Agriculture in capitalism Ruthless Criticism

[Translated sections of “Landwirtschaft im Kapitalismus” from GegenStandpunkt 1-04]

Agriculture in capitalism

Mad cow disease, foot-and-mouth disease, pig doping, avian flu – the population is upset, the media concerned. Consumers, animal rights activists, economic experts – everyone gets worked up about “insanities” that are – so one hears everywhere – common practice in agriculture. First fattening cattle unnaturally with subsidies, although there are far too many anyway, and then taking them off the market again with tax money and destroying them in order to save the market price. Cramming livestock together and transporting them across Europe, although cattle, sheep, and pigs can be raised anywhere. Breeding sickly animals, producing undigestible and unhealthy food that no one wants to buy. And all this at state expense. Squandering billions so that farmers can mass produce what is not needed, even though most farms can’t survive adequately anyway. Promoting an agriculture that is increasingly reckless and contrary to nature, only to have to deal with the devastating consequences for society and farmers. The complaints are similar.

No wonder: agriculture and its periodic scandals make a particularly glaring mockery of all the common notions about supply and business, use value and profit, rational economic activity and competition being compatible and going together beneficially. The most die hard supporters of the market economy simply can’t find this in agriculture and suddenly no longer understand the world – instead of doubting the familiar ideologies about the best of all possible economic systems. Consumers and their public advocates are profoundly indifferent to the principles of a political economy which are also obeyed by agribusiness with its less than thoughtful production methods and the food industry with its often unpalatable products. They prefer to accuse irresponsible farmers, greedy animal feed producers, Brussels bureaucrats, and lax national regulators whenever a bit of this industry’s harmful practices to humans and nature are once again publicly exposed. But they also regularly calm down again when the state takes up the issue: A new minister promises controls and crackdowns, and even in the toughest cases, this is sometimes enough for consumer behavior to return to normal, and the consumer is happy not to have to constantly wonder what he is eating – until the next ‘scandal’ stirs things up again. All those who shake their heads at the practices of the state-supervised agricultural industry simply don’t want to know anything about the system that produces all this; not when they get upset, and certainly not when they calm down again.

I. The business of the farmers

Today’s farmer is called an agriculturalist. The name emphasizes his status as an independent entrepreneur and thus the farmer is counted among the most important positions of the market economy. In fact, he differs fundamentally from the “employee” because he owns the means of production. He does not need to make himself available for others to maximize profit in exchange for wages, but can operate on his own account and for his own benefit. The fact that he does not combine his property, land, and equipment, which are usually inherited as part of a farm, with paid labor by others, but with his own, distinguishes him again from other representatives of the entrepreneurial class. The farmer is not an owner who has others work on his means of production and appropriates the yields from that, i.e. who is able to derive an income solely by owning these material resources. He works and earns an income from the sale of his labor products. Like other trades, he is informed about the standard of profitability that he has to meet by the market, i.e., on the one hand, by the selling prices that commercial capital makes in agricultural equipment and inputs, and on the other hand, by the prices that the food industry, with its profitability calculations, is willing to pay for his products. The farmers seem to have a general problem with this profitability. They apparently do not succeed in generating enough profit from the selling prices they can achieve with their products to earn an income sufficient to support their families and reproduce their farms.

In all capitalist countries, the “agricultural entrepreneur” is at the same time a permanent drag on the national treasury who does not earn a significant part of his income on the market, but receives it in the form of various subsidies from the public sector. The state does not care whether, how, and how many farmers pass the test of the market and hold their own, but dedicates a ministry of its own to the problematic sector and, with its political regulations and support measures that deviate from general economic policy, recognizes that farmers have a special handicap in their efforts to turn their property and their work into a useful capitalist source of revenue.

The chronic deficit in the budgets of farmers, whose production provides an indispensable food supply even to societies that secure their future with cars, hi-tech, and stem cells, is apparently not due to any arithmetic weakness. Farmers do everything in their economic power to operate profitably. In their own interest, they calculate with the solvent need that the market has in store for their products. They strive to grow their businesses so that they can extract more earnings from the market. And they constantly increase their productivity so that their goods remain or become “competitive.” If, nevertheless, the number of farms regularly declines and the survival of the “successful” farmers is done via state subsidies, then the earnings situation of agriculture points to a deficient feature of this industry. The interplay of its “factors of production,” the combination of property and labor that is employed in agriculture, does not serve for an entrepreneurial career in the circus of the market economy.

1. On the obstruction of business by natural growth

It’s one thing that production in agriculture depends on natural growth processes in animals and plants, processes that the farmer sets in motion and controls – so that the weather forecast plays a decisive role in the yields of work in this sphere.

It’s another thing that the farmer – once placed in the market economy – has to generate income for his livelihood and for farm equipment. Dependent on his products making as much money as possible, he competes with other producers over the solvent needs provided by the market. And finds out that his way of producing is ill-equipped for exploiting the market. As an “independent producer,” he pays the costs for his operation – he counts himself and his family among these costs – to the extent that they are incurred, i.e. constantly. However, the returns from which he also expects a surplus as the owner of the farm only happen periodically, in longer intervals, according to the requirements of the growth that takes place in the field and in the stable. Insofar as and as long as the sale of his products is tied to the time period dictated by nature, the farmer suffers from a lack of money. In his capacity as a businessman who manages with his own assets and calculates in business terms, the farmer is the victim of a bad quality of his means of production: his working capital simply turns over too slowly. And even with faster or more work, he first of all has no means at his disposal by which he can continuously supply the market, so that regular and faster returns contribute to the profitability of his property.

