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To: Cloverfarm

Don't we pay farmers NOT to grow things? Why not try to get them to plant more.


41 posted on 03/19/2007 5:11:31 AM PDT by Paperpusher
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To: Kent1957

"Don't we pay farmers NOT to grow things? Why not try to get them to plant more."

For the most part we do actually pay them to grow more. Most crop subsidies these days are paid on each bushel a farmer produces. They government will set a target price they think farmers need to make per bushel to stay in business, and then pay subsidies to make up the difference between the actual market price and the price they set. The higher the market price for a crop like corn goes, the lower the government's per bushel subsidies go. A lot of people believe these subsidies encourage overproduction and are self perpetuating because farmers keep producing more to make more money and as they do that they drive prices down which means the government will have to pay more in subsidies for each bushel produced. There isn't really a penalty for producing way more of a particular crop than we need. If the market price gets driven down the government will make up the difference. As a result corn prices have stayed really low for a long time until just last year when drought and demand for ethanol started making prices climb again.

There is still a limited soil conservation program where they pay some farmers with erosion prone soil not to grow crops. They only pay a little better than forty dollars per acre on average though so not many farmers participate in this program, especially if their farmland is productive. It wouldn't make economic sense for the farmers. What the soil conservation program ends up being then is welfare for a few farmers with bad farmland that shouldn't be farmed anyway. Most of this land wouldn't be farmed even if the program did not exist.


63 posted on 03/19/2007 7:15:11 AM PDT by TKDietz (")
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