6 ms·

This question may be naive, but why is the agricultural industry so subsidized? I understand the moral argument, but why, economically, does subsidizing farms r

This question may be naive, but why is the agricultural industry so subsidized? I understand the moral argument, but why, economically, does subsidizing farms result in a more efficient allocation of resources? I've heard that it's because farming as a business is full of unpredictability, but if that were the case, wouldn't there be a significant market for private insurance, and wouldn't the cost of that insurance be priced into the cost of food?

ggm 9mo ago
1. Farmers vote. And, Farmers live in states where the value-per-vote is high under both state-vote balancing, and gerrymander. Farming is politically useful. 2. Food is part of national security. It's sensible to keep the sector working. 3. Consumers hate variability in food pricing. So, general sentiment at the shop is not in favour of a strong linkage of cost of production to price, and under imports, there's almost always a source of cheaper product, at the socialised cost of losing domestic food security: Buy the cheese from Brazil, along with the beef, and let them buy soy beans from China and Australia to make the beef fatter. -And then, you can sell food for peanuts (sorry) but you won't like the longer term political consequences, if you do this. See 1) and 2).
- TimorousBestie 9mo ago
  I agree with you that the food supply chain is vital to (any country’s) national security, but I don’t think anyone with any real power takes this seriously.
- seanmcdirmid 9mo ago
  America has a surplus of soy beans, it’s China that needs to import from us or Brazil. The mess farmers are in now is that China has decided Brazil is a better source for them given the current trade war going on. China actually imports a lot of food from us, they seem to be the biggest consumer of chicken and pork feet, for example, which we don’t seem to have much use for. The current subsidies are because that export trade, which farmers have depended on and invested in, has basically disappeared now.
deleted 9mo ago
[deleted]
bawolff 9mo ago
Not everything is about economics. As the romans said - you need bread and circuses to stay in power. Keeping food cheap serves an important political function. It also serves an important security function to keep food domestic because if you are at war with where your food is grown, you are not going to win that war.
- ryuker16 9mo ago
  The romans got their grain cheap from egypt.
  - scheme271 9mo ago
    Egypt and the north african provinces were a part of the Roman empire fairly early on. They were also some of the wealthiest and most important provinces in the Empire.
- JumpCrisscross 9mo ago
  > As the romans said - you need bread and circuses to stay in power “One thing, however, that I will note that Juvenal does not say is that the panem et circenses are either how the Roman people lost their power or how they are held under the control of emperors. Instead first the people lose their votes (no longer ‘selling’ them), then give up their cares and as a result only wish for panem et circenses, no longer taking an interest in public affairs” [1]. [1] https://acoup.blog/2024/12/20/collections-on-bread-and-circuses/ https://acoup.blog/2024/12/20/collections-on-bread-and-circu...
- jollyllama 9mo ago
  It keeps the farmers politically subservient and makes them dependent on the continuation of the establishment. Otherwise, they could become a power bloc unto themselves that could act against the establishment.
nemomarx 9mo ago
Pricing anything into the cost of food would be political poison. Paying farmers to grow nothing is considered preferable to that
- Loughla 9mo ago
  It's not always about price. Paying farmers to grow nothing ensures they stay open if we need them to grow something. When I farmed we had set aside land paid for by the government. When there were predicted shortages on food in the future, we were allowed to farm that ground. You don't want farmers going under. It just takes one bad year that way and we're all fucked. I've never lived through a proper famine, but Grandpa talked about the dust bowl and depression. It sounded fucking awful.
  - bruce511 9mo ago
    This exactly. The fuss made about agricultural subsidies by non-farmers is misguided. Dropping subsidies doesn't make food cheaper, it makes it go away. Consumers are addicted to cheap food, so they pay taxes instead to make up the difference. Given a progressive tax system this actually is a very efficient approach to take. And overall, as a % of the total budget, these subsidies are insignificant. What is hurting farmers are reduced markets. USAid used to buy up a lot of surplus production (effectively a back-door subsidy), lots got exported to China et al. Given the economic antagonism towards the US (thanks to things like tarifs and insults) demand for US food exports either dropped naturally (eg Canada) or with reciprocal tarifs (eg China). Politicians like to say "we don't make things here anymore" ignoring the most fundamental production of all (farming). They destabilize foreign trade, and (if we look at more labor intensive crops) target farm workers for deportation. To be fair, agriculture states are also red states, so it's fair to say they voted for this.
    - IG_Semmelweiss 9mo ago
      The vast majority of countries have barriers preventing our highly efficient production from selling in their countries. Think Argentina and meats, Switzerland and all things cattle, EU and pretty much everything. Tariffs were one way to pry open those markets, but of course, the few agricultural products that were already selling , were affected in the retailiation . It will take some time for things to sort out.
mistrial9 9mo ago
because the energy states of inputs are so massively beyond ordinary bounds that distortions of unexpected kinds develop and persist in markets that otherwise appear to be straightforward? And, this is not new, but more energetic and more far-reaching than ever before. (more comments would have to chose a lens through which to postulate e.g. economic, legal, energy exchange, human nature ... etc.. ?)
bluGill 9mo ago
most of the subsidies are insurance not direct payments.
itake 9mo ago