The turnover of his assets, on which his money advance and his work are calculated, is not even a reliable thing. As is well known, his production process is at the mercy of the whims of nature. If the weather or pests impair or even destroy his harvest, the farmer has spent money and expended labor, but the proceeds fail to materialize. The farmer is exposed to this risk to this day, which distinguishes his budget significantly from that of other commodity producers. In addition, he shares their customary market risk – the old story of supply that finds no demand. And even when nature is kind to him and his peers, of all times. Then he is told by trade and industry on behalf of the consumer that there is no business to be done with so many goods. Or only at lower prices, which erodes the profitability of the “good year.” Just as farmers are unable to manage their production process so as to make it suitable for accelerating returns, their “market power” is just as useless when they are in possession of a good crop. The perishable nature of their commodities, which – as far as technically controllable – is converted into preservation or storage costs, falls on them as suppliers. The usual way out of this is to switch production, but this does not help. Finally, switching from feed grains to malting barley, from cattle to pigs, etc., does not undo the commitment to long production periods that stand in the way of rapid turnover. In the proclamation of “pig cycles,” etc., farmers experience the poor suitability of such “flexibility” for the market.

As commodity producers who are looking for profitable sales revenues with their agricultural business items, farmers apply the same cost-benefit analysis as entrepreneurs in other industries. They themselves know that this does not by a long shot make them capitalists. After all, they work on their property themselves. And they can’t get away from it either. Because the production process, which they are the master of, denies them a crucial service: it does not allow a continuous turnover that would enable the farmer to command at least part of his returns. Without this, however, he lacks the liquid funds for the running costs and the money for financing additional production. So the duration of the turnover in agriculture delays the re-use of his earnings as a business fund. This means – expressed the other way round – there are limits to his enrichment because he does not succeed in using his money profitably several times within the same time period in accordance with good capitalist manners.

It’s well known that faltering as well as shaky incomes in the farmer’s budget makes itself felt as a lack of money, which is reflected in the more or less existence-threatening indebtedness of the farm. Apparently, the farmer is considered a businessman at least to the extent that loans are granted to him. However, the establishment and commitment of special institutions, which for decades have looked after the insolvency of farmers, reveal that the world of money capital is not so readily convinced of the collateral that farmers’ property represents. And this is not at all surprising. The plight of a borrower who is unable to “raise capital” from his land distinguishes the farmer from a capitalist who has been successful in business and has used credit to accelerate his turnover – and needs additional funds to increase his capital in order to conquer more market shares. A farm in debt raises the question of its shelf life.

The state may not care about the economic peculiarities of the agricultural industry – but it has always been aware of the difficulties of this profession. Politicians are not able to overlook the fact that the cultivation of land by its owner according to basic free market accounting methods never nourishes the farmer properly, that there is mass ruin instead of enrichment through the market. And in the interest of a functioning foodstuff profession and its services for the nation, the political power is ready to this day to regulate the “survival” of agriculture through all sorts of “market interventions.” With the relevant aid, farmers can survive the competition – or not.

2. On the expansion of agricultural production: the crux of property

The fact that more can be gained from the market if more commodities are supplied to it is not an insight that capitalists have a monopoly on. Every farmer who buys or rents additional land heeds the same prescription. He is also able to show off the respectable size of his operation, the extent to which he attends to demand, the evaluation of his turnover or the weighed quantity of his produce. Just like industrialists who report their turnover and the number of cars manufactured and sold. If, however, the question of size is not understood to be about business results, about completed sales, but requires information about the business potential that an operation competes with, differences are guaranteed to arise.

A capitalist will name the amount of his investments, list the locations where these funds – transformed into means of production – are standing around; and he will cite the workforce he calls his own, i.e. so and so many employees. The farmer can’t offer the latter at all: the information about how much money he has “put in” may come up in particular with the housing of livestock and the agricultural machinery he can afford. Eventually, however, he will express the productive power he commands in hectares. (The modern lunacy called animal husbandry has yet to be mentioned here.) The reason that he doesn’t talk about the workforce is that he – along with his family – is part of it himself; the cultivated area indicates that his business success simply rises and falls with how much he grows as a tiller.

The decision to build on more land is based on a simple finding: the farmer is not satisfied with what he earns from working his own land. It does not matter at all whether the dissatisfaction with the earnings situation results from private needs, e.g. family projects such as improved housing conditions, supporting children, etc., or is due to the ailing balance sheet of ongoing operations which should become profitable again through more sales because otherwise the preservation of the farm as a source of income is in question. In any case, the farmer must pay dearly for his decision to expand. Because the increase in the area under cultivation costs money, and in the case of borrowed money, interest as well.

The additional soil that he wants to use is owned by others; it is landed property. This exclusive power of disposal is worth money, it entitles the owner of the land to sell it for payment as well as to temporarily lease it for interest – land ownership is value as much as it is a source of income, and the farmer encounters this beautiful capitalist institution with his intention to produce more. This changes his calculation to his disadvantage. The purchase of land at the commercial rate greatly increases the advance to the agrarian businessman and confronts him with the intriguing problem of whether the increased production he is setting out to achieve will make the cost worthwhile. Pulling off this feat is not that easy, given that the turnover of his assets on the additional acre does not work any differently than it did on his previous one. There may be a relative advantage in that the farmer uses the new land differently, growing crops that are marketable at different times, so that the return of available money is more businesslike overall. However, he has not bought the advantage of land ownership, which is that it serves as a source of income almost by itself.

This is because he uses the new soil, like his original landed property, as a condition of production. He does not maintain it as such by processing it and selling it according to its use, but by working it. With the purchase price, as with the rent for land, he does not acquire a functioning means of production, but merely the right to cultivate these indispensable conditions with the means at his disposal. That this expense for his business expansion is and remains a tribute to landed property is the rule of the market economy.[1] And it is no consolation at all for the farmer that even capitalists from trade and industry are not spared this tribute. Because they have other means of coping with this deduction from their earnings.

In any case, the farmer has his hands full ensuring more income through his labor, which increases as his business grows, so that he can afford the deduction.

3. On productivity and profitability in the countryside

Another thing that “market pressure” makes clear not only to industrial capitalists is that production for the market can be increased not only by expansion, but also by intensification. Reductions of unit costs, brought about by the use of technical means that allow more marketable products to be produced in the same amount of time, is just as common in agriculture. There, of course, this weapon in the competitive struggle – it’s about more revenue, faster sales, cheaper sales in any order – is at the same time the confrontation with the economic adversities of nature and landed property.

The application of the capitalist calculation with unit costs to agriculture is not possible without a change in the means of labor. Anyone who follows the slogan “more pieces per time” or “more yield per area” is concerned with increasing the efficiency of labor by providing it with new tools. These manipulations of the labor process and its material conditions require investments, so they are again a challenge to the budget of the farm. Chemical products are purchased such as disinfectants and growth agents of all kinds and machines for mowing and milking, as well as new types of structures for livestock and the appropriate feed. The related work is done. With the application of the stuff, productivity is not long in coming.

Of course, there is still one calculation still pending. In view of the enormous increase in supply, the distributors decide which commodities, quantities, and at what prices they can use it for their business. And it is they who judge whether and for whom the rationalization has paid off. Here government subsidies, purchases, etc., alleviate the harshness of the findings they reveal and confirm from an economic point of view: This upswing in productivity in the countryside is not to be confused with profitability. The circulating agricultural products lack a very significant ingredient: the price they obtain on the market does not pay a surplus for the farmers who have so assiduously upgraded and retooled their farms. Although they have thoroughly increased the yield per hectare and stall, the profit – the goal of their investments – has not materialized.

In the effort to transfer to agriculture the means of increasing productivity, which does such excellent service in large-scale industry, farmers uncover the ultimate economic deficiency of their trade; a deficiency which prevents them from really copying the “model”: In the calculation they practice, they lack an essential item. There is no denying that they submit to the market, out of necessity as well as out of responsiveness, in order to strive for monetary revenue in the competition for money. Nor can they be accused of failing to make an effort in participating in the struggle for quantities and prices. Therefore, they are not resigned, merely because the institution of landed property is a burden to them. And they are certainly not conservative when, in the interest of market success, it is necessary to give natural growth a boost: Ecologists can thank their drive for productivity for plenty of scandals. In the interest of ensuring that their cost-benefit calculation finally works out, continues to, or does so once again, they have even outstripped students in the subject of demonstrations. However, their calculation fails because of the general handicap that they can’t manage labor. Firstly, in the sense that they do most of the labor themselves, and secondly, that they simply lack the cost factor of labor when it comes to reducing unit costs.

The true capitalistic unit cost design supplements the – rather gigantic – investments in the helpful machines by savings in costs for labor, which gives the increase in productivity the effect that matters. The farmer does not know this “compensation” for his capital advances; he lacks this item for the success of his efforts in matters of productivity. This item is only at the disposal of those who operate with other people’s labor; who skimp on their pay and make generous use of their efforts – that is, those who have at their disposal the source of wealth which is truly useful for enriching others.

Because the farmer lacks this source, his enrichment does not work out so well. Nevertheless, the productivity of his handiwork is not in vain – after all, fewer and fewer people of his ilk are supplying entire capitalist nations, now across borders, with inexpensive food. So much of it in fact that agriculture is regularly told that there is already too much of it. As far as needs with the ability to pay in our capitalist latitudes is concerned, this is absolutely true. And the poor people all over the world who can’t afford even the cheapest delicacies are none of the farmers’ business – they have their own cross to bear. After all, they produce for the market.

4. On the sector’s progress

Undoubtedly, significant changes can be reported from the history of capitalist agriculture. The efforts of the peasants to overcome the barriers which their trade imposes on the profitable cultivation of land have not been in vain. Especially since, in their struggle for survival, they have met business partners who have not only stimulated the interest in productivity and continuous feeding of the markets, but also served them.

However, not so much has changed in one respect which is crucial for the market economy. The growth in production which is constantly taking place in the countryside is still not matched by an increase in the financial power of farm operations. Capital in this sense does not accumulate in agriculture, so that economic statistics register a declining share of agriculture in the wealth of industrialized nations. And as for the farms that have held their own in the face of competition and have escaped the “dead farms,” the same figures show a significant growth in business assets, but also a miserable income situation for the operators. The earnings of farmers must always stand comparison with those of industrial workers – and do not even fare well compared to labor power as a source of income.

The special support for farmers by the public sector has also remained. Very different points of view are intermixed in the state’s solicitude. The constant influence on the income situation of agricultural producers, the related corrections to the earnings provided by the market, are reminiscent of social considerations on the part of the guardians of the common good. On the other hand, state interventions openly pursue the goal of steering – directing the extent and type of “modernization” along lines that cause perpetual victims among those who make a living from agriculture. Apparently, there is an interest in their achievements that never really goes together with their free market need for a secure income and livelihood, so that the farmers simply can’t get rid of their economic problems despite all the efforts of science and technology.

At the same time, the economic hardships of this sector can no longer be attributed to the adverse conditions that nature has in store when its growth is used to promote business. Through the deployment of all purchasable productive forces, agriculture has almost completely emancipated itself from the relevant barriers, and the state’s efforts to maintain the “nutrient level” include it as an item in the national economic balance sheet, which reliably enters into the accounts of the national product as well as the state budget. The output of the farmers is a calculated part of the market; and the fact that they can’t cope with their calculations is the result of tribulations inflicted on them by the market, i.e. the capitalist calculations of the buyers of their commodities and suppliers of their tools and machines, as well as the political decisions of the responsible ministries. The instruments made available or prescribed to them, which they use for their business success, turn with conspicuous regularity into constraints exercised by their business partners and political representatives. The more they make use of the productive forces of capital, the more thoroughly their labor itself is treated as such a productive force that mobilizes capital. Their livelihood enjoys consideration as a cost on which the “industrialized nations” save as long as they “incur” it.

