If it costs you 12 to make something that sells at 9.33, sounds like that justifies liquidation of the business. I am indeed sorry for you and your’s, but why isn’t it obvious to you that the business doesn’t work?
Zoff wrote:
You’re ignoring the possibility that American farmers might go out of business entirely, as they find themselves unable to compete with foreign imports.
And if farmers go out of business on a large scale, then yes, the agricultural infrastructure will atrophy. Fertilizer plants, farm equipment manufacturers, food transportation and storage facilities may also find themselves out of business.
In short, we will have become unable to feed ourselves.
minty green wrote:
We do now. But would we, if subsidies were eliminated and American farmers were unable to compete with imports? Wouldn’t farmers simply go out of business? Why would they keep producing if there were no profit in it?
And if American farms stopped production, how quickly could production be cranked back up in an emergency?
Take a look at the Trade states (Dep of Commerce, e.g.) and reflect on that.
Lots of what ifs out there, we might get hit by a giant turd from space – however the liklihood is low.
Zoff rather correctly noted only certain food goods are susceptible to international trade, largely dry ones or high end. Given immense natural competitive advantage (climate, land, tech) there is near zero liklihood of this event. Major competitors are of course Canada and Mexico, and I submit if we have problems such that their exports to the US are cut off, food substitution is but a minor worry.
You may as well get your dainty economically illiterate panties in an uproar over US dependence on foreign capital flows – a much more real and terribly serious issue.
Otherwise, I rather do believe we can ignore fantastical, ignorant chicken little what if scenarios in creating national policy.
Not really, as you’ll find very few people in Congress that ran on a “Increase/maintain farm subsidies” platform. In fact, except for the farmers in those swing states whose votes the politicians are trying to buy, people are nearly universally opposed to them. If Congressmen were running and winning on farm subsidy platforms, it would tend to legitimize your point, but they aren’t.
Bring to heel? … sounds like a perfectly reasonable paranoia complex. 
Trade is a two edged sword … maybe the US will be less inclined to interfere in the internal affairs of it’s food suppliers. Maybe see the effects of global warming from a global perspective. Equally the suppliers will be less interested in harming the interests of one of their more substantial customers.
As distinct from the ones you do?
Wasn’t the last one American Swine Fever (Spanish Flu)?
As distinct from the famines caused by US disruptions to trade?
The notion that US agriculture will atrophy and die with the winding back of subsidies leaving the US dependent on imports is simply base nationalistic propaganda
Am unashamably in the “US will thrive without subsidies” school of thought and that includes it’s agricultural sector. What you’ll also find is that even a slight opening of the US market will allow the TPLAC’s to earn hard currency from the things they can produce which will probably be spent on aquiring value added, high tech things that America is efficient in producing.
BTW chique, what’s the solution you are seeking? Are you wanting a bigger subsidy so that your family continues to produce goods below cost or an assistance package that allows your family’s skills to be deployed into a more productive and profitable line of business?
Chique, what do you grow or raise on your farm?
Any niche markets you could produce for (e.g. organics)?
Agricultural subsidies are a bad thing. And so are price supports.
Why should I pay a higher price for milk due to the Northeastern States Dairy Compact, at some cost to my family, to support yours?
Fuck me.
chique , we currently have government handouts to farmers, and you still have to sell your product at a loss. Shouldn’t that tell you something about the effectiveness in farm subsidies in keeping american family farmers in buisiness?
spoke
Read about the Victory Gardens of WWII as far as produce goes. Milk is not a necessity, and spoilage issues will keep most foreign countries out of the market in any case (hell, spoilage issues are why we dump our excess government-subsidized milk instead of exporting it).
I grew up in Wisconsin. And I don’t know anybody who’s making money on a pure family run dairy farm. The only profitable people I know who are still in it are doing all sorts of side projects, field work for other farms (and getting paid in cash, if you get my drift), lumber work, mechanical work (I’ve never known a better mechanic than people who have grown up on farms), raising steers, selling good-pedigree heifers to the corporate farms, part time jobs in town, just whatever they can to bring in more money while still producing the milk so they can get the handout.
So sorry, no sympathy.
