Posted on 02/14/2005 7:43:05 AM PST by 1rudeboy
They’re not ‘saving’ family operations – they’re actually contributing to their demise.
In 2003, Allen County farmers received about $7.5 million in subsidies from the federal government. The top 20 percent of producers – that was 653 of the 3,269 who got payments – received 82 percent of the money, for an average of $91,082 each. That included top recipient Henry Hilger & Sons at $123,176. The remaining 80 percent of the farmers got only 18 percent of the money, about $4,836 each, on average. That included recipient No. 2,184 Walter Langley, who got $12 for one acre he has farmed so he doesn’t have to mow it.
OK, go ahead now: Try to make the case, as so many in Washington have done so disingenuously for so long, that the point of agricultural subsidies is to “save the family farm.”
The truth is that such subsidies – mostly on commodities such as corn, soybeans, rice and cotton, in which farmers are paid the difference between the selling price and a government-set minimum – are accelerating the rate of disappearance of smaller farms. The bigger the farming operation, the more subsidy money and therefore profit; the big farms use that profit to buy smaller farms, which makes them eligible for even more money, which they can use to buy even more smaller farms.
President Bush, in announcing his new proposed budget, said he wants to cut payments to farmers by $587 million, or about 5 percent, next year, and save $6.7 billion in subsidies in the coming decade. He would do this principally by setting a firm limit of $250,000 a year for each individual subsidy. Theoretically, the current limit is $360,000 a year. But growers have found many ways around the limit (such as dividing one farm into several partnerships) and can get several times that amount; more than 70 get $1 million or more in subsidies.
The president’s intentions quickly got the attention of farming organizations. More than 100 of them, led by the American Farm Bureau Federation, said they would fight the proposal. The Indiana Farm Bureau’s president said the move is “ill-timed” and farmers “need a reliable safety net.”
It’s a pretty selective safety net, however. Nationwide, 10 percent of the farmers get more than 70 percent of the subsidies, a fact that causes the conservative Heritage Foundation to call farm subsides “America’s largest corporate welfare program.” Since farming households in general have higher incomes, greater wealth and lower consumption expenditures than most households, this creates a perverse anti-Robin Hood effect: The poor (relatively speaking) are being robbed to pay the rich.
“Any way you look at it,” Indiana U.S. Sen. Richard Lugar has noted, “this is a highly concentrated system of payments.” Lugar has been a longtime member of the Senate Agriculture Committee and in 2002 led an unsuccessful attempt to cap individual subsidies at $275,000. He also sponsored the 1996 Freedom to Farm bill, which would have gradually weaned farmers off subsidies altogether. But commodity prices dropped, “emergency appropriations” were approved, and there’s been no going back.
Until now. Considering the history of such proposals, it’s fair to say the president has an uphill battle. But he’s certainly right. Besides making a few rich farmers even richer, the subsidies don’t do much for the agricultural community. They keep land prices high, limit the entry of new farmers, make food more expensive than it should be and keep our farmers producing far more than we can eat in this nation.
Overproduction is an issue our trading partners keep trying, justifiably, to make an issue of. How can we make a persuasive moral case against a foreign government dumping, say, steel on us by subsidizing the producers when we’re doing the same thing with our agricultural products?
By the numbers
An organization called the Environmental Working Group has compiled an incredible farm subsidy database at www.ewg.org/farm/ at which you can find every recipient of a farm subsidy in the U.S. – and how much each has received in the nine years between 1995 and 2003. You can do the same thing for every recipient in Allen County or any county in any state. Using the database, you can make such comparisons as the following one.
Concentration of payments to farmers from 1995-2003:
U.S. – the top 10 percent of recipients got 72 percent of the payments, for an average of $309,823 each.
Indiana – the top 10 percent of recipients got 70 percent of the payments, for an average of $269,082 each.
