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Wednesday, August 15, 2007
John Stossel :: Townhall.com Columnist
Dead Men Farming
by John Stossel
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By now you've probably heard that a new Government Accountability Office (GAO) report states:

From 1999 through 2005, the USDA "paid $1.1 billion in farm payments in the names of 172,801 deceased individuals. ... 40 percent went to those who had been dead for three or more years, and 19 percent to those dead for seven or more years." One dead farmer got more than $400,000 during those years.

And they say you can't take it with you.

Defending the USDA, the GAO adds, "The complex nature of some farming operations -- such as entities embedded within other entities -- can make it difficult for USDA to avoid making payments to deceased individuals."

Exactly. The agricultural section of the U.S. code is nearly 1,800 pages.

There's an easy way to avoid such absurdities: Abolish all farm subsidies.

Why are taxpayers forced to pay farmers $25 billion a year? Sure, farmers face droughts and floods, but that's been true since Moses' day. They can't say they weren't put on notice that farming has risks. Running a restaurant or a software company entails risks, too, but we don't guarantee their continued operation. Those businesses and America are stronger for it.

Farm subsidies are popular with politicians because Big Agriculture lobbies hard, and many people believe that without subsidies, we wouldn't have a reliable food supply.

But what an insane myth that is. As I wrote in "Myths, Lies, and Downright Stupidity", most crops are not subsidized. Yet we have no shortages of fruits, vegetables, livestock and poultry. America has plenty of peaches, plums, peas, green beans, etc., and farmers who grow those crops do fine. What makes wheat, cotton, corn, soybeans and rice different?

Last week, the New York Times reported that dairy farmers in New Zealand get along perfectly well without subsidies : "[E]ver since a liberal but free-market government swept to power in 1984 and essentially canceled handouts to farmers -- something that just about every other government in an advanced industrial nation has considered both politically and economically impossible. ... [O]utput has soared."

Yet in America, our congressmen enact a 742-page farm bill that, among other things, includes 10 times more money than in 2002 for "specialty crops," including citrus, tomatoes and melons, and an amendment to include goat meat in the mandatory Country of Origin Labeling Program.

An amendment that would have withheld subsidies from farmers with incomes of $250,000 or more was rejected by the House.

The farm program is repulsive welfare for the rich. The average farmer earns much more than the average American.

And even rich nonfarmers have received subsidies -- among them the late Ken Lay of Enron; Ted Turner, founder of CNN; my ABC colleague Sam Donaldson; and banker David Rockefeller.

And how absurd is this? "After handing out commodity subsidies that pay farmers to plant more crops," Heritage Foundation senior fellow Bruce Riedl notes, "Washington then turns around and pays other farmers not to farm 40 million acres of cropland each year -- the equivalent of idling every farm in Wisconsin, Michigan, Indiana and Ohio".

It's time we got over the myth that the government helps the heroic family farm. Riedl points out that "federal farm policies specifically bypass family farmers. Subsidies are paid per acre, so the largest (and most profitable) agribusinesses automatically receive the biggest checks."

Besides all the obvious ones, there's another reason to end farm subsidies. They show us to be hypocrites. How can we preach free trade in talks with developing nations when we subsidize farmers who then dump their crop surpluses in poor countries and wreck their domestic farms?

Give me a break.

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About The Author
John Stossel blogs at http://blogs.abcnews.com/johnstossel/ is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.
 
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American Subsidies Bad for Everybody
It's been commented that subsidies are bad for the rest of the world. This is true. I won't repeat the reasons already given.

It's also bad for the American consumer. We end up paying more for our groceries than we would otherwise.

And, ironically perhaps, it's also bad for the recipients of the subsidy. Just the way welfare payments create a culture of dependence and weakens the recipients self-esteem and ability to fend for themselves, it does the same thing for the agribusinesses that are subsidized.

It's welfare for the rich, and has the same negative effects as any other kind of welfare.

EdEKit -- on Giverment Subsidies
quoth EdEKit: "We do need to end subsidies to CORPORATE farms for sure, and possibly to sole proprietorships too."

We do need to end subsidies PERIOD.

E: "But we do need to insure profitability to farms."

Why? Farming is risk venture like anything else. If it proves unprofitable, fewer people will do it. This will result is more profit for those who remain, as lowered production will increase prices. This encourages people to come back to farming.

It all balances out, so long as the Free Market remains unfettered by the givernment trying to choose who the winners are supposed to be in advance.

The givernment should never "guarantee profitability" to *ANY* enterprise.


E: "It is ridiculous to subsidize the planting of crops, and subsidize not planting crops at the same time."

What, you want them to take turns?

No, giverment subsidies need to be ENDED. PERIOD. END OF SENTENCE. END OF PARAGRAPH.

Hooky, futures markes don't manipulate p
They only transfer risk from those who are unwilling to accept it to those who are willing.

Economic independence
Economic independence would ruin this country. I found this quote above:

"People want energy independence but aren't concerned about food independence"

Neither of those is desirable. You want to see economic independence? Watch National Geographic. See how well those people live.

Farm Subsidies
We do need to end subsidies to CORPORATE farms for sure, and possibly to sole proprietorships too.

But we do need to insure profitability to farms. The Fallow Land payments are of great benefit to the nation, They allow private owners to hold farm land in reserve. And at the same time prevent overproduction.
It is ridiculous to subsidize the planting of crops, and subsidize not planting crops at the same time. It is also unfair to non subsidized foreign farmers. I believe that there is strong evidence that American Farm subsidies are adding to the problems of inadequate production in many countries, simple because imported American produce is cheaper than local growers are able to produce the same crop.

American Subsidies bad for rest of world
As someone who's concerned with world poverty and the Fairtrade movement, I can tell you: the reason so many poor farmers in Third World countries remain poor is because of the heavy subsidies paid to American farmers. If those subsidies were removed, then poorer farmers in developing countries could truly compete in the global market and lift themselves out of poverty.

DashingDave -- on Futures
quoth DashingDave: "I have never used futures contracts. I always feel I am betting against people who do this for a living."

Don't worry about it. Those guys lose almost as much money as they make, and sometimes more. Do a little research, give yourself an education, start small and expand with experience, and you could probably run circles around those guys.

I know for a fact that a (formerly) well respected member of the oil trading community lost about $80 million and tried to cover it up with accounting maneuvers that would have put Enron to shame. (You might have heard about it in the news, although it's rather a niche news item.) Needless to say, his job has subsequently been forfeit. (Unfortunately, so has the subsidiary he worked for.)

my “World War II” injury
My, my, all these nice farm stories bring back memories. I got my “World War II” injury on the farm. Brother Paul won a Bronze Star Award for his heroic efforts in the Battle of the Bulge on Dec. 20, 1944, and Jesse’s US Navy Destroyer sunk two Jap ships at Iwo Jima four days later, and neither of them got a scratch.

Fertilizer came in 167 pound bags, and that bag, a ten gallon can of milk, and a bale of hay were rather heavy for the back of a 14 or 15 year old kid. And it still hurts. These days I am in such physical condition that I can touch my knees without bending my elbows.

And while I had milking machines to help milk the 50 cows mentioned elsewhere, at another farm I did milk 22 cows by hand in the morning, and 14, (the farmers’s wife helped) in the evening.

One problem mentioned several times has never been a problem to me. That is the estate tax, I never inherited a thing. My dad was a Brethern minister.

Nothing new. From ''The Husbandman''
--
"...LET the farmer, so far as I am concerned, be damned forevermore. To Hell with him, and bad luck to him. He is a tedious fraud and ignoramus, a cheap rogue and hypocrite, the eternal Jack of the human pack. He deserves all that he ever suffers under our economic system, and more. Any city man, not insane, who sheds tears for him is shedding tears of the crocodile.

