dependence of the individuals on the outside continues to intensify. In the course of commercialization, their farms became less diversified. Farmers lost valuable knowledge and many skills. For example pottery, and weaving were common activities in the villages. Today, almost all clothes and kitchen utensils come from outside the village. The decrease in diversity has led to less variation in the diet. Also the work in fields has changed. Hand tractors have replaced the good carabao. Farmers can now plow more land faster but at higher cost.
In the past people exchanged only surpluses for the products that were not available in the communities and the neighboring villages. Now, farmers sell most, if not all, of the produce to buyers residing in the next town or city. A farmer selling his produce to trader is at the beginning of a long series of transactions. Cost for transport, handling, storing, risks, processing, and capital as well as taxes are added until the farmer’s product reaches the consumer. Along that line, traders and agribusiness corporation earn large amounts of money.
If a farmer does not produce his own food, he relies on food bought in stores or at the market. As a consumer, the farmer finds himself at the end of a longer sequence of services for which he has to pay. Computed on a per food calorie or per gram of protein basis he will pay much more than he received for his produce. In this manner, substantial wealth moves from rural areas to the urban centers where traders, processing plants, and banks are based. One can speak of a drain of wealth ; thus, surplus extracted from the countryside is accumulated in the urban centers. The debts farmers have incurred and the high interest rates aggravate the situation.
Today, farming has turned into agribusiness . The main purpose of farming is for cash or profit and not food for the family. Often the main trust is to produce raw materials for big agribusiness corporations. By using several kinds of inputs the farmer becomes more and more dependent on the industry. Now, most farmers are dependent on the markets for agro-chemicals and farm tools. Most farmers have no capital to buy the inputs. Hence they have to borrow often from traders or private money lenders at high interest rates. Typically, farmers have to sell a big share of their harvest just to pay the loans and interest.
On the other side, they depend also on the traders for their products. The markets for most farm products are controlled by few big companies that often form cartels. Several enterprises are transnational corporations. Since deregulation of markets, farm gate prices are increasingly determined by the situation on the world markets for the respective commodities which are dominated by big international trading companies.
Worldwide, farmers are facing a similar fate. They have to cope with declining prices for their harvest, while the prices for farm inputs are increasing. Many farmers give up because of the pressure. Others try to survive by cultivating more land or by raising more farm animals. By this they hope to lower the production costs. The economic pressure is causing tremendous social problems and forcing farmers to use farming methods that are not ecologically sound. Producing under pressure of low prices and huge debts farmers are more or lees compelled to ignore the effects of their toil on the environment.
Some agribusiness companies involved in the yellow corn business, for example, promote ‘contract growing’ schemes. With these contracts, the corporation provide the farmers with services for land preparation (by tractor), hybrid seeds, fertilizers, and pesticides. In return, the farmers have to deliver the products at prearranged prices for the corporation.
In the short term, this might be attractive for the farmers since they have an assurance of a market, credits for the inputs, and a higher margin for themselves. The need for inputs and the difficulties in getting credits make the farmers vulnerable to accept the conditions of the big corporations. Consequently, farmers have to follow all instructions stated in the contract. This includes the scheduled use of fertilizers and pesticides which will contribute to the destruction of the soil.
By: Engr. Winfried Scheewe
The use of farm inputs has totally changed the way of farming. For a long time, the main purpose of crop production and animal husbandry was the achievement of self-sufficiency in food. The peasants had an intuitive knowledge and were guided by the experience of many generations. They considered nature as a whole. The necessary inputs came mainly from the farm itself.
Until only a few decades ago, most agricultural activities in the Philippines, as in many other Third World countries, aimed to support the various needs of the rural families. Farmers allotted only a small portion of their land to cash crops. The government and some corporations supported self-sufficiency in the countryside. However, during the last decades, the basic character of plant cultivation and animal husbandry has changed from subsistence-oriented agriculture to an industrial type of agriculture or agribusiness, that is the production of cash, often for export, as the main source of rural livelihood.
Many farmers are still aware that the increasing dependence on the market economy caused a tremendous shift in their communities. Where there was a mutual aid and cooperation in work (Bayanihan or alayon), there is now paid labor. Today people are paying with money for nearly everything and for every service. The orientation for cash, of course, undermines the community spirit; and it undermines self-reliance as well. As the community ties become weak, the dependence of the individuals on the outside continues to intensify. In the course of commercialization, their farms became less diversified. Farmers lost valuable knowledge and many skills. For example pottery, and weaving were common activities in the villages. Today, almost all clothes and kitchen utensils come from outside the village. The decrease in diversity has led to less variation in the diet. Also the work in fields has changed. Hand tractors have replaced the good carabao. Farmers can now plow more land faster but at higher cost.
In the past people exchanged only surpluses for the products that were not available in the communities and the neighboring villages. Now, farmers sell most, if not all, of the produce to buyers residing in the next town or city. A farmer selling his produce to trader is at the beginning of a long series of transactions. Cost for transport, handling, storing, risks, processing, and capital as well as taxes are added until the farmer’s product reaches the consumer. Along that line, traders and agribusiness corporation earn large amounts of money.
If a farmer does not produce his own food, he relies on food bought in stores or at the market. As a consumer, the farmer finds himself at the end of a longer sequence of services for which he has to pay. Computed on a per food calorie or per gram of protein basis he will pay much more than he received for his produce. In this manner, substantial wealth moves from rural areas to the urban centers where traders, processing plants, and banks are based. One can speak of a drain of wealth ; thus, surplus extracted from the countryside is accumulated in the urban centers. The debts farmers have incurred and the high interest rates aggravate the situation.
Today, farming has turned into agribusiness . The main purpose of farming is for cash or profit and not food for the family. Often the main trust is to produce raw materials for big agribusiness corporations. By using several kinds of inputs the farmer becomes more and more dependent on the industry. Now, most farmers are dependent on the markets for agro-chemicals and farm tools. Most farmers have no capital to buy the inputs. Hence they have to borrow often from traders or private money lenders at high interest rates. Typically, farmers have to sell a big share of their harvest just to pay the loans and interest.
On the other side, they depend also on the traders for their products. The markets for most farm products are controlled by few big companies that often form cartels. Several enterprises are transnational corporations. Since deregulation of markets, farm gate prices are increasingly determined by the situation on the world markets for the respective commodities which are dominated by big international trading companies.
Worldwide, farmers are facing a similar fate. They have to cope with declining prices for their harvest, while the prices for farm inputs are increasing. Many farmers give up because of the pressure. Others try to survive by cultivating more land or by raising more farm animals. By this they hope to lower the production costs. The economic pressure is causing tremendous social problems and forcing farmers to use farming methods that are not ecologically sound. Producing under pressure of low prices and huge debts farmers are more or lees compelled to ignore the effects of their toil on the environment.
Some agribusiness companies involved in the yellow corn business, for example, promote ‘contract growing’ schemes. With these contracts, the corporation provide the farmers with services for land preparation (by tractor), hybrid seeds, fertilizers, and pesticides. In return, the farmers have to deliver the products at prearranged prices for the corporation.
In the short term, this might be attractive for the farmers since they have an assurance of a market, credits for the inputs, and a higher margin for themselves. The need for inputs and the difficulties in getting credits make the farmers vulnerable to accept the conditions of the big corporations. Consequently, farmers have to follow all instructions stated in the contract. This includes the scheduled use of fertilizers and pesticides which will contribute to the destruction of the soil.