Drop in farm economy hurts community

Rik Dalvit/For the Capital Press

Editorial

It's no secret that a lot of farmers are having a hard time getting by these days. The ongoing recession coupled with low commodity prices and natural disaster have put the bite on farmers and ranchers across the West.

No where is this more true than California. The state is an agricultural powerhouse, accounting for more than 10 percent of the country's total farm output. But three years of drought and the collapse of the dairy industry have taken their toll on Golden State farmers.

Production figures for just two counties in the San Joaquin Valley illustrate how sharply the value of farm production has declined, and the impacts that has on both the farm and general economies.

In Tulare County, California's leading dairy area, the total value of farm products in 2009 was pegged at $4.04 billion. That's roughly equal to the value of the farm output of the entire state of Oregon, and would seem robust by most standards.

But that's a decrease of 19 percent -- $971.5 million -- compared to the value of farm production in the county in 2008. Dairy alone was off about $500 million from the year before, despite an increase in production.

The drop in dairy prices rippled through other sectors of the local farm economy. Milk was diverted from manufactured products, causing a $30 million decline in the value of that output in 2009. The value of the Tulare County alfalfa crop dropped by $105 million. Cattle values were off $88 million.

Kings County, another large dairy area, posted a total farm value of $1.3 billion, a decline of $431.9 million, or 24.9 percent. In the context of the larger economy, the value of farm products is about equal to the county's taxable sales.

Dairy values in Kings County declined $258 million, and field crops were off by $180 million, mostly because of drought and lower prices.

In just two California counties, $1.4 billion in the value of created goods is gone. That's money that would have turned over in the community multiple times as it passed through various suppliers and retail outlets. It would also have gone toward wages for farmworkers and employees at packing and processing facilities.

In many cases, some of the buying power of that lost value was made up with loans against farmer equity. Those debts carry their own consequences. It will take years for those farmers who are able to limp through to regain the personal wealth they have lost in the last 18 months. Some will never recover. They and their families will lose what in some cases has taken generations to acquire, and the community will lose the jobs and other commercial opportunities their businesses generated.

Here the interests of farmers, ranchers, the working class and the business community combine. When a farm is no longer economically viable, real people throughout the community suffer.

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