II. The capitalist business with the farmer

The industries that process and market the farmers’ products can certainly compete with multinationals in other spheres in terms of balance sheet size and growth figures; the same applies to the producers of agricultural technology and to the chemical and pharmaceutical companies that supply the farmers with a wide range of instruments for increasing agricultural productivity. Such companies produce capitalist industries suitable for the world market out of the feeding of nations, including all the necessary pre- and post-processing – without, however, the rural ‘nutritional profession’ deriving any corresponding business benefit from it. The food industry and trade turns the farmer’s natural product into a circulating commodity, into a consumable foodstuff, the production and sale of which makes profits on the market. It is true that the farmers’ product is indispensable for the business of trade and the food industry; after all, they supply the raw material for all the nice things that fill the shelves and freezers of the supermarkets and for which the ‘consumer’ pays money. However, these are merely the raw material for the consumer goods that the food companies and trading companies do their business with. Their profitability calculations with these business items set the conditions for what the results of the farmers’ production efforts are worth. Dairies and other bulk buyers, feed suppliers and banks dictate to the farmer the measures with which he has to prepare his products in line with the market so that their capital investment in this business sphere is worthwhile. Today, he is confronted with the elementary problems of his political economy in the form of the requirements that his well-financed business partners make in terms of the price, quantity, quality, and continuous delivery of his agricultural products.

1. Marketing

There is a long distance between the farm and the consumer. It takes a lot of effort to get calves and potatoes to the point where they can be sold to the end consumer, an effort that far exceeds the farmer’s means and possibilities. However, this does not matter insofar as the responsible industries are happy to relieve him of this effort. The processes and techniques that commercial capital and the food industry use to market the farmer’s products do not simply result from the material nature of agricultural products. Whatever such banal activities as transport, storage, and processing of perishable commodities may technically require – when subsumed under a capitalist business calculation, they gain a quality of their very own.

The way to the customer is first of all a matter of the space to be covered. The days when the farmer’s wife hawked the farm’s various products to the housewives of the next small town on market days are long gone; nowadays, the farmer’s product is picked up by transport companies, temporarily stored, and sold further on. This service alone is good for a decent capital investment: fleets of vehicles, warehouses and logistics of delivery are splendid opportunities to invest capital, to use wage labor and accumulate. For the farmer, the perishable nature of his product is an insoluble problem that forces him to make a distress sale; for capitalists, this circumstance is a business opportunity. They advance their capital into trucks, refrigerated warehouses, etc., which keep transported and stored goods serviceable for the necessary time and, like any other industry, make their investment profitable by employing paid labor. Therefore, such companies are always open to technical progress. In the service of free and flexible calculations with the timely and price-appropriate purchase and sale of natural products, they gladly invest in the expertise of food chemists who use ever newer processes to give the commodity an open shelf life. Chemical processes that enable the continuation of ripening processes during transport and storage also light up such companies when they are concerned with reducing the time needed to make the products available and thus make the use of their capital as cost-effective as possible.

The effort required to process the farmer’s raw products into salable foodstuffs and to present them to the consumer is certainly beyond the reach of his trade. This is where large corporations operate, combining transport, processing, and sales in a variety of ways; it is there, and not in private households, that the bulk of the farmer’s product initially ends up.[2] With large sums of capital, these companies set about finally degrading agricultural products into the raw material of an industrial manufacturing process and transforming them into new consumer values with extensive use of work organized on assembly lines. The natural properties of the agricultural product which impede the turnover of the farmer’s capital and make it difficult for him to do business become the subject of food chemical research and technology – all for the purpose of eliminating all the properties in the raw product that hinder the continuous turnover of capital – and at the same time producing new properties in the foodstuffs which make them available to a clientele that is not exactly richly endowed with time and money. Food chemists are allowed to let off steam in large laboratories, analyzing, separating, and recombining edible substances in order to create new products from them, supplemented by all kinds of additives to ensure consistency, enhance flavor, and preserve shelf life. There is a lot to be done, but nothing that can’t be done with money.

As a result, the farmer’s raw material is no longer recognizable – it has been transformed by the use of natural science and technology into a capitalistically cost-effectively manufactured industrial product whose useful properties are entirely owed to the calculation of the monetary outlay and return that this production obeys. How much of a cost outlay is needed, on the one hand; how much can be saved on the outlay, on the other; which expensive substances can be substituted without damaging the product in terms of sales; what is feasible in terms of cost-saving modifications in shelf-life, consistency, taste, appearance, shape, etc.; what can be produced as a result of technical advances in terms of marketable, i.e. sales-promoting and profitability-improving, properties: All this is tried out and turns food production into a large-scale experiment in terms of profitably packaging its useful properties. As is well known, this often includes a more or less far-reaching damage to the “nutritional” use value, leads to some cutbacks in terms of digestibility and edibility, but also to some compensatory quality advances in the same field and to a market-oriented multiplication of taste and nutritional habits that can’t be overlooked in the wake of the multiplication of competing product offerings. It is no secret to anyone – least of all to those who have made the continuous test of what the body politic and the solvency of the masses can tolerate into their business sphere and source of enrichment, calculating with what government oversight will allow or permit. For good reason, the state monitors and regulates this best practice particularly extensively because it knows the problematic consequences of the business with food for public health and the environment and wants to keep them under control without unduly restricting this business. It mandates expiration dates and ingredients lists on every package; it regulates the permissible degree of poisoning which is therefore compatible with public health in limit values and in some cases even resorts to bans. This is how consumer protection is served and the consumer himself is requested. As a – of course, critical – consumer, he is allowed to complain about the fact that as a customer he no longer knows what he is eating, and with his wallet and his more or less committed price comparisons he can help the various creations of food chemistry to succeed. The manufacturers support him with advertising and product information that energetically cultivates the appearance of pleasure and gives the creations of their business calculations the image of a thoroughly natural and therefore healthy product. Be it designations of origin, brand names, pretty pictures of cows and chickens, or the absence of any substance that, according to the latest findings, is harmful to health or enjoyment, which can otherwise be found everywhere: the more consistently the food industry technically produces the useful properties of food, the more fiercely it advertises its ‘naturalness’ as a quality feature.[3]

