What's Wrong With Farm And Oil Subsidies? (gallon, Congress, Missouri)

[knowledgeiskey]

Aren't they good for our society? Don't they make oil and farm products cheaper for consumers? So why are people opposed to them?

[Bill Keegan]

Originally Posted by knowledgeiskey

Aren't they good for our society? Don't they make oil and farm products cheaper for consumers? So why are people opposed to them?

From where comes the money to pay that subsidy? The government has no money that it doesn't take from the citizens. Let the cost of the product be borne by that products users, and keep the government out of it. Adding a government bureaucracy to manage the subsidy, and decide who is worthy of receiving it, just increases the cost uselessly, and takes control away from the market & gives it to an already too large government.

[Mircea]

Originally Posted by knowledgeiskey

What's Wrong With Farm And Oil Subsidies? Aren't they good for our society? Don't they make oil and farm products cheaper for consumers? So why are people opposed to them?

Straw Man.

The purpose of oil subsidies is not to make oil products cheaper, rather the purpose of oil subsidies is to make US oil companies globally competitive.

US oil companies must compete against foreign oil companies, especially nationalized foreign oil companies, who pay far less in corporate taxes than US oil companies, plus are subsidized through their respective governments. Certainly a nationalized foreign oil company has deep-pockets, since it effectively has access to the government's money and borrowing power.

Regarding farm subsidies, originally they were granted to small farms and family farmers during the Great Depression. Technological advances --- such as mechanized farming and the use of oil and natural gas based fertilizers --- resulted in an increase of crop yields which depressed the prices of crops, since the supply of crops now far exceeded the demand for crops both domestically and globally.

Later, the logic was that farm subsidies helped stabilize food prices in the US. Accordingly, you had rather silly stuff like the government paying dairy farmers to slaughter dairy cows to decrease the supply of milk to artificially increase the price of milk, and then paying dairy farmers to dump milk into the sewer system (literally) and then also the government buying dairy products to remove them from the supply in order to jack up the prices.

The information I'm about to give you is severely outdated, however in 2004, one gallon milk was actually $0.65 but everyone was paying an average of $2.49-$2.69/gallon because of government policies related to farm subsidies (in the dairy sector).

Anyway, since the 1990s, farm subsidies go to the big corporate agro-business farms and not to family farmers or small farmers.

Note too, that those big agro-business farms have effectively used your tax-dollar subsidies to influence Congress and the EPA and to enact rules and regulations that have either driven small and family farmers out of business, or barred new family and small farms from starting up.

The result is that 24 Million acres of fallow farmland and 3+Million acres of grazing land are sitting idle in Ohio -- and between Ohio, Indiana, Illinois, Missouri and Wisconsin there are some 135 Million acres of farmland sitting idle.

Those Millions of acres could be producing corn for ethanol, or cellusotic fibers for ethanol, but the cost to comply with EPA regulations is more than a family farm or small farm can afford.

Agriculturally and petro-chemically....

Mircea

[thecoalman]

Originally Posted by Bill Keegan

From where comes the money to pay that subsidy?

The government doesn't pay anything for a lot of these subsidies, these subsidies are usually doled out as tax breaks. It's a small difference but you actually have to make money to get the subsidy. It's not like solyndra where it's an outright loan/grant.

As far as the oil subsidies go they protect small operations from being run over by behemoths like Exxon. These subsidies are for drilling and one or two bad wells could be devastating for a smaller company and easily absorbed by larger company like Exxon.

The result of removing this subsidy is debatable, when you consider cost per BTU it's only fractions of a penny per gallon. Short term the consumer would not see anything if it were removed, the biggest effect would be on the companies that go bankrupt.