You can't eat private insurance. The consequences of not being able to produce enough calories is severe. It is much better to overproduce and everyone gets fed than producing just enough and a climate event erases out 20% of our calorie production.
- mapt 9mo ago
  Your buffer here is meat. Cattle are tremendously inefficient consumers of grain. Eat your burgers in the bountiful years, then slaughter 75% of the herd in a hardship year, eat well for six months, then spend the next three, four, five years eating more grains while the herds recover. Ethanol is another one. That's the sensible way to do it. Somehow I doubt that it's the way we do it... But maybe the variability is coming from world trade and developing nations.
  - cperciva 9mo ago
    Cattle are inefficient consumers of grain, but highly efficient consumers of grass. Most land used for pasture can't effectively be used for anything else.
    - mapt 9mo ago
      We feed the average cow >10lbs of grain and also some alfalfa for every pound of meat we get out right now. Part of the cull would likely be shifting towards more grass fed production. Another part would simply be prioritizing chicken or pork for a while.
    - hombre_fatal 9mo ago
      This argument might sound good, but those cattle are fed crops, not just sunshine and the grass they walk on. Most crops grown in the US are used as animal feed. They are dependent on arable land that could be used to grow food for humans directly and much more efficiently. We just like the taste, so we accept the inefficiency.
      - 9mo ago
OgsyedIE 9mo ago
Some of them date back to 'westward expansion', where they were incentives to encourage settler immigration (e.g. Texas tax exemption from 1839). They've stayed on the books because nobody wants the trouble of suggesting their removal. More generally, however, it's a cost that is paid to support massive efficiency gains in other sectors. Like roads, aviation or the military. The freight system particularly would be unreliable if food prices floated according to only supply and demand, due to freights vulnerability to political upheavals, militias, etc.
lovich 9mo ago
… but why, economically, does subsidizing farms result in a more efficient allocation of resources? It’s doesn’t. Agricultural subsidies in the US, and I presume most states but I’m not as well read on their policies, are a mixture of realpolitik, war preparedness, and graft. If you are trying to square the circle, you can’t, because economic efficiency was not an input for the decisions on these subsidies.
hsuduebc2 9mo ago
At least in Europe they have inproportionally big lobby and food is considered a security issue. If it would not be subsidized it would probably be beaten by much more cheaper imports. You can see they ignored security issue with energy and it backfired pretty bad.
maxglute 9mo ago
> so subsidized Emphasis on "so", i.e. past obvious strategic rationale like food "security", there's reason to believe US ag has excessive subsidies. IMO answer is like every other "strategic" sector, farmland political economy has been captured by wealth (i.e. Bill Gates largest farmland owner). There's a fuckload of tax haven / loop holes tied to farmland that defers capital gains tax, estate/inheritance tax, property tax. Farmland is stable investment (because land) used to park wealth - it's an asset class, hence if held as asset, wealthy will double down / double dip to make sure it doesn't go idle, so they lobby all the "easy" crops to get massive subsidies and now something like 80% of subsidies goes to top 10% of recipients. US doesn't need to produce that much surplus corn/soy, but it's relatively easy to grow so big agri with capital sunk on those crops will lobby for continued subsidy of said crops, build up even more wasteful sectors like agri to energy (30-50% of corn goes to ethanol), and next thing you know a very inefficient ground water to subsidized agri commodity to gdp generator takes on it's own logic. TLDR, people good at at spread sheets rigged US agri like they rigged everything else.
silisili 9mo ago
You have to realize the vast majority of farmland is in states suceptable to floods, droughts, hurricanes, pests, frosts, etc. You can read stories of an off year where locusts were so bad they darkened the skies, for example. Compounding this, farm equipment is freaking expensive. It's not abnormal for a large farm to have hundreds of thousands in payments on machinery. In a good year they make hundreds of thousands. In a bad year they're on the hook for hundreds of thousands. It can take only one bad year to wreck a farm, which is why their suicide rate is so high. It's hard to imagine as a dev. But imagine you make 200k. Then next year, because of ransomware your boss installed, they tell you you owe 200k through no fault of your own. What would that do to your finances? Insurance is a parasite. I'm usually against subsidies, but for as something as important as food, it seems reasonable.
- elsjaako 9mo ago
  You've repeated the part that the parent poster claimed to understand ("I've heard that it's because farming as a business is full of unpredictability"), but skipped over the part they didn't understand ("wouldn't there be a significant market for private insurance?") with the statement that insurance is a parasite. Can you explain more why insurance is a parasite? Maybe a state-run insurance would be better? Subsidies (AFAIK, please correct me if I'm wrong) typically either get paid when farming supplies (tractors, seeds, fertilizer, land etc.) are bought or when the final product is sold. So they are paid when things go well for the farmer, but not (or less so) when the farmer has a bad year. I feel like the risk of bad years would be better managed by paying farmers when bad years happen. You know, like insurance.
  - silisili 9mo ago
