10 Reasons Why Farmers Should Get Paid More

10 Reasons Why Farmers Should Get Paid More

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While consumers continue to pay more at grocery stores, the prices that farmers receive for their products have remained low or dropped. Denying farmers fair prices for their products is leading to dire consequences.

The greatest reason why farmers should get paid more is to save lives. Farmers are dying by suicide more than other professionals, mostly because of financial stress. Offering farmers reasonable product prices can also curb overproduction and reduce waste.

Many farmers barely survive in the business because they aren’t making enough money to cover costs and afford a good lifestyle. This article explores the top reasons why farm jobs are undervalued in our society.

1. Save Farmers From Suicide

Farmer suicide is alarming, and money is at the center of the problem. The suicide rate among farmers is among the highest in the country compared to workers in other occupations.

The struggle to service agricultural loans is among the significant drivers of farmer suicides. Farmers are increasingly relying on loans for their operations.

The other stressing factors for farmers are pressures to sustain generational family farms, weather concerns amid climate change, and market uncertainties. For example, many farmers are overwhelmed as they try to keep family businesses going amid challenging economic conditions for the agriculture sector.

Since financial stress is the primary reason farmers take their own lives, paying them better prices can reduce suicides.

2. Reduce Agriculture Sector Pollution

Although it feeds the world, the agriculture sector is a major source of pollution. Farm inputs, products, and byproducts can have a serious detrimental impact on the environment if not handled properly.

For example, farm pesticides and fertilizers can pollute water sources and air and contaminate food. Moreover, animal waste is a major source of greenhouse gases that drive climate change, which makes farming business even more unpredictable.

Farmers are typically price takers. As a result, buyers can offer farmers prices that don’t match production costs, causing them losses.

When farmers can’t make enough money because of poor prices, they tend to produce more in an attempt to increase their earnings. That results in increased use of pesticides, fertilizer, and farming waste, which in turn means more pollution.

Offering farmers reasonable prices can discourage overproduction and reduce pollution from agricultural activities.

3. Prevent Resource and Food Waste

Faced with weak prices that can hardly cover their production costs and earn a living, farmers produce more to make more money. That results in overproduction and oversupplied markets. The end is even weaker prices and more trouble for farmers.

  • Farmers suffer resource wastage because the prices they receive can’t compensate for their production investment. That can sink farmers deeper into debt as their resources shrink, increasing their financial burden.
  • Overproduction causes food waste because demand hardly expands to consume the extra supply. Many dairies pour their milk down the drain when they can’t find a market. That can demoralize farmers and lead to suicidal thoughts.

Apart from resource wastage hurting farmers’ finances, it can also have a damaging impact on the environment. Food wastage can add to environmental pollution and cause hunger.

With better pay, farmers can expand their storage capacity and acquire better solutions to avoid wastage.

4. Make Loan Service and Equipment Upgrades Manageable

Many farmers rely on credit to purchase the necessary inputs and equipment to grow crops and raise animals. Many of these things are becoming more expensive, so farmers need to borrow more to stay in business.

Interest rates on agricultural loans can be exorbitant – even as high as 2,500% annually. This is because agricultural lending isn’t subject to most consumer protection regulations, and farmers can’t do without the loans.

Most farmers borrow on variable rates, which can soar unexpectedly. High-interest rates on farm loans can prevent farms from borrowing enough to meet their funding needs. 

Farmers may borrow more to obtain the supplies they need. But the financial burden arising from high-interest rates can cause them to hike product prices. As a result, food becomes more expensive for consumers.

Farmers can service their loans more easily and upgrade their machines with improved earnings. That can lead to a stable food supply and prices. Moreover, banks can thrive if their farming clients service their loans properly.

5. Reduce Farm Bankruptcies

Many farms have become bankrupt and collapsed after soaking up on loans and racking up debt they can’t handle.

Poor crop yields because of adverse weather and weak prices are among the factors that have spelled financial troubles for farmers.

Chapter 12 bankruptcy filings can offer a glimpse of small farms’ financial struggles. Chapter 12 filings have soared in recent years.

Many farms are highly leveraged, putting them at risk of failing if earnings don’t improve. Reasonable farm produce prices can save more farmers from going out of business.

6. Boost Food Production

When cash-strapped, farmers can be forced to reduce the fertilizer they apply to their crops. They may also reduce land under crops or raise fewer animals, which could reduce crop and livestock yields.

That can cause food shortages and trigger a chain of other problems, including higher consumer prices and hunger. With better prices, farmers may have fewer challenges to produce.

7. Stabilize the Farming Sector

More farmers are operating on rented farmlands, not owned property. Stiff competition for farmland is driving land rent prices. Furthermore, farmers increasingly acquire equipment, seed, and other inputs on credit.

Therefore, defaulting on land rent can trigger a chain of problems and destabilize the farmers and the food supply chain. Better prices can help farmers keep away from destabilizing factors.

With insufficient earnings, even a slight adverse event can cause a farming operation to fail.

8. Stimulate Interest in Farming Jobs

The best-paying jobs are in the financial and technology industries. As a result, top talents seek to work in these sectors while they shun other careers.

Low earnings from agricultural activities are also causing younger generations of farming families to quit the profession.

The agricultural sector suffers a labor shortage, which drives up farmers’ costs when they import seasonal labor.

Here’re a few challenges of importing labor:

  • Farmers incur costs to bring temporary workers into the country, reducing their profit margins.
  • The process of obtaining labor from outside the country is long and subject to many uncertainties. This can cause harvesting delays and result in crop damage.

Farmers may afford to hire more people if they receive fair prices for their products and can pay competitive wages for domestic labor. That would also result in more job opportunities locally and boost the economy.

If farmers make good money, they could offer more attractive pay compensation, attract top talents, and keep more people in the farming business.

Moreover, drawing top talents to farming can lead to better solutions to the agriculture sector’s problems.

9. Diversify the Food Economy

Many family farms are failing as making money in the business becomes difficult. The result is that food production activity is consolidating in the hands of a few large corporations. That leaves consumers vulnerable to food supply disruptions and price instability.

Paying farmers fair prices for their products can enable small independent farms to survive. That can help keep the agricultural sector diversified and avoid the risks of relying on a few corporate food giants.

10. Save Taxpayers From the Farm Subsidy Burden

The government intervenes with subsidies from time to time to keep struggling farmers in business. While the farm subsidies are crucial to the agriculture sector, they’re a burn on taxpayers and diver resources.

With fair prices for their produce, farmers can rely less on subsidies. That would save taxpayers and free more resources for other important programs.


About The Author

Nathan Brunner
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Nathan Brunner is a labor market expert. He is a mathematician who graduated from EPFL.

He is the owner of Salarship, a job board where less-skilled candidates can find accessible employment opportunities.