So go out of business, already!

[Big Iron]

I do not pretend to be an expert on US agriculture policy (nor do I think I want to be one). However, is there some rational public policy justification for the farm subsidy policies that currently exist?

Today I read that Congress is contemplating a $7.4 billion bailout of the agricultural economy. The reason? Why, this year has produced a bumper crop! In any sane industry, this would be a good thing, and it certainly is good overall for the US. But, alas, this tends to depress the price for farm commodities (even though there are more units to sell).

Is there any good reason to treat the farming industry differently than the rest of the economy? Because if it's just about keeping some farmers' heads above water, I say let 'em drown. It bothers me no more to see a farmer go out of business than it does to see any other businessman fail.

Please tell me there is more to this policy than that.

[Hazel]

Uh, you're expecting what the govmint does to make sence? ... Seriously, I have to suspect that whatever subsidies are given out go mainly to big agribusness, and not to small farmers.

[HeadlessCow]

From what I understand farm subsidies serve two purposes:
First: Farming sucks as a way to get rich so the government subsidizes some so that people will continue to farm.
Second: The government pays people to produce smaller crops to artificially create a certain level of scarcity to keep prices up so that the farmers are able to be profitable enough to stay in business.

[sly]

Much more, Bob. While the fed does frequently bail out the farmers, they are, by no means the only ones. Our taxes pay for the DNR (or some branch thereof) to build logging roads in remote locations for timber companies. Our taxes pay for overseas advertisements for everything from cat food to tomato juice.

The truth is, the government funnels up to $75 billion each year into business, nearly half of the federal deficit. This figure does not include the estimated $50 billion in tax breaks every year.

When GM, Ford, Boeing, Nissan or whoever decides to build a plant somewhere, cities usually crawl on their hands and knees to have the plant built in their backyards. Tax breaks, payroll subsidies, you name it. Huge amounts of money, too, no nickel-and-dime shit.

I do some contract work for a small (30 employees) engineering firm that relies on subsidies for education, computer equipment, even office furniture. This company does about $3 million in business per year. Between the state of Michigan and Washington, DC, they've received $40-80,000 per year seven years running.

Nice, huh?

[Big Iron]

You're telling me that it's impossible to make a profit farming (despite the universal demand for the product), and that if there were no subsidies there would be hardly any food grown? I don't think so.

[funneefarmer]

It's simple to make a profit from farming, economies of scale. But I don't think you're seeing the larger picture here. The government wants there to be a large supply of cheap food. The best way to accomplish this is by having more farms operating than is needed. To keep the poor fed in a capitalist society you need cheap food. I do sort of agree that this job sucks but trust me subsidies don't come close to making this profitable enough to make up for the 'suck factor'. One of the main reasons I'm still here (Bach. degree in Bus./Econ. so it's certainly not a lack of education) is because my family has been on this land for 5 generations. That and the view out my office window... hey wait a second I'm outside most of the day, and hey I'm self-employed. Screw the boss, screw the office politics, etc.
Another point, most of the agric. field is on the edge, put a large group of them out of business all at once and you've got a skyrocketing unemployment rate and a jumpy Wall Street.
I think in general that the gov. is afraid to tackle the issue of agric. subsidies in general because you screw up the food supply and you've got everybody mad at you, screw up most other industries and it's affects aren't as important. This is a shame because as a farmer I'll be the first one to tell you that the system they use right now sucks. They had a chance to change the milk pricing structure this year but it looks like they've just put together another system that sucks a little differently.

To the degree that the federal agricultural policy makes any sense (and it's a very small degree) it accomplishs one thing: it keeps small independent farmers in business. If there were no government subsidies, most independent farmers would eventually be wiped out and agricultural production would be taken over by a handful of national combines. This would create a situation where a small group of businessmen controlled all of our nation's food supply. While I stand second to none in my loyalty and devotion to our corporate masters, I can see where this might be a bad thing.

