Creative Destruction Related to Farms

When I (Myron) was young, the United States produced a lot of extra food that was exported to many countries. The U.S. was called the breadbasket of the world. But times have changed. The number of farms have decreased, population has increased and we now import almost 50% of our food. What has perplexed me is that the government doesn’t seem to care that each year we have to import a greater portion of our food. Part of our national security is our ability to produce our own food and not have to rely on other countries for our food. There are many things we can live without, but we can’t live without food.

Recently, I found out the reason why farms have been declining in America. It is part of financial engineering by the Federal Reserve in an attempt to create a higher standard of living for Americans. The economic theory is called "Creative Destruction". The philosophy of creative destruction also explains why the U.S. government changed regulations for domestic manufacturing and clothing factories so that it became too costly to produce their products in the U.S. The result has been that most of our manufacturing segment has moved oversees. Before we go any further, I want to make it clear that the concept of creative destruction is not a conspiracy theory of someone speculating on the motives of the Federal Reserve. It is a philosophy that the Fed has clearly stated it is using. The following are former Federal Reserve chairman Alan Greenspan’s own words from a speech given on Oct. 21, 2007:

"We have been doing things different for quite a long period of years. And many of them turned out to be awful. So I think that the issue always rests in capitalist market economy which as you point out has its roots and its necessities in creative destruction because remember it is only creative destruction that creates higher standards of living.

"Because by definition creative destruction is essentially moving the capital from less productive obsolescent industries to cutting edge technology related industries and by definition the moving a body of capital from the low output per man hour type industries to higher man hour output industries and that obviously raises the average and its only the average increase in productivity which generates higher standards of living. There is no other way that we have found and that includes having oil in the ground or gold somewhere. Adam Smith is right it is essentially the wealth of nations is determined by productivity and productivity can be advanced only in broad economies such as those which we deal with by a form of competitiveness and that generates creative destruction.

"As I say in the book I’ve just written there is a very significant problem here of the destruction part. Because remember when you move the capital from the lesser productive industries to the more, you also have to move people. And its always been a major problem in the fact that there are losers as well as winners and how to handle that problem is always been critical and necessary in order to maintain a viable market system. But the truth of the matter is there is no other system which has worked as well." (From the website: http://www.womensgroup.org/Per-Jacobsson-Foundation-Lecture.htm?eventID=941)

Richard Fisher, president and CEO of the Federal Reserve Bank of Dallas, in a speech to the governors of the southern states, said the following:

"The destructive side of capitalism’s creative destruction is evident in lost jobs. Let me share a few numbers for the states you govern. The number of workers in apparel manufacturing in your states decreased 80 percent between 1990 and 2005. In the same 15-year period, payrolls fell 18 percent at paper manufacturers and 15 percent for furniture makers. The number of farm workers decreased 6 percent, and the number of mine workers declined 5 percent. That is pretty painful stuff. And it is not ancient history. It all occurred within a time frame that is fresh in the memory of everyone in this room—between 1990 and 2005.

"And yet, despite these employment losses, each state in the Southern region now has a larger job base than it did in 1990. North Carolina, for example, has created 1 million net new jobs since 1990. Texas’ employment has risen by more than 3 million since 1990.

"Why? Because the creative side of creative destruction outpaced the destructive side. Your economies replaced lost jobs in declining sectors with new ones in emerging, higher-value-added sectors. Between 1990 and 2005, the number of data processing and Internet service provider workers in Southern states increased 65 percent. Professional services workers grew 63 percent. Financial services employees increased 31 percent. Retail employment grew 23 percent. By 2005, the financial and real estate services sectors employed as many Southern workers as the manufacturing sector. Lodging and food services accounted for the same share of the Southern workforce as construction.

"Health care sector employment in the South alone grew by 2.3 million from 1990 to 2005. Let me put that in perspective: For every manufacturing job lost in the Southern states between 1990 and 2005, the health care sector created 2.4 new jobs."  (from the website http://www.dallasfed.org/news/speeches/fisher/2007/fs070825.cfm)

Time will tell if creative destruction is the greatest thing the Federal Reserve ever did, or if it will turn out, to use Alan Greenspan’s words, "to be awful". There are a number of questions that comes to my mind.  Is creative destruction sustainable in the long run when we give up industries, food and clothing, that are basic necessities of life? If creative destruction is sustainable, why do we need 2.4 new health care workers for every manufacturing job that was lost? Is our health decreasing so fast from eating cheap food that we need that many more health care workers? Do politicians really believe that increasing the health care industry is more sustainable for the US economy in the long run than producing food?

