So go out of business, already!

Factual Questions
21

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 © 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.

22

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.

23

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.

24

[[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.

25

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.

26

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

27

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

28

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.

29

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.

30

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.

31

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.

32

[[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?

33

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?

34

Someone who doesn’t want to save the farm.

35

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

36

[[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.

37

“…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.)

38

[["…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. :slight_smile:

39

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

40

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 :slight_smile: