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Source link: http://blog.mises.org/13649/powell-versus-farm-subsidies/

Powell Versus Farm Subsidies

August 21, 2010 by

Here’s Suffolk University economist Benjamin Powell on farm subsidies and their effect on poor countries (like recently-decimated-by-flooding Pakistan. A question: is low volatility in food prices explained by protectionism and subsidies, or is it explained by prosperity? My hypothesis is that the US and Europe have stable food supplies and low price volatility because (a) we’re extremely wealthy and (b) we have extremely well-developed financial markets. I would also predict that eliminating all agricultural protectionism in the US and Europe tomorrow would dramatically raise the incomes of and lower the risks facing farmers in poor countries. HT: Will Luther.


{ 50 comments }

DD5 August 21, 2010 at 6:26 pm

Powell is just brilliant here. To manage to get across so much and so clear in just 2 minutes of live sound-bytes is amazing.

EC August 21, 2010 at 6:56 pm

Awesome to see Ben on tv.. I’m starting my economics phd at Suffolk this fall, and the opportunity to learn from and work with Ben was a big factor in my decision.

I especially liked when he used the comparison of building greenhouses in Alaska.. I just wish he would’ve pointed out at the end that the reason the pro-subsidies guy was afraid of free markets is because he knows that if foreign farmers were allowed to compete on an even playing field, the inefficient American farmers would lose their customer base.

Zach Bibeault August 21, 2010 at 7:06 pm

Guy contra Powell: “you want to let the free market rule” (paraphrased)

^Yes, I would like to see consumers’ desires favored over those of welfare queens on unproductive farms.

These people can never think outside of collectivist aggregates — I think that’s why people like the guy contra Powell think of a free market as “ruling” as opposed to it actually being a matrix of voluntary individual exchanges.

Franklin August 22, 2010 at 9:23 am

This is a perceptive catch, Zach. Note always in political circles the personification, usually pejorative, of the noun “market.”
We are comfortable, as human beings and in our daily conversation, to casually attribute human qualities to animals, things, nature, and especially groups (“General Motors has invented….”; “The White House said….”; and the worst of all, “The United States has decided to…”) A market cannot rule anymore than a piano recital.
These “collectivist aggregates” (very nicely put) immediately and deliberately corner libertarians into a defensive mode. Turning the argument on its head, illustrating that every action is a unique action among specific individual, thinking, players was the correct response.
And, heh, I think there might even be some scholarship around this human action thing.

Nicolas Cachanosky August 21, 2010 at 7:18 pm

Nice Ben!
No doubt the Coke example would show up as soon as the word “sugar” came up! :-p

Bruce Koerber August 21, 2010 at 9:06 pm

U.S. Agricultural Policies Are Corrupt And Unethical.

At the end it was identified by the union boss that the issue was free market vs. an interventionist alternative. That was a good end result for this short interview.

If indeed this debate continues in a way that befits a free press, the union boss will not be able to overcome the empirical evidence of statistical proof of the corruption of corporatism nor the ethical depravity of policies (with its worldwide reprecussions) that violate free trade.

J Cortez August 22, 2010 at 1:23 am

I have a feeling that this Ben Powell is a star.

Not only was this little debate great and informative (which almost never happens on CNBC,) but I recently came across a very interesting FEE talk he did on the largely state-less society of Somalia.

I’ve got to look up more of his stuff.

newson August 22, 2010 at 8:31 pm
michael August 23, 2010 at 9:42 am

Fresh power will immediately step into any political vacuum. And it doesn’t look like any free market I ever saw.

http://www.newsobserver.com/2010/08/21/639078/somalia-rebels-looking-increasingly.html

Dave Albin August 24, 2010 at 12:27 am

The Islamic militant group looks a lot like a central government – taking away civil rights, forcing sons to enter a “draft” for military service, etc. The problem there, according to your link, is still too much centralized authority in the hands of a small group of people – like our governments in the USA!

michael August 24, 2010 at 7:30 am

It’s not a government. It’s what happens when you don’t have a government.