[DougC]

- - - The farm program is a handout, plain and simple. It is politicians buying votes. The stories about "saving the family farms" is a crock of ****. There is no reason to worry about food production in a capitalist society:
- - - We already have laws addressing monopolies. Sometimes those laws are used when a monopoly doesn't even exist. Have you been following the Office Depot story?
- - - Farmers don't need any handouts because farming on the average, is profitable. Granted, there are good years and bad years but there are also too many farmers in business. Not all farmers want subsidies, but none really need them. The reason banks forclose is that a farm has a record of not being profitable, which probably has something to do with the farmer running it.
- - - Farm production has gone up in the last five decades much faster than farmers have been willing to quit the business. This crap about "farming as a vanishing way of life" is socialist - the thought that someone should get government support to stay in a non-profitable business because they want to. Screw that, McDonald's is hiring.
- - - Concerns of "food prices skyrocketing" is also idiocy. People try to justify subsidies by trying to imply that farming is special somehow because "we all need food", but it doesn't take a master's degree to plant a garden. Most people now simply don't bother because it isn't worth their time. - MC

[Mazey]

Within the last few years, I heard an interesting question that might possibly be better put in another thread. Given the opportunity to wipe out government subsidies, which ones would *you* be willing to drop? (Before you answer, better check to see which ones subsidize all the things you hold near and dear in your own state.)

Farming costs money...especially for the small farmer. It costs money to own/tend the land. It costs money to buy the seeds to grow the crops...and what happens if a drought/flood/pestilence (grasshoppers, locusts, rabbits) destroys the crop as well? You don't get to wipe that year's debt-slate clean and start afresh with make-believe money. Check the price on a plain-old John Deere tractor with equipment to manage just five acres. It ain't cheap!

American consumers DEMAND low prices for produce, eggs and other farm-raised products. If they don't get lower prices from American products, while it may cause them a tear, they'll buy some of the other imported products available nationwide (Australian oranges among others currently available).

If you don't believe me, try to buy a loaf of bread somewhere in one of the numerous Russian countries. (We subsidize those, as well.) funneefarmer...are you subsidized? Are you willing to give up your subsidy and pays your money to takes your chances? (Sorry...you're the only poster I know who can realistically answer this one.)

------------------
"There will always be somebody who's never read a book who'll know twice what you know." - D.Duchovny

[handy]

Hey, what happened to W Nelson and his Farm Aid concerts?

On the average, a person has to work 20 seconds of the day to pay for social welfare but 22 minutes to pay for corporate welfare.

Im with you, it doesn't make much sense.

[funneefarmer]

Define subsidies. We (my parents and I) haven't been part of any of these direct subsidy programs. The situation with milk is a little different though. Pop over to the thread Socialist milk marketing. The government in the past has bought surplus cheese and powdered milk and given it as aid to third world / former soviet bloc. etc. I would have to call this an indirect subsidy because it basically reduces the supply, increasing the price via gov. action.
In the past, up to a couple years ago, there was a program attempting to increase the price by encouraging less production. Basically milk comp. took a certain percentage from your milk check and send it to the gov.(much like auto. tax deduct.). Then at the end of the year if your total prod. for this year was LESS than the prev. year they wrote you a check for the amount that they had taken out of your check for the year. If your prod. went up the gov't kept your money. Granted many small farmers did exactly this because they thought the price would go up. Unfortunately and predictably the mid and large farms just increased prod. to make up for the auto. ded. from their checks. In other words the supply stayed the same or went up during the program while the total number of farms decreased.
The current New England dairy compact expiring in Oct. only affects farms supplying the NE mkting area. This is funded by money taken out of farmers check during high price times ( and also from the milk comp.) and then when the price is low paid back to the farmer, basically trying to create a price floor.
Since neither of these programs are(were) directly paid for by gov. it would be tough to call them subsidies. Both prog. though were pieces of legislation so the farmers had a lobbying voice but not really a direct vote on these prog. that included direct deduct. from their milk checks. Thus you wll find among farmers different attitudes on these prog and their success. I personally like the Dairy Compact mostly because I think I've gotten out more than I put in. The other prog. (ccc for short, I can't remember the extended name), was a total crock, it didn't effect the price nor did it help the small to mid. size farmer, which was the whole idea behind it in the first place.
I wouldn't say that any of these would be called direct subsidies but the aim was the same.
The "Buyout" however was. Back in the 80's the gov't paid you to milk less cows/ no cows. They paid you a sum and for a certain number of years you were no longer able to milk or were limited to a certain number of cows. This attempt at limiting prod. was not only expensive it created an increased number of cows bound for beef and depressed meat prices. Just goes to show you everythings related, you screw with one thing you mess another up. It also wasn't a major effect in increasing price.

