The joys of farm subsidies

[Mikey]

My father just sent me this joke letter regarding the sate of US farm subsidies:

Honorable Secretary of Agriculture
Washington, D.C.

Dear Sir;

My friend, Ed Peterson, over at Wells Iowa, received a check for $1,000
from the government for not raising hogs. So, I want to go into the "not
raising hogs" business next year.

What I want to know is, in your opinion, what is the best kind of farm
not to raise hogs on, and what is the best breed of hogs not to raise? I
want to be sure that I approach this endeavor in keeping with all
governmental policies. I would prefer not to raise razorbacks, but if
that is not a good breed not to raise, then I will just as gladly not
raise Yorkshires or Durocs.

As I see it, the hardest part of this program will be in keeping an
accurate inventory of how many hogs I haven't raised.

My friend, Peterson, is very joyful about the future of the business. He
has been raising hogs for twenty years or so, and the best he ever made
on them was $422 in 1968, until this year when he got your check for
$1000 for not raising hogs.

If I get $1000 for not raising 50 hogs, will I get $2000 for not raising
100 hogs? I plan to operate on a small scale at first, holding myself
down to about 4000 hogs not raised, which will mean about $80,000 the
first year. Then I can afford an airplane.

Now another thing, these hogs I will not raise will not eat 100,000
bushels of corn. I understand that you also pay farmers for not raising
corn and wheat. Will I qualify for payments for not raising wheat and
corn not to feed the 4000 hogs I am not going to raise?

Also, I am considering the "not milking cows" business, so send me any
information you have on that too.

In view of these circumstances, you understand that I will be totally
unemployed and plan to file for unemployment and food stamps.

Be assured you will have my vote in the coming election.

Patriotically Yours,

PS: Would you please notify me when you plan to distribute more free
cheese.


- I can't imagine why we operate in a deficit.

[Teaos]

The truely bad thing about them is they give farmers bonuses at the moment for growing ethanol crops. Not only does this waste tax payer money it feeds a BS industry,

[Mikey]

The truely bad thing about them is they give farmers bonuses at the moment for growing ethanol crops. Not only does this waste tax payer money it feeds a BS industry,

PLUS it reduces availability/raises the price of corn, making it more difficult for Third World nations to purchase and harder for First World nations to subsidize it for foreign aid. The kicker is that E85 isn't a clean fuel compared to gasoline by any stretch.

[Teaos]

Dont get me started on Bio fuels.

The WORST idea in the last century. I'm not exagerating either.

It has the potential to kill more people than all the wars of the last century and cause more damage to the planet the oil...

I HATE Bio fuels.

[sunnyside]

Geez first your complaining when the subsidize farmers to bring prices down and then when something raises them you complain again. Hurm. Actually I wonder if there is some clever economics there (farm subsidies are usually based on a price floor raising the price by having biofuel would raise the price and avoid having to pay at least that subsidy).


Regardless on the subject of farm subsidies. I'm sure, but like every other commodity, it would be cheaper for US/UK to import much of its food from abroad.

However have you heard of the rice shortage going on right now? Countries talking about shutting down export? That may get ugly.

Also there is the issue of sanctions. Right now if some county decides to sanction us it could mean you don't get a shiney new cell phone this year. If we relied on them for food you wouldn't get to eat. That's an entirely different proposition. On the flip side a number of other countries rely on us/rest of the world for much of their food supply. So if the international community slaps sanctions on them people do die. And that gives the world some serious leverage.

[Mikey]

Farm subsidies rarely function as intended, to bring staple prices down. In fact, when they're as widespread as they are, they limit production and end up working in the opposite way. And what I was actually mentioning here regarding raising prices was E85 ethanol fuel.

And if we're ever in the sitch that we are completely unable to rely on foreign staple sources, take away those subsidies and see how fast American production rises.

[sunnyside]

Farm subsidies rarely function as intended, to bring staple prices down. In fact, when they're as widespread as they are, they limit production and end up working in the opposite way. And what I was actually mentioning here regarding raising prices was E85 ethanol fuel.