"No more grasping, selfish and dishonest mammal, indeed, is known to students of the Anthropoidea. When the going is good for him he robs the rest of us up to the extreme limit of our endurance; when the going is bad be comes bawling for help out of the public till. Has anyone ever heard of a farmer making any sacrifice of his own interests, however slight, to the common good? Has anyone ever heard of a farmer practising or advocating any political idea that was not absolutely self-seeking – that was not, in fact, deliberately designed to loot the rest of us to his gain? Greenbackism, free silver, the government guarantee of prices, bonuses, all the complex fiscal imbecilities of the cow State John Baptists–these are the contributions of the virtuous husbandmen to American political theory. There has never been a time, in good seasons or bad, when his hands were not itching for more; there has never been a time when he was not ready to support any charlatan, however grotesque, who promised to get it for him. Only one issue ever fetches him, and that is the issue of his own profit. He must be promised something definite and valuable, to be paid to him alone, or he is off after some other mountebank. He simply cannot imagine himself as a citizen of a commonwealth, in duty bound to give as well as take; he can imagine himself only as getting all and giving nothing."

--H.L. Mencken
See http://www.bizbag.com/mencken/menkfarm.htm

Sick of it Not Working
I'm a resident of a heavily agricultural state (North Dakota). I'm tired of watching the failure of farm policy first hand. Year by year, my classroom shrinks. Every year schools shut down for lack of students. Very few return to farming after school.

North Dakota's problems have to do with more than farming policy. However, I would argue that current solutions aren't working. Very few of my students (most of whom live on farms or ranches) plan to return.

Gross income
Inkling, it is adjusted gross, rather than gross income which USDA uses to set their limits. Here I am pasting from a USDA site:

How Adjusted Gross Income Differs From Gross Income: Adjusted Gross Income (AGI) is very different from gross income in that farm expenses and depreciation are subtracted from the total. Other deductions include the cost of self-employed health insurance, one-half of the self-employment tax and contributions to retirement accounts.

BornToFarm
Back in from the chores...

We milk 200-250 depending on the season. I've been farming for 25 years now. We rented the family farm for many years until buying it a few years back. At $5-7000/acre, it's tough to buy land and pay it off with farming profits. We have mortgage payments of $10K/month to deal with. Here in Virginia, land prices continue to move up and I fear production agriculture is on the way out.

I have never used futures contracts. I always feel I am betting against people who do this for a living.

As to subsidies, I am happy to take money if Uncle Sam wants to give it to me. Right now, my rich Uncle wants to buy me a new manure pit. One that will insure that all my cow poop can be percolating until just the right moment when the crops need it. Thanks, Uncy.

As a business, I must be successful financially. My strength is not as a herdsman. I love the thrill of managing multiple enterprises, staying current on new technologies, and making choices which will benefit our business and our family.

Ultimately as a person, my commitment is to God. I am active in my church in worship and music ministries. I enjoy writing songs and dream of cutting a cd sometime. Yeah, I'll do that in my spare time:)

funky p, check YOUR facts
funky p demonstrated just how well-informed he thinks he needs to be in order to sneer at other posters here.

He wrote, at 6:15 PM, "Check your facts; estate/ParisHilton taxes do not effect the small farmer, so your argument is invalid."

You shouldn't be posting on this subject, funky, 'cause you don't know anything.

Estate tax applies to any estate valued at greater than $600,000. This includes LAND values, at current market values. Let's say farmland goes for around $5,000 an acre (a modest price in most parts of the country.) That means that any farm with more than 120 acres has to pay estate tax, simply by virtue of the value of the land. 120 acres isn't a small farm, it's a postage stamp.

The estate tax varies between 35 and 55 percent. So, for a farm of 300 acres, the land alone could be valued at $1.5 million, and the family would need to come up with around $700,000 to keep the farm. In cash. Right now.

Since the USDA definition of a small farm is a farm that earns less than $250,000 GROSS farm income per year (that's GROSS, not net), how many small farms do you imagine can come up with an extra $700K in cash?

Grow up and learn some humility, funky p. You're voicing opinions about real peoples' lives, and you're talking out of your alimentary canal.

funky p
I hate to tell you but estate taxes ARE incurred for farmers. Everything they leave to their next of kin is taxed *at its current value*.

I note your Marxist class envy in your post.