Cathy and I are of the opinion that the intentional creative destruction of local farms and the government’s encouragement of eating cheap food has been a mistake. However, rather than focus on the negative, on our farm we are rowing against the flow of creative destruction to provide you with nutritious, nutrient dense, healthy, local food that is difficult to find, but which is important for your health. This year we encourage you to eat local for your health and the financial health of the local farms who are rowing against the flow of creative destruction.

World Food Crisis

An indicator that the intentional creative destruction of local farms was a bad idea is that there is a growing shortage of food worldwide. The food shortage is only partially caused by biofuel production. The total world production of food is not enough. The poorest countries are being hit the hardest because they can’t afford the higher cost of food. The price of rice has increased from $460 a ton to over $1000 in just a few month’s time. That also means that humanitarian relief can now feed less than half as many people as before with the same amount of money. Twelve countries have had food riots, and the prime minister of Haiti was run out of office because of their food shortage.

Our dependence on other countries for food is greater than most people realize. Most people have no idea the total volume of food that they consume each year. Nor do they realize how difficult it would be for each family to produce all the food that their family needs for the entire year if they had to. I know we didn’t realize how difficult it was until we started farming. We raise almost all the meat we eat. We produce all the eggs we want. Our two cows provide most of the milk, butter, ice cream, and yogurt we eat. We have a large garden, and Cathy freezes and cans lots of vegetables. You would think that we were almost self sufficient, but we are not! We still spend around $6,000 at the grocery store or for other off farm food purchases for our family of eight. That amount includes total grocery store purchases which includes toilet paper, detergents, etc. Producing everything  you eat for an entire year is difficult.

There is a slogan that applies to the present food crisis: "Think globally, act locally". The more food we produce and consume locally, the less food that has to be imported and taken from poorer countries who can’t compete with us price wise for the food. If we eat more potatoes and less rice, it means more rice will be available for others. We encourage you to consider doing some gardening this year. If you have not yet started a garden or even just a few tomato plants, it is not too late to do it.

Plant a Garden This Year

We encourage you to consider raising some of your own vegetables this year. You cannot eat more local than out of your own back yard or patio.The food you eat is important to your health. When we buy food in the grocery store, even organic food, we do not know the health of the soil was that it was raised in. It is difficult to be healthier than the health of the soil that our food was grown in. Supplements can help, but eating "garbage" and then taking some vitamin and supplement pills is not a good recipe for health. 

We have been learning a lot the last six months about raising nutrient dense food. Nutrient dense food is being encouraged by the Weston A. Price Foundation and others. The key is to have the proper amount of trace minerals and biological activity in the soil. You can test the plant, fruit, or vegetable with a refractometer to find the brix (sugar and mineral content) reading. The refractometer can be purchased for $35 – $50 and is very simple to use. We are realizing that what we had in the past considered to be good food, is not as good as it can be.  An example of excellent nutrient dense produce is the following excerpt from an email that was on the BrixTalk Yahoo Group recently. Imagine having tomatoes that you could keep all winter without canning them, and they wouldn’t rot! It would save a lot of time preserving them and the nutrient dense food would be much better for us.

"Last year, we decided to use lime, rock phosphate, gypsum and iron sulfate (for pH modification to 6.4) in our tubs in addition to the fertilizers we had been using in the past. We could grow tomatoes where we could get good brix levels and about 50-60 large sized tomatoes per plant in the past. The additional nutrients we added last year on ten tomato plants produced an average brix of 10 for the large sized tomatoes, but the yields per plant went to about 400 tomatoes per plant in three pickings. We found that the tomatoes in the final picking that were green, ripened at room temperature in two to three weeks. We also found that we have been able to store these tomatoes at room temperature for 5 months and the vast majority of them didn’t spoil. They do shrivel up a bit as water comes out of the tomatoes. Most of the stored tomatoes are not shriveled and have remained quite sweet. For quantities of fertilizers, I followed a book written by Dr A.F. Beddoe, one of Dr. Ream’s students.

"A couple of years ago we were able to get Yukon Gold potatoes up as high as 2 lbs. in weight with many at 1.5 lbs. The normal number of tubers per plant is about 7. We were able to get 19 per plant. We averaged about 11 lbs. of Yukon Gold potatoes from two plants in a tub. That year we were harvesting tomatoes, green peppers, cucumbers, and yellow crook nick squash a little under 30 days after transplanting the plants. Best Regards, Thomas Giannou"

Thomas has further information on his website:
http://www.tandjenterprises.com/tandj_container_gardening.htm 
Some other good websites are http://www.highbrixgardens.com/ and http://www.crossroads.ws/brixbook/BBook.htm
The book referenced, written by Dr. A.F. Beddoe, is titled Nourishment Home Grown, the 2004 edition. The 2004 edition is only available from Dr. Beddoe at http://www.advancedideals.org/016_book_ordering.html

OK, here is one more reason to consider planting a garden this year. Yesterday, March 9, 2008 the New York Times ran the article: A Global Need For Grain That Farms Can’t Fill. It tells how the global demand for food is greater than the supply. We have been used to an abundant supply of cheap food in the grocery stores, but it may not always be that way. This is one of several articles we have seen about a global food shortage. Some are predicting that the next big crisis will be a food shortage. No one knows what will happen. We can’t grow our own gasoline, but we can grow our own food. There is a learning curve in learning how to grow vegetables successfully. By raising vegetables now, we can learn how to do it successfully and productively rather than waiting until things get more serious. And if nothing serious develops, we still have that satisfied feeling as we eat the delicious, nutritious produce that we grew ourselves. Here is the link to the NY Times article:

http://www.nytimes.com/2008/03/09/business/worldbusiness/09crop.html?_r=1&em&ex=1205380800&en=edc992e29863088d&ei=5087%0A

Happy gardening!

Our Food – a National Security Emergency

There is a national emergency occurring. We are quickly losing our ability to produce food here in the U.S. because more and more farmers cannot make a profit from their farms, and good farmland is steadily being destroyed with housing developments. Our population is rapidly increasing and food production is rapidly decreasing. Using U.S. government population statistics, approximately 1/6th of the U.S. population in 2005 had immigrated into the U.S. in the last 15 years. (this does not include illegal immigrants.) It is a greater population increase than the baby boom years! We can have the best military, and all the fuel we need, but if we have a world war and can’t import food, we will be in trouble. In West Virginia, about half of the apple orchards have closed in recent years because of cheap imported apples. Recently Paul Harvey reported that in one peach producing state the farmers could not compete with imported peaches so the state was paying the peach orchards to cut down their trees!

According to the U.S. Department of Agriculture website quoting a 2002 census of agriculture, only 10 percent of Maryland’s farm families relied on farming for 100 percent of their income. The rest had some form of off-farm income to support their household and farm.

One magazine we subscribe to, Stockman Grass Farmer, revealed how inexpensive it is to ship products around the world. They had a pallet of books printed in India. The pallet was placed in a container and put on a ship and shipped to New Orleans. It was then put on a truck and traveled 150 miles in the U.S. to their office. The cost to ship the books 150 miles in the U.S. cost 1 ½ times more than it cost to ship them from India to New Orleans! The cheap container shipping gives every farmer in the world a superior advantage to the American farmer because of their lower shipping, land, labor and living costs. It is cheaper to ship frozen beef or any other farm commodity around the world, than it is to ship it from the Midwest to the East coast in the U.S. Recently one man told me it cost them $3000 to get a tractor trailer load of organic field peas shipped to Virginia from South Dakota! We have also received several emails from China trying to sell us "certified organic" soybean meal for our chicken feed. Cheaper "organic" soybeans imported from China have been driving down U.S. organic soybean prices in the last year. You may be thinking that by buying organic products at the health food store you are getting U.S. products, but in reality an increasing amount of our "organic" food is coming from grains imported from China and other countries.

You might think that if we have a shortage of imported food, individuals can just plant gardens in their yards and make up the shortage. However, gardening and farming have a huge learning curve. A person doesn’t just put seeds in the ground and have a bumper crop. There are a lot of things that have to be learned in controlling bugs, disease, and other challenges. Being totally self sustaining food-wise is much more difficult than what you might think. Our family is an example that being totally self sustaining is difficult. We raise almost all our own milk, eggs, and meats. We also have a large garden. I was totally shocked when Cathy told me how much we spent at the grocery store in 2005! We are not even close to being self sustaining, even though we produce all that food.

Here in America, most people have lost contact with where their food really comes from and could care less about the success of U.S. farms and farmers. We have become so used to getting whatever food we want, when we want it at the grocery store, regardless of what time of year it is. There is always an endless supply of food in the grocery stores. By purchasing groceries in small quantities several times a week, most people don’t really realize how much food they are actually consuming each year.

Our national security is only as strong as our weakest link. Our domestic food supply is one link of national security that is becoming weaker with each passing year.