    Fair! My comment was probably more dramatic than it needed to be, but I was trying to paint a picture as it kinda irks me when a lot people act like farmers are 'welfare queens' just taking money and living the good life. Not that OP did that, but it makes subsidies a 'dirty word.' Subsidies is a hugely loaded term that would take more than a few comments to even begin to cover, but yes, they do cover those things that you mentioned, but a lot more than that. Heck they even sometimes pay farmers not to grow things at all - we used to get a check not to grow tobacco. I was a child then, I don't remember all the details. Importantly, subsidies already include a federal crop insurance program that the government pays most of. That would cover most reasons for loss of crops. But there's also payments when say, you had a great year, but prices crashed through no fault of your own. And separate payments for say, farm animals catching disease and dying, or natural disasters. And separate payments for things like the messy situation COVID created. And a lot, lot more. My comment was mainly with the lens of 'get rid of subsidies and buy your own insurance', and well, we see how well that works with health insurance. "Oh sorry Mr Smith, those cicadas were underground when you bought the farm, pre-existing condition, denied."
Ekaros 9mo ago
Because agriculture is hard industry. The producer prices that is what the farmer gets are often laughable cut from final product. And this is due to farmers having little or no power in the system. Their products are made at certain time. And then they start declining in quality and finally rotting away. Most of the value ends up in other parts of the chain. You could increase prices relatively little and farmers would earn lot more. But no one else is willing to allow that to happen. As such directly subsidizing them is more efficient.
jillesvangurp 9mo ago
It's out of political fear. The irony is that it doesn't actually work all that well. Apparently, New Zealand abandoned all farm subsidies at some point and while the transition was abrupt and rough for farmers the farming sector recovered and is now performing much better. They abandoned it because they could no longer support it economically. They were producing lots of sheep that couldn't be sold. Now they produce much more meat with much less sheep. Farming subsidies aren't unique to the US. Here in the EU, farmers are giving away subsidized potatoes in Berlin currently. You can literally go to a collection point and pick up some free potatoes. They have so much over production that farmers literally don't know what to do with it. Nobody wants them. In the same way there's a history of subsidized beetroot farming for sugar production, too much wine in France, butter and milk surpluses, etc. This happens over and over again. In the US, the two main crops that are being subsidized are corn and soy beans. Corn syrup isn't exactly a thing that the rest of the world needs in their diets. It's a very uncommon ingredient outside the US. And commonly associated with obesity issues inside it. Soy beans are useful for export and for feeding animals. Exports are problematic (tariffs) currently and animals can also be fed with corn. And of course much corn is also used for ethanol production, which in turn is used to greenwash fuel usage in the ICE vehicles that burn it. Bear in mind that intensive corn farming is very CO2 intensive. The extensive mono cultures in the US are destroying the landscape and contributing to desertification. It's not great the environment or global warming. It doesn't make any economic sense to be subsidizing corn production at this scale. The problem here is that these are relatively low value crops that would not be produced in anywhere near the current volumes without subsidies. They aren't actually needed in these volumes either. Farmers mainly grow it because they get money to grow it. They would be growing more valuable things without subsidies. Or at least be diversifying what they do. The irony of this is that many farmers don't even like being that dependent on subsidies. The whole system perpetuates but there's no solid argument for it. Everyone could arguably do better without that. But it's easier/more convenient to not change the system. So politicians keep on "protecting" the farmers (i.e. their own seats).
- rgblambda 9mo ago
  >Here in the EU, farmers are giving away subsidized potatoes in Berlin currently. I looked into this story because it doesn't sound correct. It seems the potatoes were indeed sold but due to an unusually high yield this year, the trader decided not to pick them up so the farmer gave them away rather than try to find another buyer. And it was just one farm in Saxony. So this is not an EU or even a Germany wide issue.
mlrtime 9mo ago
The ability for a nation to feed itself is national security, period. Anyone who says otherwise is wishfully thinking or naive. The quickest way for a government to collapse is famine. IMO it is the role of the federal government to ensure that the US is not dependent on another country to feed its people. This is probably not popular here, but its a fact.
conductr 9mo ago
It’s similar to oil. Our people are very price sensitive to food and gas. It’s required in America at all economic classes fairly heavily in our society. So, politicians have decided to try to force prices low and keep hidden costs at the federal level. It allows for reallocation of wealth (a richer person’s taxes helps pay for a poorer person’s lunch and gas to the grocery store). Also, if taxes aren’t enough to cover it well we run our country at a huge deficit so it’s all a big illusion of sustainability that pretty much is destined to fail eventually anyway. I don’t think people or politicians really care about the future or what world their children will inherit as much as they act like they do here; or I’ve not been witness to that thought process in most of our systems.
adregan 9mo ago
> This question may be naive, but why is the agricultural industry so subsidized? I believe this is the same tune we hear in other industries: it’s the effect of the consolidation of companies which provide the inputs (seed and chemicals) leading to a lack of competition and the increase in prices on a captive consumer base. When farmers feel the crunch due to macro forces in the market (and tariffs), the government effectively acts as a backstop for the conglomerates providing the inputs. Think of the farmer’s hand as an open palm, the subsidy flows through it directly to the company to which they are indebted (“the money is in the ground” as I used to hear during a brief time in crop insurance). While these subsidies may have initially began with the quaint notion of protecting against scarcity (as many sibling replies seem to believe), the reality is that farmers are being squeezed just as the rest of us. Profits are way up while competition is way down.

