US Farm Bill

Syxx

Diabloii.Net Member
US Farm Bill

Hi All,

http://www.indystar.com/apps/pbcs.dll/article?AID=/20080516/OPINION08/805160390/1291/OPINION08

I was reading an article about the recently passed $300 billion Farm Bill ... and it seems to me the American tax payer is getting slammed dunked (unless he happens to be a farmer).

How bad is this bill? It will ladle out $25 billion a year in subsidies and $5 billion in direct payments at a time when farm income and food prices are surging. Net farm income is currently about 50 percent above the decade-long average. The typical farm family now makes about $90,000 a year. Food prices last month, according to the federal government, were up more than 5 percent from a year earlier.
Subsidizing famers, when farmer are earning more than they have for many years due to the surging food prices.

The bill even managed to bestow more largess on the highly subsidized and highly protected U.S. sugar industry. Under the legislation, the government promises to purchase excess sugar from producers at 23 cents a pound. The sugar then will be resold to ethanol producers at 2 cents a pound. Who makes up the difference? You, dear taxpayer.
Buy sugar for 23 cent and sell for 2 cents .... yup that makes alot of sence (he said sarcastically).

With the US ecenomy being stretched to the limit, how can politicians support such a bill as this ? How can they expect American tax payers to foot the bill for this ?

Is there something I am missing ?

Regards
Syxx
 

Johnny

Banned
Re: US Farm Bill

Well out of those 23 cents the farmer will end up paying 51% of them in taxes before the money switch hands to the next guy who also pay his taxes in the united states. If the sugar the state gets is sold to other countries then that's pure income for the country as a whole while the original 23 cents just take it tour around the us economy and back in the states hands.
 

DurfBarian

Diabloii.Net Member
Re: US Farm Bill

You missed the other good part, which is where Americans can then undercut the developing world when it comes to ag product prices. That way people in Laos and Colombia go for the real cash crops like opium and coca. Then America spends another pile of $$$$$$$ on "the war on drugs." It's win-win all around, so long as you're a farmer who also owns a munitions plant.
 

krischan

Europe Trade Moderator
Re: US Farm Bill

It's a very convenient situation if a country can produce enough food to support its own population. That should be worth a bit. I think an anti-starving insurance of $100 per year per US citizen isn't expensive. For god's sake, keep the farmers happy (or in a state which makes them produce food), else you will all regret it ! Food is far more important than anything else produced by men. Without food there's no freedom, democracy, human rights etc.

If there's not enough food to feed everybody, prices will explode. Food deliverers might decide to demand let's say an egg for $100 or a sack of potatoes for your house. If you are starving, they can demand any price. Sure, farmers will begin food production again, but it will need a few months to grow new plants and it will need far longer to produce the machines needed for mass production. Until then, you will pay dearly for that neglect.
 

SaroDarksbane

Diabloii.Net Site Pal
Re: US Farm Bill

It's a very convenient situation if a country can produce enough food to support its own population. That should be worth a bit. I think an anti-starving insurance of $100 per year per US citizen isn't expensive. For god's sake, keep the farmers happy (or in a state which makes them produce food), else you will all regret it ! Food is far more important than anything else produced by men. Without food there's no freedom, democracy, human rights etc.

If there's not enough food to feed everybody, prices will explode. Food deliverers might decide to demand let's say an egg for $100 or a sack of potatoes for your house. If you are starving, they can demand any price. Sure, farmers will begin food production again, but it will need a few months to grow new plants and it will need far longer to produce the machines needed for mass production. Until then, you will pay dearly for that neglect.
That's assuming all the food in the world disappears over night, and then takes a long time to build back up. Why/how would this happen if the bill was not passed?

The real world market doesn't work like that. A natural (or man made) disaster could make such a sudden shortage happen, but subsidies won't stop a drought from taking out your crops, or a nuclear missile from landing in your corn field.



