Will CARES Act Be Equitable for Small Farmers?

The U.S. agricultural sector more than welcomed that news that the CARES Act includes financial aid and other forms of relief for farmers.

Out of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $9.5 billion disaster relief program was created to provide disaster relief to members of the agricultural sector. Even more welcome is that the relief money for specialty crop producers, livestock and dairy producers, as well suppliers of produce for farmers markets, restaurants and school cafeterias, is separate from the funds allotted to the Commodity Credit Corporation. The CARES Act also extends financial assistance that will enable the credit entity to extend 12-month loans to those who suffer losses.

Based on an economic analysis undertaken by the National Sustainable Agriculture Coalition (NSAC), the loss of access to direct markets as a consequence of social distancing and shelter-in-place restrictions will result in loss of direct market sales amounting to as much as $1 billion among small U.S. farmers.

Concerns Raised by the NSAC Over the CARES Act Relief for Farmers

While it is true that legislators of the CARES Act remembered to include small farmers among the recipients of disaster relief funds, concerns are raised on how the stimulus package will be administered by the USDA. The NSCA pointed out that the legislation did not provide directions on how the USDA should distribute the funds, nor specify loan payment structures.

Moreover the NSAC is wary that there will be a repeat of history in which smaller-scale farmers who sold their crops and produce in farmers’ markets, did not have first priority, nor had access at all, to the relief funds. Notwithstanding that this group of farmers, particularly those who are already experiencing systemic disparity, have fewer resources to support them in times of economic crisis and financial hardship.

The Plight Faced by Small Farmers During the Ongoing Covid-19 Crisis

In counties and communities under lockdown and where citizens have been mandated to shelter-in-place, many farmers’ markets have been ordered to shut down. Orders came after health authorities noted that the conditions in farmers’ markets made it difficult for consumers and sellers to maintain social distancing.

In San Diego City for one, farmers’ markets were immediately met with permit cancellations. Still, they were subsequently granted permission to operate as essential service providers. During the week however, not a few farmers’ markets in the city had to shut down due to the limitations imposed by social distancing and public gathering mandates.

Even if there is a great demand for farm produce, which farmers are capable of supplying, the problem presented by the Covid-19 crisis is that people cannot just converge in farmers’ markets where social distancing is next to impossible. Although some have taken alternative marketing steps by selling and offering to deliver their farm products via the Internet, not all small farmers possess the technical knowhow or ability to carry on with such strategies.

The stark possibility that looms ahead for many farmers doing business in this city, is that once the Covid-19 crisis is over, there will be a need to seek legal assistance from a bankruptcy attorney san diego based.

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Uses Of Agricultural Loans

Loans, whether short term or long term, secured or unsecured, could be very helpful for many persons and businesses. Citrus Loans, for example, offer a broad array of loan options and alternatives that could match and meet your needs for credit. If borrowers aren’t successful at applying for a loan in one of their major products, they do still have other alternatives that could fit the borrower’s needs.

In the industry of agriculture, farmers could also apply for a loan to use in their farming business. Just like any other form of business, operating and managing a farm or any agricultural business comes with its own set of challenges as well. Although the industry of agriculture has its particular challenges to  surmount, there is a challenge that individuals in the industry of agriculture, such as ranchers, farmers and entrepreneurs, that similar to other business owners encounter form time to time, the need for capital and other financial concerns.

It is without a doubt that owning and running a ranch, a farm, or any other business under the industry of agriculture go together with immense heavy expenses and financial needs which are usually used to buy large heavy ranch or farming equipment, purchasing land, and/or for paying their employees and business operations. Frequently a business owner couldn’t deal with such financial challenges alone, and these expenditures could swiftly stack up if left unsettled, leaving business owners, even the most equipped, struggling to keep the business going. This is where agricultural loans enter.

Agricultural Loan Uses

Agriculture or Agricultural loans are purposely allotted for agriculture use, and careful and responsible use of the loan could aid in the success of your agricultural business.

But prior to applying for one, you have to formulate a plan on how to use the loan the proper way, primarily where and what you need the money for as well as how much you need. Below are some agricultural loan uses to consider so you won’t end up mismanaging your funds.

Procure Equipment and Supplies

You can’t efficiently operate a farm if you lack the equipment specially designed for your farming needs, such as tractors, silos and irrigation systems. Great-quality, reliable farm equipment would last a bit longer and make job much easier, however such equipment could be quite costly since you have to take into account operational costs and supplies such as fuel, repair and maintenance, seeds, fertilizer and others. So, assess what equipment you need, whether you need a new one or would only need repairs. Additionally, compare prices so you could determine how much you need to loan and that you would be able to pay it off.

