PULLMAN, Wash. — Author Steven Blank admits the title of his book and lectures, “The End of Agriculture in the American Portfolio,” is a bit alarming, but he doesn’t back down from his prediction that America will lose agriculture as we know it, unless public policy intervenes to preserve the nation’s agricultural capacity.
Blank spoke at the Washington State University Cooperative Extension Conference 2000 here Wednesday.
“American agriculture will outlive me,” Blank said, “but I’m not so sure about my grandchildren. It will last a few decades, but it certainly will not exist as we know it by the end of this century.”
That is, it won’t survive without government intervention. And Blank emphatically expresses his belief that America has an obligation to preserve its agricultural capacity, for strategic political reasons.
Intervention would come in terms of government programs that encourage farmers to take more risk.
“Freedom to farm didn’t work,” Blank said, noting that farmers are receiving some $23 billion in government payments.
Noting that no apples are grown in Manhattan (New York), Blank said America is taking farmland out of production. Once it is lost to urbanization, it never will return to agricultural production.
Blank noted the irony that cities that were founded to support farms in California’s San Joaquin Valley today are the greatest threat to the survival of those farms.
As Blank grew up on the family farm near Modesto, Calif., he thought he would become a fifth generation farmer. But the farm failed while he served in the armed forces and he became an agricultural economist, eventually joining the University of California, Davis faculty.
Blank says when farmers came to him for an explanation of economic events they saw happening in agriculture, he discovered that farmers follow the same basic economic principles that govern investors.
The economist peppered his WSU audience with data showing that agriculture is a declining industry and that farmers eventually are forced to get out of farming and invest in something else.
In 1992, there were 1,925,300 farms in the United States. In 1997 there were 1,911,900. The decline in full-time farms was even more dramatic. Blank said 869,700 farmers received all of their income from farming in 1997, down from 932,500 in 1992. Acreage in farming also is down, from 1.2 billion acres in 1954 to 931.8 million acres.
About 88 percent of the income of the nation’s farmers comes from non-farm income, a fact that makes them “hobby farmers.”
Blank credited land-grant universities (such as WSU and UC, Davis) with helping American agriculture survive. They have done so by creating new technology that has enabled American producers to be the most efficient in the world.
However, he said the back side of new technology is that it is always exported and applied in other countries. Rising production causes prices to fall. Among farmers, only the early adopters of new technology benefit.
However, Blank said consumers always benefit from lower prices. Americans, he said, currently pay only 8 percent of their income for food.
The problem for farmers, Blank said, is that supply and demand always are global, but production costs always are local. This means production will go where costs are least — overseas — and more Americans will leave farming.
Blank illustrated this phenomenon with data showing that the average prices U.S. farmers receive for their crops has fallen 7 percent over the past 10 years while their costs increased 16 percent or 17 percent.
The average profit from farming in America has consistently been only 2 percent or 3 percent, “year after year, after year for 30 years. Even my checking account pays that well,” Blank quipped.
More and more farmers leave agriculture in search of better investments. Those who remain are forced to get bigger and bigger in order to afford the high cost of farming.
While Blank predicts that biotechnology may be the next wave of increased agricultural production that will keep some farmers in business, ultimately, it will create more surpluses and drive prices down. That’s good news for consumers, but bad news for farmers on an economic treadmill.
Burgeoning world population notwithstanding, Blank says food surpluses will be an even bigger problem in the future.
Blank said various experts predict world population to grow from today’s 6 billion people to somewhere between 8 billion and 11 billion by the year 2060. But today’s technology and natural resources can produce food to feed 11 billion people a 2,500 calorie-a-day diet, “Blank says.
China, a wheat importer today, may be the world’s leading wheat exporter in 20 years, Blank said.
Despite the scary title, Blank says farmers who have read his book are among his strongest supporters. He isn’t any happier than farmers about the sad story he tells about the future of American agriculture, but he said economists have to tell people what they need to hear, not what they want to hear.
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