so cranberry farmers have been ordered to cut production down and destroy extra cranberries, because of a glut in the market. i have read about this being done w/r/t other things- grain, milk, etc.
first off, it is INSANE in my eyes to be destroying good food, glut or no. as stupid as pissing in your own drinking water.
my question is- would it really f the markets up if we gave away the food to be destroyed. let’s say donating it to shelters, or exporting it to drought-ravaged countries. they’re not buying the food from us anyway, so i can’t fathom how our businesses would be affected. what’s going on here?
It’s simpler and cheaper to destroy the food than it is to pack it and ship it. Morally reprehensible, you say? Remember that it would be your tax dollars at work.
Personally, I’d rather see my tax dollars used for this type of activity than for a lot of other projects, so–no nasty flames, please.
WTF? Lenin never had any extra food to give away. One of the reasons for the revolution was that the peasants were starving. What, exactly, are you trying to say? That Lenin called for equal food distribution to those who needed it? Yes, he did. And the starving people wanted to hear that. And there was a revolution. Unfortunately, the food distribution never happened quite like it was promised.
That’s right. Losing your income by destroying crops is different than losing your income by giving them away. If the government is going to subsidise the farmers anyway, why not put the food to use?
Why does jb have to be wrong? Doesn’t his opinion count?
Were they really ‘ordered’ to cut production because I’ve never seen that done before ? Usually the government just gives an incentive for lower production. Nothing wrong with giving it away as long as someone pays for it. The government used to buy surplus cheese then give it away. They also used to withold a certain percentage of milk checks each month then at the end of the year if your production went down then they refunded it to you. If production went up you forfeited it.
Some of these programs just seemed to worsen the market problem however. If the government buys the excess they in effect keep demand, and prices, artificially high. You may think this is a good thing but it keeps some less efficient farms in business and contributes to the over supply. Once the government started to buy the excess they basically created a situation that contributed to more excess.
If you think the other alternative, witholding then refunding with lower output, would work you’re wrong. Basically everyone just increased production to cover the automatic deduction from the milk check. Since the deduction could be taken off taxes as an expense farmers just looked at it as an expense. The farmers that did lower production to gain the refund were at a competitive disadvantage at the end of the program. Since most of the farms that took advantage of this refund policy were small farms the government basically ended up lowering the number of small farms rather than helping farmers keep prices high, the intended result.
It would be difficult to find a way where it wouldn’t effect the market unless you find a private not-for-profit organization willing to cover the cost of transporting the product from the farm to the needy and also cover the cost of refining the product (if needed) and packaging. Also you would have to get the producer to donate the extra because if he gets paid for it then there is no incentive for him to lower production further down the road (see above).
This is simply capitalist economics at work. Nothing gets produced under capitalism unless it can be sold at a profit. If it cannot, then it must be destroyed. Sometimes, society gets the goods it needs under this system, but sometimes it goes absurdly wrong, like in the case of the destruction of food.
If this seems like a bankrupt system, it is because it is. Even as a child, I could see the absurdity of plowing down perfectly good food. So do the farmers, but they are captives of the system like everyone else.
One of the reasons we have government agriculture subsidies is to insure that there is always an excess. Free market capitolist condidions create times of surplus and times of loss (lack of surplus). Have you ever gone to the store to buy something and it was back ordered and you had to wait 6 weeks for delivery. If this happened with bread people would riot.
Also free market conditions have large price fluctuations. Think about recent gas prices. Wild swings in food prices are not tolerated in any of the industrilized nations. I believe all industrilized nations have some form of agriculture support.
If there is an over supply of a good produced through mis-calculation of projected sales, poor market, market glut etc. etc. etc. and that good is impossible to store economically or process pack and ship at a viable economic cost due to the aforesaid market conditions what would you have them do? Tell people to get their waders on and they can eat as many cranberries as they can carry out of the bog or form a caravan of SUV’s to haul away tons of raw cranberries? Beyond a few enterprising home canners who would be satisfied with a half bushel each this market is limited.
Food is a perishable and costly to process, store, package and ship commodity item. The actual agricultural production of the food item itself is often the least costly part of the farm to table sequence. While it may seem to be sin to destroy food it would be a bigger sin to go out of business and impoverish yourself and your family by being forced to incur additional uncompensated costs delivering the product to a market that doesn’t want any more of what you are selling or is unwilling to pay the cost you require to make a sustainable profit.
Capitalism is the most efficient system developed to date for production of goods but it is not perfectly efficient. When I buy some discontinued item for 50%-90% off at the local office supply store this is the equivalent of the cranberries. The store is making little if any money on these items and is in many cases incurring a negative cost selling them and if they do not sell may at some point throw them in the trash to make additional shelf space.
Yes it sucks for the producer/seller in these cases but if there is a better system that is more efficient overall please let me know.
This has absolutely nothing to do with capitalism. The reason these gluts happen is because the agricultural marketplace is probably the least capitalistic industry in the U.S. Agriculture in the U.S. (and Canada) is a massive web of government subsidies, disincentives, price controls, freight tariffs, and other mechanisms that interfere in the marketplace.
This is not due to any failure in the market. It’s simply politics. Farming is politically charged subject, and farmers have a lot of money and influence in elections, especially in the rural states. It’s also a feel-good issue, because farm life is an intrinsic part of the American experience. Politicians can buy a LOT of votes by making promises to farmers.
Read the history of government-subsidized and controlled agriculture in New Zealand, if you want to see how destructive government meddling of this sort can be. The government there finally ended almost all farm subsidies and price controls. At first, the farmers screamed bloody murder, but now there’s almost a universal consensus that the farm industry is much healthier without the government than it was with it.