All these lines of business follow the necessities of capitalist accumulation. Like any other line of industry, they are concerned with quick and continuous turnover; the technical means and processes they employ owe their existence to this purpose. Means of transport need to be utilized at capacity, warehouses continuously filled and emptied; the shelves of supermarkets need to be continuously filled, independent of the season and flexibly according to the level of demand. The application of these aspects to natural products is not a problem for these companies but, on the contrary, a constant incentive to give their engineers and chemists new orders for suitable processes. For the optimal use of technical means, as everywhere, the mass of capital is decisive. Thus the concentration of capital is also progressing in the food trade and industry. Thus, regional or product-specific monopolies have emerged in recent decades; in the meantime, the company logos of the major food producers and traders can be found on all kinds of food products throughout Europe or even worldwide. The new size of capital is in turn the basis for the spatial expansion of shopping and delivery areas.[4] As the size of the company grows, so does the mass of products that it transports, packages, and processes every day. Thus food companies grow to world market size;[5] and thus the farmer also becomes a world market participant.

For this purpose, he does not even have to move away from his land. As a supplier to an industry that calculates with his product as a raw material for industrial mass production, he is included in its capital cycle and subsumed under it. The conventional, limited cycle of his business, in which he carried his products to the next distant market according to season and harvest yield, has been replaced by a new cycle in which the farmer has to prove himself as a supplier – according to the criteria of demand presented to him by his major customer. The customer faces the farmer more or less as a monopolist and does not simply buy his product from him: according to his business calculation, he makes demands on its quality. Here it is true for once that the customer is king and the market dictates production: Because the farmer does not have at his disposal all the profitability-generating means that his customers command, they are the ones who dictate the terms of the deal to him. The profitability of their capital investment stands and falls with the continuous and flexible utilization of their means of production; thus the farmer has to gear his production so that his supply meets this demand. He has to deliver exactly the right quantity of goods, on time, in the right shape and quality, continuously and flexibly at the same time, to fit in with Nestlé’s or Metro’s production and sales planning. At the same time, he must not make any demands on the price side that would place too great a burden on his customers’ cost calculations. The fact that these demands are somewhat contradictory is of little concern to the farmer’s customers – after all, they are the ones who give him market access in the first place. Thus, industry presents the farmer with every problem it takes away from him in a new form as a constraint of capitalist accounting.

2. Production

If the farmer wants to meet the demands of his customers, his production cannot remain as it is. The direction in which it must be turned is clear: agricultural production is only suitable as a reliable means of supplying a capitalistically calculating large-scale industry – and thus as a source of income for the farmer – if its own production processes are increasingly given the character of an industrial production process. The farmer is not left alone on this front either. The hardships caused for him by the task of acting like an ordinary industrial subcontractor, contrary to the speciality of his trade, are the entry point for other departments of industrial capital.

The industries that operate here focus their business acumen on the technical management of natural production processes. Like their capitalist colleagues in the ‘marketing’ department, these industries do not suffer from the restrictions imposed on the farmer in his attempts to make money under capitalism. Conversely, every problem he has is a business opportunity for a department of the means of production industry. Mechanical engineering and the automobile industry supply him with agricultural machinery that enable him to cultivate ever larger areas of land to increase productivity. With new types of production equipment, modern agribusinesses overcome the limitations imposed on their production by location, soil conditions, season, weather, and so on. These helpful lines of business also support farmers in making their production independent of the size of land area available to them. The chemical industry and genetic engineering play their part by developing substances and processes that increase yields, shorten natural processes or replace them with completely new ones. With ever newer growth aids, soil additives, pesticides, and medicines of various kinds, they put themselves entirely at the service of not only accelerating growth and ripening processes, but also emancipating them as far as possible from natural conditions in terms of duration and timing of yield.

The production of these techniques is completely beyond the reach of the farmer; the results are available to him as a user who is narrow-mindedly interested in the effect. In order to appreciate the effect as a useful business tool, he naturally does not have to know the exact mode of action of the various preparations; the “side effects” of the various chemical and hormone additives, which the public regularly notes with concern as the “price of technical progress” or the “consequence of large-scale agricultural production,” are certainly none of his business. The farmer is merely the interested purchaser of the various cocktails, the dependent variable of a chemical-biological large-scale production which becomes indispensable for his trade to the extent that its benefit proves itself for the market-driven adjustment of his operating procedures. This industry can therefore be sure of its continuous sales and the associated profit: without it, the farmer would not be able to meet the demands of his customers. The harder the pressure of the food industry on the farmer, the more reliably his suppliers can count on him as a customer. In this way, these companies develop into world market players who make good profits, even and especially in times when farmers complain about declining income.[6] The research departments of this special breed of “global player” are now regarded by both friends and foes of modern agribusiness as the nursery of agricultural technological progress, and companies like Monsanto present themselves as the real guarantors of the future food supply of humankind, which the farmers obviously have such a hard time doing on their own. This much is true: with their campaign to open up more and more new markets, agricultural multinationals want to finally make their chemical products, genetic engineering, and seed patents the indispensable means of production for farmers all over the world once and for all – in other words, to make all of humanity dependent for nutrition on their global use and to make money from it.

