Crop Subsidies

Readers of this blog probably don’t need much convincing as to the negative effects of crop subsidies, but I’ve rarely come across a newspaper article which gives so straightforward a look at how the system works. It’s not an opinion piece; it’s matter-of-fact reporting on what farmers today “must” do to be successful. Interesting (but not surprising) that “switching to sustainable agricultural practices” is not even mentioned as a possibility (let alone a “must”).

A sample of this world-view:

The modern farmer must pay as much attention to subsidy programs as the weather. There are programs that pay even if no crop is planted. Other programs also turn conventional farming on its head.

The government’s loan deficiency program, for instance, has farmers hoping for low prices at harvest, when they have the most grain to sell. It works like this: When the price of corn falls below what’s called the loan rate, usually about $2 a bushel, farmers are eligible for per-bushel subsidies, regardless of whether they borrowed money on their crop. If the loan rate is $2 and the market price is $1.50, a farmer can collect 50 cents for every bushel of harvested corn. Except he doesn’t have to sell when he gets the government money. Rather, farmers typically collect the subsidy, then store their crops for a few months until prices rise.

“That’s absolutely part of our strategy,” said Kendall Cole of Virden, former vice president of the Illinois Farm Bureau. “Most of us didn’t come into this game because it was low risk. You take the challenge out of it, you get lazy.”

Go read the whole article, if you can stomach it. But you might find yourself asking why, if “most” farmers don’t want the “challenge” taken out of agriculture, they don’t explore doing something other than raising all this (subsidized) surplus corn and soy that the government then needs to find and subsidize a use for (read: Ethanol and biodiesel).

I especially love some of the comments, including this one:

Farmers provide a safe stable food supply. I would say our nations food supply is worth tax dollars. A little more important than an auto shop. Did you also know you only spend about 10% of your income on food? The lowest percentage in history! Lets support our farmers who support local economies, and put food on our tables.

I’m left asking the question: why not support our farmers by paying MARKET PRICES for their produce? If prices rise, so will production. We don’t need subsidies to ensure a stable food supply. Market demand will do an excellent job all by itself.