Dave Albin August 24, 2010 at 1:02 pm

A small, centralized group of “leaders” who spread around fear and rob people – call it what you like (religious militia, government, etc.), the results are always bad for those not in charge.

J. Murray August 24, 2010 at 1:10 pm

It is a government. Government is merely the organization that enjoys monopoly of force.

newson August 24, 2010 at 1:47 am

great, more taliban to bomb into the 21st century.

Old Mexican August 22, 2010 at 10:23 am

The person debating Powell never explains why subsidies are needed, past this obviously bogus excuse that they keep prices “stable.”

Slim934 August 22, 2010 at 10:57 pm

Of course he wants “stable prices”. Stable prices basically mean that the protected producers do not have to do any sort of real competition in their marketplace. Seriously: what business does NOT want to have totally stable prices for what he sells?

This is precisely what they want. Imagine if Intel in the 80s were able to get huge federal subsidies to “stabilize” the price of microprocessors. I’m sure we would all have a nice stable oversupply of consumer electronics. The problem would be that the most advanced thing they would likely have come up with at this point (assuming huge subsidization) would be about as powerful as our current wristwatches.

james b. longacre August 24, 2010 at 3:38 am

Seriously: what business does NOT want to have totally stable prices for what he sells?

airline seats can fluctuate right?? often hundreds of dollars.

Lemmywinks August 22, 2010 at 10:29 am

This was great. Speaking of which, here’s a database that tries to compile all of the United State’s agriculture subsidies. It’s pretty depressing.

http://farm.ewg.org/

Ryan August 22, 2010 at 11:04 am

I think the best thinker in this clip is the anchorwoman. She made the clearest point. Powell seemed to focus on the knee-jerk emotional responses, and he also seemed a little too irate.

Bruce Koerber August 22, 2010 at 11:12 am

I don’t know how much of a rein MSM has on her but, unrestrained, she seems interested in more investigative reporting with no reason to discount the free market as a viable alternative.

Bobby Brager August 22, 2010 at 11:46 am

Powell was fine, I thought. But, yeah, Erin Burnett can be pretty good.

“At Williams College she studied political science and economics, graduating with a Bachelor of Arts in Political Economy. As an undergraduate, she played lacrosse(!) and field hockey for the College.”

Obviously, being big on the Mises Institute, I’m predisposed to suspect self-education is the catalyst for clear economic reasoning and not necessarily the guiding hand of some authority figure. But I can’t help but wonder who’s on or has been on the faculty over at Williams College.

It would have been nice if there was time left in the segment to address the final point that Roger Johnson had tried to make, in regards to his cherished “price stability”, going so far to support an export embargo Russia slapped on its agricultural product. The reasoning being that the authorities in Russia feared “their own people going hungry because they had a drought”. It’s a convenient cover and it’s partly understandable within the Russian context because of that country’s long historical association with famine. But let’s carry this argument to its furthest. What if forcibly reserving all of their excess production beyond their domestic market is insufficient to cover the shortfalls in production attributable to the drought? Obviously, you’d better hope that other agricultural countries haven’t followed your country’s example and reciprocated with export embargoes or high tariff walls of their own, in which case you are guaranteeing that people go hungry. This, of course, says nothing of the vast unseen, such as what isn’t produced or saved because less capital was available because of the fixing scheme to sustain high prices, but that’s besides the point.

Mises had, of course, plenty to say about the perils in store for the nation committed to autarkist designs.

Slim934 August 22, 2010 at 11:02 pm

The entire notion of stable prices is bogus even for a cover. It probably sounds soothing to someone who does not know any better, but the argument loses all force when you understand what a price is and what all it does.

Why would you want artificially stable prices? Prices are INFORMATIVE. They give you critical information about a particular market situation at some point in time. If there is a famine in russia and prices for wheat skyrocket, this is A GOOD THING. It informs entrepreneurs worldwide that there is a profit opportunity to be made by shifting wheat from its current place to Russia. Letting the price system work would allow the marketplace (individuals seeking their own interests) to bring the crisis to an end FASTER.

