6 ms·

Just stop subsidies altogether. Subsidies distort the market and encourage farmers to grow crops the market doesnt actually want.

landemva 5y ago
Start with removing corn subsidy. There is so much corn ovrrproduction that it gets processed into a bit of sweet and blended in to packaged foods like ketchup. And blended into gasoline. Corn subsidy is massive economic distortion which leads to monocrop farming and lack of diversity.
etempleton 5y ago
The problem is that the whole farming industry is proped up on subsidies and if you ended it tomorrow almost every small to medium farm would fold and get bought by a large farm or sold to build a housing development.
- AnthonyMouse 5y ago
  That isn't consistent with 10% of the farms taking 90% of the subsidy. The subsidy argument is a scam anyway. It's a commodity market. The margins will be razor thin, the end. If you subsidize production, prices go down. It will eat the whole subsidy and leave the margins razor thin. The only way the subsidy helps you is if you get more of it than your competitors. Now who do you think that applies to, the family farm or the huge corporation with lots of lobbyists?
  - klyrs 5y ago
    Lower food prices are good for the consumer. Exclusively focusing on the supply side is a mistake.
    - AnthonyMouse 5y ago
      The consumer is the one paying the taxes that fund the subsidies. That isn't helping them.
      - theptip 5y ago
        I get the general point you're making, but in a progressive tax regime like the US, the poor (who benefit most from lower food prices) are paying proportionately less of their income as tax than the rich, so this is helping them. Many US families paid no tax in 2020 due to tax credits, so they won't pay for the subsidies. I would definitely argue that there are simpler ways of helping low-income families to afford food though, if that is your goal... just lower their taxes further, or give them negative tax / UBI if they are already paying no taxes, rather than adding lots of complex gears to distort the economy to try and affect the same outcome. Or more food stamps if you don't like the idea of poor people spending their tax rebate dollars on non-food items that they prefer.
        AnthonyMouse 5y ago
        > I get the general point you're making, but in a progressive tax regime like the US, the poor (who benefit most from lower food prices) are paying proportionately less of their income as tax than the rich, so this is helping them. That's assuming that you would lower taxes uniformly instead of e.g. lowering them for the lowest tax bracket, which is in no way required.
        listenallyall 5y ago
        Income tax may be progressive (before deductions, of course). But payroll taxes definitely are not, and if you earn under 50, 60k or so, your payroll tax burden is going to be higher than income tax. Sales tax and gasoline taxes aren't progressive either.
  - ars 5y ago
    If 10% of them grow 90% of the food then it's completely consistent. Your misunderstanding is that a subsidy is not aimed at one US farm versus another, it's US farms versus foreign farms. The reason should be pretty obvious, without the subsidies they would be no US farms. And then in time of war there would be trouble. There are a huge number of US industries that exist only to make sure that US capacity will remain even in time of war. The same goal could be accomplished with tariffs, but then the price of food would be higher.
    - AnthonyMouse 5y ago
      > If 10% of them grow 90% of the food then it's completely consistent. The claim implied that the small farms get more of the subsidy, i.e. that they would be the ones wiped out without it. > The reason should be pretty obvious, without the subsidies they would be no US farms. Why would there be no US farms? Real estate in San Francisco is much more expensive than it is in Mexico City or the like, but farmland in Oklahoma is not uncompetitive with farmland outside of the US. If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses.
      - Talanes 5y ago
        >If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses. Politicians are crafty buggers who will repurpose anything they can to provide themselves with an edge, so that doesn't necessarily say anything about the theory behind the subsidies.
willvarfar 5y ago
Subsidies can be about ensuring crops are produced in-country instead of imported from cheaper countries. This is not the same as saying there is no market for the produce.
- simonh 5y ago
  Who cares where it’s produced? If farmers in a developing country can get off aid and earn a living, good for them. I do care how it’s produced.
  - azinman2 5y ago
    So many reasons why this is bad, but the most obvious reason right now is the supply chain crisis. It’s one thing if you can’t get a new car. It’s another if you can’t get new food.
  - PeterisP 5y ago
    There are two main aspects. One is long-term food security - even if global trade is mostly fine right now despite the current hiccups, there's no telling how it's going to be in a decade or two, and it's hard to ramp up production (due to lack of skillset, machinery and infrastructure) if you suddenly need it; so it makes all sense to pay some fraction of a percent of your GDP to ensure long-term strategic security of your food supply, especially if it looks like global tensions will eventually rise due to climate change. The second aspect is that even in the current circumstances we're seeing rapid urbanization and depopulation of the countryside, which is generally seen as a problem for many areas. In a "natural" regime without rural subsidies this would happen even faster.
  - AussieWog93 5y ago
    Relying on imports for food makes your country a sitting duck in times of war. All the enemy needs to do is blockade you and then you can be starved into submission.
  - ineedasername 5y ago
    Given the global logistics mess at the moment, I would think it's pretty obvious why the location of food production matters.
AngryData 5y ago
Subsidies are an alternative to having massive granary stores to supply an entire nation. If you don't guarantee overproduction, you will soon find yourself having shortages as crop yields can vary up to 30% each year. Without subsidies farms will optimize towards producing only barely enough to satisfy demand so they don't waste money on crops they can't sell, profit margins are usually 1% or less so there is very little room for overproduction. Once everyone is trying to thread that thin line, a single bad month of weather or a large wind or hail storm would turn you from a food exporting nation to a food importing nation overnight, and crop prices will swing wildly in either direction from it. Subsidies certainly are poorly applied and could use some serious work fixing them, but just getting rid of them outright is foolish.
vkou 5y ago
Given the choice between a free market plus bread riots every time there's a bad growing year, versus subsidies and no bread riots, I'm going to have to swing towards subsidies. As I understand it, during a bread riot, free marketeers get eaten first.

landemva 5y ago

Start with removing corn subsidy. There is so much corn ovrrproduction that it gets processed into a bit of sweet and blended in to packaged foods like ketchup. And blended into gasoline. Corn subsidy is massive economic distortion which leads to monocrop farming and lack of diversity.

etempleton 5y ago

The problem is that the whole farming industry is proped up on subsidies and if you ended it tomorrow almost every small to medium farm would fold and get bought by a large farm or sold to build a housing development.

AnthonyMouse 5y ago
That isn't consistent with 10% of the farms taking 90% of the subsidy. The subsidy argument is a scam anyway. It's a commodity market. The margins will be razor thin, the end. If you subsidize production, prices go down. It will eat the whole subsidy and leave the margins razor thin. The only way the subsidy helps you is if you get more of it than your competitors. Now who do you think that applies to, the family farm or the huge corporation with lots of lobbyists?
- klyrs 5y ago
  Lower food prices are good for the consumer. Exclusively focusing on the supply side is a mistake.
  - AnthonyMouse 5y ago
    The consumer is the one paying the taxes that fund the subsidies. That isn't helping them.
    - theptip 5y ago
      I get the general point you're making, but in a progressive tax regime like the US, the poor (who benefit most from lower food prices) are paying proportionately less of their income as tax than the rich, so this is helping them. Many US families paid no tax in 2020 due to tax credits, so they won't pay for the subsidies. I would definitely argue that there are simpler ways of helping low-income families to afford food though, if that is your goal... just lower their taxes further, or give them negative tax / UBI if they are already paying no taxes, rather than adding lots of complex gears to distort the economy to try and affect the same outcome. Or more food stamps if you don't like the idea of poor people spending their tax rebate dollars on non-food items that they prefer.
      - AnthonyMouse 5y ago
        > I get the general point you're making, but in a progressive tax regime like the US, the poor (who benefit most from lower food prices) are paying proportionately less of their income as tax than the rich, so this is helping them. That's assuming that you would lower taxes uniformly instead of e.g. lowering them for the lowest tax bracket, which is in no way required.
      - listenallyall 5y ago
        Income tax may be progressive (before deductions, of course). But payroll taxes definitely are not, and if you earn under 50, 60k or so, your payroll tax burden is going to be higher than income tax. Sales tax and gasoline taxes aren't progressive either.
- ars 5y ago
  If 10% of them grow 90% of the food then it's completely consistent. Your misunderstanding is that a subsidy is not aimed at one US farm versus another, it's US farms versus foreign farms. The reason should be pretty obvious, without the subsidies they would be no US farms. And then in time of war there would be trouble. There are a huge number of US industries that exist only to make sure that US capacity will remain even in time of war. The same goal could be accomplished with tariffs, but then the price of food would be higher.
  - AnthonyMouse 5y ago
    > If 10% of them grow 90% of the food then it's completely consistent. The claim implied that the small farms get more of the subsidy, i.e. that they would be the ones wiped out without it. > The reason should be pretty obvious, without the subsidies they would be no US farms. Why would there be no US farms? Real estate in San Francisco is much more expensive than it is in Mexico City or the like, but farmland in Oklahoma is not uncompetitive with farmland outside of the US. If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses.
    - Talanes 5y ago
      >If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses. Politicians are crafty buggers who will repurpose anything they can to provide themselves with an edge, so that doesn't necessarily say anything about the theory behind the subsidies.

willvarfar 5y ago

Subsidies can be about ensuring crops are produced in-country instead of imported from cheaper countries. This is not the same as saying there is no market for the produce.

simonh 5y ago
Who cares where it’s produced? If farmers in a developing country can get off aid and earn a living, good for them. I do care how it’s produced.
- azinman2 5y ago
  So many reasons why this is bad, but the most obvious reason right now is the supply chain crisis. It’s one thing if you can’t get a new car. It’s another if you can’t get new food.
- PeterisP 5y ago
  There are two main aspects. One is long-term food security - even if global trade is mostly fine right now despite the current hiccups, there's no telling how it's going to be in a decade or two, and it's hard to ramp up production (due to lack of skillset, machinery and infrastructure) if you suddenly need it; so it makes all sense to pay some fraction of a percent of your GDP to ensure long-term strategic security of your food supply, especially if it looks like global tensions will eventually rise due to climate change. The second aspect is that even in the current circumstances we're seeing rapid urbanization and depopulation of the countryside, which is generally seen as a problem for many areas. In a "natural" regime without rural subsidies this would happen even faster.
- AussieWog93 5y ago
  Relying on imports for food makes your country a sitting duck in times of war. All the enemy needs to do is blockade you and then you can be starved into submission.
- ineedasername 5y ago
  Given the global logistics mess at the moment, I would think it's pretty obvious why the location of food production matters.

AngryData 5y ago

Subsidies are an alternative to having massive granary stores to supply an entire nation. If you don't guarantee overproduction, you will soon find yourself having shortages as crop yields can vary up to 30% each year. Without subsidies farms will optimize towards producing only barely enough to satisfy demand so they don't waste money on crops they can't sell, profit margins are usually 1% or less so there is very little room for overproduction. Once everyone is trying to thread that thin line, a single bad month of weather or a large wind or hail storm would turn you from a food exporting nation to a food importing nation overnight, and crop prices will swing wildly in either direction from it. Subsidies certainly are poorly applied and could use some serious work fixing them, but just getting rid of them outright is foolish.

vkou 5y ago

Given the choice between a free market plus bread riots every time there's a bad growing year, versus subsidies and no bread riots, I'm going to have to swing towards subsidies. As I understand it, during a bread riot, free marketeers get eaten first.