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Agriculture Secretary Tom Vilsack said he expects a once-sacred cow of political spending—government subsidy payments to American farmers—to face cuts.
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The mere fact that Vilsack, a former governor of farm-rich Iowa, is resigned to seeing the farm payment system change illustrates just how far the government-spending debate has shifted as the nation hurtles toward an August 2 deadline, when the U.S. could default on its debt.
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Every year, the U.S. government pays farmers between $5 billion and $6 billion in direct payments to subsidize their sales of products ranging from peanuts to cotton and corn. The payments have become a staple of the American farm business, and powerful members of Congress have long sought to protect them, particularly from fiscal conservatives in the Republican Party.
I understand that the article that I posted with this tread is more on the political spectrum....but.....I think that this is issue is also very much effect the health of our economy in general. Considering we are big in the world when it comes to producing food.
So let me ask you guys.
1. What do you think the effect on the U.S. economy would be if they did cut farm subsidies all together or at least severely cut them?
2. What would be the final effect on the U.S. Debt if they were cut?
3. How would this effect the U.S. competitiveness in the sphere of world agriculture?
In the long run, not subsidizing farming would be best for everyone, both taxpayers and farmers. Today the business of farming is severely warped by government handouts, rules and political goals. Not a good foundation for running a business, big or small.
Farming can be (and is) a profitable enterprise, so subsidization isn't really necessary. We would be far better off as a society if farmers made business decisions based in what is best for their farming business rather then what the government wants them to do to get handouts. Most handouts end up going to large companies that are profitable and would still be profitable without them, few go to the "family" farms that most of these programs were designed to preserve. If people want to stay in farming they need to do something that makes money by actually farming, not waiting for a check from the taxpayers.
Getting rid of subsidies would of course help with containing government spending and debt. Of course it will take far more then cutting farming subsidies to slow creating new debt. It is a start that is necessary from keeping the federal government from becoming insolvent. Because when that happens subsidies would stop anyway, so cutting them in a orderly fashion makes it a little easier.
I think American farmer would be more competitive in a more open market. Farming products are already big exports for the US, and that would increase with fewer government regulations.
1. What do you think the effect on the U.S. economy would be if they did cut farm subsidies all together or at least severely cut them?
The problem with cutting them in half is that Big Corporate Agriculture has its hands down the pants of Congress. They'll get the half of the subsidies that aren't cut, and the small family farmers will be driven out of business, which is what Big Corporate Agricultural is doing anyway. They use their political clout to enact all manner of regulations that serve as a bar to keep new farms from going into business, while simultaneously driving existing farms out of business. The EPA is the common vehicle for doing this. You bribe Congress to enact "wetlands" legislation, the small farmers are killed, but Big Corporate Agriculture, of course, gets an exemption. You bribe EPA officials to interpret statutes as "run-off" then penalize small farmers making them pay $Millions to prevent was is essentially non-existent "run-off" and naturally, Big Corporation Agriculture gets an exemption. And the list goes on.
Cutting subsidies will result in price increases. The difference between Big Corporate Agriculture and small farmers is that Big Corporate Agriculture is liable to share-holders, has a huge expensive bureaucracy, and high transportation costs from centralized locations to markets. Small farmers answer only to themselves and their families and farm hands, have little overhead and since their in your "back-yard" an increase in fuel prices has little to no impact on prices to you.
If you read the Washington Post, about $1.3 Billion goes to farmers who farm nothing.
The subsides were about $167,331,000,000 from 1995-2010.
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Originally Posted by baystater
2. What would be the final effect on the U.S. Debt if they were cut?
Almost nothing.
If you're referring to the annual budget or the budget deficit, then they're about $25 Billion per year. Your budget deficit is $1.5 TRILLION and has been that for the last several years and apparently for the next several years so long as there are investors to buy US treasury securities.
So your farm subsidies are roughly 1.6% of your budget deficit.
As part of the whole 2011 budget, it would be less than 1/2 of 1%.
As far as it's affect on the National Debt, that wouldn't even pay interest for one month.
