Agricultural economists describe grim situation for farmers, compounded by multiple factors - Entrepreneur Generations

Covid-19 is hurting the agricultural economy, but its appearance is only the latest in a string of misfortunes. "The recent Emergency (Market Facilitation) payments have put a band aid over the wound for some farmers but the fever of the underlying economic illness is still raging," Harwood D. Schaffer and Daryll E. Ray of the University of Tennessee write in their latest "Policy Pennings" column.

Climate change is having a major effect on farming, though not all believe it, they write. The biofuels waiver issue has hurt the ethanol industry as well. Plus, supply chain issues could become a bigger problem as more farmworkers or meatpackers get sick. 

"We are facing the development of a farm financial crisis, the likes of which have not been seen since the 1980s and before that the farm crisis that began in the years following WWI and exploded during the early years of the Great Depression," Schaffer and Ray write. "Over the last five years, crop and milk prices have plummeted to the point that they are significantly below the full cost of production. While there are differences with the 1980s—1. lending is on the basis of cash flow and not the growth in assets and 2. interest rates are not in the stratosphere—the increasing number of bankruptcies among crop and dairy farmers provide clear signs that rougher times are still ahead of us.

from The Rural Blog https://ift.tt/2RCL90j Agricultural economists describe grim situation for farmers, compounded by multiple factors - Entrepreneur Generations

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