-lv
Chique… here’s a scenario: in a rural New Zealand town, the abbatoir has just closed down. NZ main exports are meat, dairy and wool, and our farmers used to get very generous subsidies, but thats no longer the case- it’s pretty much a free market now and they’re out there on their own.
So back to this rural town… did local farmers finally just fold under the pressure of price demands on meat, forcing the abattoir to close? Did the pressures of free trade ruin meat farming? No. The farmers cleverly diversified into growing grapes for wine production. Not something they were familiar with, but something they learnt about real quick. The reason the abattoir shut down was because there were not enough sheep in the region to butcher. Lots of wineries have popped up, however.
True free trade introduced them to reality. And rather than crying foul, these guys thought laterally.
This may be an overly simple example to give Chique, but life can be hard and unfair. You can let it defeat you, or you can concentrate on figuring a way out.
I’m avoiding the whole subsidy debate (I have nothing to add after reading Narrad’s and Woolly’s posts) entirely.
What I do want to say is that I’m sorry things are looking down for you and yours, Chique. I hope your circumstances improve, whether that’s in becoming a profitable business, or in a new field. I wish you the best. {{{chique}}}
What about people like Ted Turner who are obviously not farmers yet still receive farm subsidies?
Chique, first of all, let me say you have my sympathies. I hope that you and your family can still find a way to save the family farm. I think that there is definitely a place for the family farm today and for the forseeable future.
But in order for family farms to survive, they are going to have to give up their dependance on subsidies that may be here today, gone tomorrow. And they are going to have to diversify.
Subsidies, as several other posters have mentioned, only benefit the big guys in the long run. The Cargills and the Monsantos will always benefit from the subsidies because they have the lawyers and lobbyists to ensure that any subsidies passed will always be to their benefit. Whether they benefit the smaller farmer or not will always be a matter of chance.
That is why diversification is so important.
Let me give you an example:
I live not too far from a large Amish community here in Ohio. Most of the farmers there haven’t been affected by any loss of subsidy, mostly because they didn’t depend on them in the first place. The farms in that area will still probably be there in 100 years, most likely owned by the same families. But a large number of them depend on their farms more for self-sufficiency than for profit. For cash income, almost all of them have diversified into other areas – quilting, woodworking, and other crafts, primarily.
Another possibility is to increase the percentage of the sale that goes directly to the farmer. Some of the farmers around here supply farmer’s markets in the big cities and the farmer can eliminate the middleman and get a larger share of the sale.
Another scenario is that restaurants in the big cities have entered into agreements with the local farmers to grow specialty produce for their restaurant. The restauranteur gets much higher quality, with a reduced time from field to table. The farmer gets all of the premium price that is charged for such produce.
It’s not just farms, any business that doesn’t change with the times won’t be in business for long. We all need to be aware that things are changing faster now. It used to be that you could count on a job for life, but there are a lot of unemployed people out there (and I was one of them for almost 2 years) who can tell you that things have changed, and we have to be willing to change also.
To the Op. FUCK YOU.
¿Free Market is to tough for you? ¿Why don’t you go crying to big mamma Busha? I am sure he can give you and your kind a couple of billions.
I am from the third world, my country was known not so long ago as “the world’s barn”. Then the developed world started implementing subsidies. What happened? We still produce food for more than 300 hundred million persons (Argentina’s population is 35 millions) we are the biggest per capita producers of food… and we can´t pay our bills.
¿Do you know how many industries closed in my country because they were inefficient and weren’t capable of competing in the new order (Globalazation).
A couple of months ago a surreal incident happened. Your secretary of treasure Osama Bin o’Neill started complaining about Argentina’s default, he said that “we didn’t have an export industry and we seem to like it (laughs)”. At the same moment your congress was passing the new farm bill. Conclussion our “inexistent” export industry will loose and aditional thousand millions. I know that for you chique that kind of money is pocket money… not for us pal.
If you want to loose your time check Argentina’s employment indexes. Before the “market deregulation” of the 90 in steel industry (very inefficient and therefore protected by the state) worked hundreds of thousand. Today much less than that. But know our steel industry is efficient, small but eficcient. Do you want to hear how many jobs and money were lost because of bush steel tariffs? (just remembered in English you don’t open question marks ¿ sorry)
No question we still haven’t managed to “terminate” the political corporation that destroyed our country but even with them we could live a lot better without your policy. You preach free market you don’t practice it.
