A recent evaluation of Danish farms by real estate agents, the chief economist at the Danish Agriculture & Food Council and the head of the Food Economics Institute at the University of Copenhagen finds that low product prices coupled with massive debt has been more then farmers could bare.

Chief economist for Agriculture and Food Products, Leif Nielsen told public television station DR;

“I believe that there will be 25 percent fewer farms within five years. It’s a loose estimate, but not an unrealistic one.”

It is estimated that Danish farmers have a combined debt of 350 billion kroner (47 billion Euro), with 13,000 of them accounting for 255 billion kroner of that total or nearly 20 million kroner (2.7 million Euro) per farmer.

A nock-on effect is being felt in the real estate market as the number of farms sold in the past 6 months has dropped by 66% over last year, according to real estate agent Olav Kristensen.

The problem is being exacerbated by the financial sectors un-willingness to make loans to farmers in the wake of last year’s financial breakdown. Henrik Zobbe, director of the Food Economics Institute at the University of Copenhagen, is predicting massive foreclosures in the agricultural sector in the next few years;

“I can’t see how the farmers will survive in the long run, unless a lot of their debt is erased.”

Just how that massive load of debt could be erased is left to the imagination, anything like ‘debt forgiveness’ or even debt restructuring would be political suicide, the alternative, however, would be the elimination of thousands of farms resulting in an appreciable increase in food prices or increased reliance on foreign production.

As the world focuses on CO2 and climate negotiations it is rather ironic that the host countries food sustainability is being overlooked. A cursory look at modern agriculture shows just how a farm could a-mass 2.7 million Euros in debt.

The use of mono-crop, economy of scale and the reliance on highly efficient (and equally costly) farm equipment relentlessly drives competition to the bottom line; price. The slightest inconsistency in production costs (such as that leveraged by cheaper labor in foreign countries) in a global market sends ripple effects focused on the farmer.

Unfortunately no one has come up with a solution to this problem as the ‘cheapness’ of global commerce is at direct odds to local production.

	The competition… Jerrold @ flickr Harvesting by hand, Tibet

The farmer must purchase massive equipment to be competitive, own huge tracts of land, earn and pay working hands the absolute minimum just to squeeze out a living. All this in a country where the cost of living is arguably one of the highest in the world; dropping a million kroner (135000 Euro) on a used tractor or annual phosphorus fertilizer inputs is a necessity.

I can’t help but see that we are at cross-purposes in the most important national product; what good is saving 15 cents on a head of lettuce when it collapses your countries food industry.

	Wheat harvesters… Okinawa Soba @ flickr Japan 1923

Via: The Copenhagen Post