With the use of technology and chemistry, the farmer is able to adapt his products ever more perfectly to the requirements of his customers in terms of quality, price, quantity, and time of completion. What is unsuitable for capitalist use, which is inherent in the farmer’s product, is thus pushed back further and further; the ideal of factory production is met more and more. However, this in no way abolishes the limitations of the farmer’s production efforts. It is still up to the farmer to manage the feat of organizing natural processes between the prices of his customers on the one hand and the prices of his suppliers on the other hand in such a way that they are not only a reliable means of producing a product that is suitable in terms of price and quantity, but also secures him a halfway adequate income. With a natural product that, despite everything, is still more or less unpredictable, he has to adapt to the just-in-time production of his customers: This is what bleakly remains of the metabolism with nature which remains attached to him throughout the whole great cycle of agricultural-industrial production and, not coincidentally, takes on the character of a progressive overexploitation of nature.[7] In this way and in no other way, that is, at the highest level of technical progress, biological organisms are transformed into marketable products; the farmer has to struggle with the remaining – and increasingly with completely new – adversities in the natural part of the production processes of a food industry, which makes him a stopgap for the fact that the program of a profit-oriented control of natural growth processes can never be fully realized. Chickens in battery cages need to be kept alive and eager to lay eggs, herbicides do not prevent the harvest from being spoiled by hail, even hormone-doped cattle need to be brought to slaughter in reasonably good health; and when modern production methods or nature strike in the form of diseases, weather, or the like, it is still the farmer’s business accounts that get messed up – his customers and suppliers have in their capital the means to indemnify themselves or to make money from the adversities of farm production. Even if the farmer happily overcomes such perils, the matter is by no means settled. Because his bulk customers do not simply buy surplus quantities from him, they also reduce prices so that the market prices, which tend to fall with good results, make it questionable whether his past efforts will bring in enough money to be able to pay supplier bills and cover domestic expenses.

This, then, is the result of the farmer’s toil: he allows the necessities of making money to dictate all the measures with which he advances the emancipation of agricultural production from nature – but he does not free himself from his financial worries. Even more: To the extent that the tools of the supply industry become the necessary equipment for the farmer to survive on the market, i.e. in the competition for the demand of industrial customers, he finds himself forced to constantly make new and larger advances. First of all, in order to ensure that his farm is equipped with the latest technology; secondly, because this equipment is generally only halfway worthwhile if production is expanded and sales are increased with its help. His business must grow in order to survive.[8] As efficient as the farmers are, they do not refuse this task either.

3. Finances

To get his production ready for the market, the farmer needs money which he does not have. There, too, he is helped: Once again, a whole line of business is active and takes care of the financial worries of farmers. We are talking about bank capital: As always, it is on hand when it comes to making a business out of the money needs of other economic subjects. And it does not hesitate to include farmers in the circle of its debtors; after all, they are property owners who have a valuable security in their land. They bring this in when they apply to the bank for a loan. Thus, in addition to its function as a means of production, their land has the second function of securing bank credit.[9] What this security is worth in bank terms, however, is determined – as with any other bank debtor – by the farmer’s ability to generate a return from his property which can service the interest. Of course, the bank knows that the farmer does not pay this interest from a surplus, as more solvent borrowers do, but that the interest is rather a deduction from his income. In this respect, it attaches importance to certain proofs of the farmer’s ability to service his loan as a condition for entering into a credit relationship in the first place.[10] So before any economic income is generated by the farmer, it is in any case already ensured that his expenditures have a capital-forming effect elsewhere.

The farmer can also become well familiar with a second department of finance capital: We are talking about the insurance industry. The insurance industry discovered a lucrative source of income early on in the special circumstances of agricultural production and offers to insure the farmer against the unmanageable rigors of nature for a fee. It is up to the farmer to decide whether any damage to the harvest is worth the fee he has to pay for hail insurance.

Finance capital, which helps the farmer tackle his financial problems, does not, of course, reduce the farmer’s financial worries in the end. On the contrary. The loan for more modern, expanded production facilities or additional leased land must be serviced with interest from the income that the farmer earns from his increased sales. By modernizing his farm, he has created the necessary, but by no means sufficient condition for this to succeed. On the market, he is confronted with the fact that his competitors have done the same. The all-around expansion of production allows buyers to reduce prices; thus many a farmer has to realize that the proceeds he obtains from his increased quantity of products do not cover the costs of his production – which have now also been increased by interest payments. Finance capital thus has the task of sorting out the farmers. On the basis of level of indebtedness and the state of loans serviced, the banks determine which farms are finally judged unable to compete; these farms have their credit cancelled, thus ending their existence. Others are granted a grace period by extending credit. Third parties can be helped to achieve further production and market successes with new credit. This is how bank capital does its part to ensure that the development of the agricultural production sphere takes place side by side with farms dying out, the remaining farms expanding in size, and the farmers as a whole become increasingly indebted.[11]

4. The farmers’ adaptation skills - no remedy against ruin

The members of the farming community see to it that they accommodate themselves to this state of affairs. Very few work their way up to become owners of technically well-equipped agricultural production facilities in which they carry out a part of the agricultural production process quasi industrially on their own account – with a corresponding farm size, it is then even worthwhile to employ wage laborers on a more or less permanent basis.[12] More common is the practice of fitting themselves into a new kind of broker system in which farmers act as direct suppliers for food corporations.[13] They produce to the specifications of the buyers, are paid regularly, and deliver on completion; they retain the “entrepreneurial risk,” of course. Third parties, on the other hand, can afford to keep their farms as “sidelines” – whereby “sideline” can at most be spoken of in terms of income, but by no means in terms of the work involved.