I’m not surprised he is arguing for stable prices. Stable prices are precisely what huge incumbent businesses want. They certainly do not want to really compete with anyone.

Bruce Koerber August 22, 2010 at 11:59 am

Uncontested, the union boss spoke and made statements that were those of a socialist thinker even to the point of recommending that the U.S. follow the example of even more totalitarian regimes. Can MSM release itself from its socialistic tendencies enough to allow investigative reporting?

Franklin August 22, 2010 at 12:50 pm

Would be nice, but no time for that.
The name of the game is theater, and the actors (though I like Ben) get a nice mini feature to throw on their ever-widening resume.
The producers invite the “perceived” leftist and rightist, ring the bell for one round, skip any victory announcement, say “thank you”, and then move to the next bout with the next pugilists.

Bruce Koerber August 22, 2010 at 1:10 pm

Dear Franklin,
Chances are very good that you are correct.

J Cuttance August 22, 2010 at 7:56 pm

The National Farmers’ Union is not about farming crops or stock so much as milking the public tit.
If its president Roger Johnson can’t make a profit out of his farming ops without graft then he should clear off and free his land up for someone who can, i.e. a REAL farmer.

Modorok August 23, 2010 at 7:32 am

Basically im going long with the austrian view that subsidies are bad for the wealth of everyone.

I agree that it doesn’t make any sense to plant rise in the desert, when importing those goods cost the half.

But I must confess, that there might be some reason for governmental subsidies which are vital for the people. As we here in Europe are less productive in producing milk, corn, potatoes and so on, because of small cultivable land, our farmers are dependent from those relative high subsidies. I know of every negativ aspect of those subsidies.

In my view I’d rather pay higher prices for corn and some !!essential!! agricultural products, than to be dependent on political disposal. If there were no subsidies in Europe, most farmers would fade away here. Products would be much cheaper and wealth would rise, thats undenieably but there are just as well some negative aspects, which concern me more:

- Most european countries would be dependent on the friendliness of those nations, which produce that aliments. What would happen in the case of war, terrorism, civil war or something else, that could destroy the support lines? I think it is in everyones interest to be in a small part undependent and that in every country there should be a minimum of agricultural production to feed the people in rainy days. Subsidies for most fruits or even rice or other “luxury foods” in most countries are certainly unneccery, but If the free market would destroy the local production of food of a souveign country, the government should give incentives. I am only talking about the necessery basic supply with food, that the people don’t have to starve in war times.

The sovereignity of a country, in such a vital aspect of food production, is even in a free nation the only aspect of governmental intervention, I would and will support.

Best greets from Europe

Modorok

EC August 23, 2010 at 10:09 am

Modorok,

You justify subsidies because you think it is important to keep local farmers in business, even if the costs are higher. Well if that’s true, then the subsidies aren’t necessary because you would be willing to pay a higher price *voluntarily* to keep local farmers in business. Many others, however, they would prefer to buy cheaper goods from foreign farmers. Who are you to say that their preferences are wrong?

You also worry about the outbreak of war, but if two nations benefit from economic exchange with each other then that will reduce the incentive for those nations to go to war with each other. Still, if war does break out, there are plenty of other farming countries the European nation could buy it’s food from, or it could expand it’s own farming efforts in response.

Modorok August 25, 2010 at 11:53 am

Not all local farmers – only those who produce certain aliments to a certain degree, e.g. that the inland production of corn is half of what is needed to feed the population. And only on basic food like potatoes and corn. No subsidies for everthing else. In war times it would be possible within a relatively short time to double the output so that the people won’t have to starve. Imagine that the USA, most of the american continent would have produced no more corn or food before WWII and instead it would have imported everthing from Simbabwe and Pakistan because it would be cheaper. With the start of WWII the supply lines would be interrupted from one day to the other. You can’t build up an agricultural economy to feed 250 Million within a week, not in a month or in one year. Your population would have died of starvation. And America, their power, economy would have vanished. For those hundreds of millions that have died because of US-Imperialism within the past 65 years, this would have propably been better, right???

