Farmers: The Originators of the Gig Economy
Self employment is the latest trend, but it’s nothing new for farmers.
With the gig economy alive and growing in the United States, I must be part of it.
That’s because farming is my gig.
Maybe employers just don’t want to pay what it takes to keep someone on call every day, all week long plus time-and-a-half for overtime. Whatever the reason, it’s getting so more people are taking jobs as independent contractors rather than employees. They do their jobs and move on.
I’m starting to feel that way about farming.
Maybe it’s the rising cost of benefits like health insurance and retirement. Ask a farmer about his benefits and he’ll usually say fresh air and sunshine. Everything hourly or salaried workers refer to as benefits is just another cost for us—or something we do without.
According to USDA’s Economic Research Service (ERS), net cash income has become much more volatile since 2009. That makes it hard for farmers to pay for things that most workers get with their jobs.
Drought, floods, currency values, interest rates, China. All that and more have affected farm production and prices. One of the ways we refer to that is globalization, and globalization has been a big contributor to the gig economy.
Self-employed farmers have a lot in common with other small businesses and the gig economy.
While other small businesses do, on average, slightly better than farmers, farming is much more uncertain in terms of annual gross income highs and lows. That,s partly due to farm reliance on government subsidies for things like crop insurance, as well as price supports when markets dip, or yields and financial assistance when disaster strikes.
Weather, markets, and the big one, trade, also known as government meddling in markets, make this a tough gig.
Farms have all the costs other businesses shoulder, including competitive pressures at home and abroad. That’s one thing Farmer-me has in common with outsourced gig workers everywhere, because there’s always someone—a soybean grower in Brazil or wheat grower in Canada—who wants my job.
When applying for a loan or credit card, if farmers report their net income, chances are they’ll be turned down flat because most credit reports show total debt, and that includes personal farm debt. To qualify for credit, farmers must show their gross income, which doesn’t give an accurate picture of what we actually put in our pockets each year. It does make us look bigger financially, but that’s because gross income includes the amount we pay to service debts that provide our capital. Sometimes, what’s left over from that can be less than nothing.
Gross income can be 10 times net income. Or net income can be negative if the bills aren’t paid. That’s why a lot of farmers are using limited liability corporations to shield themselves from liability and tell-all tax records.
If President Trump had been a farmer, the contents of his income records would be old news because the farm creditors’ backup is farm income tax records. They often insist upon seeing them before extending new credit. Five years ago when grain prices were soaring, farm records showed business was booming. Now with prices close to half what they were and corporate-supplied inputs as high as ever, the boom is more closely related to the free fall sound made by a rock thrown into a dry well.
That relationship between costs we pay and income we gain is what makes farming difficult. Livestock and poultry feeders can’t control feed costs. Crop farmers can’t control seed, repairs, petroleum, or pesticide costs.
Ultimately we’re all at the mercy of corporate buyers and sellers and their vested interests. To advance those interests, they lobby for weaker antitrust enforcement and environmental restrictions in farm country, while encouraging all out crop production, fewer, bigger farms, and talking about “weather extremes” rather than investment in conservation that addresses the problems of climate change.
For farmers whose income is iffy, equity loans on the homeplace, machinery, or livestock, are all that’s left to combat liquidity problems before the last step, liquidation of assets. That usually leads to more taxes on income, and capital gains, followed by more asset-selling.
This is no shock to farmers.
Maybe there’s certainty in the farming gig after all. The financial cycle is as reliable as taxes. And death.