ggm 9mo ago

1. Farmers vote. And, Farmers live in states where the value-per-vote is high under both state-vote balancing, and gerrymander. Farming is politically useful. 2. Food is part of national security. It's sensible to keep the sector working. 3. Consumers hate variability in food pricing. So, general sentiment at the shop is not in favour of a strong linkage of cost of production to price, and under imports, there's almost always a source of cheaper product, at the socialised cost of losing domestic food security: Buy the cheese from Brazil, along with the beef, and let them buy soy beans from China and Australia to make the beef fatter. -And then, you can sell food for peanuts (sorry) but you won't like the longer term political consequences, if you do this. See 1) and 2).

TimorousBestie 9mo ago
I agree with you that the food supply chain is vital to (any country’s) national security, but I don’t think anyone with any real power takes this seriously.
seanmcdirmid 9mo ago
America has a surplus of soy beans, it’s China that needs to import from us or Brazil. The mess farmers are in now is that China has decided Brazil is a better source for them given the current trade war going on. China actually imports a lot of food from us, they seem to be the biggest consumer of chicken and pork feet, for example, which we don’t seem to have much use for. The current subsidies are because that export trade, which farmers have depended on and invested in, has basically disappeared now.

deleted 9mo ago

[deleted]

bawolff 9mo ago

Not everything is about economics. As the romans said - you need bread and circuses to stay in power. Keeping food cheap serves an important political function. It also serves an important security function to keep food domestic because if you are at war with where your food is grown, you are not going to win that war.