Unthinkable example in the case of such a big, multicultural country like the USA? Maybe – but the most of the countries in the world are not that big. My country has been attacked twice the last century. My family has lost their home and we are just about to loose it again, because of facist regimes in whole europe. Millions of my people had to starve because of interrupted supply lines. Or what about those dead jews, who had to die of hunger because the Allies destroyed the supply lines,hmmm?

Is it that worth paying 30% less for corn or potatoes??

Yes I know – If we were all equal – and the world would have totally free trade – no more war would arise in the world and it would be paradise on earth. Yeah… ok – the day all men on this planet are equal – i am going long with your opinion for tottally stop on subsidies. But until that day I am trying best not to starve because of some people who won’t see that reality is different and equally of men is communist idiocy.

Powell is right with his opinion on sugar, fruits and rice – no doubt.

But reality is no game – and me and my people – we don’t care about 30 Percent on essentiel food to secure against starvation. Yes – I am no Arnacho-Capitalist – but I am an Austrian seeing the world as it is.

Without subsidies – most agriculture economie in Europe would vanish. Explain me where to get food for 350 Millionen within one year in the case of war or broken supply lines??

The totally free market is an ideal and the goal is to come it nearest as possible, but every rule has it exception – and this is one.

Best greets from communist Europe

Modorok

Kermit August 23, 2010 at 7:35 pm

What is the purpose of farm subsidies and who benefits? At least when it comes to corn, I would say the consumer benefits more than the farmer. It does stabilize prices quite a bit, because it has guaranteed (over) production. This has kept corn prices cheap. IMHO, the consumer has gotten quite a bang for the buck here. Does it help farmers? Probably not so much, as all of the inputs he buys rise to consume any of the increased income he might receive. Picture the farmer looking at an acre of corn about ready for harvest. Beside him you have the landlord, saying that he wants a share of any extra income, since the farmer cannot farm without land. Then there is the seed company saying that the farmer cannot afford to plant anything but the most economical seeds, which usually mean the latest technology with the best yield. There is also the chemical company saying that they want a share. And John Deere and CaseIH. And, of course, the insurance companies, since the risk is such today that the farmer cannot afford to farm without crop insurance. How much leverage does the farmer have here? Answer – not much. Who has the inputs that are most valuable? Probably the landowner and especially the seed companies like Monsanto. And Monsanto is probably using the extra money to further R&D so that it can stay on top and demand more of the extra income from every acre of corn.

It isn’t a simple matter. I am a farmer and a cattle feeder. I maintain that I could have made much more money over the years if the government had not been involved in making sure I didn’t lose money. In fact, I know that if the government had been involved in cattle feeding like they have been in growing corn, I would never have made the living I have made. I made money feeding cattle because the government was not protecting me against risk. If you take away the risk, you also take away the profit potential. So, for you non-farmers, please differentiate between the farmer and the landowner, and realize that the farmer has little leverage when it comes to demanding any increased income from farming that acre of corn. Short term, yes, but not longer term.

michael August 23, 2010 at 8:18 pm

Farm subsidies give the large farmer and advantage over the smaller one. Farm bills are written by lobbyists who serve the highest bidder for their services: access to the legislative process. Therefore it’s not surprising that the bills they write and induce Congress members to sign favor the interests of those who pay the best.

Look at the spread among those who benefit, here:
http://farm.ewg.org/progdetail.php?fips=00000&progcode=total&page=conc

The other way in which subsidies favor the large US farmer is they keep the playing field from becoming level in foreign markets. Heavily subsidised US cotton growers, for example, can price their cotton below the production costs of a Malian cotton farmer with a hoe and mattock. And drive him out of business.