[funneefarmer]

I'm not saying that there is any reason that I worry about they're being enough food, I'm saying that the gov. worries about there being enough cheap food.
Many of the farm programs cater to grain/veg. prod. because there is more borrowing in general involved with this type of farming. Borrow for spring planting, pay it back at harvest, unless of course there is no harvest and then you just have debt.

[funneefarmer]

Ooops forgot one that happened just in the past year or so. Clinton gave a lump sum to be distributed to farmers in various states. I can't even remember what the reason was for that one, weather, high feed prices, or low commodity prices. I do remember that it was based on production but there might have been a ceiling on the aid. I don't remember the average take of each farm but I seem to remember it would have been just a couple hundred for me. Don't quote me on any of this one, even though it was recently I don't remember much about it.

[NeedAHobby]

I am so glad there are farm subsidies.

First, part of my tax money goes to stabilize the food prices. I'd really hate it if I went to the store one day and the price of the foods I eat had tripled, even if sometimes the prices were also 1/3.

Second, since there are good years and bad years, I like the idea that we keep the average food production high enough so the lulls don't cause serious shortages. Beyond having to pay more, I'd hate to go to the store and have there be no food. I _need_ food.

In other words, consider food production to be a standard statistical distribution from year to year. If the farmers made "just enough" food on average, half the time there'd be too much and half the time there wouldn't be enough. The way it is now, they always make way too much, so maybe once in a hundred years will they make "just enough," but even more rarely will they make "not enough."


------------------
Hey, aren't you supposed to be at work?

[John W. Kennedy]

Hey, funneefarmer, maybe you can help me out, here. I was just visiting Maine this weekend, having grown up there in the 50's, and while we were eating at a restaraunt, my wife (a native New Yorker) asked me to taste the milk she had gotten because it seemed "off" to her. I did, and sense memory immediately plunged me back 40 years. I told her at once that there was nothing wrong with it -- this was just what Maine milk tasted like. (I actually had an incredible sensation that I was drinking out of a glass bottle, instead of a cardboard box.)

Now remember, this was straightforward homogenized, pasteurized vitamin-D-added milk from a commercial dairy -- but it tasted different from the stuff I've been drinking in NJ for almost 40 decades. Have you any idea of what's going on here?

------------------
John W. Kennedy
"Compact is becoming contract; man only earns and pays."
-- Charles Williams

[funneefarmer]

So what are they doing to your milk in Jersey, irradiating it (just a joke they usually only do that in the mid-east so they don't have to refrigerate). To be honest I haven't drank a store bought glass of milk in years, I seem to have a plentiful supply on hand. Temperature difference plays a huge role to my tastebuds when we're talking milk. The restaraunt may purchase organic milk exclusively, while I don't see a huge difference in production methods small organic bottlers get their milk to the shelf sooner. The organic bottler I've heard of is out of Vermont, so it wouldn't be stretch to find it in Maine or to find a small Maine based bottler that buys from local farms.

[Big Iron]

Sorry -- I have no more desire to protect small farmers from their business folly than I have for any other schmuck who can't make ends meet. I have yet to be convinced that this elaborate system of (mostly) corporate welfare serves any valid public purpose.

[funneefarmer]

Fine with me, a strictly supply/demand setup would suit us fine. With our small debt load we could survive the initial price drop and yo-yo effect that a changeover would have. I think the price to the surviving farmers would go up within a year as long as the gov. didn't try to soften the changeover. I think you would see a high drop out rate among operations that are too heavily in debt. The larger farms are in a better position to survive over the long term, but there would certainly be small farms as well making the transition. But it is still my assertion that it will not happen anytime soon. The ag. indus. is heavy into politics and the majority of states in the union are still big supporters of agriculture in general. The legislature is population based which gives it a more urban-centric feel but it is also a more liberal/hands on approach to econ. and labor. While the Senate is more Conservative hands-off the econ. it also gives the ag. field much more support ( you must realize that most states outside the coastal ares are heavily vested in ag. and CA and NY are as well). I don't see any point in the near future where it will be politically acceptable to the legislative or executive branches to make agriculture an entirely supply/demand marketplace, even if it would be positive for the economy/country in general ( and yes it certainly could be positive for many farmers)