Nor is there a lack of attempts to escape in one way or another from the “market power” which confronts the farmers in the form of the supply and consumer industries. Farmers organized themselves into cooperatives early on. The purpose of these is to use collectively procured machinery to keep the purchase cost of agricultural inputs affordable for individual farms; they purchase fertilizer, seed, etc., as bulk buyers who can negotiate better prices; and they act as collection points and collective sellers of cooperative members’ products. With the increasing centralization of these functions in their hands, the cooperatives have now established themselves as suppliers and intermediaries vis-à-vis the farmers on the one hand and the industry proper on the other; some have evolved into processing plants. Some have developed into processing companies. Today they act as commercial capital, dictating purchase and sales prices to individual farmers. So it is only logical that many cooperatives organize themselves as joint-stock companies which still have farmers as shareholders, but draw their credit like regular capitalists on a business that is profitable.

There remains the niche in which a small part of the farming community is trying to establish itself: the business of luxury food consumption. The existence of such a distinct ‘market segment,’ which nowadays goes under titles such as ‘direct marketing,’ ‘back to nature!’ or ‘organic farming,’ only sheds further light on the generous way in which capitalist food production takes care of feeding the masses: For people who have enough time and money, it is quite possible to produce better and – at least according to the seal of quality – healthier food than the consumer goods intended for the common people. This is not forgotten: After all, the many consumers with their interest in ‘health food,’which is encouraged by the relevant scandals, represent a ‘customer potential’ not to be scoffed at for a growing new business sphere in which everything is “organic.” In this way, agribusiness still profits from the negative effects on consumer confidence that its usual production produces.

The farmer may twist and turn as he will – the market economy has no suitable offer to overcome his lack of money. However, the farming community does not have to fail because its continued existence is the responsibility of politics.

III. The political business with farmers

Because farmers, who provides useful services for the growth of national capital, are unable to ever get anywhere, the state intervenes. It takes care of the difficult sector on a permanent basis in order to secure these services, thereby recognizing in practice that it is an exceptional economic case, an industry that is necessary on the one hand, but on the other hand as a whole not able “on its own” to play the role required of it in the market economy. [14]

The elementary achievement that the state is concerned with first and foremost is securing the national food base. Economic policy makers express the fact that agriculture, which is responsible for this, is the basis and source of every industry when they cite the small number of workers still engaged in agriculture as a success of the development of their industrial nation: The wealth of the nation has already gone so far beyond its agricultural basis; a country must first achieve the luxury of agricultural overproduction, which then needs to be controlled and curbed. The capitalist state takes care of the nation’s food base by taking care of the income of the farmers. Securing the people’s nourishment is part of the higher goal of keeping the farming economy viable to the extent that it is needed as a basis for profitable business with it. Enough farmers should be able to survive in the competition for their role as a capitalist location factor. The state’s contribution to the functioning of its agricultural base therefore looks like a sponsorship of the farmers. And this much is true about it: Only with public subsidies do enough farmers earn an income that enables them to continue their efforts to earn money by producing food.

[1] Marx characterized the antagonism between the peasant living by his own labor and capitalist landed property as one reason why capitalism and rational agriculture contradict each other: The expenditure of money-capital for the purchase of land, then, is not an investment of agricultural capital. It is a decrease pro tanto in the capital which small peasants can employ in their own sphere of production. It reduces pro tanto the size of their means of production and thereby narrows the economic basis of reproduction.... It contradicts in fact the capitalist mode of production … The conflict between the price of land as an element in the producers’ cost-price and no element in the price of production ... is but one of the forms manifesting the general contradiction between private land-ownership and a rational agriculture, the normal social utilisation of the soil. But on the other hand, private land ownership, and thereby expropriation of the direct producers from the land — private land-ownership by the one, which implies lack of ownership by others — is the basis of the capitalist mode of production. (Marx, Das Kapital Vol. III, Part VI: Transformation of Surplus-Profit into Ground-Rent, Chapter 47: Genesis of Capitalist Ground-Rent)

[2] Just how backward “real socialism” was in this respect is revealed to German sugar producers when they enter the new Eastern European market: while sugar companies in Germany sell 85% of their sugar to “industrial customers,” 60% of production in Eastern Europe is still consumed by households, according to the head of “Nordzucker.”

[3] The ideal of the ‘naturalness’ of food has no merit, even if it is taken seriously by eco-advocates of a healthier and more environmentally friendly way of life and used against capitalist food production. Enjoyability and wholesomeness are – by the way, just like resource-saving, rational production processes – not at all the same as an ‘unadulterated’ ‘naturalness’; and certainly not identical with a return to ‘orientation’ to, of all things, ‘harmonious with nature,’ possibly outmoded ‘ways of life.’

[4] “The Danish retail chain Netto has set up its headquarters for Eastern Europe in Stavenhagen (Mecklenburg-Western Pomerania). In Poland alone, 150 Netto supermarkets have already been built. Aldi built a warehouse on Autobahn 20 – which is still under construction.” (FAZ, 2/12/04)

[5] The bankruptcies of multinationals in this sphere are correspondingly spectacular. On the occasion of the collapse of the “Parmalat” corporate empire, the astonished newspaper reader learns how a global corporation could be built from the processing of tomatoes and milk in the Italian north, which in the end controlled, among other things, 10% of the Brazilian dairy industry, but in retrospect, unfortunately, accumulated essentially “losses” with its “rapid expansion” to Latin America, the USA, and Eastern Europe. (Financial Times, 2.20.04) Why should this sphere also be an exception to the capitalist logic according to which capital seizes markets with huge amounts of credit masses only to find that the solvent demand does not serve so many realization claims after all.

