Thursday, December 23, 2010

The vanishing farmer

What makes any person think is the fact this blog reported on yesterday.
That Gumaro Gonzales in Punta Boca del Salado, Baja California, Mexico bought a 1997 Ford F250 pick up truck for $ 10.000 by exchanging it for a piece of his land.

According to the "Internet Autoguide" the retail value of this vehicle is about $ 6.000 but that is in the USA.
So the issue is not whether Gumaro Gonzales payed 66% too much for his new truck.
Many second hand cars are brought from the USA into Mexico because they do better prices here.

The issue we may want to look at is that Gumaro Gonzales was not able to pay with money for his new car.
In a normal economy a person works and makes money.
In a good economy a person makes more than he actually needs and this we call prosperity.
The financial flourishing makes the economy do better because the surplus is spend on purchasing new products.

In an economy that is doing well Gumaro Gonzales would be able to sell his cows to the butcher for such a good price that after a while he has enough cash to buy his new car.
Illustrating the economy is exploding.

But we live in a time of an imploding economy.
The price the butcher pays for meat to the supplier is so low these days that the ranchero cannot make money.
In fact, like this year when hardly any rain fell in the area where Gumaro Gonzales has his ranch and cattle, he needs to buy extra food to keep his cows alive and because of the high cost of this extra food and the low price the meat does his business is losing money.

A farmer that has to sell his land to operate his business, is a vanishing farmer.
Especially when the money that his land represents is spend on a car.
The vehicle will last only a certain amount of time and eventually end up in the junk yard.
Then the land is gone and the truck too, leaving Gumaro Gonzales with nothing.

To escape this dramatic destiny is to operate the new car in a way that it will assist in making money.
That it becomes instrumental in financial flourishing.
But this is not very likely to happen.
Because Gumaro Gonzales is a ranchero raising cattle and he will not and cannot change his trade.
He depends of the circumstances like the price of meat and the meteorological conditions.

However, the man who traded a $ 6.000 truck for a piece of land worth $ 10.000 might sell this later with profit.
Or build a holiday house on the land to sell this for big money to some tired retiree.
We live in a society these days in which some can still make money.
But a majority, who work in a traditional way, are slowly pushed out of prosperity and into economic misery.

But for the moment, Gumaro Gonzales is very happy and proud with his new car.


No comments: