The BBC had a note about food prices rising.
And given that global wheat prices are so high, it is tempting for farmers to borrow more in their hope that their gamble pays off with a bumper harvest.
“It really is back to the bank manager,” says George, explaining how that conversation will now go: “‘OK, this is THE crop. Everyone is talking it up. Let’s have a go at it.’
“But it’s borrowed money that’s doing it. And if it doesn’t come off and there are too many more [poor years], then you have to sell the farm.”
But who is going to buy the farms?
“There are already two or three farms in the district which are up for sale and should have been sold. But people just don’t have the money to buy them,” explains George.
With global wheat prices at record highs, one bumper crop would alleviate much of the financial burden and help many local farmers pay off their debts.
But their hopes have been dashed before.
Last year saw one of the best starts to a growing season for years, but dry weather in recent weeks has forced the Australian government to slash its crop forecasts by 30%.
It struck me that unlimited credit expansion has an appeal because it will be successful for awhile, even a few years for the players, but HAS TO fail in any one year when market forces somehow come together to restrict the three laws of unlimited credit expasion Old Vet proposed.
Farmers gamble also, but the market has more limits and is not as elastic. But farmers also fail sometimes. There is just no glamor, and the pizza you order is pretty mundane looking…unless you can’t get one.
If you are going to invest, take a look at CommunitySupported Agriculture (CSA’s) to take on a portion of the risk to feed your family. It might even be healthier for you. There are two locally I know of, but you need to look around in your own locality.
And why is it farmers have no status?