Usury and Its Effect on the Environment: a Local View

Dr Yasin Dutton

An article in a recent issue of "Natural World", the magazine of the Royal Society for Nature Conservation, begins in the following way:

"Let us get one thing straight from the beginning. The battle for the countryside has been lost. The struggle now taking place is a last despairing attempt to salvage something from the wreckage …

"Most of the old order – the great wetlands and woodlands, moors, heaths, hedgerows and flower meadows – have been swept away and replaced by new landscapes which are all too often dreary, disfigurred and hostile to wildlife.

"Endangered, damaged, lost, destroyed ... even in the dispassionate statistics of scientific record books the same bleak words ring out agan and again. They are the sounds of nature being driven under; hammer blows for crumbling habitats and vanishing species…

"Who could have foreseen 30 years ago that the countryside would be overturned not by urban sprawl but by the ponderous momentum of modern agriculture? But market forces, allied with new technology which can wring every last ounce from the land, have transformed the face of rural Britain. A triumph for faming a catastrophe for wildlife ..."

"The miracle is", the writer concludes, "that anvthing has survived at all." (See B. Jackinan and T. Paskell, "Nature in the Balance", in the Spring/Summer 1986 issue of "Natural World", RSNC, pp.13-14).

The figures speak for themselves. Now in the 1980's in Britain, 40% of the natural woodlands have been lost, as have two-thirds of the natural coastline of England and Wales, 95% of the hay meadows, 80% of the chalk grassland, at least 30% of the upland grassland, heath and blanket bog, and over 50% of the marshes and wetlands, along with widespread pollution and canalization of waterways. (See, for further detail, "Natural World", Winter 1985, RSNC, pp.24-33).

And this situation is reflected in every country in the world.

The above-mentioned writer puts the blame on the "ponderous momentum of modern agriculture", referring in particular to "market forces" and "new technology". Let us look a little closer at these so-called "market forces" as they apply to agriculture, and it will be apparent how usury, and this usurious economy that we have been talking about today, has its effect in ultimately destroying the environment.

I would like to take one example from Norfolk, the Broadland grazing marshes, which illustrates this process on a local level, and it is a process which is happening in greater or lesser degree all over the country, and for very much the same reasons. Small, locally-based farmers are being forced to give up traditional low input-output farming practices, which are conducive to a clean conservationally high-value environment, for intensive semi-industrial alternatives, which in their turn destroy the unique plant and animal systems which give the area its particular value and attraction. The reason behind them doing this is, quite simply, because the pressure is on for them to increase production so that everyone can get their money moving and pay off their loans, always with the extra pressure of interest included, of course. The banks, as we have seen, have to get their money on the move in order for them to be able to make their own money and pay off their own debts. Governments have to do the same, for exactly the same reasons. Farmers, though, are not in a position to make money out of money. They have real wealth, i.e. land, which is finite and thus does not increase with regular increments of interest, and so for them to make money and meet their interest payments they have to increase production, whatever the cost to the environment.

The grazing marshes of the Norfolk Broads form an integral part of the Broadland ecosystem because they provide not only feeding areas for birds which nest around the waterway, such as herons and marsh harriers, but also because they provide the remaining large refuge, in their dykes, of the water-plant and animal communities now almost completely lost from the waterway itself. They now form the principal location for such nationally rare species as the Norfolk Aeshna dragonfly, which is confined to this part of England. There was also a Norfolk Damselfly, but that has already become extinct in England, having last been recorded from the Norfolk Broads in 1957. The area also harbours large numbers of winter bird visitors, such as Bewicks's swan and bean geese, sometimes in flocks of nationial importance, in addition to holding significant breeding populations of wildfowl, waders and other grassland nesting species such as yellow wagtail, for which the area is also of national importance.

These marshlands, after a long period of relative stability, are now threatened by further agricultural change. The traditional summer pasturing of stock has become uneconomic, owing to UK and EEC agricultural policies, and there is pressure on the farmers to increase productivity through deep-drainage and conversion of the land to high-yielding grass and arable crops. This means larger fields, reduced dyke lengths, and reduction of the dyke water levels. This inevitably reduces the area and viability of the present dyke aquatic-plant communities and their associated faunas.

