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> I have no idea where you are getting this from. Experience. I am a farmer. > if their market price is below a certain price set by the government, the gover

> I have no idea where you are getting this from. Experience. I am a farmer. > if their market price is below a certain price set by the government, the government pays farmers the difference as a subsidy. Yes. This is insurance. A claim is made if the price fails to meet the insured value. There is also insurance against production output, which covers things like weather events. This is where the vast majority of the subsidy dollars go. Farmers pay 60% of the cost, the government pays 40% of the cost. As such, like I mentioned, for every dollar required in insurance premiums, you pay 60¢, the government pays 40¢. > I don't know which small farmers you are talking about The data indicates most farmers have off-farm jobs, myself included. I can certainly talk about my small farm, if you wish. Let's face it, unless you have a large farm, there simply isn't much work to do. You need an off-farm job to remain viable. The customer isn't going to pay you to sit on HN all day long. They will pay enough to justify the time you do spend farming, but the rest of your time is up to you to figure out how to make it pay. > because in a free market the premiums would be based solely on actuarial data on the frequency of flooding and the expected losses from flooding It is interesting you mention data, as that is the primary reason why the government operates this insurance system. It gives reason for farmers to report what they are going to produce ahead of time, allowing the government (and private sector) to make informed decisions. > They are advantaged by being able to lobby to have the subsidies go to crops that they can more easily grow. I'm not sure what you mean? The subsidies give no preference to what you want to grow. It is simply a matter of you paying 60¢ on every dollar or premium required to insure you. The reason corn producers receive the most subsidies, which is likely what you are thinking of, is simply because corn is the most frequently grown crop – by a large margin. More acres means greater overall risk, and therefore more overall insurance premiums. Which means that the 40¢ on each premium dollar equals a greater amount than a crop with lesser premium demands. If you want to grow tomatoes, you'll still get 40¢ on every premium dollar you need to spend to enrol in the insurance system. The reason you'll probably choose corn over tomatoes is simply because the market for corn is tremendously larger. It is mostly eaten by animals and cars, which dwarf the number of humans eating tomatoes by orders of magnitude, not to mention much more easily shipped across the entire world. The market for tomatoes is highly localized due to shipping issues (before reaching the processor) and a fairly tough sell in comparison due to the much smaller market.

pdonis 7y ago
> Experience. I am a farmer. Fair enough. > This is insurance. Not by any reasonable definition of that word. It's a subsidy. The fact that you "file a claim" is just a way of using words to obfuscate what is really going on. > There is also insurance against production output, which covers things like weather events. This isn't really insurance either, because weather events that affect farm output are not rare (neither are price fluctuations, for that matter), and insurance is only supposed to insure against rare events. (Not to mention that risks that affect everybody, instead of just a small percentage of people, are not really insurable, as you yourself have already pointed out.) > for every dollar required in insurance premiums, you pay 60¢, the government pays 40¢ What premiums? Also, it makes no sense for the entity that is insuring you (the government) to pay part of your premium. > The subsidies give no preference to what you want to grow. Yes, they do, since there are only subsidies for certain crops. > unless you have a large farm, there simply isn't much work to do. You need an off-farm job to remain viable. The customer isn't going to pay you to sit on HN all day long. They will pay enough to justify the time you do spend farming, but the rest of your time is up to you to figure out how to make it pay. In other words, you are confirming that small farmers are at a disadvantage compared to large agribusinesses. Do you think large agribusinesses complain that customers don't pay enough for them to make a living at farming? To some extent this could be due to economies of scale, but given modern technology I have difficulty believing that that alone is enough to account for the obvious disparity between your description of how tough it is for small farms to stay in business, and the position of large agribusinesses. If the government is supposed to be helping farmers stay in business, it clearly is not doing a very good job.
- randomdata 7y ago
  > What premiums? The money you have to pay to enrol in the insurance system? I'm not sure I understand what you are asking here. The agriculture policy was reconfigured a number of years ago. My farming career is admittedly too young to know how the way things used to be, but perhaps that is our point of contention? That you're remembering the way things used to be? > This isn't really insurance If it walks like a duck, and quacks like a duck... > because weather events that affect farm output are not rare In aggregate across the entire country, sure. I doubt an individual farmer will have many claims in their career. Disastrous weather events aren't that common when observed within a single area. Areas that are naturally risker, of course, pay higher premiums. This is no different than any other type of insurance. When observed across the entire country, people make claims each and every day within the private sector insurance system. > Yes, they do, since there are only subsidies for certain crops. But the insurance – and thus the subsidy on the premium – is available for anything you'd ever want to grow. I guess if you want to start farming ragweed you might be out of luck. Is that something you see viability in or are we simply looking at made up hypotheticals that have no bearing in reality? Besides, if you do want to start growing ragweed for whatever reason, since there is no government insurance available you can buy your insurance from the private sector at much lower cost, as you stated earlier in this thread. No need for a subsidy in the first place thanks to the efficiency of the private sector. > In other words, you are confirming that small farmers are at a disadvantage compared to large agribusinesses. I suppose that in terms of economies of scale, larger farmers have an advantage. The insurance system (and thus the subsidies we speak of) seems quite fair to me, however. There is no preference given to any farmer. You pay 60% of your cost no matter how big or how small your farm is. If you want to give preference to smaller farmers, I guess I'll take it, but I'm okay with things being fair. It is only fair. > Do you think large agribusinesses complain that customers don't pay enough for them to make a living at farming? I'm not sure why anyone would complain, to be honest. On a per-hour basis, on average, it pays better than software development, my other career. But it only takes me a couple of months out of the year to do all the work. Why would I sit around doing nothing the rest of the time? That seems rather silly. Why would you, the person who eats my food, want to pay me to sit around 10 months of the year when I'm happy to have another job to keep me busy? The big farmers have to keep busy in order to make ends meet. Should there be preference given to smaller farmers? And if so, shouldn't the consumer make that choice on their own by choosing to buy from the smaller farmers?

