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Farm subsidies
Posted by: McQ on Monday, August 20, 2007

A Chicago Sun-Times op/ed begins with this sentence:
It goes against the grain for farm subsidies to be handed out to the rich.
Actually, for most Americans, it should go against the grain to hand out farm subsidies at all. Just as it should go against the grain to hand out corporate subsidies. Subsidies of any type are an outright perversion of the principles under which this country was founded.

The argument is that subsidizing farmers keeps food prices stable. Your money, in many cases, pays for farmers not to farm and thus keep the price of food at a particular level.

What if the government let the crop prices go where they may and let you keep the money they pass along in subsidies? Most likely pricing would quickly sort itself out.

But there's no power in that. Farm subsidies are a powerful vote getter for politicians. They get to play Santa Claus with your money. Subsidies are the epitome of special-interest democracy. They represent a blatant vote buying scheme which uses your money to effect it. If you want to see real bi-partisanship in Congress, watch the Representatives from farm states on both sides of the isle defend this monstrosity.

And yes, this is the annual libertarian lament which goes mostly unnoticed or is blatantly ignored. Just as "ethical Congress" is an oxymoron as long as Congress is in charge of their ethics, the same holds true about subsidies. As long as there are Congressmen who benefit from handing out subsidies, subsidies will exist, and Congress will do absolutely nothing about it except pretend to be concerned.

UPDATE: Edited at 12:26. Changed 2nd and 3rd paragraphs to reflect "stability" in crop prices vs. buying those prices down. I knew what I wanted to say, I just didn't say it correctly. Not enough caffeine.
 
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Its all Iowa’s fault =P. Their stubborn insistance on being the ones who determine our presidential candidates causes this to happen.
 
Written By: Jimmy the Dhimmi
URL: http://www.warning1938alert.ytmnd.com
Paraphrasing here, since I don’t have the exact quote.. but Dave Barry, a humor writer who’s also something of a libertarian, wrote something like this in his book on government:

"All presidential candidates kiss major farmer butt on the corn subsidy/ethanol issue when they go to Iowa. Once they leave Iowa, they relegate ethanol to its appropriate place on their priority list, which is: nowhere. Then they go to New Hampshire to talk about federal slush insurance or whatever it is that New Hampshire voters care about."
 
Written By: Kevin R
URL: http://
Not to mention that these are peddled to the public as necessary aid to the plight of the poor farmer, scraping by with six mouths to feed, surrounded by dustbowl-ridden fields of failed crop, with Neil Young benefit concerts playing in the background. Politicians love to tug at our heartstrings with this claptrap and make people all dewey-eyed. But it ain’t close to the truth.
 
Written By: the wolf
URL: http://
McQ writes:
The argument is that subsidizing farmers keeps food prices down.
Perhaps I’ve only ever heard half the story, which would be the other half. I had always thought that farm "subsidies" were in fact "price supports," i.e., intended to keep the prices of farm products up to a level that would keep farmers from losing money and that that in turn tends to keep food prices up. And that most subsidies were paid to farmers to not plant some of their acreage, thus giving them some money to not lower the price of crops by flooding the market, while theoretically allowing them to get a better price for the crops that they do grow.

I’m happy to be corrected if I’m wrong. I confess to paying close to zero attention to anything having to do with agriculture in the United States. And I say that realizing that politics in this country is often wrapped around the "farm states" (like Iowa) and farm politics. I just have a real lazy eye about it.
 
Written By: Martin McPhillips
URL: http://mcphillips.blogspot.com/
You are correct - conservation subsidies pay farmers not to cultivate their land, resulting in higher prices for crops that are thus made scarcer.

In fact I have friends who have spoken of land they regretted not buying, so they could NOT plant, and get paid for it. The one recently discussed with me was the ability to use the subsidy they received not to plant the land to pay for morgage on the land, and the price they could have gotten the property for at the time would have allowed them to pay it off in 5 years through the subsidies.