Before leaving Chique. Agriculture is so important in Argentina that we have an special branch of engineer (6 years in college). My father is one of those. He raised sugar cane. The fact is that he lost his buisness 10 years ago (the land was of our family for more than a hindred years) Did he cried before strangers? NOPE at 54 he started all over again. Even though that he was born with a silver spoon (my family used to be very rich) he did not hesitate to “dirty his hands”. Conclussion even an iliterate baby like you will manage with time and effort to be back in buissness
I’m curious. Which foods is it that you and your Randian buddy Zoff think are not suitable for import/export?
Meats? Try telling that to the Europeans who regularly dine on Argentinian beef.
Produce? Let’s see, I had a California cantaloupe for breakfast, and this afternoon, maybe I’ll pick up some Chilean grapes at the market.
Milk, surely then. Nope. Wrong again. Even milk may be given extended shelf life, when sterilized and stored in aluminum-pouch-lined containers:
Best stick to debates on Middle Eastern matters, Collounsbury, where your ignorance is less glaring.
You know, spoke-, I thought I was being pretty civil. So why in the fuck do you feel the need to be a dick and misrepresent my posts then call me “Randian”?
My point about imports was that even if US agriculture atrophied (which it won’t) there is sufficient worldwide production of goods for import. If we manage to piss off every country that produces these goods, then we have much bigger problems than a shortage of Cream of Wheat.
Let’s run through this once again. The depressed prices come through overproduction. The overproduction comes because the US government gives incentives to overproduce through its subsidy program. In other words, farmers don’t have to choose what to grow wisely because they will get paid regardless. These low prices cause farmers to ask for more subsidies and the cycle continues. If you remove the subsidies, then this constant cycle of price depression will be removed.
How do I know this? Aside from the fact that it’s Econ 101 theory, we have a recent example here in the US. In 1996 the system was changed. The government used to provide price supports which guaranteed a price for crops. This, of course, caused massive overproduction. When they changed to a new system that didn’t guarantee price supports farmers began to actually respond to the market. More soybeans and less wheat were planted. Why? Because the market needed more soybeans and less wheat. You see, farmers can change the crops they plant, and that’s exactly what they did. There’s plenty of arable land in the US. Eliminating subsidies isn’t going to sow salt into the land, it’s going to make the land more efficient.
You’re basically arguing that we should keep a system that every economist knows is horribly inefficient just in case we need to go to war with every other nation in the world or there’s a worldwide plague (which is so fucking common). We should take $20 billion out of the economy annually and hand to farmers to make farming inefficient in case influenza hits real hard. That idea sucks. Not only does the idea suck but you’ve yet to argue a single economic model under which US agriculture would be devastated by imports. We currently produce enough to feed ourselves and export under an inefficient system. Are you seriously arguing that making it more efficient will ruin it? Please explain how this can happen economically. Don’t rehash “What if a meteor hits”, tell me how that would happen. I want to see economic cause and effect under your scenario.
Chique: I’m very sorry your family is having to go out of the dairy business. Ten years ago, there were 17 dairy farms in my county. Now there are none. This situation is not limited to dairy operations either.
The cause/effect relationships of U.S. farm policy are complex, and not well understood by a population that has less than 2% involved in agriculture. I’m not getting into that here.
A couple of points:
At first glance, it would seem to make sense for a larger portion of U.S. food to be imported, but: One reason that third world countries are able to produce it cheaper is that they are allowed to use chemicals that are banned in the United States for environmental reasons. You may want to question whether we want thousands of additional tons of environmentally dangerous chemicals released into the world’s environment.
ralph124c:What you describe is fraud. It would require a farmer and a crop insurance adjuster to enter into a conspiracy to defraud the insurance company, as every crop insurance claim is visited by an adjuster. The adjuster must determine that the crop was tended to “In a workmanlike manner”. If you have first hand information about this, you should report it to the local USDA office that serves the area in which the farm is located. Alternatively, you can report this at 1-800-424-9121, or online at www.usda.gov/oig . You should have some hard information, such as the farmer’s name, location of the farm, or some other way for the investigators to find a starting point. Stating that “Somebody is doing this…” won’t get results.
There are people serving time in federal prisons for this right now. If you have facts, you should report them.