Here are the facts:
1. Paris Hiltons father paid taxes on ALL THE MONEY HE EARNED and therefore shouldn't pay more just to leave it to his bratty daughter.
2. Its none of your *d@mn* business what I leave to my children. Once I have paid my taxes on it its mine until I spend it again.
3. Less than 1% of Americas millionaires inherited their money. Stop worrying about how much money OTHERS have and go earn some yourself.

You do know wealth is created don't you? That means the amount I can earn is *in no way* connected to how much any other person has.

I learned that in Middle School.

DashingDave
You are right and make sense. But I disagree that you don't tell the market at what price you will sell. You certainly don't set the price the dairy is willing to buy at, but by selling you agree to their price. That is the eqivalent to setting the price at which you will sell.

It is no different than the stock market (or any market). Shares of milk are worth only what people are will to pay for them. But if we all want milk the the producers of milk collectively withhold it from the dairy until the dairy price matches the farmers anticpated sell price you have effectively set the price. The power unfortunately rests to a greater degree with the dariy since it deals with several sellers and not with the farmer since it is one of many sellers. What farmers really need is to have cooperative dairies that they control (and that can compete with private non-cooperative dairies), not subsidies.

I like retirement better
BornToFarm writes: Wednesday, August, 15, 2007 5:11 PM

says “ … … I Milk 40-50 cows.”
----------
That’s nice,

Since my formal education consists of 2 years at high school, sleeping in class (Ruthy tells me!) after getting up early to help milk 50 cows at the local dairy, no one can imagine how I was able to work so successfully in the computer industry. Ruthy’s father was a teacher, and she says he would thump my head with his finger just like he was checking a ripe watermelon, to wake me.

Well, I got out of farming and into the computer business in 1950, retired 30 years later, so I guess milking 50 cows each morning is a very good education.

Now 30 years later I like retirement better.

Dashing Dave
So you're a successful dairy farmer. So am I.

But just how do you define success?

Is it the almighty dollar?
Is it number of cows?
Is it production per cow?

To me, success is knowing Jesus Christ. It is paying your bills and working with your cows on a daily basis, and loving what you do.

Me, I started out without a farm family 30 years ago. I'm debt free now with my farm paid for. Milk 40-50 cows. Currently in a battle to the death with Johnes. I'm winning. Thought I would be Johnes free this year...but we caught another positive.

Subsidies... I'm rather ambivalent about them. Can take it or leave it. No subsidies ultimately mean higher prices in the long run, much more volatility in the short run. Conservatives and liberals need to understand that we need to eat too, and that means more revenue in an era of ever increasing costs. More revenue means more price.

About futures contracts...Dairy contracts or options are just too large for me to mess with. I'd be interested how much milk you had locked in for June and July and at what price. That was a good time to have one's production uncovered. Futures can be a good tool, but there are few things worse than locking in a price at a loss.








Dashing Dave
I grew up on a Dairy and crop farm. My parents were educated, at a time when many were not. My father routinely had the same observations that you provided. We carefully prepared the soil, cultivated the fields, rotated all crops annually, watered long before sunup to conserve the water, and routinely removed every weed. Our production was always among the best in the valley. Others couldn't be bothered, it was, after all more work. Farming is often an occupation passed down to children who have no particular talent for it, yet do it because it's all they know. Today, I'm in the business world. There are no subsidies. We survive by competing, and, in general, the most efficient, those with the best economies of scale, and brightest do the best, whereas the others struggle and are allowed to fail. The agricultural system does not permit this, as you know. And that's the problem with farm subsidies. In the business world the inefficient are weeded out. Ultimately the entire system works better. Granted, there is dislocation of those that fail, but that's what we call capitalism.

So Mugabe said
that true power comes from being able to provide food to the starving. Sounds right. I guess that is why his government works to ensure the maximum number of starving people.

In this country we have 535 people working hard to convince us we are starving when reality might be different.

Same principle, slightly different system.