Covering Cost of Land

Agriculture loans could be utilized to buy or lease a land. Buying or leasing a farmland could be complicated. Moreover, the type of land you require will rely on the type of farming you intend to do. Again, evaluate your needs and decide the amount you need to borrow.

For Land Enhancement & Repairs

Farms require regular upkeep to run efficiently and productively. Agriculture loans could be utilized for pricey improvements or repairs/maintenance to land and/or infrastructure. However, such improvements and upkeep could help further the value of your land, better your products and make more efficient your business. With consumers being very conscious nowadays, you’ll need to keep with most recent trends in land care as well as ethical farming.

Other Uses:
  • Refinancing of a Previous or Older Loan
  • Advertising and Marketing Efforts
  • Covering Costs of Operation
  • Rebuilding Following a Natural Calamities

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The Coronavirus Infected All Agricultural And Raw Materials Market

The cornavirus has meanwhile infected all agricultural and raw material markets. Panic is spreading because the possible effects of a global pandemic on the economy and trade cannot be estimated.

“Due to the rapid spread of the corona virus, agricultural markets are driven solely by negative market sentiment and not by the fundamental data of supply and demand,” says a US market analyst.

Impact of COVID-19 on Agriculture

Prices for grain and oilseeds on the futures markets already fell significantly on Thursday . In the USA, pork was also down sharply. Agricultural prices are thus following the further drop in crude oil and energy prices. And also today, the grain and oilseed markets in the US are showing deep red signs in pre-exchange trading . This will also pull prices in Europe down on today’s trading day. They also had to give up on Thursday.

In addition, the agricultural markets no longer perceive positive or fundamentally good news: for example, that container trade in China is gradually starting up again and that global trade flows are slowly picking up speed again. Certain prices on the US stock exchanges fell to new lows on Thursday. US wheat plummeted along with the stock and energy markets to their lowest level in two and a half months.

It was the worst week for the global equity and commodities markets since the 2008 financial crisis. Hopes that the coronavirus epidemic would be over in a few months and economic activity would normalize quickly were dashed.

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Mitigating the Threats of a Covid-19 Plague

Risk management and mitigation plans are about to be tested as the world is currently confronted by threats of a Covid-19 plague. No one knows for sure how and when the epidemic will affect a country, but the World Health Organization (WHO) and the Centers for Disease Control (CDC) is urging everyone to prepare.

U.S. president Donald Trump is brushing off the threats of an infectious disease epidemic, stating the opposite of what expert health officials are saying. Trump also claims that a vaccine that will cure the coronavirus infection is already underway. Yet the CDC is keeping everything transparent; letting the public know that even if scientists are at work to develop a cure, testing and production of the vaccine will take 18 months at the least.

Moreover, during the initial stages of the vaccine’s distribution and administration, treatment of those who are already infected will be the first concern. The rest will just have to stay safe by following the precautionary measures recommended by health officials; until such time that the vaccine has been mass produced.

Since the CDC cannot say when the spread of the Covid-19 virus will reach epidemic levels, business owners, experts in residence property management, employers, administrators, operators and community leaders, must start applying their mitigation measures in order to make less severe, the impact of a Covid-19 epidemic.

Why is Risk Management and Mitigation Important?

First off, know that risk management involves identifying the wide variety of threats that an institution or organization faces. At the same, it requires finding and/or formulating the most effective solution to control or prevent the impact of such threats when any becomes a reality.

The CDC has confirmed that there are now two cases of person-to-person communication of the Covid-19 disease; one in California and another in Illinois. It has therefore become inevitable that the contagion will continue to spread, while the agency continues to track down persons who need to be quarantined.

The moment the spread of the novel coronavirus became inevitable, the CDC took another step in mitigating the risk faced by the nation. The act of informing the public, raised awareness about the need to protect oneself against potential infection. The CDC announcements have made more people attentive to the dangers posed by crowded places and of holding or attending social gatherings.

Rather than resort to self-medication, sick individuals will seek professional medical attention and care. When diagnosed as infected, they will readily agree to be kept in isolation in order to avoid the disease from spreading further.

Infectious disease outbreak is an occurrence that can greatly affect public health. It is also a risk faced by the economy because poor public health will lead to loss of wages or earnings and eventually, inability to buy, attend, participate or take part in any economic activities.