ryuker16 9mo ago
The romans got their grain cheap from egypt.
- scheme271 9mo ago
  Egypt and the north african provinces were a part of the Roman empire fairly early on. They were also some of the wealthiest and most important provinces in the Empire.
JumpCrisscross 9mo ago
> As the romans said - you need bread and circuses to stay in power “One thing, however, that I will note that Juvenal does not say is that the panem et circenses are either how the Roman people lost their power or how they are held under the control of emperors. Instead first the people lose their votes (no longer ‘selling’ them), then give up their cares and as a result only wish for panem et circenses, no longer taking an interest in public affairs” [1]. [1] https://acoup.blog/2024/12/20/collections-on-bread-and-circuses/ https://acoup.blog/2024/12/20/collections-on-bread-and-circu...
jollyllama 9mo ago
It keeps the farmers politically subservient and makes them dependent on the continuation of the establishment. Otherwise, they could become a power bloc unto themselves that could act against the establishment.

nemomarx 9mo ago

Pricing anything into the cost of food would be political poison. Paying farmers to grow nothing is considered preferable to that

Loughla 9mo ago
It's not always about price. Paying farmers to grow nothing ensures they stay open if we need them to grow something. When I farmed we had set aside land paid for by the government. When there were predicted shortages on food in the future, we were allowed to farm that ground. You don't want farmers going under. It just takes one bad year that way and we're all fucked. I've never lived through a proper famine, but Grandpa talked about the dust bowl and depression. It sounded fucking awful.
- bruce511 9mo ago
  This exactly. The fuss made about agricultural subsidies by non-farmers is misguided. Dropping subsidies doesn't make food cheaper, it makes it go away. Consumers are addicted to cheap food, so they pay taxes instead to make up the difference. Given a progressive tax system this actually is a very efficient approach to take. And overall, as a % of the total budget, these subsidies are insignificant. What is hurting farmers are reduced markets. USAid used to buy up a lot of surplus production (effectively a back-door subsidy), lots got exported to China et al. Given the economic antagonism towards the US (thanks to things like tarifs and insults) demand for US food exports either dropped naturally (eg Canada) or with reciprocal tarifs (eg China). Politicians like to say "we don't make things here anymore" ignoring the most fundamental production of all (farming). They destabilize foreign trade, and (if we look at more labor intensive crops) target farm workers for deportation. To be fair, agriculture states are also red states, so it's fair to say they voted for this.
  - IG_Semmelweiss 9mo ago
    The vast majority of countries have barriers preventing our highly efficient production from selling in their countries. Think Argentina and meats, Switzerland and all things cattle, EU and pretty much everything. Tariffs were one way to pry open those markets, but of course, the few agricultural products that were already selling , were affected in the retailiation . It will take some time for things to sort out.

mistrial9 9mo ago

because the energy states of inputs are so massively beyond ordinary bounds that distortions of unexpected kinds develop and persist in markets that otherwise appear to be straightforward? And, this is not new, but more energetic and more far-reaching than ever before. (more comments would have to chose a lens through which to postulate e.g. economic, legal, energy exchange, human nature ... etc.. ?)

bluGill 9mo ago

most of the subsidies are insurance not direct payments.

itake 9mo ago

You can't eat private insurance. The consequences of not being able to produce enough calories is severe. It is much better to overproduce and everyone gets fed than producing just enough and a climate event erases out 20% of our calorie production.

mapt 9mo ago
Your buffer here is meat. Cattle are tremendously inefficient consumers of grain. Eat your burgers in the bountiful years, then slaughter 75% of the herd in a hardship year, eat well for six months, then spend the next three, four, five years eating more grains while the herds recover. Ethanol is another one. That's the sensible way to do it. Somehow I doubt that it's the way we do it... But maybe the variability is coming from world trade and developing nations.
- cperciva 9mo ago
  Cattle are inefficient consumers of grain, but highly efficient consumers of grass. Most land used for pasture can't effectively be used for anything else.
  - mapt 9mo ago
    We feed the average cow >10lbs of grain and also some alfalfa for every pound of meat we get out right now. Part of the cull would likely be shifting towards more grass fed production. Another part would simply be prioritizing chicken or pork for a while.
  - hombre_fatal 9mo ago
    This argument might sound good, but those cattle are fed crops, not just sunshine and the grass they walk on. Most crops grown in the US are used as animal feed. They are dependent on arable land that could be used to grow food for humans directly and much more efficiently. We just like the taste, so we accept the inefficiency.
    - 9mo ago

OgsyedIE 9mo ago

Some of them date back to 'westward expansion', where they were incentives to encourage settler immigration (e.g. Texas tax exemption from 1839). They've stayed on the books because nobody wants the trouble of suggesting their removal. More generally, however, it's a cost that is paid to support massive efficiency gains in other sectors. Like roads, aviation or the military. The freight system particularly would be unreliable if food prices floated according to only supply and demand, due to freights vulnerability to political upheavals, militias, etc.