Mom's sense
I don't think she was trying ot make sense of it. She was just explaining how it worked. If the gov't is going to take the land out of production, they should have to pay for it. It's not her fault the gov't is the way it is.

a nice place to raise the boys
dairyfarmermom writes: Wednesday, August, 15, 2007 6:54 AM
“The government rents the land to provide flood control. … … … Our capital is land. The rate of return is about 2%.
=========

Aw come on Mom, that makes no sense at all. I’ll bet that land flooded long before you arrived, and the people below who get flooded should have checked before they built. I don’t want to pay for that, any more than I want to pay for New Orleans. Now don’t remind me that once in a thousand years Southern Calif has an earthquake.

Mom’s comment reminds me of a family with three boys, who lived along a river. I often visited their home and swam in the river with the boys.

Many times their home was flooded in the Spring. Once it happened three years in a row. Some people in our church, who were tired of donating money to help them, suggested they move. The mother said, “But it’s such a nice place to raise the boys.”

I was maybe 10 years old at the time, but I thought, what a stupid remark.

DashingDave
I couldn't agree more.

Dead Men Farming
That is the title of this column. I know Democraps have no problem with the concept because dead men or their largest voting block.

to Buzzcat
Two seperate thought processes that I didn't distinguish between very well.

This can be a typical futures scenario. To make the math easy I'll use round numbers, well below the actual averages. I hedge corn at $2.00/bushel on my 100 acre farm My avg yield is 100 bushels per acre. I hedge 80% of my anticipated yield (8000 bushels), because analysts say that a higher than average amount is being planted to corn this year, and S. Amer is having a bumper crop. You can resonably expect the price to drop.

During the season, there was a wet, cold spring that delayed planting, and low rainfall during key points of the growing season.

Now fast forward to harvest. My yield is down to 75 bushels per acre. I need a yield of 90/acre to cover operating costs and break even. I'm contracted to deliver 8000 bushels, I've got 7500. The price is now 2.25 bushel, for the reasons above. I'm now forced to buy 500 bushels with money I don't have and resell it at a further loss to fullfill my contract. I couldn't control any of it, except for the amount I contracted.

You can mitigate some risk with futures, but you can hardly guarantee your livelihood. You can easily put yourself out of business as many have done doing what you suggest.

As far as the crop insurance comment, that is just another form of subsidy.

I'm not saying the futures market controls prices. I stated they can manipulate prices. No such thing as perfect information. If enough traders jump on the bandwagon du jour, the market will adjust accordingly, regardless of facts or lack thereof. Think of it in the same context as global warming. Lots of people pushing the fact that we're the cause, yet plenty still say it's preposterous. The loudest voice, or most momentum in this case, wins.

Get gov't out of farming
I am a dairy farmer. A quite successful one. I hate to attend most farm meetings because there are too many people b*tching about things they can't control. Each spring, I am part of a group of dairymen that`share financials with eachother in my area. This past year was a tough year for dairying. 40 farms took part in the group and the profit/cow ranged from -$350/cow to over $1800/cow. How, you might ask, do some farms lose $350/cow while others are making excellent profits? The answer in many cases is that many farmers farm because Dad and Grandpa farmed. Did they take business courses or for that matter even attend college? Have they looked at their input costs and trimmed nonessential expenditures? Too many farmers aren't willing to make changes neede to keep themselves profitable.

Too me, subsidizing poor farmers is nothing more than working against the market by allowing poor managers to stay in business. I say get government out of farming and let profit decide who stays and who goes.

this act of chivalry
I have a lot of favorite stories, but here a favorite farmer story.

Shorty’s dad owned a lot of cows, but the cost to ship the milk to town using the regular milk truck, was expensive. So instead, Shorty drove his pickup truck to town each day to deliver the milk. Since people in the neighborhood knew of this trip, he often had a passenger.

One day as I rode to town with Shorty, there was a beautiful lady sitting in the middle seat. Shorty was horrified at the possiblity of being misunderstood if he pulled the gear shift lever into high gear, so he drove the whole way to town in second gear.

Shorty is now 90 years old, but he still remembers me kidding him about this act of chivalry.

So much misinformation here....
Buzzkat: Futures are insurance against lower prices but NOT lower yields. Farmers can and do buy crop insurance for that.