[funneefarmer]

" Hey aren't you supposed to be at work?"
My schedule is highly fluctuating at some points and rigid at other times.
Times are EDT:
3-5 am get cows in and milk them, turn them back out.
5:30-7 am drive over to Cooperstown work out at the gym (yes I know odd, weird, masochist- actually stress reducing and about the only time I see faces that are not my immediate famlily's)
7- 8:30 B-fast/ internet
8:30-noonish work usually
lunch sometimes on the net if not in a hurry
noonish-2ish work usually
2-3:10or so, if we're not working a little break
3:10-5or so, milking cows again.
Note that from 3-5 both ends of day is a rigid schedule, the rest of the day is flexible, when we're heavy into haying we might go from 8am straight through until 6pm or later if we need to finish things up after milking. This time of year haying is getting close to being done, we'll just be puttering around on it through Sept.

[cmkeller]

Another thing about farms that some people seem to be too easily forgetting...for most small farmers, their farm isn't just their source of income, it's also their home. Do we really want to make people homeless, and on top of that, leave all that good land unused, if a bad crop year occurs or prices are depressed? Talk about a production drain on society! Subsidies make much more sense.

------------------
Chaim Mattis Keller
ckeller@schicktech.com

"Sherlock Holmes once said that once you have eliminated the
impossible, whatever remains, however improbable, must be
the answer. I, however, do not like to eliminate the impossible.
The impossible often has a kind of integrity to it that the merely improbable lacks."
-- Douglas Adams's Dirk Gently, Holistic Detective

[Big Iron]

Another thing about farms that some people seem to be too easily forgetting...for most small farmers, their farm isn't just their source of income, it's also their home. Do we really want to make people homeless, and on top of that, leave all that good land unused, if a bad crop year occurs or prices are depressed?]] cmkeller

Perhaps you are unaware (insert joke here) that (A) bankruptcy laws allow the debtor to keep the homestead dwelling, (B) most farmers going out of business need not declare bankruptcy, since the property thay own still has a lot of value and can be readily sold, the proceeds of which can get another dwelling, and (C) when a farmer goes out of business, someone else gets the land and uses it.


[[ Talk about a production drain on society!]]

Talk about not understanding a whit!


[[ Subsidies make much more sense.]]


QED.

[Sam Stone]

Farm subsidies are an outragous pork program. First of all, as a class farmers are some of the wealthiest people in North America. They may be cash poor in some cases, but their net wealth because of the property they own is much, much higher than the average.

I come from a farming family here in Canada, which has similar subsidies. At my last family reunion, I was treated to a long diatribe at the dinner table as to why subsidies were necessary, and how they could not survive without them. I had a look at their new vehicles after supper - Caddillacs and Beamers for everyone. Obviously, not all farmers are this well off, but if *these people thought they needed the subsidies, you can imagine how entrenched the idea is among the poorer farmers.

Farm subsidies actually hurt farming, by rewarding non-productive behaviour. If you're interested, check out what happened to New Zealand's agriculture industry when it was heavily subsidized. The government gave out cheap fertilizer, so everything was over-fertilized, polluting many small streams and rivers. The government paid a subsidy for sheep based on weight and subsidized feed, so farmers produced fat sheep with meat that no one would buy, so the government bought up the sheep and used them for tallow.

When the subsidies were phased out, New Zealand farmers screamed bloody murder, and the media was full of accounts of how New Zealand's agriculture industry would be wiped out. Instead, the farmers had to learn to raise sheep that people actually wanted to eat, and the price they could get rose. New Zealand farmers are now doing much better than they ever have.

