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Re: imports govt games


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Posted by paul on March 31, 2011 at 09:32:17 from (66.44.132.120):

In Reply to: Farm Subsidies Question posted by Mecum on March 31, 2011 at 08:33:01:

Farm prices are a world-wide commodity business, the lowest bidder wins...

So, over time, more & more food would be grown in countries with low land, labor, and regulation costs, while less and less would be grown in countries with higher standards & costs.

That means more stuff grown in China, South America, Africa, and less grown here. It means less safety standards on the foods you eat.

=======

What happens is the USA uses food as a weapon. Grain embargoes, taxes, etc create 'commodity wars' between countries, and in one day a farmer's worth can drop by 1/3. That doesn't work, so to protect farmers from the actions of the govt, they offer subsidies to help out. This is a mean, ugly cycle, but it is how govt plays politics.

==========

There are long term cycles in food production, when there is a lotr of food in the world people pay nothing for it, so farmers go broke. When food is short, people are willing to pay a lot for it, but no one is farming any more to make the big money.... It's an ugly cycle. The govt has figured it doesn't pay to have those ugly cycles; use subsidies to put a bottom floor in food production and it keeps that 30 year ugliness from happening. (It's real tempting to forget about this ugliness when farm prices are high right now; but end the subsidies and people will starve in the world 15 years from now.....)

========

Stable, long lasting, calmer governments & people are those who have plenty of cheap food around, so there is time & money to devote to other things. The USA govt has realized this for decades, centuries perhaps, and the farm program is a small price to pay to keep food supplies high & cheap.

==========

What happens if we end the ag subsidies? A lot of people cheer, taxes get used for some other projects (taxes never go down...) and over the next 20-30 years, we run into problems with out food supplies, depending more and more on imports, and hit with more and more ups and downs on food costs. Food production will slowly move to other countries with cheaper costs, less regulations.

Farmers will be happy for a while, but eventually bad weather pattern, govt regulations, or govt political actions will really mess up the USA grain supply or prices, and we either lose all our farmers to other countries, or world grain supplies collapse an we have grave world issues of food shortages. These deals take many years to come about, it will look good in the short term, but someday, some time, bad cycles or bad govt policy will cause bad problems. Govt subsidies kick in to help level out the results of this badness.

I dislike govt subsides. But what do we do, we live in a country with a lot of safety regulations, a lot of eco-friendly laws, a lot of high taxes. Those tend to be good things when it comes to food - look at the issues we've had with stuff coming in from China, Mexico, etc.

The govt regulations, and the govt subsidies, kinda go hand in hand. One balances the other.

Short term tho, the people you would hurt the most if you ended subsidies are rural retired folk and rural fire, sherriff, and school districts. The only thing farmers can really control is land prices/ land rent, so stopping the subsidies would really put a hurt on those first.

Farmers haven't collected on 2/3 of the farm program in a number of years - those 2 programs are designed to kick in when prices drop very low. The other 1/3 of the program is a payment to 'keep us in line' so we keep signing up for the ag program, keep up with eco-friendly rules and laws, keep reporting our crop & livestock intentions to the govt, etc. Without that 1/3 payment, the govt would lose control. So anyhow, over the past several years, the farm program has not paid out a whole lot. It's in idle mode, waiting for really bad pcrop prices to kick in the 'safety net' parts of the subsidies.

Sorry for the long message, and yea there are a lot of different sides to the issue, I understand.

--->Paul


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