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Originally Posted by baystater
3. How would this effect the U.S. competitiveness in the sphere of world agriculture?
That's highly subjective for the most part. There is some quantifiable data. It is true that some countries subsidize farms and agriculture far heavily than the US does, but seriously, if a farmer in Gujurat, India making $300/year is a threat to US farmers, yeah, well okay, right, sure, whatever.
Many of the subsidies in the US got to sugar, rice and nut farmers. My sentiments are if you can't compete, then get out of business or start farming something that is more competitive. That's certainly the case with sugar.
Oh, the irony of fiscal conservatives in congress trying to protect farm subsidies (a form of socialism) to avoid alienating a voting bloc. Tends to make their anti-socialist rhetoric quite meaningless.
If the conservatives who favor a free market economy were true to their words, they would apply the same logic to farm subsidies that they applied to GM and Chrysler and all corporate subsidies, including oil. That is, they will either survive or fail on their own merits and a better system will replace the one that fails. However, this is the true nature of hippocracy, where one's politics favors their agenda at the expense of others and ideology trumps reality.
The argument about price increases is moot, we are paying taxes and debt interest on lost revenue to avoid realistic pricing, just like with oil. If spreading the cost to those who can afford it is not an example of socialism, I do not know what is. I do not necessarily disagree with this, but let's not pretend it is not a form of socialism.
I am really not sure where I stand on these subsidies, but what is good for the goose...
If people want empathy for their plight they should start spreading some around or it simply becomes dog eat dog!
Last edited by shaker281; 06-30-2011 at 01:52 AM..
Oh, the irony of fiscal conservatives in congress trying to protect farm subsidies (a form of socialism) to avoid alienating a voting bloc. Tends to make their anti-socialist rhetoric quite meaningless.
If the conservatives who favor a free market economy were true to their words, they would apply the same logic to farm subsidies that they applied to GM and Chrysler and all corporate subsidies, including oil. That is, they will either survive or fail on their own merits and a better system will replace the one that fails. However, this is the true nature of hippocracy, where one's politics favors their agenda at the expense of others and ideology trumps reality.
The argument about price increases is moot, we are paying taxes and debt interest on lost revenue to avoid realistic pricing, just like with oil. If spreading the cost to those who can afford it is not an example of socialism, I do not know what is. I do not necessarily disagree with this, but let's not pretend it is not a form of socialism.
I am really not sure where I stand on these subsidies, but what is good for the goose...
If people want empathy for their plight they should start spreading some around or it simply becomes dog eat dog!
The irony you speak of is no different than anti-war or anti-defense liberals who would fight to preserve a base scheduled for closure or a military contract for a company in their state. All politicians pander to their voters. That's part of their job - but is the root cause of earmarks and a portion of silly government spending.
Farm subsidies need to be phased out. Consumers and the farming industry need to accept over time the true cost of agriculture. Same with oil subsidies, tobacco, etc.
The irony you speak of is no different than anti-war or anti-defense liberals who would fight to preserve a base scheduled for closure or a military contract for a company in their state. All politicians pander to their voters. That's part of their job - but is the root cause of earmarks and a portion of silly government spending.
Farm subsidies need to be phased out. Consumers and the farming industry need to accept over time the true cost of agriculture. Same with oil subsidies, tobacco, etc.
So, your first point is that if the other guy does it, it is acceptable? Disagree.
Or, that both parties are full hippocricy? Now, we are getting somewhere!
But, we are not talking about military closures here. You should start a thread about that.
Oh, the irony of fiscal conservatives in congress trying to protect farm subsidies (a form of socialism) to avoid alienating a voting bloc. Tends to make their anti-socialist rhetoric quite meaningless.
If the conservatives who favor a free market economy were true to their words, they would apply the same logic to farm subsidies that they applied to GM and Chrysler and all corporate subsidies, including oil. That is, they will either survive or fail on their own merits and a better system will replace the one that fails. However, this is the true nature of hippocracy, where one's politics favors their agenda at the expense of others and ideology trumps reality.