Unio dude, etal.: Paying subsidies only to poor farmers is just a way to favor one group over another. I say promote fairness.


Workingforwages: CRP payments are not high enough to justify the purchase of land. Especially considering property taxes and interest. A better way would be for likeminded people to pool funds to lease or purchase land in their area for open spaces or wildlife habitat.



Borntofarm and adpdo: Every business must compete with the market for its share. As a dairy farmer, I can never tell the market what the price for my product can be, but I can control my input costs.

Hooky
"On the production side, you have no business playing futures to a large enough degree to guarantee your livelihood, due to the variability of your output (which you have very little control over). "


Why not? The futures markets are insurance. There's nothing wrong with the concept of insurance in a capitalist system.

"It's the futures market that helps artificially manipulate prices."


Free markets by definition do not "control" prices, which is what I take your meaning to be. Futures markets mitigate huge price swings when the inevitable natural disasters occur. All they do is provide an efficient mechanism for both risk takers and risk avoiders to manage risk.


While your statements about the middle men may be true, they are irrelevant to the concept of the futures markets themselves.


What has not been brought up in this article and thread is the fact that all of the world's countries, particularly the Western "free market" societies, subsidize agriculture. If all government interference worldwide were removed from agriculture, North American farms in the form of corporations (because of economies of scale) would dominate the world markets to an even greater extent than they already do. And food prices would be lower too.

Just wondering...
Has anybody ever seen John Stossel and Michael Medved in the same place at the same time?

Focus on the processor
"buzzkat writes: Wednesday, August, 15, 2007 9:40 AM
Futures markets
Farmers claim they need government assistance to guarantee against crop failure. There already is a market mechanism (far more efficient) to achieve this. It's called the futures market. "

First off, that's part of the problem. On the production side, you have no business playing futures to a large enough degree to guarantee your livelihood, due to the variability of your output (which you have very little control over). It's the futures market that helps artificially manipulate prices.

The producers (farmers) and retailers (grocery store) have slim margins and can only consistently turn a profit based on volume. Which is why you see the rise in industrial farms and the demise of the locally owned grocer.

It's the processors in the middle of the supply chain who drive policy and reap the highest margins. The subsidies are in their best interest. If the subsidies weren't there, market forces would drive a higher price for the producers and eat into their margins. Why should they give up margin dollars when they can get the gov't to subsidize the producers? When you really look at it, it's apparent where the price elasticities are where they aren't.

The whole system is broken. The similarities with our health care system is eery. The best product in the world, but way too much special interest money in the middle.

farming
Is a business like many others.When the small corner grocers were run out of business by super markets did they get subsidies.I live in the middle of a farming community.I look out my front window and see soy beans,out back it is corn.None of these farmers are poor.Sobsidies should only given to the small farmer that doesn't hold another job.The amount of the subsidy should be only enough to maintain the farm profitability

CRP land
If the feds want to idle land to prevent erosion, preserve/improve wildlife habitat, etc, maybe they should just BUY that land at market value. A one time payment instead of keep paying every year. And as much as I sympathize with small farmers and their woes, where in the constitution does it give government the power to prop up ANY business? I was mightily po'd when they bailed out Chrysler and NYC.

STICK TO THE CONSTITUTION! If the constitution has flaws, amend it.

Farm subsidies have become like
SS, an untouchable rail of politics. And like SS the case law involved with farm subsidies is flawed.

If we had a true supreme court and the federal (national) government was forced to follow the real Constitution we would have no farm subsidies.

I saw a farmer cry
Lolo,

Back in the early 1930's I watched the next door farmer use the hay mower to cut down his corn field, with a tear in his eye, to fulfill Roosevelts demand for less crops, more money.

Believe me, no one, even those who had voted for him ever understood that.

born to farm
It's no surprise that farmers don't get to individually set the price at which they will sell their milk. That is one of the great down falls of a market of such enormous size. Problematically it requires that all farmers, collectively or at least in concert, refuse to undersell their product. Other dairy farmers have to work with you and yet simultaneously compete with you in order for the free market to adjust the price to where it should be. In this way the price is neither too high nor too low.

If we had a truly free market, individually each farmer would still be too small to immediately correct the market price without the bankrupting of many of the players before the change occurred. So long as people kept wanting milk though, the change would occur. But the govt prevents this from occurring because with subsidies availiable at some lower price, farmers have no reason not to sell at a loss. Therefore, the dairy sets the price based on IT'S margin for profit.

I'm in a field that prevents me from charging what I think is a fair price for what I do as well. Because of the intrusion of govt, I'm sometimes forced to overcharge and sometimes to undercharge. (It is liberating to the extent that I don't have to worry about what other physicians are charging) but it prevents people from getting a service at it's real cost and value. If we could get the government out of the business of business it would be infinitely better for all consumers and hard workers everywhere. Conversely, lazy people would suffer.

Baloney
I read here that we should all get out of the city and get the facts. What a load of dung. It may one way in your state but not in the Golden State. I come from a long line of farmers. I know exactly how it is. The other side here is there are many farmers that don't want the subsidies because of the strings attached but the govt. gives them no choice. You guys seem to forget the Orange Growers in Madera Calif. who had a fit because the govt. paid them to let their crops rot to drive up the price of oranges and they wanted to give them to the poor. My family gave the subsidy program the finger because they didn't like the strings. They were not poor by any stretch of any imagination. Subsidies are about trade deals and price control, they are not about the free market.

Go Hatley!
I'm glad someone chimed in on there being more to 'not farming' than just 'not farming'.

Maximum Output is not physically sustainable, even if the Free Market might like it for a while.

- MuscleDaddy

adpdo
You are one of the few that doesn't have a problem with the higher price. What most people don't understand is that revenue has to come in from somewhere. If it doesn't come from the government in the form of subsidies, then it has to come from the market, which means higher prices.

One misconception however. Dairy farmers don't charge for their milk. They take what the dairy gives them. Some very large farmers may be able to bargain for an additional cent or two per gallon, but that is about it. The price floats depending on market conditions.

And, we don't know until after the milk is produced what the price will be. Altho, I can come up with an educated guess based on the futures market and such. For example I should get paid for the milk I produced in July, either today or tommorrow, but I don't know exactly how much.


"And how absurd is this?"
uhm................it IS our Federal government, please, and we blindly elect and re-elect those who rip us off over and over again!
the Dust Bowl years of the 1930s came and went, but did the "emergency" Fed AG programs come and go? NO, they came and stayed to this day!
...and grew!
the only business the Federal government has in agriculture is in research of new and better crops and herd animals and safety, both of which they have been found sorely lacking at.

Born to farm
Actually it does make me feel good that the price of milk has reached the point that the govt no longer has to chip in to make sure you can "pay your bills". Of course it would make even more sense if they stopped meddleing in the process altogher and this miraculous occurance of you being able to charge what you need to be profitable would have occured long ago. People shoud pay what something costs to produce plus a reasonable profit for any item they want. A turely free market will automatically assure that that occurs. Since the government keeps getting in the way it seems that it's just dumb luck that we finally get to pay $4 a gallon for the milk that's been worth $4 for a while now. I would be elated if farmers were actually able to demand a price at a level where they were profitable (or at least where the skilled and efficient famer would be profitable). Unfortunately govt involvment prevents that from happening.

Mugabe? Seriously?
Anyone quoting Robert Mugabe on economic issues loses all credibility immediately. During his time presiding over Zimbabwe, his destruction of property rights has made that country one of the few in the world (or in history, for that matter) to have output per person be reduced in half without war, famine or disease. Quoting Mugabe for his thoughts on economics is like quoting Bob Shrum for this thoughts on running successful campaigns.

I was hoping
that Loyal Democrat would have written a response to this one. It might have gone:

"Grain farmers are the salt of the earth, and they feed the world, making farmers the best people on the earth. They therefore deserve to receive government subsidies despite the fact that they already have high incomes and their land is worth millions. They also help to save the environment and the world by producing corn for ethanol production. They therefore deserve the highly-inflated price of corn caused by the well-thought-out ethanal mandates and subsidies. Livestock producers and other consumers of corn-based products will simply have to pay a higher price in order to compensate the corn farmers, who are on a higher moral plane than all other people."

