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The importance of agriculture The importance of agriculture
by Joseph Gatt
2021-02-17 09:48:52
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COVID-19 has dealt a huge blow to agriculture. Because, unfortunately, agriculture is not just fruits and vegetables.

Agriculture is also the source of all kinds of oils and additives and is used in some many chemical products, from the textile industry to cosmetics to soap and hygiene products to cleaning products, and is even used in chemical industries like coloring, paint, ink, medical products and so many other products.

Yet, during the COVID period, while people still kept eating vegetables and drinking milk, a lot of companies saw huge dips in the sales of ink or paint or cosmetics or cleaning products and the like.

agri0001_400This halt of transformation industry meant that a lot of farmers lost a huge chunk of their business. While consumers still purchased agricultural products, industrialists basically stopped purchasing agricultural products, or at least reduced their purchase of agricultural products significantly.

And because agriculture is such a globalized industry, where farmers in country A sell their produce to factories in country B or countries C, D and E, a lot of farmers are stuck with products that have no use, because a lot of times that kind of agriculture is tailored for industrial use, and the crops tend to be unfit for human ingestion or consumption.

Not to mention the whole ecosystem. Farming is not just for human consumption, but also for livestock consumption or industrial use. And industrial products made from farming products are used by farmers for farming and livestock.

And there's a legal question around protecting farmers and their losses. Most insurance companies cover farmers for natural disasters, be they drought or disasters caused by insects or soil, or weather disasters. But most insurance companies do not cover farmers for damage caused by a recession that is by clients that stop purchasing farming products.

Plus, farmers face a double whammy: a lot of their long-term clients have gone out of business, or the business is agonizing and they are about to go out of business. That is a lot of the cosmetics or cleaning products companies that were once good clients of some farmers are no longer around, as COVID saw dwindling demand that led to factories to shut down.

Other big problem for farmers: people now eat at home! In the days where a lot of people ate at restaurants, restaurants often purchased large quantities of farming products, a lot of which would end up being thrown away. Or given away to that Israeli NGO that collects leftover fresh food from restaurants and donates it to nursing homes and retirement homes.

But now that people eat at home, they tend to eat smaller quantities, tend to purchase smaller quantities, and tend to throw away less food.

And then there are the huge clients that were forced to temporarily close shop during COVID. McDonald's and Burger King, two giants of the food industry, when those two shut down for a few months, it's hundreds of millions of vegetables, and millions of tons of meat and bread that get thrown out.

And then, other important loss: the pharmaceutical industry. Remember that medication is not just those pills or vitamins we take when we have headaches or fever. Pharmacy also invests billions in pharmaceutical products for the farming industry, as in medication for livestock, pesticides, food supplements for livestock, veterinarian products and the like.

Let's just use an example. Eggs are not just scrambled eggs we have for breakfast. Eggs are also used in everything from shampoo to cosmetics to ink in some cases to hundreds of industrial products, including industrial cakes and some medication and some cleaning products and so on and so forth. So when the economy shuts down, that's billions and billions of eggs that have no clear use. The eggs could be hatched and grow to become chickens and roosters, but then when the burger and meat packing industry shuts down, what's the use for chickens and roosters (we could adopt them as pets, and that's pretty much it).

Final farming problem: over the last ten years, farmers and ranchers have faced a huge, huge manpower shortage. It's sad that on the one hand you have all the unemployed people in the cities who see no job opportunity anywhere, and that on the other hand farms have to keep importing labor from Mexico or South Korea, Africa or Latin America. The problem with imported labor is that migrant workers often work in farms and wait for the visas to be in order, and the minute they get a stable visa, they run away to cities, seeking city life and easier jobs. If Korean farmers really wanted to work in Canadian farms, they'd probably be working in Korean farms. They're in it for life in Toronto or Vancouver.  

So the big problem is: if there's a scarcity of farming products, that's when you have inflation or hyperinflation. Because of tomatoes and bread is scarce, we're going to have to pay the full price for that. In some cases, that could mean having to sell the house and move into a trailer to be able to afford groceries. I hope that's not what the global future looks like.


    
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