D4B-Lancaster Farming, Saturday, May 23, 1998 The Effects Of The Asian Financial Crisis James W. Dunn Professor of Agricultural Economics Penn State University Late last year the economies of many countries in southeast Asia collapsed. Indonesia has fallen the furthest, but South Korea, Thailand, the Phillipmes, Viet nam, and Malaysia have also seen serious reversals m their growth. The other countries of the region have had spill-over effects because of their trade with these countries. As a result, in the last nine months the currencies of all of the east Asian countries except China and Hong Kong have declined compared to the U.S. dollar. In donesia’s rupiah is only 26% of its former rate, meaning that any thing Indonesia buys from the United States is four times as ex pensive as it was last May. In ad dition the incomes of the citizens have fallen in this period, making imported goods proportionately NEWARK, Del. Standing in the middle of a soybean field, one of 1,900 acres that he farms. Bob Garey pulls a penknife out of his pocket and turns up a handful of rich, dark soil. Nothing has been planted here yet, on (his cold mid-March day, but the soil is full of life earth worms wiggle just inches below the surface. “Here, take a look at this,” said the Felton farmer, as he sifts the dirt through his fingers. “You can’t do this in the field across the street; you’d get big clods and lumps.” Carey’s field unlike the other one he refers to has not been tilled. Remnants of last year’s crop litter the ground as far as the eye can see. On most of his acreage, Carey has adopted no-till farming, a practice that helps prevent erosion of the topsoil and improves its or ganic content —just ask the earth worms. Not only does no-till pro duce favorable growing condi tions, it’s good for the environment, too. Less erosion of the soil means less chance fen- run off of pesticides and fertilizers in to streams and other waterways. Like countless other Delaware farmers, Carey sees himself as a steward of the land. He considers it his moral imperative to leave the land as good as he found it, or even better. “We are doing everything we can to make farming environment ally friendly,” noted Garey. Notill farming is not a brand new concept, it’s been used since the 19605. However, to maximize yields, techniques are constantly being refined and improved. So for the latest information on no-till and a variety of other conservation practices, Garey arms himself with knowledge; his sources range from neighborhood farmers to computer databases. Garey is quick to note that a key resource is the University of Dela ware. He stays in frequent contact with his extension agent, Gordon Johnson, and many other exten sion and university staffers, in cluding integrated pest manage- On U.S. Poultry Exports even more expensive The other countries have not declined to this degree, but the price of U.S. prod ucts for all of them has increased over the period, m many cases by more than 50%. How important are these coun tries as markets of our poultry products? The answer is pretty important, especially when poten tial is considered. The east Asian countries in total bought 27% of the broilers, 59% of the mature chickens, 31% of the turkeys, and 41% of the eggs that the U.S. ex ported in the first eight months of 1997. Hong Kong, Japan, and China were the 2nd, sth, and 6th largest broiler customers during this period, and Hong Kong, Ja pan, and Korea were in the top 10 for mature chickens, turkeys, and eggs. The true importance of these countries was always their poten tial. As a group the east Asian economies had large populations, ment specialist Joanne Whalen, plant pathologist Bob Mulrooney, and agronomic specialist Richard Taylor. “We lean on the university,” said this 4th-generation farmer. “We look to the university for training, we turn to them for nutri ent management knowledge, and almost anytime we have a prob lem.” Yet despite the rich network of university support and other re sources that Carey has developed, he knows full well that the success or failure of his 1,900-acre opera tion rests squarely on his should ers. Gary Farms is strictly a family business. Carey, his wife Linda, and their sons, Rob and Alan, along with nephew Terry Morris, do it all from crop planning and equipment maintenance to plant ing and harvesting. Anyone who has a romanticized view of farming as an idyllic, stress-free existence need only look at Carey’s lifestyle to see the reality. On the day that Carey gave a tour of his farm, he was up at 4 a.m., poring over research propos als submitted to the Delaware Soybean Board, of which Carey is treasurer. The soybean board is just one of more than a half-dozen agricultural organizations and committees that Carey is actively involved in. Later, that March day, he made the short trip into town for an in formal breakfast meeting with area farmers; this is how he stays abreast of planting conditions and other news. Then, as in usual in the winter months, he returned to his home office for an 8-hour ses sion of research, planning and pa perwork. Despite plenty of 12-hour sum mer days on a combine, Garey es timates that he only spends 30 per cent of his time out in the fields. The majority of his work is done in his office, which involves everything from seed selection to getting on the computer and checking out the commodities boards, so he can market his crops better. Computer databases and spreadsheets the übiquitous For Garey, Farming And Conservation Go Hand In Hand high economic growth, and an in crease in meat consumption in their diets. Unlike the countries of the former Soviet Union, these countries had money to spend and the prospect of continued rapid growth in their purchases. The increased purchases of corn by these countries in 1995-96 in the face of much higher prices played a major part in the high feed prices of that period. Asia was al ways mentioned as the largest growth area for U.S. food and ag ricultural exports. Furthermore, the cuisines of most of these countries is amenable to the use of dark meat, which