The reasons why stock pasturing has become uneconomic lie in the political manipulation of agricultural policies, particularly those relating to subsidy and price-support, these manipulations all being, as we have seen, the result of, ultimately, the same economic pressures, only higher up the scale, as it were, as far as the Governinent is concerned. These policies have encouraged farmers in Broadland, and elsewhere, to take livestock off the marshes. Consequently cattle, ithe mainstay of the marshland landscape, are disappearing. At the same time, Common Market cereal producing policies are encouraging farmers to deep-drain and convert their grazing marsh to arable crops or high-yielding grass. The intervention prices of many arable crops, e.g. soft wheats, are now sufficiently high to give farmers a guaranteed return on the conversion investment, despite recognised over-production within the EEC.

In other words, despite the lack of need of the crop, farmers will grow it because it guarantees them a return, and they need that return to pay off their debts as soon as possible, especially since these debts are otherwise constantly increasing through the ever-increasing addition of interest.

Coupled with the operation of EEC agricultural policies are grants available through MAFF (the Ministry of Agriculture, Fisheries and Food) to help farmers improve field drainage. These grants range from 37.5% to 50% depending on the scheme chosen, and are awarded open-handedly without any formal cost-benefit analysis. If they show an increase over a notional period they are awarded. So, if the grant is of 37.5% there is another 62.5% which has to come from somewhere else, or, if it is 50%, there is another 50% which has to come from somewhere else, i.e. the banks, who will be more than willing to loan it since the crop is one which, with the present policies, will guarantee quick returns and allow them to reap their interest to pay off their own debts as soon as possible. And if anything should go wrong, they always have the land as collateral.

A further major reason for land drainage improvement is the obsolescence of many of the existing drainage pumps. Internal Drainage Boards have been unable to establish a capital fund for their replacement so that when a renewal becomes necessary they are obliged to seek MAFF grant aid, and, of course, to borrow the rest. These grants from MAFF, of 50%, are only available where a cost-benefit analysis shows improved agricultural production over a 25-year period. The remalning 50% must, as we have said, be borrowed, and the repayment and servicing of interest can only be met through an increase in the drainage rate. Thus Internal Drainage Boards, in order to attract grant aid, are encouraged to invest in efficient high-capacity pumps which allow for large-scale deep-draining, while the farmers, faced with a substantial increase in drainage rates and a poor return on stock, are obliged either to sell up if they are unable to adapt their enterprise to arable farming, or under-drain and convert.

What is important to note here is that whereas usury is clearly involved in the bank loans that the farmers, or the Drainage Boards, take out to make up the non-grant portion of the capital required in any of these cases, usury has almost certainly already been involved in the money which is being given as grant aid, since this latter is, of course, generally raised through interest-bearing bond issues on general funds raised at interest on the money-market by the government or authority concerned.

Thus both farmers and Internal Drainage Boards are seeking grants from the Government, whose money is already tainted with interest; both also need to borrow substantial sums from the banks to make up the difference. The Drainage Boards can only pay off their loans, with the extra pressure of interest always in the background, by increasing their rate of drainage, whilst the farmers, faced not only with this increased drainage rate but also the bank-instituted, national and international policies aimed at growing as much as possible of what will bring as quick a return as possible, are forced to continue to increase their production in order to pay off the debts they incurred in their conversion investment.

All this means that a combination of cash inducements, grants, and price-support, all of which lead to a further increase in the attendant bank-loans and subsequent burden of mounting interest, have led to a substantial increase of drainage and arable conversion on the grazing marshes. This in turn has led to a corresponding decline in the variety and ecological value of the land, along with the attendant problems of increased pollution. It has also led to a corresponding increase in the inducement of everyone concerned, whether farmer, Drainage Board, Government, or EEC, to become ever more deeply involved in the international banking system, which, ultimately, dictates the policies of them all.

A report prepared in 1982 by the Ecology Working Group of the Broads Authority, entitled "A Strategy and Management Plan for Broadland", commented on possible future changes in the following way:

"In considering ways forward it is important to note that farmers are as much the victims as the beneficiaries of present agricultural policies. Given declining profits, patterns of incentives and subsidies, and constant exhortations to improve production and efficiency, farmers are increasingly unable (and in some cases now perhaps unwilling) to manage their land to retain significant wildlife habitat and a varied landscape. They just cannot afford to. The imposition of planning controls on top of the present agricultural policies would only lead to further divisiveness within the community. What is called for is not swingeing controls at the farm level, but a radical rethink about agriculture and the role it should play in an environmentally sustainable rural land use strategy Without this we can really only tinker at the margins." (See "A Strategy and Management Plan for Broadland", Report of the Ecology Working Group of the Broads Authority, 1982, p.57; for further details of the above, see also pp.27-29 and 56-58).

Since 1985, the Government has agreed to offer compensation payments for farmers for them to retain the traditional stock farming on certain areas of the grazing marshes. This is being done under a three-year experimental scheme, the viability of which was considerably enhanced following designation of the Broads as a whole as an Environmentally Sensitive Area (ESA) in 1986. A large proportion of farmers in the eligible areas have in fact opted for this scheme, which guarantees them £50 per acre if they retain the traditional stock-grazing form of management. As a result, so-called drainage "improvements" have temporarily ceased in all but a small fraction of those areas of grazing marsh which come under the scheme. (See, for more detail on the above, the Broads Authority's "Broads Plan" (1987), pp.40-58, especially pp.48-49).

However, if this seems to be a success on the part of the conservationists, one should remember that the basic agricultural policy of the Government has not changed, and, indeed, in the climate of the present usury-based economic system, with its intractable demands for ever-increasing growth and improved production, it cannot change. It just cannot afford to, as in the case of the farmers. What is happening in the case of the compensation payments is that a symptom of the disease is being covered up, while the main cause is being left untouched.

This, as we said, is a local example, but it is an example that is being repeated, in essence, all over England, indeed, for that matter, all over the world (the Brazillan rain-forests being an obvious example). The environment is being, or has been, changed for the worse, and in some instances destroyed, because someone somewhere wants a quick return, by interest, on money that he has lent, while someone else is forced to do something whose destructive impact he may well fully realise in order to get a quick enough return to pay back the first man what he owes him.

A Lakenheath farmer whom I met recently told me of a man he knew - another farmer – whose wife had come in one evening to find her husband in tears, with an empty whisky-bottle on the table beside him, – a situation in which she had never ever seen her husband before. When she asked him what the matter was, he said "I had to mow that marsh", referring to a favourite piece of marsh that he had until then been able to retain in more or less its natural unspoilt form, but which he had now had to mow, and thus destroy, in order to convert it to arable. And this was solely because he was under pressure from the bankers to increase his productivity and thus his cash returns.

The point is that a whole environment makes for a whole man. Diversity in the environment makes for diversity in man. Diversity of species depends on there being pure air and pure water, and, ultimately, it is pure air and pure water – i.e. a pure environment – that are necessary for a pure human being, one who is pure both inwardly and outwardly.

The other essential requirement is pure thought and action, of which greed and the taking of interest are not a part.

Usury and Its Effect on the Environment: A local View – Postscript

When the system of governmental price support began in 1947, farming was in a low gear; production was low compared with what it is now, and the costs were more or less in proportion. As years went by, successive Governments, under their own pressures of paying off money borrowed at interest on the world's money markets, called for higher levels of production, couched in the language of increased seIf-sufficiency.

In 1979 the "Food from Britain" campaign began, with maximum production now the target. But to get the highest output from the land, you must put in the highest and most costly inputs, and that means more money that has to be borrowed and more interest that has to be repaid, but if the increased output is there it seems to be worth it. The farmers went along with the idea of top-gear farming, but most of them did not have the surplus capital available. So they went to the banks, in their thousands, and borrowed millions of pounds more; their total indebtedness to the banks and other mortgagees went up to an estimated 6,000 million pounds where it had previously been less than 2,000 million pounds. Over-production did not matter. With the Common Agricultural Policy, farmers were guaranteed fixed prices as long as they grew the right thing.

The banks were happy. This agricultural policy suited them, since it guaranteed returns from the coffers of Europe. And in any case, they had people's land as collateral. In fact, the clearing banks and the larger merchant banks, which had been lending money to agriculture on an increasing scale, also spent large sums on advertising to the British public the advantages of the Commom Market, especially the Common Agricultural Policy; and those who lent the most to the farmers were the ones who spent the most on advertising.