[funneefarmer]

This thread won't die, will it?
As for the whether the homestead gets taken, it depends on whether it was mortgaged as part of the farm or seperately. A local farmer lost the house when he lost the farm, granted he should've quit the business decades ago, but don't say the house can't be taken as well. It must be nice to live in an area of the country where old farm land gets subdivided into suburbs or vacation homes but in other parts of the country that's not the case. Price for good farm land around here is $500/acre, $350/acre for hilly scrub. In other parts of the country it's less and there is always a discount on large parcels. Depending on how much you owe and how much you own the sale price of the real estate may not cover the debt. Also sale of the equipment doesn't necessarily cover the debt because many times it is either leased or has a seperate lien. I think some of the problem is that banks will lend to easily. I've seen banks lend to some farmers that have no business borrowing more money, and you're right when you say there should be few tears shed when the lender comes back to take the keys from a farmer that gets that far down on the hole.

[Big Iron]

[[This thread won't die, will it?]] Funneefarmer

Yes -- all of 23 posts and stretching back almost four days. Truly intermionable!


[[As for the whether the homestead gets taken, it depends on whether it was mortgaged as part of the farm or seperately.]]

Yup -- but either way almost no farmers who have to go out of business are left even very uncomfortable, much less homeless (even if they have to go shop for a different house).


[[ It must be nice to live in an area of the country where old farm land gets subdivided into suburbs or vacation homes but in other parts of the country that's not the case. Price for good farm land around here is $500/acre, $350/acre for hilly scrub.]]

Sounds like crappy farmland, and the price for it must have been squat, and/or the farmer is a fool for farming such terrain -- dairy farmers, I guess, can manage that.

[[ In other parts of the country it's less and there is always a discount on large parcels. Depending on how much you owe and how much you own the sale price of the real estate may not cover the debt.]]


But it usually does, I think.


[[ Also sale of the equipment doesn't necessarily cover the debt because many times it is either leased or has a seperate lien. I think some of the problem is that banks will lend to easily.]]


True, although I'd phrase it that some farmers borrow too foolishly.

[funneefarmer]

I thought I did phrase it as some farmers borrow foolishly, just like banks lend foolishly.

Old threads don't die they just get spun into yarns.

[moriah]

History, people. History.

During the World Wars, the government needed to encourage farming. Troops need to eat. A lot. A food shortage could serious hurt a war effort.

After the WWII, the US continued to encourage US farming because devastated Europe needed to be fed. US officials (wrongly) assumed that it would be a long time before European food production was back to normal.

However, European farming got back on track surprisingly quickly. And the US was left with the overfarming it had encouraged. And so, US farmers needed subsidies and policies to help them from mass bankruptcy.

And yes, I will agree that the subsidies got out of hand and went on too long. And yes, there are abuses in the system. And yes, that the US should have gently discouraged the continued growth of US farming that outpaced demand over the past few decades.

But, consider that the ability to produce higher and higher yields (thanks to modern science) has continually surprised everyone. This leads to even more oversupply and is no one's fault -- but has to be dealt with.

And also consider, that, as mentioned already, overproduction does ensure adequate food supply, even in drought/famine/lean years.

And also consider, that an overproducing US agriculture means that the US doesn't have to worry about famine in another Great War. Hmmm, I guess that's not a real issue anymore. But, inertia, you know.

My gripe is the subsidies for tobacco. Only recently is this going by the wayside. It should have been gone within five years of the first Surgeon General's warning.

My other gripe is subsidizing farms with bad land-use practices -- you know who you are, shame on you.

Peace.

Oh, John, re: milk taste. Yes, different brands of milk have distinct tastes. Depends on the breed of cow and what it's eating. Clover-fed cows produce a good tasting milk, IMO.

I pray cows never yearn for garlic asparagus.

-m

[funneefarmer]

One of our fellow members sent me a link regarding this that he thought was funny and I agree. Entitled "Stop saving Our Family Farm"... http://www.theonion.com/onion3529/stop_saving_farm.html

[DavidForster]

MC - "There is no reason to worry about food production in a capitalist society."

Really? That statement, plus some of the other things in your post (name-calling is always red flag), smack more of political conformism than careful thought. Replace the word "capitalist" with "christian" or "technological" or "(favorite faith icon here)" and the semantic content of that sentence becomes more clear.

I do not mean to defend socialism, and I do not defend farm subsidies, so DO NOT go off on that tangent. I am merely challenging you to do some more in-depth cogitation. (I like your comment, by the way, about planting a garden. Too bad we've screwed our cities up so much through bad planning and overpopulation.)

