> Robert J. Bradbury wrote:
>
> I notice that nobody seemed to comment on my comments about the
> rather hefty increases in subsidies the U.S. farmers seem to be
> getting now.
I guess I'm falling down on the job, being the List Farmer. Thank you for
providing the figures, Robert. To refresh everyone's memory, since it's been
a couple of days, Mike Lorrey wrote:
<<US farm subsidies are actually quite low at the moment>>
RB responded:
<<In 1999 (the last year available), total "Farm marketings" were $188.6B.
"Government payments" were $20.6B or almost 11% of the "marketings" value.>>
It's quite a stretch to call subsidies amounting to 11% of "marketings"
value low. In fact, in at least some individual cases (I suspect in MANY
such cases) the subsidies make the difference between a net loss and a net
profit.
Mike Lorrey continues:
<< They don't
subsidize low prices either, they are used to prop up prices. If we
ended subsidies entirely, US food prices would be far lower. >>
I need to do some research on this, as I'm presently only aware of what's
happening locally. I get a newsletter each month from my local Agricultural
Extension Service, a branch of the USDA. The subsidies currently being
offered are in the nature of "disaster" relief. Farmers go to their partners
(maybe more accurate to say their bosses) the bankers, mortgage everything
they own, and put the whole wad into a thousand acres of one or two verities
of corn. No diversification, and it's all planted at the same time, in
accordance with the instructions from the seed and chemical companies
(which, these days, is generally the same company). If the corn burns up in
a drought, it's considered a disaster rather than poor planning on the part
of the farmer, and the federal gov't bails the farmer out.
The real beneficiaries of this policy are the banks, the seed/chemical
companies, and the politicians. I fail to see how this policy props up
prices. Farm prices are currently artificially low, and if more realistic
accounting methods were used by farmers, I don't think even the subsidies
would keep many farms from showing losses.
Among other misleading items on the financial statements is this: today's
dominant methods of farming rely on what you might call strip mining the top
soil. In most cases where a natural resource is used up a bit each year, a
business must annually book a fraction of the value of the resource as
depletion expense. This is not done by farmers, nor do farmers relying on
non-rechargeable aquifers for irrigation (such as the Olalla) book depletion
expense for water consumed.
It's a great tragedy to see this method of agriculture being exported. For
Ayn Randians out there who support Big Business All the Way--I think some of
you have misinterpreted Rand's writings. The Agribusiness-Seed/Chemical
Co.-US Government partnerships are the equivalents of Orren Boyle's
Associated Steel and Ma Chalmer's soybean project (did I get the names
right? It's been many years since I read *Atlas Shrugged*).
Barbara
This archive was generated by hypermail 2b30 : Fri Oct 12 2001 - 14:40:15 MDT