Farm Ireland
Independent.ie

Friday 24 November 2017

It's a hard taskmaster but capitalism actually works

Vast tanker ships travel globally bringing hundreds of thousands of containers from port to port
Vast tanker ships travel globally bringing hundreds of thousands of containers from port to port
Joe Barry

Joe Barry

Farming is, yet again, in crisis. Now where did I hear that before?

Probably since I first understood what adults were discussing. The only optimistic period I can recall was when we first joined the Common Market.

So why do we keep on farming? There is no rational answer to this other than the fact that many are slow to change the practices of a lifetime and if we are honest, we might admit that the money we earn is secondary to the pleasure we get from a farming life.

It might at times be a hard life, but it's a good one and if we are not struggling to rear children and have enough to get by on, job satisfaction then becomes the primary driver.

But if the aim is to get rich, then it is a different matter.

Most farmers are expert at growing crops and rearing livestock. He or she is skilled in a profession that contains some excellent practitioners but is being ground down to subsistence by the huge food processors and retailers.

So what are we to do? EU subsidies are declining and the demand for cheap food cannot be halted.

Different political systems have been tried throughout the world to improve the standard of living of rural dwellers. Most were found wanting and I will list them from an agricultural perspective:

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Socialism. You have two cows. You give one to your neighbour and share what you produce for free. This ensures that everyone remains poor.

Communism. You have two cows. The State takes both, puts them in a collective State owned farm where there is no incentive to produce more milk so everyone remains poor. Even the Russians and Chinese gave up on that idea.

Fascism. You have two cows. The State takes both and sells you some milk. You are still poor.

Nazism. You have two cows. The State takes both and shoots you. Well at least that way your impoverished existence has ended.

Capitalism. You have two cows. You sell one and buy a bull. Your herd multiplies, you open a butchers shop and the economy grows. You sell up and retire on the accumulated capital.

Competition

As we can see from this oversimplified example, capitalism appears to be the only system, so far, that actually works but it can be a hard taskmaster.

There is always competition which keeps us on our toes and in a free trade situation, the pressure on prices continues downwards, especially with so many goods coming in from abroad.

I have been racking what is left of my brains to discover what it is that the emerging young entrepreneurs in the farming community have to do to survive and took a look at what most successful people who own farms are actually doing.

Virtually all of them have diversified and rather than just selling milk or meat or corn to the current limited numbers of purchasers, they have concentrated on adding value before they part with their produce.

Many, such as the organic farmers who sell direct to the public, have become traders and buy in fruit and veg from abroad to add to their own range of goods.

Some farmers sold land and purchased house property to rent and started dealing in property. Those who seem to have fared best are the ones who trade rather than simply produce food for others to get rich on.

My own ancestors traded in cattle and sheep rather than producing them and lived by the rule that you must keep turning your stock over; once you stop trading you begin to lose money.

Throughout history, enterprising people grew wealthy from trade. Many travelled widely, buying and selling and were rarely involved in primary production.

This dates back to the time of the Silk Road when merchants took great risks to bring spices and silks across deserts and over mountains.

Nowadays huge cargo airplanes fly twenty four hours a day transporting food from one end of the earth to the other so that fresh fruit and vegetables are available throughout the year.

Vast tanker ships travel globally bringing hundreds of thousands of containers from port to port.

This is just a modern and gigantic version of the ancient traders with their camels and mules.

The competition among the world's farmers is cut throat. The only ones making real money are those who buy, add value and sell on.

The founder of one of Britain's largest companies started life as a barrow boy in East London and where better to learn the finer points of commerce.


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