lovich 9mo ago

… but why, economically, does subsidizing farms result in a more efficient allocation of resources? It’s doesn’t. Agricultural subsidies in the US, and I presume most states but I’m not as well read on their policies, are a mixture of realpolitik, war preparedness, and graft. If you are trying to square the circle, you can’t, because economic efficiency was not an input for the decisions on these subsidies.

hsuduebc2 9mo ago

At least in Europe they have inproportionally big lobby and food is considered a security issue. If it would not be subsidized it would probably be beaten by much more cheaper imports. You can see they ignored security issue with energy and it backfired pretty bad.

maxglute 9mo ago

> so subsidized Emphasis on "so", i.e. past obvious strategic rationale like food "security", there's reason to believe US ag has excessive subsidies. IMO answer is like every other "strategic" sector, farmland political economy has been captured by wealth (i.e. Bill Gates largest farmland owner). There's a fuckload of tax haven / loop holes tied to farmland that defers capital gains tax, estate/inheritance tax, property tax. Farmland is stable investment (because land) used to park wealth - it's an asset class, hence if held as asset, wealthy will double down / double dip to make sure it doesn't go idle, so they lobby all the "easy" crops to get massive subsidies and now something like 80% of subsidies goes to top 10% of recipients. US doesn't need to produce that much surplus corn/soy, but it's relatively easy to grow so big agri with capital sunk on those crops will lobby for continued subsidy of said crops, build up even more wasteful sectors like agri to energy (30-50% of corn goes to ethanol), and next thing you know a very inefficient ground water to subsidized agri commodity to gdp generator takes on it's own logic. TLDR, people good at at spread sheets rigged US agri like they rigged everything else.

silisili 9mo ago

You have to realize the vast majority of farmland is in states suceptable to floods, droughts, hurricanes, pests, frosts, etc. You can read stories of an off year where locusts were so bad they darkened the skies, for example. Compounding this, farm equipment is freaking expensive. It's not abnormal for a large farm to have hundreds of thousands in payments on machinery. In a good year they make hundreds of thousands. In a bad year they're on the hook for hundreds of thousands. It can take only one bad year to wreck a farm, which is why their suicide rate is so high. It's hard to imagine as a dev. But imagine you make 200k. Then next year, because of ransomware your boss installed, they tell you you owe 200k through no fault of your own. What would that do to your finances? Insurance is a parasite. I'm usually against subsidies, but for as something as important as food, it seems reasonable.

elsjaako 9mo ago
You've repeated the part that the parent poster claimed to understand ("I've heard that it's because farming as a business is full of unpredictability"), but skipped over the part they didn't understand ("wouldn't there be a significant market for private insurance?") with the statement that insurance is a parasite. Can you explain more why insurance is a parasite? Maybe a state-run insurance would be better? Subsidies (AFAIK, please correct me if I'm wrong) typically either get paid when farming supplies (tractors, seeds, fertilizer, land etc.) are bought or when the final product is sold. So they are paid when things go well for the farmer, but not (or less so) when the farmer has a bad year. I feel like the risk of bad years would be better managed by paying farmers when bad years happen. You know, like insurance.
- silisili 9mo ago
  Fair! My comment was probably more dramatic than it needed to be, but I was trying to paint a picture as it kinda irks me when a lot people act like farmers are 'welfare queens' just taking money and living the good life. Not that OP did that, but it makes subsidies a 'dirty word.' Subsidies is a hugely loaded term that would take more than a few comments to even begin to cover, but yes, they do cover those things that you mentioned, but a lot more than that. Heck they even sometimes pay farmers not to grow things at all - we used to get a check not to grow tobacco. I was a child then, I don't remember all the details. Importantly, subsidies already include a federal crop insurance program that the government pays most of. That would cover most reasons for loss of crops. But there's also payments when say, you had a great year, but prices crashed through no fault of your own. And separate payments for say, farm animals catching disease and dying, or natural disasters. And separate payments for things like the messy situation COVID created. And a lot, lot more. My comment was mainly with the lens of 'get rid of subsidies and buy your own insurance', and well, we see how well that works with health insurance. "Oh sorry Mr Smith, those cicadas were underground when you bought the farm, pre-existing condition, denied."