This kind of thing is a major factor in the reasons why some nations are inherently poor while others are inherently rich. We can afford to drive the “developing” world right into the ground. Haitian rice growers were another group of farmers crushed by subsidies.

And it’s the reason we have so many undocumented Mexican laborers in this country. NAFTA rules took away their jobs when they were small, independent corn, wheat and chicken producers in Mexico. So they came here in search of the work they lost.

Kermit August 24, 2010 at 12:03 pm

Yes, subsidies can give the large farmer an advantage, especially when it is subsidized crop insurance, IMHO. Take that away, and quite possibly large farmers would not be able to talk their bankers into loaning them so much money.

So, however, you solution is to eliminate subsidies and get prices higher so the Malian cotton farmer can make a profit? Just wondering – do you have no problem getting grain prices higher then also? (Note – I would like more risk in farming, as I am confident that I could take advantage of the opportunities that the extra risk would generate. But, what would the results be of higher grain prices worldwide?)

Again, IMHO, the argument not being made is that the market always adjusts. Today it has adjusted by creating demand to absorb all the grain produced. Keep something cheap enough long enough, and you find ways to make profits using it. Any serious hiccup in grain production today can turn into a disaster, since the subsidies have pushed us into full production and demand has come up to consume it all.

Note – just the thoughts of a poor dirt farmer here.

michael August 24, 2010 at 12:41 pm

No need to be humble… the dirt farmer usually knows more than the city feller about these things. I have a few friends who are dirt farmers as well… and they say that direct crop subsidies are just pass-throughs so farmers can afford to pay for the kinds of inputs that are integral to modern, energy-intensive farming. The money barely stops in the farmer’s hands before it is out the door again, to find a home with the provider of seeds, fertilizers, herbicides and farm equipment. It amounts to a government-sponsored cash recycling program.

Without these monster subsidies, into the tens of billions annually, my suspicion is that large-scale farming as we’ve come to practise it would be impossible. Today, Farmer Bill often spends half his day at his computer, looking over his spreadsheets and the futures market. It’s not seeds he has in the ground so much as it is hundreds of thousands of dollars. Without careful subsidy, matched to the price of oil-based products, his way of life would become untenable.

If this picture sounds inaccurate to you, please sharpen my perceptions. My friends are mostly into market gardening, and so practise a very different brand of agriculture. That is, they use no chemicals and come in for lunch with muddy boots. They’re very far from qualifying for any subsidy at all.

Kermit August 25, 2010 at 10:01 am

Yes, and the question is – are these government payments beneficial, and if so, beneficial mostly for whom?

Farmer Bill, if he is like me, spends a lot of time thinking about what direction he should go and what and when he should sell. But, during planting and harvest especially (but not only then, of course), he works longer hours than non-farmers might realize. The thing to keep in mind about farm payments is that to receive them, you must grow the bushels of grain. So, they do not interfere with motivation like many other government programs do. In fact, they make for more motivation, IMHO. In a couple of weeks or so, I’ll be out in the combine before daylight and stay until well into the night many times. I look across into the distance in the darkness and I see many lights moving slowly back and forth across the fields. I kind of marvel at how well the system works. Everyone is responsible for their own well-being, and the motivation is obvious. It’s not a really bad system, again IMHO.

Now, what does the current system select for? Without any government intervention, I would say that the most important point would be whether or not a farmer would be good at deciding when to sell the crop. Second would be his competency as a farmer. The way it currently is, I believe that competency as a farmer, which includes competency as a businessman, is at least as important as being gifted at knowing when to sell. From the viewpoint of society, I’m not sure this is all bad. I am sure that it is this way in cattle feeding, where the government does not intervene if I make poor decisions. The reason I have been successful is because I have been right about when to buy and when to sell, and that has been much more important than my being competent in the actual feeding of the cattle. I don’t know if this carries over fully to grain farming, but I suspect it does at least somewhat.