[6] “Sygenta, the world’s largest agrochemicals group, achieved unexpectedly good results in 2003. Net income rose 37%, considerably more than sales... After the summer drought in northern Europe, which reduced sales of crop protection products, the second half of the year brought a revival, especially in northern and southern Europe.” (FAZ, 2/13/04)

[7] For example, in modern fishing, where the production process is nothing other than overfishing. In the consistent ruination of the natural foundations, the logic of a mode of production proves itself, in that the transformability of a use value into money is the only production criterion and therefore seizes all nature as a source of money in a technically perfect and ruthless way - as long as it is still there. In waters that have been fished empty, a new capitalist industry then spreads with the breeding of edible sea creatures.

[8] Despite all the capital inputs, this is still and not least about land: “German farms need more land! ... The vast majority of full-time farms in western Germany would find it much easier to earn a sufficient family income if they had two to three times more land at their disposal... Promoting an increase in the land area of farms would be a very important task of the Minister of Agriculture.” (Heinz Vetter, FAZ, 3/8/01) The goal of development can be admired in the East: The socialization of land and the creation of “agricultural production cooperatives” by the GDR communists is now paying off capitalistically. With the farm sizes of the eastern estates – after the dismissal of 80% of the employees – German agriculture is fully on a world level.

[9] The movement of land prices therefore has contradictory consequences for farmers’ business calculations: To the extent that the price of land, i.e. the cost of renting land, falls, the value of the farmers’ own land as collateral for a loan falls.

[10] In the relation between the farmers and the banking system, credit has historically lasted the longest as a purely usurious relationship, in terms more similar to small loans to poor people than to loans to the business world. The need of the peasantry to be recognized by the credit industry as solvent borrowers at all was the reason for the foundation of special financial institutions for peasant credit needs in the past. The names of such cooperative foundations that remain today are essentially: Credit Agricole in France, Cassa Rurale in Italy, the German Raiffeisen-Genossenschaft operate like normal commercial banks, which at the same time, insofar as they serve farmers as customers, mostly enjoy political guarantees and state-subsidized interest rates. Too many loans are apparently not serviced and repaid for this sector to be worthwhile for normal banking business on its own. And the substitute appropriation of bankrupt farms and unprofitable land is not a particularly interesting form of enrichment for a bank. In the U.S., therefore, a large part of the government's subsidies for agriculture is paid out directly in the form of credit assistance and government-backed crop insurance.

[11] Therefore, as the size of farms that can generate a farm income grows, so does the debt that farmers must finance out of their incomes.

[12] However, such labor relations are not wage labor according to the usual standards of developed capitalist nations, as can be illustrated, for example, by the cultivation of vegetables in southern Spain: In Central European department stores, one pays about as much for a kilo of southern Spanish early vegetables as the Moroccan farm worker who harvested them earns in an hour... The Andalusian greenhouse owners react to the price dictates of the large-scale distributor with an expanded supply and the increased use of pesticides... Under plastic, about 3 million tons of vegetables and fruits are produced each year.... Here vegetate not only vegetables and fruits, but also people, under scanty sheds protected by plastic and boards... Sometimes they have work, in winter a few days a month, and they barely earn what they have to spend immediately for their own survival... The marketing system and the price dictates force the growers to flexible solutions; sometimes you need a lot of labor, sometimes little. They have to be on call or accept an unpaid attendance time. (NZZ, 2/12/04) It is a good thing that for every capitalistic constraint the appropriate human material is ready.

[13] This is what a success story of a German agricultural location looks like these days. When 1,500 jobs are secured in potato farming thanks to “Pfanni,” “Netto” runs the local brewery, a large waste disposal company processes animal waste into biodiesel (“a world first”) and an American company plans a sturgeon farm – then, according to the FAZ (2/12), we are dealing with a thriving agricultural community.

[14] Historically, it has always been the same when the bourgeois state takes care of social emergencies created by the capitalist mode of production: The state first reacts with repression when there is discontent. With its democratic-parliamentary pluralism, it also opens up a way for the aggrieved to “get involved” with their survival interests: they may demand that the state power protect them to the extent that it depends on them as an indispensable component of capitalist class society; in return, they translate their plight into a willingness to cope with the necessities of earning money in a market economy. With this double achievement, farmer parties also established themselves in the emerging democratic class state. They wrested support services from state power; and they showed their farmers how to become a special class of market participants under the pressure of “circumstances” and with state tutoring, and as such to discover the self-confident citizen in themselves: the proud owner of his soil who demands comprehensive guarantees of success from the state and at the same time cultivates the gesture that the state should kindly stay out of his expert handling of plants and livestock. The decimation of the farmers in the course of capitalist progress has deprived the farmer parties of their voter base in the most modern of democracies. And the great popular parties face up to the social hardships of the farmers the same way they do to every discontent among the people whom they claim as a mass base for their electoral success: They recommend themselves with alternatives for the leadership of the Ministry of Agriculture and cite all the material hardships suffered by the farmers as examples of the need to advance the nation as a capital location and center of power, with all the greater success which, of course, their leaders vouch for. What they get out of it then astonishes the politically educated farmers – like all other strata of the electorate – without them learning from the damage. They more easily become radical in a nationalist way, clinging to the belief that agricultural policy should serve their well-being, therefore feeling betrayed by “their minister” and unleashing a militancy unmatched by most other demonstrations when they defend their right to their home market and good prices by blockading borders, overturning foreign tomato trucks and wine containers.