And if we're ever in the sitch that we are completely unable to rely on foreign staple sources, take away those subsidies and see how fast American production rises.

I don't think bringing staple prices down is the purpose of farm subsidies. Particularly the past policies that paid farmers to keep land fallow to control supply. I believe the modern purposes are to stabalize the crop market against the inherent volitility of crops (one nasty storm and the crops for an indavidual are wiped out, so the government is into insurance type things for farmers), and to get them to keep producing a large amount of crop.

These things may actually wind up being profitable for the government. A volitile market tends to produce waste, and just because something is subsidized doesn't mean it isn't profitable for the government. Especially since crops are one of the few things we export.

The other part is insuring that other countries have to suck our d**k when food shortages and sanctions get thrown around and not vice versa.


As for biofuels. Honestly it sounds like they could just be a bad deal. Certainly they're more expensive to produce, currently, than just buying more oil on the market. However on the flip side of that you get people going on and on about how we need to quit pumping money to hostile nations and need energy independence. Apperantly they wanted to not do that AND pay less money for it. It could be that our government would rather pay even double the amount for fuel if its going to people within the country instead of people outside the country.

That said it's also possible there could have been some cheaper short term way to general fuel. Like plasma reactors to convert coal to gas.

The problem is in the things I've read on the matter biofuels are compared vs paying for more middle east crude. Or they're compared with methods that hadn't been totally worked out like switchgrass. Biofuels are a "right now" sort of need. Hopefully in the future they'll get fuel cells or something worked out and we can just quit the fuel thing.

[Mikey]

Well, many of the subsidies are for non-production rather than vice verse. In a kind of back-handed way, it does help the export ledger, because it artificially keeps prices high while allowing the guv'mint enough control to keep them just under the level at which people won't buy.

As far as E85, bio-diesel, etc.; they were merely an attempt to appeal to under-informed "green" buyers - "look! they don't use gasoline!" - but are in fact NOT clean, nor are they less expensive, and availability (of E85) is a huge issue depending on your location.

[stitch626]

It could be worse... one of the other biofuels that could have been pushed instead of E85 was cow manure. Imagine the smell of that engine.

[sunnyside]

I don't think we've done the non-production thing in the US since 1996. We might do it again, but I remember reading a policy quote that the government wanted farmers planting crops hedgerow to hedgerow.

I don't know about E85. Due to engine refits and everything one would think expanded use of E10 would be better. But I'm not an economist. I'm also given to understand that the ethanols are "greener" just not by the sorts of margins one would expect. Though part of that could be the trade off between where that carbon footprint is. Out in the country were it isn't doing so much harm or in a city where it's smog alert time. Still to me a bigger issue would seem to be the energy independence issue.

Actually on that note I wonder how things do balance out for profits in trade related scenarios. I.e. lets say in a "natural" market there would be fallow fields due to it just not being profitable to grow crops in them and oil would be imported. Instead a subsidy is put in place and the field are used and the production goes into biofuel. This biofuel production/consumption is then taxed. Can you come out ahead in such a scheme? It would certainly seem you would.

And I'd think you'd certainly come out ahead of the oil dollars abroad when into weapon systems you then have to pay to counter as may be the case all too soon.

[Mikey]

General Motors is at the forefront, and I imagine some of the others aren't far behind, of factory-ready flex-fuel engines - E85-capable with no modification. In fact, GM has been selling these in large numbers for a couple of years now - the 5.3L V8's in the half-ton pickups, Tahoes, Suburbans, and Yukons have all been E85-capable as standard equipment. The problems are: it isn't any cleaner - it just sounds like it is because it requires no drilling/cracking; and fuel cost isn't an issue, because you simply can't get it at all outside the midwest. It's not even a step between current gasoline drivelines and the supposed future of electric/H-cell.