Michael A. Clem August 24, 2010 at 2:05 pm

One thing you’re forgetting – while the actual prices of subsidized goods may be lower, the difference is made up by taxpayers, so taxpayers who are consumers are, in fact, paying the higher price, and taxpayers who are not consumers are just SOL. So that “good deal” on corn isn’t really as good as it looks, especially once you factor in what the resources that went into growing corn could have been used for instead to satisfy consumer demand.
The problem isn’t just about the prices, but about interfering with consumers’ wishes, and creating perverse incentives and unintended consequences in the market.

michael August 25, 2010 at 7:42 am

I agree wholeheartedly, Clem. Subsidies peg food prices artificially high and mask the true prices from consumers’ perceptions. And not just food. Auto fuel is artificially high due to corn ethanol policies. Blame Iowa for being the first caucus state. Blame the entire upper Midwest for carrying swing votes in every election.

Corn ethanol feeds high corn prices. It causes eutrophication (dead zones) in the Gulf of Mexico. It costs more to produce than can be recovered in usable therms, by many analyses. It results in a costlier, less efficient fuel than just straight gasoline would. It depletes what used to be good topsoil. And the hidden subsidy costs are truly horrendous. It’s a classic case of crazy government controls wrecking any semblance of a normal market.

No one says it better than Cato:
http://www.cato.org/pub_display.php?pub_id=7308
http://www.cato.org/pubs/pas/pa-241.html

Read both articles… and be appalled. It’s not that I was ignoring this aspect of crop subsidies; it just wasn’t the subject I was addressing in my previous comments.

Kermit August 25, 2010 at 9:46 am

You’re right. “Politics is the art of taking money from one group and giving it to another.” (I don’t know where that quote came from, but it has stuck in my mind.)

I would argue, however, that currently direct subsidies to grain farmers is not a large amount. (Less than 3% of cash sales for me for the last three years.) And, over the years, subsidies have pretty much done what they were intended to do – stimulate full production. And that has generated a lot of tax revenue from the added economic activity, along with advances in seed genetics that might not have happened as quickly without the extra stimulus to maintain full production. Of course, you might not like the direction seed genetics has taken either. (g)

But I do agree with your post.

Dave Albin August 24, 2010 at 12:31 am

You are exactly right – grain versus livestock farming (except dairy farms) and the difference in risk.

J. Murray August 24, 2010 at 1:18 pm

I don’t see how you can justify the consumer being better off. Who pays for those subsidies? The consumer. The subsidies are an inefficient means to pay for your product. Consumers are taxed, the money then gets spent on inefficient bureaucratic overhead, and then some 75% of what was taxed goes to the farming community. I’ll use some very basic numbers to get the idea (ie, these aren’t real figures, just an example).

The consumer is taxed to provide a $20 subsidy to corn farmers to keep the price at $80. But to get this $20 subsidy, the consumer is taxed $25 ($5 is for the people necessary to collect and distribute the subsidy). So, the consumer pays $25 in taxes and $80 for the subsidized corn. In the end, the consumer just paid $105 for something the farmer is willing to sell for $100. How does this benefit the consumer?

At no point does the total cost ever come out lower due to farming subsidies becuase the production process has done nothing more than add new bodies (bureaucrats) to the production cycle that otherwise didn’t need to exist. We cannot add more labor to a production system, keep productivity the same, and expect lower costs.

Really, farming subsidies are bad for BOTH the farmer AND consumer.

Kermit August 25, 2010 at 9:06 am

I don’t know the numbers, but I remember visiting with a former Cargill employee awhile back about this. He wholeheartedly agreed with me that the consumer/taxpayer gets a very good bang for his buck here. I looked back in my computer records, and I see that over the last three years government payments (not including a small amount for a CRP plot) amounted to less than three percent of cash sales. The purpose of this money, IMHO, is to guarantee full production, and it does. This, for many years, has greatly smoothed the ‘roller coaster’ ride in prices that normally would occur. The benefits can be seen in places like John Deere, CaseIH, Monsanto, Cargill and other grain companies, etc. They tend to not be on roller coasters also, and the taxes generated by this economic activity would seem to be significant. On the consumer side, meat production tends to ride this price roller coaster, but not to the extent it would if corn prices were also fluctuating like normal markets do. The combination of the grains and meats could regularly get pretty wild. Again, just my opinion.

