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What Happened When New Zealand Got Rid of Government Subsidies for Farmers
The Daily Signal ^ | September 22, 2016 | Josh Siegel

Posted on 09/28/2016 9:02:11 PM PDT by Tolerance Sucks Rocks

In 2006, Chris Hausman, a fourth-generation Midwestern farmer long accustomed to depending on government support for survival, traveled across the world to witness a revolution in agriculture.

It had been more than 20 years since a left-leaning government in New Zealand chose to eliminate government subsidies for farmers, and Hausman was surprised at what had transpired since.

“I will tell you it was a shock to their agricultural system,” says Hausman, 58, who farms corn and soybeans on a 1,500-acre plot 150 miles south of Chicago.

“You had a system dictated by government programs that was thrown out the window overnight,” Hausman adds in a recent interview with The Daily Signal. “But the farmers kind of reinvented themselves and now New Zealand is a powerhouse when it comes to agricultural production on the world stage.”

Hausman, like others in the industry, is careful not to equate New Zealand’s experience with what could happen in the U.S. He is thankful for federally subsidized crop insurance that his government provides.

But those who participated in this small island nation’s grand farming experiment hold it up as a valuable case study for policymakers worldwide.

“Every country is different—that’s an important caveat to put on the conversation,” said Mike Petersen, New Zealand’s special agricultural trade envoy, during an event last week at The Heritage Foundation. “But what I can say is that we did start an incredible process of innovation, guts, and determination from those people who really wanted to make this work.”

(Excerpt) Read more at dailysignal.com ...


TOPICS: Australia/New Zealand; Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: agriculture; budgetcrisis; farmers; freemarkets; newzealand; subsidies
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Yes, folks, free markets actually work
1 posted on 09/28/2016 9:02:11 PM PDT by Tolerance Sucks Rocks
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To: 3D-JOY; abner; Abundy; AGreatPer; Albion Wilde; AliVeritas; alisasny; ALlRightAllTheTime; ...

PING!


2 posted on 09/28/2016 9:03:18 PM PDT by Tolerance Sucks Rocks (Just one of a basket of deplorables)
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To: Tolerance Sucks Rocks

Ah, yes. My Country ‘tis of Thee

Sweet land of Subsidy...


3 posted on 09/28/2016 9:08:59 PM PDT by ASOC (Have *you* visited the World of the Chernyi?)
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To: Tolerance Sucks Rocks

bump


4 posted on 09/28/2016 9:10:25 PM PDT by gattaca (Republicans believe every day is July 4, democrats believe every day is April 15. Ronald Reagan)
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To: Tolerance Sucks Rocks

No no no. We need to protect our farmers industries, bureaucrats and jobs from foreign competition...


5 posted on 09/28/2016 9:11:31 PM PDT by Uncle Miltie (This posting is a microaggression.)
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To: Tolerance Sucks Rocks

Yes, and sometimes it’s possible for them to work too good too.

What happens if there is no government oversight and one year everyone decides that corn is the best crop based on last year’s price?

This year most farmers spend their money on a corn crop. They put a lot of money into it, and when harvest time comes around, this is when everyone finds out.

This year the sales price of corn drops to 25% of what it was the previous year, because of an over abundance.

Overnight 40% of the farmers in the U. S. can’t get a decent price for their crop and they are bankrupt.

The next year, there are not corn crops. The price of corn skyrockets and supplies are not sufficient.

The next year, it starts all over, folks hoping to make a great profit off of corn since there’s a big need, based on the previous year.

If you have a solution to this, I’d be glad to hear it.

I admit I fudged the figure to make my point, but this argument isn’t without merit.

People are paid not to grow certain crops to avoid this.


6 posted on 09/28/2016 9:14:15 PM PDT by DoughtyOne (41 days: Until Presdient Pre-elect becomes President Elect Donald J. Trump. Help is on the way!)
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To: Tolerance Sucks Rocks

Bookmark


7 posted on 09/28/2016 9:18:45 PM PDT by aquila48
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To: Tolerance Sucks Rocks

Yes but agricultural subsidies is a good hedge.

The problem isn’t the ideas. The problem is the implementation by greedy politicians and bureaucrats.


8 posted on 09/28/2016 9:20:17 PM PDT by Fhios ( Globalism is the new Communism - Islamism is the new Fascism.)
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To: DoughtyOne

And what if forty percent of that corn crop was NOT used for ethanol?


9 posted on 09/28/2016 9:24:56 PM PDT by philled (If this creature is not stopped it could make its way to Novosibirsk!)
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To: DoughtyOne

There would be the opportunity to reward family farms and create a disincentive for huge agri-businesses if you want to play that policy game.

But—corrupt politicians have figured out how to maximize their utility abusing the system while making your policy argument.

That is not a flaw in your argument—that is just the way the real world works.


