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 ...
Therein lies the flaw. You rely on the funder to make your choice. The government as a funder is usually lazy and makes poor choices. If left to their own devices, farmers would make their own choices. The ones who make good choices will succeed. Those who make bad choices, will fail. The market weeds out the incompetent whereas the government enables them.
EXACTLY!
When I ran a 29,000 tree pecan orchard in Alabama, we were collecting payments for NOT growing cotton, soybeans and corn. Yet, we had no land for nor intention to plant any of them.
Actually to protect Cargill.
They buy politicians by the bushel.
I have been to NZ a few times to visit grandchild and his parents - food is quite expensive, but of high quality. They are proud of the high quality and rightly so. However, I don’t know how anyone affords to live there with the extremely high housing prices/food/energy/gas, etc. Lovely people, Lovely land, though.
The end of subsidies is what produced “chocolate cheese”!
“If you have a solution to this (individual crop choices unbalancing prices), I’d be glad to hear it.”
The bottom line is that prices and markets are are sent much more out of balance by central planners than they are by free markets with lots of individual choices. That is the moral of the story, in the article about the real experience in New Zealand.
Farmers don’t just dumbly bump along like lemmings, planting what everyone else plants - they think, worry and research long and hard on how prices might go, and what their best options are. Poor decision makers get weeded out over time. When New Zealand’s Government dropped their central planning and subsidy efforts, the individual decisions resulted in better growth, efficiency and profits. Nowadays, much more info is available to farmers to make better decisions.
Government planners are not playing with their own money, and are more motivated by political factors than economic factors - they always will be.
As in other areas of economics, the left promises (lies) to remove all the risk from life, if everyone will just put all the money into their hat and give them all the power to dole it out. They just skim off unnecessary overhead, skew incentives out of whack, and mis-allocate resource worse than professional farmers doing their best to make the best possible decisions in each of their cases.
For some time they can cover their inefficiencies with more more money mis-allocated from other people and industries - until they finally run out of other people’s money to spend, and the inefficiencies grow so big as to crash the whole economy (see the example of every centrally planned socialist experiment in history).
These guys get subsidies!
http://www.cbsnews.com/news/rich-and-famous-get-taxpayers-9b-report/
#24 They have all the gold found in the mountain.
http://gorillafilmonline.com/wp-content/uploads/2014/12/Smaug-gold-horde.jpg
The issue is not production or periodic droughts.
The issue is concentration in distribution of grain.
ADM, Continental and Cargil own the global grain distribution system.
The only time there is a good price for production? When there is none.
Otherwise the slam everyone else. It is just how it is.
Government programs are a pain in the A. In most cases not helpful at all.
My family has owned/operated farms in this county since 1889. Only way to survive is stay out of the banks. Be lucky enough to have a little oil production. Have some cattle to feed surplus grain to when the bottom falls out of the market. Don’t put all your eggs in one basket. The years you hit, you have to buy equipment for the long haul.
Also smart to have a non-farm job to supplement.
Get past that? It is a pretty good life. Especially if the Fed Bureaucraps would leave us alone. They won’t.
nope
Those kiwis sure are lucky ducks.
Diversification.
Don’t put your eggs all in one basket.
Spoken like a truly ignorant person.
You need to read what wasn’t said.
As soon as the subsidies were removed the farmers started to innovate. What wasn’t said is that the subsidies had caused production to stagnate. Government subsidies cause stagnation. Your hypothetical scenario is more likely when there is government subsidies, not the other way around.
The article also points out that the farmers are now more EFFICIENT (the article says “produce what people really wanted”). What wasn’t said was that subsidies are inherently INEFFICIENT. Farmers now respond better to fluctuations in demand than they did while on subsidies. So again, your scenario is more likely under government subsidies.
Finally the core of what you are asking is centralized planning which we know doesn’t work. But we do know you mean well ... comrade ;)
any system of subsidies by the government will eventually be manipulated to the point of not doing what it was intended to do. best to remove all subsidies and let the market take over.
I don’t disagree. It’s not the idea it’s the implementation that’s the problem.
Even so, many of these programs started out as national security programs — whether recognized or not.
It’s just a shame that necessary ideas can’t be implemented satisfactorily because of waste fraud and abuse.
Are you sure you are on the right forum? This is Free Republic, not D.U.
bkmk
...The essence of the fear that keeps people under the thumb of socialists. This Hausman guy not only likes, but needs his cage.
I haven't looked at this NZ situation closely, but I bet the only reason the programs were cut was to save other programs, or gov employee salaries, benefits, and pensions. So I doubt NZ will be discarding its other socialist inclinations anytime soon.
about time...
my father used to tell of the time that the government dumped tons of good potatoes into the Tasman Sea ...
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