[Duskofdead]

This is a very narrow launch point from which to discuss farm subsidies. The U.S. is committed to a "cheap food" policy and you don't want to see how much worse it would be if agriculture was a pure private industry and had to be perfectly legit in every way. $18 milk, anyone? $60 for a watermelon? Look at Japan if you want an idea of what an American food market without subsidies would look like, and if we actually succeeded in getting rid of all illegal immigrant labor. Expect prices to shoot much higher than any estimate on what biofuel would do (somehow, btw, biofuel has mysteriously failed to bring about the end of the world scenario in Brazil that Teaos insists on) if we abandoned a cheap food policy and farmers who couldn't sell their goods on going market prices at a profit would just stop farming and pursue some other employment.

Yes, as with any system, there are abuses and areas where tweaks could be used. However as with most discussions criticizing public systems people focus more on the silly or frivolous instances and ignore the larger picture of what that system does, or brings int erms of benefits to our society, because you take them for granted.

[Tsukiyumi]

This is a very narrow launch point from which to discuss farm subsidies. The U.S. is committed to a "cheap food" policy and you don't want to see how much worse it would be if agriculture was a pure private industry and had to be perfectly legit in every way. $18 milk, anyone? $60 for a watermelon? Look at Japan if you want an idea of what an American food market without subsidies would look like, and if we actually succeeded in getting rid of all illegal immigrant labor. Expect prices to shoot much higher than any estimate on what biofuel would do (somehow, btw, biofuel has mysteriously failed to bring about the end of the world scenario in Brazil that Teaos insists on) if we abandoned a cheap food policy and farmers who couldn't sell their goods on going market prices at a profit would just stop farming and pursue some other employment.

Yes, as with any system, there are abuses and areas where tweaks could be used. However as with most discussions criticizing public systems people focus more on the silly or frivolous instances and ignore the larger picture of what that system does, or brings int erms of benefits to our society, because you take them for granted.

I don't take having cheap, available food for granted at all. I just think the concept of family farms providing food for millions of people, and not deforesting land and taking up millions of acres is hopelessly naive. Years ago, I drew up plans for massive underground hydroponic farms using mirrored tubes to utilize real sunlight in daytime, and gro-lights at night (for certain plants), using genetically-engineered fast growing crops. You could have fifty acres of farm in one square acre of surface area, climate control would be easier, using automated systems, and voila... You have what is essentially a food factory cranking out product 24/7, with guaranteed quality and lower overall cost.

If we don't advance, we'll die. Technology like that is the only way we'll survive to spread off of this rock at all.

PS - f*ck farmers.

[Duskofdead]

F*ck farmers? I think you're viewing it a little backwards. It's agribusiness cashing in on exploiting government food policies and subsidies, with the legal teams and expertise to do it very well. Individual family farms, on the other hand, get bullied and pushed around left and right, and struggle to keep family businesses going. Wal Mart, for example, coming into areas and becoming the sole dairy purchaser... and then demanding the farms (even self sufficient ones) sell for under cost or else they will drop all contracts. (And encouraging those farmers to go on subsidies/welfare in order to sell under cost.)

As with most problems in our society, you follow the trail long enough and there's corporate scum behind it somewhere.

I agree things need to advance, but I think you have a somewhat inaccurate picture if you think farmers aren't on the net, using fairly sophisticated machinery, electric milking machines, and the works. There's always room for improvement but you can't fairly criticize that an industry for the most part always stuck at the point of breaking even can't afford to always have the most state of the art equipment at any given moment. I don't think proposing some fantasy underground hydroponic foodfarm which no one believes in and certainly doesn't want to pay for and letting all our food production (one of the very last things we DO domestically produce, incidentally) die off is a very sound policy.

[Tsukiyumi]

I suppose we'll see whether inbred Jo-Bob and his horribly outdated tractor are better than large-scale industrial production in a few years, at this rate. When everyone's eating inexpensive nutrient paste and real food is only affordable by the rich, maybe the concept won't sound so far-fetched, or "fantasy" like.