Also, crop insurance isn’t free. The farmers pay for it. The government may pay a portion of the premiums, but the farmers always pay for crop insurance.
Zoff wrote:
Yes, you were being civil. Unfortunately, your post got coopted by Collounsbury, who was being a prick (as usual), and you caught some collateral damage in my reply. Sorry about that.
Having said this, your posts in this thread do seem thoroughly Randian in their near-religious reverence for “The Market.”
You won’t find me entering into a defense of subsidies on economic grounds. I have already said that they do not pass muster under an Econ 101 analysis. But analyzing them strictly on that basis is (in my view) myopic.
My argument is based not on economics, but on national security. Economics 101 (not to mention common sense) should tell you that if food can be produced more cheaply overseas then US farmers will be driven out of business. And if US farms go out of business, then the US agricultural industry (and the infrastructure which supports it) will atrophy. I have not seen you produce evidence to counter this line of reasoning. All I see is denials, unsupported by evidence, or even by an economic model.
Now you (and other posters) seem to think it’s no big deal if US farming atrophies, no big deal if the US comes to rely upon foreign markets for its food supplies. But I ask the simple (and I think reasonable) question: What happens if our supply lines get disrupted? Do you contend that’s an impossibility, yes or no? Is it impossible that a now-unforseen war, or a now-unforseen plague may disrupt shipping?
You argue that the possibility is remote. I counter that history teaches that such scenarios are near-inevitable. They have been repeated time and again.
Should the subsidy system be tweaked, to make it more market-responsive? Probably. Should it be scrapped? I say no. Putting aside short-term economic considerations, it is vital to our long-term security interests to maintain a viable agricultural system.
John Carter of Mars wrote:
Not only that, but if the end of subsidies makes the exportation of food to the US a more economically-viable option for developing nations, we’re going to see a lot more forests worldwide being put to the plow.
I do not believe for a minute that subsidies are necessary or good in any way. The idea that the US needs to grow its own food as a matter of national security is silly on many levels. First, the US is already highly dependent on foreign trade in many ways. If the US declared war on the rest of the world tomorrow food would be the least of its problems. You can start with many electronics and many other things like clothes which are imported from Asia. The USA does not have the capacity now to cut itself off from the rest of the world. No way, no how. So the idea that food is somehow a matter of national security is plain silly.
It is also very unfair to condemn other countries to poverty by making them unable to compete with subsidized products.
In any case I do not believe American agriculture would disappear. Some operations would shut down and other more efficient would take their place.
Pointing out that subsidies are bad is not at all “Randian” it’s Econ 101. In fact, I doubt you’ll find a single economist who disagrees with the statement that subsidies distort the market by causing overproduction. I’ve found that people who accuse others of being “religious” about the market are often simply trying to avoid discussing the issue. If you think I’m being religious, please find an economist who says subsidies don’t distort the market.
It amazes me that you’d say that arguing against subsidies is “Randian”. Have you ever heard of Adam Smith or any other economist who’s lived since him? This isn’t some bizarre new theory. It’s basic economics and has been proven over and over again. Cheap shots about being “Randian” won’t change that.
If you want to accuse me of having an unthinking belief in the market, then please come up with a competing theory. I’ll be waiting.
I understand that you are arguing national security. But you’ve yet to explain why ending subsidies will hurt US agricultural competition with other nations. You say it could happen. How could it happen? Why will foreign producers be able to produce cheaper food? The US has a great deal of arable land and is technologically advanced. And US producers won’t have to pay the additional costs of exporting goods. I’m still waiting to see your explanation as to how foreign producers will cause the US agricultural system to atrophy. You can repeat that you’re arguing national security but if you don’t have a basis for arguing that foreign producers will destroy US agriculture then your national security argument is invalid.
And to say I haven’t provided an economic model is ridiculous. I have explained repeatedly how eliminating subsidies will not destroy farming. You’ve simply made blanket, unsupported assertions that it could hurt the US. How?
That’s a strawman. Nobody’s ever said they don’t care if farming atrophies. We’re asking how it could happen if subsidies are reduced.
This entire argument assumes that the basis of your objections has a valid economic basis. It doesn’t.
I appreciate the apology. I forgot to put that in my last post.