pdonis 7y ago

> Experience. I am a farmer. Fair enough. > This is insurance. Not by any reasonable definition of that word. It's a subsidy. The fact that you "file a claim" is just a way of using words to obfuscate what is really going on. > There is also insurance against production output, which covers things like weather events. This isn't really insurance either, because weather events that affect farm output are not rare (neither are price fluctuations, for that matter), and insurance is only supposed to insure against rare events. (Not to mention that risks that affect everybody, instead of just a small percentage of people, are not really insurable, as you yourself have already pointed out.) > for every dollar required in insurance premiums, you pay 60¢, the government pays 40¢ What premiums? Also, it makes no sense for the entity that is insuring you (the government) to pay part of your premium. > The subsidies give no preference to what you want to grow. Yes, they do, since there are only subsidies for certain crops. > unless you have a large farm, there simply isn't much work to do. You need an off-farm job to remain viable. The customer isn't going to pay you to sit on HN all day long. They will pay enough to justify the time you do spend farming, but the rest of your time is up to you to figure out how to make it pay. In other words, you are confirming that small farmers are at a disadvantage compared to large agribusinesses. Do you think large agribusinesses complain that customers don't pay enough for them to make a living at farming? To some extent this could be due to economies of scale, but given modern technology I have difficulty believing that that alone is enough to account for the obvious disparity between your description of how tough it is for small farms to stay in business, and the position of large agribusinesses. If the government is supposed to be helping farmers stay in business, it clearly is not doing a very good job.

randomdata 7y ago
> What premiums? The money you have to pay to enrol in the insurance system? I'm not sure I understand what you are asking here. The agriculture policy was reconfigured a number of years ago. My farming career is admittedly too young to know how the way things used to be, but perhaps that is our point of contention? That you're remembering the way things used to be? > This isn't really insurance If it walks like a duck, and quacks like a duck... > because weather events that affect farm output are not rare In aggregate across the entire country, sure. I doubt an individual farmer will have many claims in their career. Disastrous weather events aren't that common when observed within a single area. Areas that are naturally risker, of course, pay higher premiums. This is no different than any other type of insurance. When observed across the entire country, people make claims each and every day within the private sector insurance system. > Yes, they do, since there are only subsidies for certain crops. But the insurance – and thus the subsidy on the premium – is available for anything you'd ever want to grow. I guess if you want to start farming ragweed you might be out of luck. Is that something you see viability in or are we simply looking at made up hypotheticals that have no bearing in reality? Besides, if you do want to start growing ragweed for whatever reason, since there is no government insurance available you can buy your insurance from the private sector at much lower cost, as you stated earlier in this thread. No need for a subsidy in the first place thanks to the efficiency of the private sector. > In other words, you are confirming that small farmers are at a disadvantage compared to large agribusinesses. I suppose that in terms of economies of scale, larger farmers have an advantage. The insurance system (and thus the subsidies we speak of) seems quite fair to me, however. There is no preference given to any farmer. You pay 60% of your cost no matter how big or how small your farm is. If you want to give preference to smaller farmers, I guess I'll take it, but I'm okay with things being fair. It is only fair. > Do you think large agribusinesses complain that customers don't pay enough for them to make a living at farming? I'm not sure why anyone would complain, to be honest. On a per-hour basis, on average, it pays better than software development, my other career. But it only takes me a couple of months out of the year to do all the work. Why would I sit around doing nothing the rest of the time? That seems rather silly. Why would you, the person who eats my food, want to pay me to sit around 10 months of the year when I'm happy to have another job to keep me busy? The big farmers have to keep busy in order to make ends meet. Should there be preference given to smaller farmers? And if so, shouldn't the consumer make that choice on their own by choosing to buy from the smaller farmers?