 

Jaelen

Diabloii.Net Member
Re: US Farm Bill

Most farm equipment runs on gas. Gas prices surge, food prices surge.
 

krischan

Europe Trade Moderator
Re: US Farm Bill

That's assuming all the food in the world disappears over night, and then takes a long time to build back up. Why/how would this happen if the bill was not passed?

The real world market doesn't work like that. A natural (or man made) disaster could make such a sudden shortage happen, but subsidies won't stop a drought from taking out your crops, or a nuclear missile from landing in your corn field.
Which real world market are you exactly talking about ? If somebody wants to abuse the situation, he will probably do it by surprise. If food becomes scarce, the food market won't exactly work like the market for other things, in particular if there are just a small number of big companies which have agreed about prices. If you don't have food, you will die while not that much will happen if let's say wheelbarrow wheels become scarce.

I was talking about an extreme situation, however, and perhaps it's quite unlikely to happen.



 

Jaelen

Diabloii.Net Member
Re: US Farm Bill

How many gallons of gas does it take to produce a pound of sugar?

To produce, refine and deliver to the grocery? I don't honestly know. But gas does play an important part in all of that. It's just common economics that if your costs go up, you charge more. The grocery store is also going to mark up some to cover the increased cost of getting the product to the store. It isn't just the farmer that determines the price you see at the store.

The problem with increased subsidies is the same as tax cuts for corporations. Sure the smaller farmer is going to get a little help, but it is really just helping the rich farmer get even richer.


 

SaroDarksbane

Diabloii.Net Site Pal
Re: US Farm Bill

anyone who'd begrudge a farmer extra money hasnt worked on a farm.
I don't begrudge them extra money unless it's being taken by force out of my paycheck.

If they want to charge more for their goods at the register, I'll fork it over without complaint.
Which real world market are you exactly talking about ? If somebody wants to abuse the situation, he will probably do it by surprise.
It would hardly be surprising if a single entity bought up all the farmland on the continental US and left it unplanted. I bet someone would notice. :tongue:



 

jmervyn

Diabloii.Net Member
Re: US Farm Bill

The real crime is that, as the article indicates, this largess won't go to people like my Dad, with < 500 acres, but to ConAgra and other multinational conglomerates.

Can you say, "Corporate Welfare"? I know you can! The next sight words are "sugar lobby"!
 

krischan

Europe Trade Moderator
Re: US Farm Bill

I agree that these subventions are subject to abuse, We have the same problems here in Europe. AFAIK more than 50% of the EU budget goes into agricultural subventions and the small farmers are not benefitting from it, as it's far too complicated for Joe Farmer to get them.
 

AeroJonesy

Diabloii.Net Member
Re: US Farm Bill

This also sucks because it means that the sugar that the US is buying isn't being stored anywhere in case of a shortage. So not only is the taxpayer screwed by paying more for sugar at the store and by paying taxes to cover the 21 cent spread, but it also hurts sugar reserves. All in all, very sucky.
 

BobCox2

Diabloii.Net Member
Re: US Farm Bill

It's not the production cost now, It's Processing & Distribution.
Food in a Silos does not help market conditions, neither does this bill.
 

DurfBarian

Diabloii.Net Member
Re: US Farm Bill

The real crime is that, as the article indicates, this largess won't go to people like my Dad, with < 500 acres, but to ConAgra and other multinational conglomerates.

Can you say, "Corporate Welfare"? I know you can! The next sight words are "sugar lobby"!
Oh hush, everyone knows it will "trickle down" eventually. It's the Reagan promise!



 

Mcwhopper

Diabloii.Net Member
Re: US Farm Bill

america had a $857 billion trade deficit in 2008, 6.5% of the GDP
the national debt is increasing with $1.4 billion a day
the current debt (both the public and the government) is 9,352,655,251,865.99
'

and yet the spending increases with an extra 25 billion

Is no-one worried? Suprised? Afraight this might (will) backlash?




Slighty more on topic : THis resembles the huge subsidies we have/had in the EU for milk/cows/wine/etc. The eu ended up with a godawefull excess of said goods and the end of the story was the subsidies being reduced and a lot of farmers out of work.
 
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