The argument about price increases is moot, we are paying taxes and debt interest on lost revenue to avoid realistic pricing, just like with oil. If spreading the cost to those who can afford it is not an example of socialism, I do not know what is. I do not necessarily disagree with this, but let's not pretend it is not a form of socialism.
I am really not sure where I stand on these subsidies, but what is good for the goose...
If people want empathy for their plight they should start spreading some around or it simply becomes dog eat dog!
i wonder who wrote that article. most fiscal conservatives are not for farm subsidies, but for free market:
Direct payments to farmers have been a frequent target of fiscal conservatives and other critics of farm programs because they are paid regardless of crop price or yield. They have survived for years, along with tens of billions annually in other subsidies for farmers, because a powerful coalition of farm state lawmakers in both parties has protected them.
also, i think a lot of fiscal conservatives think it is almost brain dead to turn food into wasteful fuel with even worse gas mileage.
Trust me...the crops being developed as potential energy sources could not be eaten. But, that is neither here nor there...
I live in an area of mostly small family farms. A lot of the farmers here have been in the red for years and rely on the subsidies to get them through, especially of late (mostly because of severe weather and drought).
I sometimes have to sympathize with them, because it is not easy to switch from one crop to another and you really can't just go back and forth....and it is quite the risk. Most crops require different equipment investments and these small farms can't afford new equipment every time a new crop is on the horizon and could potentially make them more money.
On the other hand, I think subsidies on some crops is causing stagnation in our farm industry, because there COULD be a switch to higher-value, more nutrient dense crops if the impetus were stronger. Would it be only the large Corporate Farm entities remaining, though? I feel that is not the ideal outcome for consumers or our land. Large, monoculturous farms bring with them all sorts of damage and problems that could be kept largely under control (naturally) without an EPA if replaced by a large network of smaller, more diverse family or co-op farms. Because much of what is produced is sold overseas (at least where I live), I think the profit margins could also be far greater were we to head in that direction (different crops, in particular).
I say different crops because currently so much of what is produced is not needed...a lot of it doesn't get harvested or rots in silos. Part of the problem with large monoculture is that there is no resilience built in, so it is boom or bust depending on the weather for 1 or 2 crops. However, I feel like subsidies have had the effect of dampening farmer's interest in building in more diversity in their farming operations. The subsidies were a sure thing; new crops, new markets, new equipment...no so much.
I really feel like instead of cutting back on them, they need to just drop them completely and pull off the bandaid, but I also fear the complete loss of small family farms. Not sure what the answer is here.
Oh, the irony of fiscal conservatives in congress trying to protect farm subsidies (a form of socialism) to avoid alienating a voting bloc. Tends to make their anti-socialist rhetoric quite meaningless.
If the conservatives who favor a free market economy were true to their words, they would apply the same logic to farm subsidies that they applied to GM and Chrysler and all corporate subsidies, including oil. That is, they will either survive or fail on their own merits and a better system will replace the one that fails. However, this is the true nature of hippocracy, where one's politics favors their agenda at the expense of others and ideology trumps reality.
The argument about price increases is moot, we are paying taxes and debt interest on lost revenue to avoid realistic pricing, just like with oil. If spreading the cost to those who can afford it is not an example of socialism, I do not know what is. I do not necessarily disagree with this, but let's not pretend it is not a form of socialism.
I am really not sure where I stand on these subsidies, but what is good for the goose...
If people want empathy for their plight they should start spreading some around or it simply becomes dog eat dog!
I aggree, i wish republicans would push to cut ALL subsidies. They call it raising taxes on businesses but thats bull, it is only taking taxes from one person and giving it to another. They need to quit that sh-t!
So, your first point is that if the other guy does it, it is acceptable? Disagree.
Or, that both parties are full hippocricy? Now, we are getting somewhere!
But, we are not talking about military closures here. You should start a thread about that.
The second point, I tend to agree with.
All politicians, regardless of party or supposed political beliefs, panders to their constituents. I think it is disagreeable no matter what. I think you chose to highlight conservatives who do this - yet ignore liberals who do too.
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