The Corruption of Agricultural Subsidies
Dean
It's when I read things like this that I wonder why people on both the left and the right, as well as the center, don't feel their blood boiling.
Agricultural subsidies are dependent on one thing it seems: the romantic illusion that desperate, hard-working farmers just can't manage to continue to produce food and survive. It's ridiculous.
However, the issue is complex. All those dots on the map you linked to probably aren't people planting roof-top gardens. I'll bet they're mostly people who own land that's farmed by somebody else. Nowadays there are practically only two kinds of farms: megafarms and tracts of land farmed by somebody else. Those aren't mutually exclusive nor are they all-inclusive. For example, I've met guys who live on their own farms and farm another 10 or 20 parcels.
When politicians wring their handkerchieves over the plight of the family farm, the honest truth is that a lot of the people helped by the subsidies are much like those dots on the map.
There are still lots of family farmers. There are still lots of sharecroppers. I've seen mile after mile on the backroads of North Carolina and South Carolina. But farming is nothing like it was when we adopted our system of subsidies 70 years ago and the last nail was hammered in 25 years ago. There really aren't as many farmers as there used to be.
Ya think those Manhattan “farmers”'ll be eager to give up their subsidies?
Really.
I think that's too benign a diction, Dean. These are well-to-do people who are collecting subsidies for land they don't farm themselves.
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For better or worse, that is a true statement at least some of the time. In 2001, the last time I took a close look at the wheat business because it's outside my usual corner of agriculture, I ran the numbers and figured out the level best a farmer could do growing wheat on a cash basis was to lose about a buck fifty per bushel, based on the price of wheat at the time and the cost of land, labor, and other inputs.
I don't know what wheat is selling for today (the Chicago Merc will have it, though), but I do know that diesel is a lot more expensive than it was then. So is fertilizer. This is not to defend the current system
The current system also militates against the establishment of new family farms. If one is growing hard red winter wheat or #2 dent corn or some other commodity (the definition of commodity, roughly, is an undifferentiated product where any one unit of production is substitutable for any other unit), one must be a price-taker and can increase profits only by cutting costs.
One does this by exploiting scale (getting big). This requires lots of land and lots of capital-intensive equipment (Deere, CNH, and the other big-iron guys are making some brilliant technology these days--really, it's amazing stuff for anyone at all interested in clever engineering--but it's also expensive). Land itself is getting more expensive. This drives up rents for farmers who rent land, and the cost of ownership for those who own it as property taxes rise.
The best way for a younger farmer to get into the game nowadays is to inherit, to get really lucky, or to forget about commodity crops like wheat, corn, beans, rice, and cotton, and try instead to find a bargain on an apple orchard (or other specialty crop farm) somewhere, and get really good at producing for the fresh market and selling direct to the consumer.
I'm as against our current subsidy structure as anyone, but lets not kid ourselves. Farming is a high-risk, low-profit business.
Without being rude, can you back that up?
Because this is my tax dollars you're talking about, and I don't get it.
Of course we all lose our tempers now and then. Dean freely admits to being imperfect in this regard, which is why regulars to this establishment will generally be cut more slack than people who we don't know very well.
Still: behave like an adult, or go find somewhere else to play. Thanks.