Ekaros 9mo ago

Because agriculture is hard industry. The producer prices that is what the farmer gets are often laughable cut from final product. And this is due to farmers having little or no power in the system. Their products are made at certain time. And then they start declining in quality and finally rotting away. Most of the value ends up in other parts of the chain. You could increase prices relatively little and farmers would earn lot more. But no one else is willing to allow that to happen. As such directly subsidizing them is more efficient.

jillesvangurp 9mo ago

It's out of political fear. The irony is that it doesn't actually work all that well. Apparently, New Zealand abandoned all farm subsidies at some point and while the transition was abrupt and rough for farmers the farming sector recovered and is now performing much better. They abandoned it because they could no longer support it economically. They were producing lots of sheep that couldn't be sold. Now they produce much more meat with much less sheep. Farming subsidies aren't unique to the US. Here in the EU, farmers are giving away subsidized potatoes in Berlin currently. You can literally go to a collection point and pick up some free potatoes. They have so much over production that farmers literally don't know what to do with it. Nobody wants them. In the same way there's a history of subsidized beetroot farming for sugar production, too much wine in France, butter and milk surpluses, etc. This happens over and over again. In the US, the two main crops that are being subsidized are corn and soy beans. Corn syrup isn't exactly a thing that the rest of the world needs in their diets. It's a very uncommon ingredient outside the US. And commonly associated with obesity issues inside it. Soy beans are useful for export and for feeding animals. Exports are problematic (tariffs) currently and animals can also be fed with corn. And of course much corn is also used for ethanol production, which in turn is used to greenwash fuel usage in the ICE vehicles that burn it. Bear in mind that intensive corn farming is very CO2 intensive. The extensive mono cultures in the US are destroying the landscape and contributing to desertification. It's not great the environment or global warming. It doesn't make any economic sense to be subsidizing corn production at this scale. The problem here is that these are relatively low value crops that would not be produced in anywhere near the current volumes without subsidies. They aren't actually needed in these volumes either. Farmers mainly grow it because they get money to grow it. They would be growing more valuable things without subsidies. Or at least be diversifying what they do. The irony of this is that many farmers don't even like being that dependent on subsidies. The whole system perpetuates but there's no solid argument for it. Everyone could arguably do better without that. But it's easier/more convenient to not change the system. So politicians keep on "protecting" the farmers (i.e. their own seats).

rgblambda 9mo ago
>Here in the EU, farmers are giving away subsidized potatoes in Berlin currently. I looked into this story because it doesn't sound correct. It seems the potatoes were indeed sold but due to an unusually high yield this year, the trader decided not to pick them up so the farmer gave them away rather than try to find another buyer. And it was just one farm in Saxony. So this is not an EU or even a Germany wide issue.

mlrtime 9mo ago

The ability for a nation to feed itself is national security, period. Anyone who says otherwise is wishfully thinking or naive. The quickest way for a government to collapse is famine. IMO it is the role of the federal government to ensure that the US is not dependent on another country to feed its people. This is probably not popular here, but its a fact.

conductr 9mo ago

It’s similar to oil. Our people are very price sensitive to food and gas. It’s required in America at all economic classes fairly heavily in our society. So, politicians have decided to try to force prices low and keep hidden costs at the federal level. It allows for reallocation of wealth (a richer person’s taxes helps pay for a poorer person’s lunch and gas to the grocery store). Also, if taxes aren’t enough to cover it well we run our country at a huge deficit so it’s all a big illusion of sustainability that pretty much is destined to fail eventually anyway. I don’t think people or politicians really care about the future or what world their children will inherit as much as they act like they do here; or I’ve not been witness to that thought process in most of our systems.

adregan 9mo ago

> This question may be naive, but why is the agricultural industry so subsidized? I believe this is the same tune we hear in other industries: it’s the effect of the consolidation of companies which provide the inputs (seed and chemicals) leading to a lack of competition and the increase in prices on a captive consumer base. When farmers feel the crunch due to macro forces in the market (and tariffs), the government effectively acts as a backstop for the conglomerates providing the inputs. Think of the farmer’s hand as an open palm, the subsidy flows through it directly to the company to which they are indebted (“the money is in the ground” as I used to hear during a brief time in crop insurance). While these subsidies may have initially began with the quaint notion of protecting against scarcity (as many sibling replies seem to believe), the reality is that farmers are being squeezed just as the rest of us. Profits are way up while competition is way down.