But does "capitalism" AUTOMATICALLY provide sufficient, sufficiently-TIMELY solutions for:

- Widespread, long-term drought,
- Crop pest and disease evolution,
- Unanticipated catastrophic climate duisturbance,
- Other global disruption.

I would say the answer is NO - not necessarily. To insist that there can BE no problems is indefensible. Instead, let's agree on this: that those who favor capitalism as the answer to everything are willing to live with the challenges and the consequences - ALL the consequences - of that decision (and may secretly believe that the consequences will fall mostly on others), and that those who would avoid or minimize those direct consequences (for themselves or others) tend to favor sharing of risk, without much thought to the possible negative consequences of THAT particular decision.

As for myself, I posit two things:

1) That the apparent success of our current system is due partly to short-term production/long-term destruction of marginal lands and to the fact that there has been a surplus of products from around the world available to us, and that this balance will soon (a few decades?) change drastically;

2) that what the big agribusiness capitalists are apparently doing TO our food in the name of profits and stock market performance is much scarier than any alleged price and supply fluctuations that might accompany a change of the current system.

If we're going to change the system, START with ending the welfare to the big corporations.

[Avswincup]

would funneefarmer be so "gentlemanly" were he a pork producer 'donating' his hogs to charity? or a wheat producer watching his crop rot because all the storage facilities are full? as one who tends the land, I would have hoped he'd be a little more fervent in his defense of subsidies.

[funneefarmer]

And how are things in Colorado Avswincup?
Maybe you missed that my degree is in Business/Economics (now I can't remember whether that's in this thread or Socialist Milk Mkting). It's tough to try and juggle a capitalist view and gov't subsidies. I'm just stating that there is something fundamentally wrong with the market when as you say Hog prices are so far in the toilet. Even with the drought in the East I've seen projected Corn prices are to drop for (second or third?) consecutive years. Although I do remember several years back when we were paying double the current price. Given the rule of supply and demand there is obviously to high a supply or too low of a demand, and I gotta think it's the former. And as I stated before I don't see gov't subsidies, especially in the agrifood business, disappearing anytime soon so stop worrying about it. Be happy that your government worrys so much about it's food supply that the most die-hard proponents of capitalism don't dare try to mess with the system that allows such swings in ag prices.

[Avswincup]

things are fine here in CO, funneefarmer. thanx. Hope I didn't raise your ire. I just wish that you, as an 'educated farmer', woulda given it to that guy a little better. I live in a rural setting and run a few head. cows, hogs, sheep, etc. just for fun. But I see my neigbors, who've been on their land as long as you have, having auctions and gettin out. It's bad enough to see without people complaining from their cul-de-sacs and high rise apts. that the farmer is lazy.

[Big Iron]

[[would funneefarmer be so "gentlemanly" were he a pork producer 'donating' his hogs to charity? or a wheat producer watching his crop rot because all the storage facilities are full?]] Avswincup


What the heck are you yammering about?


[[ as one who tends the land,]]


You "tend the land," huh?


[[ I would have hoped he'd be a little more fervent in his defense of subsidies.]]


It's a shame he felt he had to apply some logic to the situation.


[[ I just wish that you, as an 'educated farmer', woulda given it to that guy a little better.]]


Maybe it's because he's educated that he didn't -- you are free to take a shot, though.


[[ I live in a rural setting and run a few head. cows, hogs, sheep, etc. just for fun. But I see my neigbors, who've been on their land as long as you have, having auctions and gettin out.]]


It sucks when anyone has to go out of business. Why is it a greater tragedy, meriting government intervention, when it happens to a farmer?


[[ It's bad enough to see without people complaining from their cul-de-sacs and high rise apts. that the farmer is lazy.]]


Who said anything about such farmers being lazy?

[Jvanhorn]

My background:

15 years ago I was helping my father on the family dairy farm, when he finally went bankrupt. He had a farm with a total of 3 different houses on it. He was not able to keep any of them. Mom and Dad had to buy a double wide trailer to put on a 4 acre piece he ended up getting from my Grandfather's place after he died.