Allen County – the top 10 percent got 68 percent of the payments, for an average of $149,985 each.
here's an interesting article i found posted at a ag forum i read at. it's about the success of getting rid of gvt subsidies, in of all places - New Zealand.
http://www.agritech.org.nz/subsidy.shtml
Subsidy-free and profitable agriculture
Farmers in most countries continue to face radical change, through the reduction or elimination of government subsidies, driven by the need to reform world trade within agricultural products. Farmers fear for the future of those who work on the land, their families, and for the rural communities. They fear the long-term destruction of the traditional farming systems and the rural way of life.
Yet the truth is quite different, and for family farming there is life after subsidies. Indeed, life after subsidies is better than farming that is dependent upon state handouts.
(continued at link)
Basically you would end up with vertical integration on a scale much closer to the defunct USSR than would be comfortable for me. I can buy corn right now if I want to, but take away CBOT and then ADM or Cargill will tell you what they want to pay. I would wager if that you took the lean hog contract from the board then the pork industry would be top to bottom with a few industrial corps squeezing what little life is left of the independent producer.
The land will still be there the banks that loaned the money won't be that was my point.
Get rid of all the farms and just produce "Soylent Green".
Hey, it worked on the Twilight Zone... "To Serve Man"
Consumers shouldn't have a say in the price of crops, they should have a say in the price of the food they purchase from the BIG corporations who really rack up the $$.
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Maybe you should buy some stock in those BIG corporations who are racking up all those $$. If you did your homework, however, you would most likely invest your money elsewhere as the food business provides only modest profitability. That's why there is so much consolidation going on within the industry.
"ADM or Cargill will tell you what they want to pay"
They already do that! It is called basis!! Right now, our elevator pays us 30 cents under the current CBOT bid. Not all of that goes to the elevator either! When cargil or adm doesn't need grain, they widen out the basis. When they need grain they narrow the basis. They can manipulate the grain out of the farmers hands by tanking the prices and scaring it out of their hands. "It's going down, I had better sell!!" Last year in beans, the basis was positive because the supply was so short. As far as the hog market goes, there aren't any independent producers around here any more. They all feed for someone! Tyson owns the local hog pack, as well as a few beef plants here in our state. They shut down about 3 of their beef plants the last month because of 'short supply' they called it, but really it was too high priced cattle! The lamb market isn't traded. It works! I know the CBOT will never be gotten rid of, but when people talk about a free market, it just isn't one unless I can go to my elevator and say, this is what I need for my product!!!! If they don't want to pay me that amount, they don't buy it. If someone can produce it cheaper than me, fine! I go out of business or I figure out a way to produce it cheaper or better.
I get annoyed when people blame the CBOT for low crop prices. Please. The brokers are conspiring to keep prices low? Get a supply & demand clue.
I never said the vast majority of farmers are getting rich at the expense of taxpayers, but some are.
We work hard for a living and just want to be able to make a profit at what we love to do. It is hard work for little return.
Well, gains in efficiency and productivity tend to increase production. Increased production tends to reduce prices. I guess we could turn the clock back to 1900 when 40% of the workforce was in agriculture. That might raise your prices and profits.
But he's a farmer. No fair!!
You probably should ping him if you're talking about him.
Gee thanks, mom.
It's true, subsidies DO make our sugar cheaper by assuring that abundant supply always exceeds demand.
However, Toddsterpatriot is a flying monkey who thinks it's "clever" to spin this basic fact of economics inside-out and upside-down until he "logically" comes to the exact opposite conclusion. Then he'll mock the hell out of you when you persist in proving him wrong. Frankly, I have better things to do with my time than waste all day "debating" the jerk, so I'm glad he didn't ping me.
Enjoy the Willie logic. American sugar at 3 times the world market price is "cheaper" because of subsidies!!
Maybe someone inhaled too much choo-choo exhaust.
Just like I said, I have better things to do.
Nope, don't see it happening here. Another "theory" of yours? LOL
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