The second part of the equation was the land wasn’t suitable for much crop production in the first place.
 
Written By: looker
URL: http://
Perhaps I’ve only ever heard half the story, which would be the other half. I had always thought that farm "subsidies" were in fact "price supports," i.e., intended to keep the prices of farm products up to a level that would keep farmers from losing money and that that in turn tends to keep food prices up.
You’re right. My point, albeit poorly made, was that through this type of government interference, the price of food remains stable and affordable thus benefiting both the farmer and the taxpayer, or so the theory goes.
 
Written By: McQ
URL: http://www.qando.net/blog
"I’m happy to be corrected if I’m wrong."
You are not wrong, Martin.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
And it has been corrected.
 
Written By: McQ
URL: http://www.qando.net/blog
Strangely enough, there are plenty of people that believe the way McQ originally put it is correct:
Actual dialog from a recent West Wing rerun:
Josh: What do I say to people who ask why we subsidize farmers when we don’t subsidize plumbers?
Farmer’s daughter 1: Tell ’em they can pay seven dollars for a potato.
Yes, I know it’s a TV show, but do people actually think like this? I always assumed that the reason we couldn’t get rid of farm subsidies was rent seeking by the farmers, but if people actually believe this, that could be part of the problem.
Read the comments there as well to get an idea of how confused some people are about farm subsidies (and, of course, basic economics). I actually recall physically scratching my head when I saw that scene, and asking myself "don’t we pay $7 for a potato? At least some of us do, and then some". And that was before I’d read "FDR’s Folly" which lays out the underlying reasons for the farm subsidies.
 
Written By: MichaelW
URL: http://asecondhandconjecture.com
There are more Republicans from farm states, to become a partisan issue it will need to be a Democrat issue.
 
Written By: unaha-closp
URL: http://warisforwinning.blogspot.com/
Subsidies do have realistic justifications, mostly to do with the threat of war; if something that is vital and could only otherwise be acquired from trade is not subsidised enough to keep a sufficient de minimis supply produced locally, we’d be SOL in case of a major war that caused disruption in supply.

This, of course, does not justify almost any of the subsidies we actually have (especially farm subsidies, many of which still, as far as I know, pay farmers to support prices by not producing), but it’s important to point out a case for subsidies in principle can be made, honestly and pehaps convincingly.
 
Written By: Sigivald
URL: http://
It’s not about the current level of production - it’s about the potential level of production as a war contingency. If it was left to the free market US farming would collapse due to foreign competition. The land of the bankrupted farmers would go uncultivated, unmanaged. The subsidy keeps that land in farmers’ possession and maintains a safety margin of production capacity.

Farming is not like running a factory - you can’t push a button and switch a farm on or off. Good management of a farm takes decades to learn, right down to the varying degrees of work you can put a field - or parts of a field - to during which seasons. The skills and experience-based knowledge required to run a farm really well are very very difficult to acquire, which (among other reasons of course) is why farming is generally a hereditary business. You can’t ramp up production simply by messing about with crop prices on Wall St, the industry just isn’t that flexible. To leave the country’s food production potential to the fickle vagaries of the free market would be extremely foolish.
 
Written By: blewyn
URL: http://
blewyn requires one of these. Really funny.

For instance - when anticipating going to war with someone capable of disrupting world food supply, do not buy submarines or aircraft carriers to prevent it from happening because that money is needed so the government can buy corn at really high prices and ship it at a loss to China. Hilarious.


NZ ditched subsidies in 1985 and farmers are still making money and worrying about the weather and interest rates and the rugby.
 
Written By: unaha-closp
URL: http://
The one recently discussed with me was the ability to use the subsidy they received not to plant the land to pay for morgage on the land, and the price they could have gotten the property for at the time would have allowed them to pay it off in 5 years through the subsidies.
I have a friend who came from a farm n MA and this s what his family is now doing. They actually work a few acres, but get lots of cash from the gov’t to NOT farm the rest.
 
Written By: meagain
URL: http://

 
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