I have mentioned to Dad how badly I felt that he lost the farm, but he always said that he went into it with his eyes open, and things just didn't work out. He was caught in the situation that funeefarmer mentioned, where the gvernment wanted to cut down the milk supply, and the farmers with a high debt load couldn't make it. Now we have to drive past the fields we used to tend so carefully, and see them growing up in velvetleaf and other noxious weeds, while someone else milks cows there. I don't know why it was possible for this person to start milking cows again, it apparently didn't cut down the supply much.

I always thought that subsidies were intended to keep enough farmers in business through the normal ups and downs of farming so that an adequate food supply could be maintained. I do know that the whole system has problems, but I don't think that it would be appropriate to eliminate subsidies completely.

However, I guess you would have to say that I still am a beneficiary of farm subsidies, because I work for a company that supplies parts to John Deere. We used to send 300 of one particuar part per week, at the end of last year, now we are sending 300 parts next month, it has been 2 months since we sent the last shipment, and we don't have any more due until January. These are parts for the larger of the two tractor series that we supply parts for, and the smaller of the two series is still doing pretty well (for the export market, as I understand it).

I think people need to be careful of making general statements about price supports, but if they are intended to even things out, they ain't working very well!!

So, we did go out of business already, and now I may get caught in the agricultural thing again, even though I went to town and got a job.

Do you have any direct experience, Big Iron?

[AWB]

Someone who doesn't want to save the farm. (http://www.theonion.com/onion3529/stop_saving_farm.html)

[funneefarmer]

Ummm thanks AWB, but that link is allready up there from a day or two ago.

[Big Iron]

[[I always thought that subsidies were intended to keep enough farmers in business through the normal ups and downs of farming so that an adequate food supply could be maintained. I do know that the whole system has problems, but I don't think that it would be appropriate to eliminate subsidies completely. ]] Jvanhorn


Why not?

[[So, we did go out of business already, and now I may get caught in the agricultural thing again, even though I went to town and got a job.]]


Too bad about the farm -- good luck.


[[Do you have any direct experience, Big Iron?]]


Nope, nor do I see any reason why I would need any to comment and inquire on the subject. I have been seking an academic-quality justification for farm subsidies -- the best ones so far, vague suggestions that somehow we won't have enough food or that food prices will illogically rise otherise, I have found thoroughly unconvincing.

As for keeping struggling farmers in business, that's not worth a penny of government money, except to the extent such assistance is available to people in all fields. If there is anything certain about this, it is that it is no worse or tragic for a farmer to go out of business than it is for anyone else.

[funneefarmer]

"...food prices will illogically rise" BI
I do think food prices will rise simply because the supply will actually be close to demand (they are never both exactly even but...) whereas right now there is simply too great a supply. I'm not talking a drastic rise, maybe 5-10% tops after the first yr. or two. As for the reasons I don't think the gov't will get around to changing it's stance on agri-subsidies in the next decade or so... There will be too large a number of small farmers going out of business. Price rises in food contribute to higher inflation numbers, even if only for a year a politician is going to find this hard to stomach. Too many politicians will be seen as being more favorable to big bus.(the larger farms are structured to handle a changeover like this better). And frankly they'll be seen as being a$$holes for killing the family farm. As for the tax savings, people don't really seem all that enthused about tax breaks as has been shown recently with the repub. talk of a big tax cut (yawn) and the dems talk of money for soc. sec. reform (yawn). ( IMO They ought to use what extra they've got to pay off some debt.)

[Big Iron]

[["...food prices will illogically rise" BI


I do think food prices will rise simply because the supply will actually be close to demand (they are never both exactly even but...) whereas right now there is simply too great a supply. I'm not talking a drastic rise, maybe 5-10% tops after the first yr. or two.]] funneefarmer


Perhaps -- I should have noted that it just seemed illogical to me. Certainly, the sort-term effort have tended to be ones that RAISE the price of farm profits.


[[ As for the reasons I don't think the gov't will get around to changing it's stance on agri-subsidies in the next decade or so... There will be too large a number of small farmers going out of business.]]


But -- is that really a problem society as a whole should worry about? It doesn't seem as though it should be.


[[And frankly they'll be seen as being a$$holes for killing the family farm.]]


Not by me -- it's cute and all, but seriously, by what twisted logic is saving family farms any kind of rational policy? I mean, as opposed to any other "family" operation? Mom and pop grocers and (especially) drug store have been dropping like flies for years -- farmers hadly deserve more government protection.