10 posted on 09/28/2016 9:29:35 PM PDT by cgbg (Warning: This post has not been fact-checked by the Democratic National Committee.)
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To: Tolerance Sucks Rocks

Farmers are the biggest freeloaders in this country. Just look at the bills and you will puke of disgust.


11 posted on 09/28/2016 9:31:19 PM PDT by sagar
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To: DoughtyOne
How about not thinking that people who grow food for a living are stupid?

Farmers do not exist in a vacuum. They actually talk to each other and they know a lot better then bureaucrats what grows well and what sells well.

Small farmers, who quite often are too small for the government to bother with, are perfect examples of what can be done. Somehow despite no government nanny running things farmers markets are filled with a variety of produce.

Not everyone is going to grow corn because not every place is good for growing corn.

And corn is not like lettuce, if you don't sell in one year you actually can hold it over until the next year.

The idea of "paying people not to grow something" is a hangover from FDR's stupidity and resulted in the last time American actually starved.

Government controls are actually what results in "boom bust cycles"

You see this in the dairy industry.

12 posted on 09/28/2016 9:36:43 PM PDT by Harmless Teddy Bear (Not a Romantic, not a hero worshiper and stop trying to tug my heartstrings. It tickles!)
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To: DoughtyOne

What if all manufacturers in the US decided tomorrow to make cellphones because there is so much money in them. The price of cellphones collapses, but we no longer have cars or airplanes or kitchen appliances.

Makes about as much sense...

Why would a soybean or wheat or potato farmer suddenly drop everything and switch to a new crop?


13 posted on 09/28/2016 9:36:51 PM PDT by Shanghai Dan (I ride a GS scooter with my hair cut neat...)
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To: philled
And what if forty percent of that corn crop was NOT used for alcohol impaired gasoline that ruins small gasoline engines like my Stihl hedge trimmer?

Amended that a bit. My hedge trimmer isn't exactly a cheap item. How many tens of thousands of people had small gasoline engines destroyed for "King Corn"?

I have nothing against corn or farmers, but I can't even buy a decent steak for less than $7 a pound while all that good cattle feed is destroying chain saws and lawn mowers etc....
14 posted on 09/28/2016 9:38:00 PM PDT by Tailback
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To: DoughtyOne
You can buy a futures' contract and lock in your price presuming a normal harvest. Or you can sell your crop before you plant. Or you diversify what crops you plant. There are plenty of options. Remember when tobacco crops were highly regulated? It took a few years, but the farmers sorted it out and they make even more money than before

I do believe that govt subsidies over the long term are counter productive. But I also believe they should be phased in (over maybe 5 years); thus, giving farmers the ability to adjust. Remember the overwhelming majority of "farmers" are big corporations.

15 posted on 09/28/2016 9:40:00 PM PDT by fini
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To: Uncle Miltie
"No no no. We need to protect our farmers industries, bureaucrats and jobs from foreign competition..."

That's absolutely right, we do -- just not by subsidizing them.

16 posted on 09/28/2016 9:40:02 PM PDT by Wyrd bið ful aræd (Flag burners can go screw -- I'm mighty PROUD of that ragged old flag)
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To: DoughtyOne

Markets do not work good or bad. The have no conscience or morality. The function of a market is to allow for the exchange of goods and services. The exchange can be free, fair, rigged, profitable, or unprofitable.

Thats not unique to corn or anything else in the marketplace. Why are farmers given a pass on supply and demand economics?. Too much crops and too low a price is called a signal. It signals that some of you need to quit growing this crop or lower your costs. The market is sending the signal but our governemt keeps overiding it because farmers want to their gibmedats.

Look wjhat happens in oil and gas. Want to prop up the low prices in that market?


17 posted on 09/28/2016 9:43:44 PM PDT by FreedomNotSafety
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To: DoughtyOne
I want to be paid to hate governance....

I'd like $230 million a year..

Some less than I make now...

18 posted on 09/28/2016 9:44:34 PM PDT by Osage Orange (PNA....my butt)
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To: Tolerance Sucks Rocks
Most, not all, but most American farmers would agree to eliminating subsidies. Going cold turkey probably wouldn't work here, but a five year draw-down most certainly would.

I recall my Uncle Ed, an Oklahoma wheat farmer, "They say if they take away subsidies and allotments, we'll have $2 wheat. OK! All right! Let us plant fence line to fence line and I'll take $2 wheat!" The recollection is circa mid-fifties and, as I recall, the support price was around $2.80.

19 posted on 09/28/2016 9:45:04 PM PDT by okie01 ( --)
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To: DoughtyOne

Big guy, I’m guessing you’re not a farmer.


20 posted on 09/28/2016 9:53:12 PM PDT by gogeo (Black Lives Matter to Donald Trump.)
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