Inasmuch as 70% of the country’s economy relies on consumers and their spending, it is important therefore to mitigate the impact of such risk as early as possible.

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The Farm Bill and the Cannabis Stock Market

Generally, politics has been a strange fellow for some. This applies true to the weed industry when both the Senate and the House approved with an agreement on the Farm Bill that helps to have marketing plan development for your crops. The current edition of this bill has an aim to legalize the industrial marijuana. Credits to Mitch McConnell, the Senate Majority Leader who pushed through this bill and firmly argued the great advantages to the economy of legalizing the weeds. Moreover, this bill also makes the regulation of the weed be covered under the control of the Department of Agriculture of US and not of the Department of Justice.

The History of the Farm Bill

Farm Bill of 2014

This bill is the beginning of legalizing cannabis. The programs of those university-affiliated agricultural researches are permitted to cultivate hemp plants under this bill. But, it should be provided that those institutions are registered under the Department of Agriculture.

Unfortunately, the bill expired and the renewal was blocked by arguments from the Supplemental Nutrition Assistance Program (SNAP). There were also arguments and disagreements coming from the forestry practices. This basically originates from the wake of the fires within California.

Farm Bill of 2018

Compared to the previous Farm Bill, this bill of 2018 is more complex. It imposed to regulate the distribution of about $867 billion cannabis for the range of five years. This were conducted via a range of agricultural and food programs.

The Effect of the Farm Bill

Basically, the kind of help that weed farmers and producers really need is the legalization of their product.

Due to the approval of the Farm Bill, hemp legalization has taken into place. This makes the cannabidiol or CBD, an active constituent of hemp, produced legally in different states. Its production and distribution had experienced a great blast as the cultivation, transportation, and sale of the weed products can be done without restrictions. Due to this economic effect, the Director of Research of Brightfield Group, a cannabis research company, stated that they are expecting the cannabis market to greatly explode. The sales of cannabis products would hit around $22 billion by the year 2022 which is generally greater compared to the industry of cannabis in US.

Moreover, there are giant movers within the cannabis industry by now. They are actually big players in the industry and total game changers for this kind of market. To name a few, here are some well-known cannabis companies:

  1. Canopy Growth (CGC)
  2. Aurora Cannabis (ACB)
  3. Cronos Group (CRON)
  4. OrganiGram (OGI)
  5. Turning Point Brands (TPB)

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Plus Points of Transitioning to Homesteading

Americans most of the time think that to it demands miles of farming machinery and farmlands needed to supply food for everyone. That they have learnt to accept the fact that we need large-scale industrial agriculture combined with GMOs and chemical inputs. Otherwise, we would face starvation. At the same time, people have a notion that we need acres of land in order to grow food of your own. But in reality, this is a false belief.

Do we Really Need Acres of Land?

Much like with millions of smallholders and farmers worldwide would tell you, it will depend on the size of your family and quality of land you own. You could actually grow any food you need in a limited space. What it only needs is to plan for a food production system that works along with natural processes in an effort to make with what you have.

If you wish to develop land for your personal food production, then you may need at least 2 acres of land. In this land area, you already have solar energy needed to run your house, enough to be self-sufficient. Following are examples on how you could make the most of your property:

Growing Power – on a 2 acre urban lot, you could grow almost a million pounds of food annually which include fish as well as livestock inventory like:

  • Bees
  • Goats and
  • Chickens

Urban Homestead – for a family of four that is producing majority of their own food and 60,000 dollars yearly, 1/5 of an acre will do.

Homesteading is basically the transition phase from your current lifestyle into something that is centered on producing things and growing foods for yourself and family. This is in an attempt to be less dependent.

The Shift

First of all, there are so many benefits associated for producing and growing stuff for yourself. Among the benefits you can enjoy would be the health benefits. Eating foods that are free from chemicals and toxins that most manufacturers have in their products nowadays is one of the vital aspects why growing our own meals is critical.

Say that you are serious to make the transition to homesteading, then the very first thing you must know is how to grow vegetables and fruits on your own. Gardening is a critical skill for homesteading. You need to know how you can stand up on your own before going off the grid. But if you’re serious with this move and ready to make it quick, you can take advantage of lawsuit loan with a fast pre-settlement funding.

