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.
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.
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.
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.
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.
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.
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
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
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.
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.
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.
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, 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
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.
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.
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)
" 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.
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.
“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