I’m a platypus that understands the incredible importance of farming and ranching to our nation. Unlike some who don’t know where their food comes from and don’t know an udder from a, well, you know, I have a healthy knowledge and respect for farmers and just what they mean to us. Cheap food (and cheap fuel) have been the driving forces (aside from liberty) of the American experiment. We need them and want them.
It is a basic tenet of supply and demand that prices are a quantity based on a ratio of those two things – a ratio of what the supply is and what the demand is. Demand is especially fluid since it can be based on fads and whims. When dealing with food the demand will always be high, especially for critical types of food like grains. However, it does tend to remain stable in a nation like American. In countries where food is scarce people will eat more when there is more food to eat but in America we tend to buy ourselves the same amount of food week to week.
Though some foods, like perhaps mushrooms, may fluctuate, your staples will always be in vogue, our stomachs demand it. If many farms produce food they compete and prices remain low. However, if they get too low some farms cannot stay in business. These failures also have the ancillary effect of putting people out of work. The government created a subsidy program for farms to keep them in business. There are many given reasons for this but for me stable prices are primary. Not too high, not too low. If there are too many farms, prices drop, not enough, prices go up. Farm subsidies are an artificial attempt to create a balance.
Currently we spend about $25 billion dollars of tax payer money annually on these subsidies.
Over the last decade there has been more and more talk about ending the subsidy. Even so, many still want to keep it around and I think they are looking for a new reason, perhaps any old reason, to convince people it should stay.
Take the article below for example. It has a novel reason to keep it when it reads, “The Agriculture Adjustment Act, also known as the farm bill, provides crop payments, insurance subsidies and loans to many American farmers. However, fewer recognize that the bill has a much wider scope that includes forestry, energy and conservation programs.”
I see this slant as an indicator that such subsidies are in danger. Those who support them are using a propaganda technique to buoy them up. Don’t care about farms? Farms not in danger anymore? Well, that’s just an aside, this bill also does this wonderful thing for – the environment! Oooooo, ahhhhhh, ohhhhhh! If you love birds and beasts and trees and flowers, then you cannot let this thing be devoured!
We’ve been at the Agriculture Adjustment Act since 1933. It followed an attempt by farmers to raise prices through artificial scarcity. They stockpiled. Prices had dropped due to over production and a growing international market. Then the great depression hit taking already failing farms down with the economy. The government paid the farmers not to plant crops, to destroy crops already grown, and purchased animals to slaughter. Eventually aspects of the act were ruled unconstitutional but congress passed a new act that corrected that and farm subsidies continue to this day.
Of course this argument about birds and flowers is just the latest argument. So many others have been given. Some about farm families being helped, some about rural areas becoming more developed, and of course some about jobs being maintained. Just like all political discussions excuse after excuse gets created to convince people it is something that needs to be done. There is one argument that I haven’t read much about that is the one I feel might justify the expense.
Is this one so simple though?
It’s difficult to over state the importance of farms to any civilization. I wonder very much about farm subsidies and if they are something we should continue to do as a nation. There is a lot we could do with that money.
It’s not really about the money though. It’s about what government should and shouldn’t do in relation to business. I don’t suppose I’m a full-fledged liaise faire capitalist, but close. When Congress voted to bail out General Motors, I was against it. I haven’t purchased a GM product since then. I don’t intend to. Partly as a protest and partly because their need for government money makes me feel like they didn’t have a good enough product. I’ve owned several of their cars over the years and they weren’t as high quality as other brands I have had. I think there are reasons GM failed and a lot of them weren’t related to the economy but rather the quality of vehicle they were putting out and their ability to run a good business.
And that’s just it, General Motors is a business and if they can’t stay in business they should go out of business. Of course this is challenging to explain to people when they know that many will be out of work because of that failure but a in capitalism there is always another company waiting to fill that void. They will see such a failure as an opportunity to advance.
Take the recent closure of Hostess bakery. Our beloved Twinkie vanished from store shelves but someone saw that as an opportunity. Not only did someone move in and buy up the brand start making them again, but companies like Tastykake moved into the market once held by Hostess. Little Debbie probably didn’t do so bad either.
Are farms the same as a car company or a bakery though?
That’s the big question I have to ask myself. Without cars or nutritiously vapid but delicious golden cakes the nation goes on but without food, real food, we all starve like a third world country or the USSR or Venezuela. Though I understand the importance of farming I don’t claim to know enough about the business of farming to know if removing the subsidies would increase food prices greatly or not. I’ve read articles on both sides of the matter. There are those who say the time for subsidies is over and that new farming techniques mean that we can easily produce enough food with only a few farms. That might be true of course but I feel it is a bit safer and perhaps smarter to have more farms than fewer. A few large industrial farms may be able to feed the nation but they can also be destroyed very quickly by blight, frost, or tactical nukes. Many small farms will survive such an attack, natural or not.
Subsidies can help maintain a system of small farms that ensures the American food supply. $25 billion actually seems like a small price to pay for that level of security.
Then again, I’ve also read that ending subsidies would not at all create a dangerous situation because there are still so many farms that the issue simply wouldn’t arise. This likely isn’t an issue that most people think about and I completely understand that.
When we have an idea that there should be as little government as possible then we have to spend time considering just what the important functions of government are. There is a legitimate function of government relating to a nation’s food supply. That much can be expected. It must be protected. What good is a nation if the people are starving?
I wonder then, why the need for propaganda to sell the idea to people? If the politicians told people that it was important to protect the farms so they wouldn’t starve I think that is a more powerful argument than the impact the farm bill has on wildlife.
© Getty ImagesThe Agriculture Adjustment Act, also known as the farm bill, provides crop payments, insurance subsidies and loans to many American farmers. However, fewer recognize that the bill has a much wider scope that includes forestry, energy and conservation programs.