And, again, I wish the government would never have gotten into paying subsidies. I could have made considerably more money. I’m not sure if it follows that the extra money I would have made would have come from the consumer, but I suspect so.

But keep in mind, direct government payments, over the past three years, have amounted to less than three percent of my cash sales. It isn’t a very big deal anymore. This does not cover something like ethanol, however.

Michael A. Clem August 25, 2010 at 2:35 pm

About this “price roller coaster”: isn’t that what the commodities markets are for, to lock in prices for the farmer, and let the investors ride the roller coaster? If so, then price stability is a poor justification for government subsidies.

james b. longacre August 24, 2010 at 3:22 pm

A question: is low volatility in food prices explained by protectionism and subsidies, or is it explained by prosperity? My hypothesis is that the US and Europe have stable food supplies and low price volatility because (a) we’re extremely wealthy and (b) we have extremely well-developed financial markets.

i dont know if there is low volatility in food prices. if there is it may be a combination of climate (no crop destroying floods or earthquakes in growing regions) , extensive infastructure (alternate means to market when problems arise on one route) and lots of empty space for growing lots of food, some of that may be considered wealth, and some good luck. automation probably has something to with it as well.

if a financial market is where you can instantly create money to do stuff, then i guess those are developed too.

Kermit August 25, 2010 at 10:11 am

Both, I think. But the natural way for a market to behave is to cycle, IMHO. Think of the more marginal land here – the good land won’t be affected. High prices lead to increased production due to increased inputs and marginal land being brought into production. High prices can also lead to demand destruction. This leads to low prices and the reverse of the above. The payments have tended to smooth this roller coaster out. This has resulted in abnormally cheap prices for corn – until just recently when demand has finally caught up with supply. So, long term, is it good? I guess I don’t know.

But again consider, if I’m right about the roller coaster tendencies of the markets, how would the normal roller coaster in the meats be affected by a roller coaster in the corn used to feed the cattle and hogs? My feeling is that it could get pretty wild once in awhile. Is that bad? Again, I don’t know.

But we know that politicians don’t like roller coaster rides in food prices.

james b. longacre August 24, 2010 at 3:26 pm

subsidies to farmers always seem to make the least sense to me. if corporate owned crop lands can yield such large quantities of stable food then it sounds like subisidies should only be those in greatest need. empty land doesnt require much maintenace unless used in crop roatation.

james b. longacre August 24, 2010 at 3:33 pm

is a better developed financial market one where the money is gold/silver/commodity where it can be traded instantly and at high volume as opposed the system that is in place now (so i have been told, that money/currency can be created instanly via banks), i dont know.

james b. longacre August 24, 2010 at 3:34 pm

i suppose tumors can be well developed

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Joost de Groot September 16, 2010 at 2:54 pm

I just ran into this interesting discussion. I am a resident from the Netherlands in Europe. We’ve had subsidies for agriculture since the fifties. By then they were very needed to maintain a steady production of food for our own population. That should in my opninion be the main reason for having subsidies at all. Nowadays the situation is completely different. There is enough production in the EU to feed every mouth, so for that reason we don’t need subsidies anymore. I think that completey quitting with subsidies is not a clever idea. Reviewing and changing targets as to what kind of subsidies we really need, that should be the question we need to ask ourselves. Perhaps it is better to use subsidies to improve animal welfare or environmental improvements so that agriculture has a lower contribution to the carbon footprint. Me, I am trying to improve the circumstances in which farm animals are kept.

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Locksmith in Las vegas June 8, 2011 at 12:58 am

What is a good economist. Should listen to every word he says

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