helps buoy the price for products that can be harder to sell to Americans. A major question is whether the economic reversals of these countries is a minor or a major setback. It is somewhat uncer tain, but in some cases these economies have serious problems. Many have a lot of U.S. dollar tools of the urban wage earner also are the modern-day farmer’s tools. “You’re always juggling all these different balls,” said Garey. “Even when you manage them all successfully, it can go downhill so fast because profit margins are slim. All it takes is a little bad weather.” Despite the trials and chal- New York Farmers Club Award NEW YORK. N.Y. At a black tie dinner on April 14, Susan Brown was honored with the Out standing Research Award of the New York Farmers Club. The presentation took place at the Union Club in New York City. Brown, who directs Cornell University’s apple breeding pro gram in the Department of Horti cultural Sciences at the New York State Agricultural Experiment Station in Geneva, N.Y., was ac companied by Daryl B. Lund, who is the Ronald P. Lynch Dean of the College of Agriculture and Life Sciences. The annual affair was held by the Farmers Club, an organization founded in 1882. The Outstanding Research Award is rotated among the Col lege of Veterinary Medicine at the University of Pennsylvania, Cook College of Rutgers University, the College of Agriculture and Na tural Resources at the University of Connecticut, and the College of Agriculture and Life Sciences at Cornell. ONTHEGROW denominated debt, that has grown in real terms by at least 50% be cause of the drop in their curren cies. The World Bank is working out plans with them, but paying the interest and principal of this debt is going to be much more difficult than was imagined when it was incurred. Fortunately for the industry, only Korea is both a major cus tomer and in serious difficulties. Japan, Hong Kong, Taiwan, and Singapore have withstood the col lapse fairly well. These countries all have higher standards of living than the rest of east Asia so that food represents a smaller portion of the income of the average citi zen. This should make demand for imported poultry products more recession proof than in the less developed countries. Nevertheless, the effects of the crisis are already clear in the ex- lenges Garey faces as a farmer, he can't imagine doing anything else. He takes his care of the land seri ously and is determined to keep agriculture environmentally friendly and economically viable in Delaware. There’s also no doubt that Garey reaps great fulfillment from what he does. He wants to leave a legacy for the two small children who may yet become the sixth Brown Receives “Dr. Brown was very gracious in receiving the Outstanding Re search medal and identified how important the Farmers Club’s con tributions aer for student support at CALS,” said Dean Lund. Most of the contributions from the club received by Cornell arc used for student support. The Farmers Club makes contributions annual ly to the above colleges and to the College of Agriculture and Natur al Resources at the University of Massachusetts to support the high est priorities recognized by the deans. Brown was honored for her re search in the area of apple breed ing and for her use of both tradi tional and molecular research techniques. The award was also recognition of the importance of new apple varieties to New York farmers. Dean Lund remarked that he nominated Brown with the full concurrence of Station Director Jim Hunter. “This award was a very appro- Am port statistics. For chicken parts, east Asia as a whole represented 33% of U.S. exports in 1996 and 28% in 1997 and exports to the region overall declined by 12% in 1997, from 1.45 bil. pounds to 1.28 bil. pounds. All of our ma jor customers m the region pur chased at least 13% less in 1997 and Korean purchases were down 37%. Since the economic prob lems of these countries arose after mid-year, further declines may yet occur. While east Asia will continue to be a major customer for U.S. poultry products, the potential for rapid growth in exports to the re gion seems to be gone for now. Although, in the long run, the re gion is still promising, it may be several years before the region can recover from their current eco nomic problems and resume their growth. generation of Garcy farmers Rob’s 6-year-old daughter and 1-year-old son. “Fanning is a crazy business; but you have to love it,” said Garey. While gazing out at the fal low fields that soon would be sprouting new life, Garey said, “Nothing matches the satisfaction of going out in a combine and har vesting a beautiful crop.” priate way to recognize. Dr. Brown’s contributions during her relatively short lime here at Cor nell,” he said. "She joined the Uni versity in 1985, but she has been very significant in moving the ap ple breeding program and keeping; it at the highest level, both nation ally and internationally.” Geneva Horticulture Sciences Department Chair Hugh Price agreed. “Under Dr. Brown’s lead ership, the Cornell apple breeding program continues to be the pre mier program in North America,” he said. “Eating quality, both at harvest and after long term stor age, is a major objective. The inte gration of genetic studies and bio technology with conventional breeding is an on-going process that Dr. Brown is using to develop the next generation of apple varie ties for New York.” In addition to traditional breed ing for taste quality, projects in Brown’s program include screen-i ing seedlings for the malic acid gene, the lack of which produces bland apples; disease resistance through transformation; using DNA markers to select for thi Wijik character, which allows „ high density planting; and market assisted selection for scab resis tance. “Dr. Brown’s excellent rapport with colleagues, students and vis- iting scientists is a wonderful tri bute to her and to her scientific achievements,” said Price. “Cor nell University is fortunate to have such capable leadership for this important plant breeding pro gram.”
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