[[( IMO They ought to use what extra they've got to pay off some debt.) ]]


And on that, we are in complete agreement. :)

[funneefarmer]

"And on that we are in complete agreement"
Well damn, how did that happen?

[Jvanhorn]

but I don't think that it would be appropriate to eliminate subsidies completely. ]] Jvanhorn

Why not?



Because, if there are not enough farmers, so that in a poor production year, they can still meet the demands for food, somone will go hungry. The overproduction is the price we pay for that safety net. If there are several years in a row of good growing conditions, the supply of food will rise, depressing the price. This will drive the farmers who are "on the edge" out of business. Then, sometime down the road, when the conditions are not as good, and we need more land in production, there are not enough farmers to do it, and they don't have any equipment to work with either, as the manufacturers have to show a profit, also.

I am not saying that the system is perfect, and there are no abuses. It should be obvious to anyone looking at the situation very closely that things don't run as smoothly as they should, but after all, the price support system is intended to (in effect) ensure a surplus of food production, which is good, compared to the alternative.

Food production is, and has been, up lately in the US. The prices for many commodities are down, which means that he farmer who might have bought a new tractor didn't, so I can't sell my product to my customer, and I had to let one of my production workers go look for a job last week. I talked to arepresentative at the customer, and she said that she expects this to last about 2 years. The previous good times lasted 5-7 years.

I am sure that my job will make it through the hard times, but one guy didn't.

No, I don't suppose that it is necessary for you to have direct experience in this, but you shouldn't assume that the only reason for price supports is to make farmers rich. That is only a secondary goal, the primary reason is to keep my job viable :)

[Big Iron]

[[If there are not enough farmers, so that in a poor production year, they can still meet the demands for food, somone will go hungry. The overproduction is the price we pay for that safety net. If there are several years in a row of good growing conditions, the supply of food will rise, depressing the price. This will drive the farmers who are "on the edge" out of business. Then, sometime down the road, when the conditions are not as good, and we need more land in production, there are not enough farmers to do it, and they don't have any equipment to work with either, as the manufacturers have to show a profit, also.]]Ivanhoe


OK, now that's an interesting angle -- any official support for that proposition? And is this really likely to be an effective/remotely-needed hedge against starvation in this rather wealthy nation?

[[No, I don't suppose that it is necessary for you to have direct experience in this, but you shouldn't assume that the only reason for price supports is to make farmers rich. That is only a secondary goal, the primary reason is to keep my job viable ]]


Why I oughtta ... !

[funneefarmer]

I don't think there will ever be a shortage of equipment. Production of farm equipment will always be there, it is just a matter of where they will sell it. If production shifts more overseas then equip. manufacturers will just change where they sell thier equip.. It is allready a global business, many of John Deere's tractors are currently made in Germany.
I do somewhat worry about land going out of production but the increase in yield per acre, or in my business yield per cow, seems to be offsetting any loss in land or cow quantity. This increase in yield per acre will only increase as more and more genetic and plant engineering ideas are incorporated into agribusiness. I remember a couple years back that China was developing new super strains of rice that were supposed to greatly increase yields, now I'll have to go see if I can dig up some info. about that.

[Jvanhorn]

Yes, JD has a big assembly plant in Mannheim.

Our parts are made in Germany, assembled in the US, then sent to Waterloo. I don't know for sure if they send assembled axles to Germany for assembly into tractors there or not. Tractors (I think) tend to be larger here in the States, so maybe they send a few of the finished tractors from Waterloo to Europe, and the assembly in Mannheim is for the smaller ones.

I do know that we have direct shipped our German parts back to Germany for service parts!

No, the world farm equipment industry is not likely to collapse, but the present situation is not helping my company much. We have only employed as many as 9 people here in our US division, but now are down to 6. The cutbacks have come almost exclusively in the production area, due to the slowdown at JD.

[funneefarmer]

Ivanhorn, I do think they sell finished tractors back in Europe simply because many of the caution stickers are not only in English but are in German as well. Now the stickers are also more picto-warnings, for example a little stick man wrapped around a PTO shaft etc., kind of funny really.