>From: James Rogers <jamesr@best.com>
>
>On Mon, 27 Mar 2000, Zero Powers wrote:
> > >From: James Rogers <jamesr@best.com>
> > >You have a strange and rather arbitrary definition of "efficient" (and
> > >"equitable" for that matter).
> > >
> > >That you will "never be convinced" suggests a position that is not
> > >rational in its basis. In fact, dumping *is* more efficient and to the
> > >benefit of *everyone* in the long-term than doing as you suggest. I
>would
> > >hardly call forcing a farmer to sell their grain at or below cost to be
> > >"equitable"; it sounds like theft to me.
> >
> > I would say that *you* have a strange and rather arbitrary definition of
> > "theft." I'm no farmer, but I'm sure that as between selling my grain
>at
> > cost and just dumping it for nothing, I'd much rather do the former.
>Sure,
> > I would *rather* sell it at a profit, but I would *not* consider someone
> > offering to pay cost for something that I otherwise plan to just
>destroy, to
> > be a thief.
>
>
>If farmers wanted to sell their product at or below cost, they would
>already be doing it. Since the only way this will happen is through force,
>it can be called theft.
>
>"At cost" is a strawman. The market would handle the situation just
>fine if it was merely "at cost". Margins are generally quite thin so
>it isn't a case of price gouging. Most of the countries receiving grain
>get it free or substantially below cost. If they could afford to pay at
>cost it would be largely a non-issue, since it would allow the producers
>to stay competitive with people re-selling their product.
>
>Let me explain it again:
>
>If producers give away excess capacity below cost, it lowers the average
>margin on the grain that they do sell for a profit, sometimes forcing
>them out of the market. The short-term effect may be beneficial
>(recovering expenses), but the glut of too cheap grain creates a very
>negative long-term effect on overall production because it decreases the
>effective market size from a producers standpoint. If the world worked
>your way, the producers would quickly sink into unprofitability and
>would shut down.
So its just like OPEC. They are destroying produce to artificially inflate
the price. Perhaps this indicates that there are too many grain producers
and that society (and the grain market) would be better off if some of them
*did* shut down? I realize that probably wouldn't go over too well for
those producers that had to do the shutting down. But in general might it
not be better than the collosal waste that current practice creates?
-Zero
"I like dreams of the future better than the history of the past"
--Thomas Jefferson
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