Agribusiness and the Farm Crisis

by Howard Brown

Labor Challenge, December 20, 1971

SASKATOON — "Save the family farm!" That slogan has been inscribed on the banner of every Canadian political party since the 1930s, and waved before farmers at election time. But today as the farm crisis becomes more and more acute, the rhetoric of the capitalist politicians stands exposed in sharp contrast to their record. The western farmers are fighting mad. They're organizing themselves for action.

In Saskatchewan, the number of farms has been reduced from 139,000 in 1941 to fewer than 86,000 in 1966. The federal government's Task Force on Agriculture has projected the elimination of two-thirds of Canadian farmers.

The monopoly press has posed the western agriculture crisis as a marketing crisis, which has in fact been a tremendous burden on the Prairie economy. But the marketing crisis only falls on top of, and serves to exacerbate the permanent farm crisis posed by the increasing monopolization of agriculture.

As agriculture becomes increasingly mechanized, the farmer is more and more under the control of capital. Corporate penetration of agriculture through production and distribution of farm capital goods, through credit institutions and through food processing and distribution, catches the working farmer in a cost price squeeze which threatens his very existence.

The impact of monopoly capital on the farm economy has been well enough documented. The records of the Restrictive Trades Practices Commission are full of examples of combination and monopoly in the agribusiness world. The Barber Commission on farm machinery documents international price fixing in machinery.

Take Massey-Ferguson for example. While it exploits farmers through rising machinery costs, its parent company Argus Corporation is penetrating the agricultural economy through banking, brewing and food processing and distribution. While farm debt spirals upward ($2.5 million in 1968) bank profits spiral upward beside them. And the boards of directors of those banks are studded with agribusiness stars. Argus Corp. shares directors with at least 30 financial firms.

The growth of huge food processing and distribution conglomerates presses down with all its weight on the working farmer. Most notable is the Garfield Weston empire, which operates companies on four continents. On the prairies, Weston's subsidiaries include five retail chains, five voluntary retail trade groups, and a score of wholesale operations.

In the words of one economist, Weston's constitutes "nearly a complete food processing and distributing economy within itself." And there are other similar conglomerates. The Batten Commission on Consumer Problems and Inflation reports that chain stores in Saskatchewan reap profits nearly 40 percent above the Canadian average, and some two to three times the rate of profit of American chains.

Far from being a collection of isolated companies, agribusiness is an entire network of inter-corporate ownership and interlocking directorships. And while there are tensions within that network, on the primary level their interests coincide in opposition to those of working farmers.

The logic of the cost-price squeeze which threatens the expropriation of two-thirds of Canadian farmers from their land is obvious enough. While farm prices remain relatively stable, or spiral downward, costs consistently escalate. The monopolies which sell to the farmer set a stable profit-making price (which has more than doubled since 1945). But the farmer cannot set his own prices when he sells; the price is determined by the giants of the food-processing empire. If modern agricultural technology forces the concentration of farm capital, it is the cost-price squeeze that determines which farmers will survive.

The last few years have seen a resurgence in the traditional struggle of farmers against big agricultural capital. A series of important struggles went into the formation in 1969 of the National Farmers Union, completely independent of agribusiness. The question of independence here is decisive, for agribusiness and working farmers have fundamentally contradictory interests. Agribusiness poses in ever more decisive terms the expropriation of working farmers. The independent organization of working farmers can only put the expropriation of corporate agriculture on the order of the day.

The NFU has pointed the way forward for farmers' struggle through mass action. In 1969, it launched tractor demonstrations throughout Saskatchewan to greet Prime Minister Trudeau. The spring of 1971 saw thousands of farmers join in mass demonstrations in the three prairie capitals. Last summer saw a week of protest against government farm policies in Prince Edward Island.

Yet for all their militancy, working farmers are critically weak by themselves. They number with their families less than l0 percent of the population, and their numbers are declining. They need allies.

There is only one potential ally in a strategic position to bring capitalism to a grinding halt — the working class. Already the NFU has recognized this, and moved to forge links with the workers.

Politically, the logical expression of the farmers' struggle is the New Democratic Party. It is the only party not organically tied to agribusiness, and offers an ongoing possibility of a real worker-farmer alliance.

The political power of agribusiness has already shown itself to be a formidable force. Through the capitalist parties, agribusiness has broken down some of the controls of the Canadian Wheat Board in the 1950s and recently was the motivating force behind the Trudeau government's Bill C-244, the Prairie Grain Income-Stabilization Act.

While a real stabilization plan which could provide farmers with-a realistic guaranteed income is a top priority for farmers, Bill C-244 was by no means pro-farmer legislation. "Stabilization" was tied to total income from sales of grain over a period of time. Thus the incomes of the agribusiness corporations which control sales of grain, such as elevator and farm supply companies would be stabilized. But the farmer would have no guarantee on his realized net income. He would have no protection from inflation and would be the victim of slashed prices. The farmer would be forced to bear the brunt of competition for grain sales in the international market, where agribusiness could dump grain at low prices and still retain a "stabilized" income.

Through the combined efforts of the NFU, the Saskatchewan Wheat Pool and the NDP the Trudeau government was forced to withdraw Bill C-244. This is an important victory for the farmers' movement. The fight now is for a stabilization bill which really benefits farmers.

The Saskatchewan NDP has projected the concept of a land bank program which would buy land from farmers at competitive prices, then lease it to small farmers or cooperatives on the basis of guaranteed land tenure. The land bank is aimed at preventing further accumulation of land by corporations and large farmers.

As the farmers' movement develops and grows, a range of demands will come to the fore: nationalization of the farm chemical and fertilizer manufacturers with the development of a worker-farmer controlled farm chemical industry; nationalization of the chain stores; government take-over of the farm machinery distribution outlets, and the building of a 'campaign for nationalization of the entire industry; worker-farmer boards with power to control prices — to fight inflation and the cost price squeeze. These are only a few demands that the NDP could take up in a mass campaign.

The farmers have taken up the struggle, and it is up to the NDP in Saskatchewan and across the country to throw the weight of all the working people behind them.

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