The banks were not the only ones who were happy. The agrochemical industry also knew that there was no money to be made out of low-geared farming, and that the more highly-geared farming became, the more the agrochemical industry could sell its wares. Its sales to farmers were but a few millions in 1946. In 1982, however, the value of such sales was no less than 1,350 million pounds. To buy such vast amounts of agrochemicals – as always, of course, with the aim of increasing production and thus immediate cash returns – the farmers had to borrow even more, always of course at interest. ICI, one of the main companies providing agrochemicals, admits that this is its most profitable branch of activity and that it has become its largest. It has invested hundreds of millions of pounds of capital in developing its agricultural interest (to coin a term), and, like the banks, it too has spent large sums on promoting the present agricultural policy of ever-increasing growth and expanding production.

Thus Government grants and price-supports, which are themselves redirected money borrowed at interest, along with substantial pressure from banks and the large agrochemical companies like Shell and ICI, have combined to induce farmers to borrow ever-increasing sums to further increase their production. And so the spiral goes on.

Discussing the factors leading to a rise in costs affecting the bread prices in Canada, a leading Canadian economist, writing in 1975, points out another way in which usury enters the picture in its usual parasitic fashion. "Land costs", he says, "have already been discussed as a critical factor in the general cost-price squeeze on farmers … The main beneficiaries from land transfers are real estate brokers who on arranging a sale of a two-section farm on the Regina Plains could net $19,200 with a 5% commission. This cost must ultimately be added to the cost of food along with the payments of interest that follow the transaction.

"The cost of mortgage credit", he continues, "is the most inflationary of all farm costs. Based on index 100 in 1961, mortgage money was at 300 by 1975. The average farm debt payment was up to 400% in 1973 over 1961. These debt totals, reflecting the capital burden of land, machinery, and operating costs, represent a second level of production costs.

He then goes on to make an interesting observation, "Ironically", he says, "but not surprisingly, the level of debt burden is not reduced but increased during times of improved gross earnings. Farmers take on new commitments to expand at higher land prices and higher interest rates. Borrowing by farmers from othe federally-funded Farm Credit Corporation increased by two-thirds in 1973 to a yearly total of $300 million, and short-term bank loans to farmers increased 21% in the first half of 1973 over 1972. This was during a year when gross farm income was up by 80% over the previous year!"

In this way the price of bread, indeed the price of wheat before it leaves the farm, carries, amongst other things, the added weight of parasitic real estate brokers, land speculators and mortgage companies, all of them basing their activities on usury (see Don Mitchell, "The Politics of Food", James Lorimer & Company, Toronto, 1975, pp.63-64).

In this spiral of ever-expanding credit, production, and debt, it is the farmer who is under the most pressure, and when he is under pressure the land has to bear the brunt of it. It is the same everywhere. A report written in 1986 pointed out that United States agriculture was in the fourth year of a deep agricultural slump, with US farmers currently owing the banks a total sum of US $210,000 millions, which is more than the combined foreign debt of Brazil and Mexico. It was also estimated that a further 200,000 US farmers were facing bankruptcy in 1986 (see "Comment: The Common Agricultural Policy", Catholic Institute for International Relations, p.20).

The operation of the EEC's Common Agricultural Policy has not prevented the emergence of a severe agricultural depression in Europe, either. In 1985, farming income fell by an average of 17.5% in the United Kingdom, and 5.7% in the EEC as a whole. Over the 1970's, with inflation and land values increasing, farmers borrowed heavily, as we have seen, to finance productivity-improving investments. Interest rates have been abnormally high since the turn of the decade (i.e. 1980), and land values are now falling. Lloyds Bank, which has loaned nearly 1,000 million pounds to the farming industry in the United Kingdom, estimates that 10% of indebted farmers will have difficulty in meeting loan repayments this year (see op. cit., p.27).

So, far from improved production improving the farmer's lot, it is having the opposite effect. Such is the effect of usury.

Usury: The Root Cause of The Injustices of Our Times (PAID, Norwich, UK, 1987)

17 May, 2007 23:07