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Importance of the Common Agricultural Market

Understanding Food and Agriculture – Agriculture Policy

For farmers:
Protection from competition is a positive aspect because farmers have priority in supplying the European Union.
However, the income problems are not resolved as the income inequalities within agriculture widen.
Prices were increased due to the pricing policy. However, this policy failed because the increases did not bring enough profit for the small businesses and the large, thriving businesses made an even higher profit.

For the state:
The state saves subsidies because consumers pay through the prices for protecting agriculture. But the state has to spend billions on it because eliminating overproduction is very costly. Without the agricultural market, there would be no EU. The common agricultural market is essential for important EU partners. However, protectionism is questionable. The EU’s self-sufficiency is disrupting world trade.

For consumers:
Consumers are safely supplied, and protecting agriculture promotes EU self-sufficiency. But, consumers pay twice

-As a consumer for price support and

-As a taxpayer for surplus disposal.

Prices don’t go up and down, which means a relative price rest for consumers.
Competition is eliminated because cheaper world market offers are not used.

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How Globalization Affects Farmer Operations

The period of the last fifty years has been characterized by the continuing globalization of economic life. We want to find out what globalization means for individual farmers and its impact on agriculture as a whole. In the following, globalization is first briefly discussed as a general phenomenon. The situation in the Netherlands cannot be viewed in isolation from that of the EU, which is why the EU’s common agricultural policy and the changes therein are subsequently examined.

Farmers With A Future – Globalization Impact On Farmers of Netherlands

It is argued that this includes both resistance to unregulated globalization and surrender to the globalization process. The question is answered as to what the most important consequences of this globalization process are for Dutch farmers.

Globalization is not a downpour

If rules are made in the context of the World Trade Organization to liberalize trade between countries or around intellectual property rights, this is part of the globalization process. Globalization as a project is about the neo-liberal idea that having a large world market, with minimal government regulation, creates an ideal world order with the best opportunities for prosperity growth. From the neoliberal point of view and the idea of ​​globalization as a project, people agree with this by stating that the only option is to go along and adjust as well as possible. The idea that countries also have their own policy space and can make choices is dismissed as wishful thinking .

The American economist and Nobel Prize winner Joseph Stiglitz rightly states that better rules are needed to guarantee fair globalization.

Globalization and agriculture: markets and food chains

With most agricultural products you see traditionally that what is produced locally or regionally is also consumed to a significant extent in the same location or region. That has recently changed. Since 2000, world trade in food has more than tripled. Some regions are increasingly dependent on food imports and this trend is also expected to continue in the future.

The countries in the Middle East that are members of the Gulf Cooperation Council even have eighty to ninety percent of their food requirements dependent on imports, of which a significant part must come from the Black Sea area with are vulnerable supply lines. Other regions the US, Latin America, One of the main driving forces behind this development is the development of demand and consumption patterns, for example as a result of increasing incomes, population growth, and urbanization.

The EU agricultural policy: from protection to market orientation

With the establishment of the European Union, there is a situation in agriculture that I would like to call one of balanced internationalization. The EU agricultural policy was very much in line with the agricultural policy that the member states already had before. Afterwards, Since the great agricultural crisis of 1880 , the protection of agriculture in many countries has not disappeared from political reality. In exceptional cases, a few countries continued until 1930 to strive for a completely free agricultural market.

Later, during the Great Depression of the 1930s, great poverty and misery forced each country to make far-reaching changes in agriculture and agricultural markets. An important motive for the protective agricultural policy was that agricultural markets are unstable and world markets disturbed and that there is a permanent risk of overproduction, structurally falling real prices and low agricultural incomes. A common market was formed with the creation of the European Union. Trade in the EU, including agricultural products, should be able to take place freely.

  • First of all, it was about internationalization within a limited space, namely that of the six member states, with which the EU project started.
  • Secondly, it was important that the prices that countries settled against each other were not the often low world market prices, but the higher EU prices.
  • Those prices were higher because the EU pursued a price support policy and price stabilization policy at the same time.

The implication was that there were trade defense measures at the EU’s common external border.

This change of course has since led to the abolition of price support policy for almost all products. EU exports have indeed grown substantially. The result is that the prices that farmers receive are now largely determined by developments as they occur on the world market. In practice, this means that Dutch agricultural prices partly depend on what is happening in Asia, with China in particular being a very important country.

With the present global economic condition, there is a huge chance that farmers are going to suffer its effects. For some farmers, meeting the demands of the market becomes a challenge that they result to taking out small loans from agencies. While this move is not the wisest, it is the quickest to keep farming operations going.

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