From: Mike Lorrey (mlorrey@datamann.com)
Date: Tue Aug 28 2001 - 10:49:10 MDT
Barbara Lamar wrote:
>
> > Robert J. Bradbury wrote:
> >
> > I notice that nobody seemed to comment on my comments about the
> > rather hefty increases in subsidies the U.S. farmers seem to be
> > getting now.
>
> I guess I'm falling down on the job, being the List Farmer. Thank you for
> providing the figures, Robert. To refresh everyone's memory, since it's been
> a couple of days, Mike Lorrey wrote:
>
> <<US farm subsidies are actually quite low at the moment>>
>
> RB responded:
>
> <<In 1999 (the last year available), total "Farm marketings" were $188.6B.
> "Government payments" were $20.6B or almost 11% of the "marketings" value.>>
>
> It's quite a stretch to call subsidies amounting to 11% of "marketings"
> value low. In fact, in at least some individual cases (I suspect in MANY
> such cases) the subsidies make the difference between a net loss and a net
> profit.
>
> Mike Lorrey continues:
>
> << They don't
> subsidize low prices either, they are used to prop up prices. If we
> ended subsidies entirely, US food prices would be far lower. >>
>
> I need to do some research on this, as I'm presently only aware of what's
> happening locally. I get a newsletter each month from my local Agricultural
> Extension Service, a branch of the USDA. The subsidies currently being
> offered are in the nature of "disaster" relief. Farmers go to their partners
> (maybe more accurate to say their bosses) the bankers, mortgage everything
> they own, and put the whole wad into a thousand acres of one or two verities
> of corn. No diversification, and it's all planted at the same time, in
> accordance with the instructions from the seed and chemical companies
> (which, these days, is generally the same company). If the corn burns up in
> a drought, it's considered a disaster rather than poor planning on the part
> of the farmer, and the federal gov't bails the farmer out.
>
> The real beneficiaries of this policy are the banks, the seed/chemical
> companies, and the politicians. I fail to see how this policy props up
> prices. Farm prices are currently artificially low, and if more realistic
> accounting methods were used by farmers, I don't think even the subsidies
> would keep many farms from showing losses.
Farmers get paid to keep land out of cultivation, and in the case of
situations like the Northeast Dairy Compact, farmers get paid if the
price of milk falls below a targeted price, and distributors/retailers
within the region must pay at least the target price.
>
> Among other misleading items on the financial statements is this: today's
> dominant methods of farming rely on what you might call strip mining the top
> soil. In most cases where a natural resource is used up a bit each year, a
> business must annually book a fraction of the value of the resource as
> depletion expense. This is not done by farmers, nor do farmers relying on
> non-rechargeable aquifers for irrigation (such as the Olalla) book depletion
> expense for water consumed.
Sure, but most farmers run into big trouble if they try to utilize
sludge to fertilize and regenerate their soil. The NIMBY attitudes of
the ignorant keep the situation as it is.
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