Anyway LD, if you're out there, I can't duplicate your satire. Would love to get one from you on this one.

You all should be very happy
to know that as a dairy farmer, I am not receiving any subsidies for milk at the moment. The milk price is above the trigger level at which they pay me.

It's a win for everyone!

The government saves money not having to pay me.
The public is happy because I am not being subsidized.
I'm happy because I can pay my bills.

Doesn't this make you all feel good all over?

Now if it would just stay that way. And maybe go up with congressman's salaries.


Mr. Stossel
Come and see me. I'll show you how little I work (if you can keep up). I'll educate you on farming as well. I'll show you how I con make the government do what I wish ( I have that power ). I'll show you all the christmas cards I get from every member of congress. Each one of them know me by name. I am the boogey man you describe.

Stop being ingnorant. Learn. My first offer is sincere.

farmerjoe

I Amend My Remarks
Farm subsidies is as good a place TO START as any.

Stossel On Target As Usual
Stossel writes: "The agricultural section of the U.S. code is nearly 1,800 pages." Does he mean the tax code? Yet another reason to support the FairTax.

I agree that ALL farm subsidies should be eliminated. And all taxes and regulations that impede any small business, including farms.

Government on the whole has become a huge jobs program for underachievers; the way they keep their jobs is by doling out 30 percent of what they take in. Just enough to keep the natives happy. We need to go back to the concept of "essential personnel" and let the rest of them find real jobs in the private sector.

Look at it this way: Would you rather buy a toaster that has the UL label or a USDA label? Everything government does can be done better by the private sector. We need to get government interference out of the market place. Farm subsidies is as good a place as any.

Futures markets
Farmers claim they need government assistance to guarantee against crop failure. There already is a market mechanism (far more efficient) to achieve this. It's called the futures market.

Fellow New Yorker, Dairyfarmermom
You're right about the average dairy farmer in NY (especially where I'm from, in Western NY), but that doesn't mean that we should still be subsidizing these massive corporate conglomerates that own a few massive farms here and there.

Even that amendment to limit subsidies to farmers making less than $250,000 would be a good step (but just the beginning). Unfortunately, we keep electing people addicted to my paycheck (and thus, to spending it frivolously). A leopard doesn't change its spots.

Why doesn't the government subsidize every massive construction corporation? Or Kenny Rogers' Roasters and Red Lobster?

And Stossel is right about the hypocrisy angle. We preach free trade, and then get some of our subsidized surplus food dumped oh so charitably in Third World countries, hurting indigenous farmers.

subsidies
Dairyfarmermom, when the government provides research it is a subsidy. Does the government do the research on new drugs and then give it to drug companies? No. Does the government do the research on new automobile designs and give it to auto companies? No. Government should not be involved in guaranteeing your living. If a company is making the wrong products poorly or inefficiently, they should be allowed to go out of business. But I'm not suggesting that you don't know how to farm - only that you are not being allowed to because of government regulation.

Government regulations limit how you can farm, cost you money for compliance and tip the scales of supply and demand to aritificially inflate prices for stuff you need like fertilizer and pesticides to produce the crops you feed your livestock. And while you are dictated the price you will receive, everyone from whom you purchase gets to dictate price to you.

I repeat myself - the government must get out of agriculture.

how to help farmers
Abolish the estate/death taxes.

Smaller farmers cannot afford to pay them and end up selling to others.
Less competition = Higher prices.

dead men farming
Hey dairyfarmermom and hatley why don't you folks man up and get real jobs if you cannot survive without pillaging the taxpayer who pays you twice; once with subsidies and then when they buy your subsidized goods in the grocery store.

And we need to raise taxes
because we don't have enough money to repair bridges and roads? Huh?

But we're paying dead farmers? why? Because the gov't beauracracy can't keep things straight? Huh? Go figure, the gov't is failing at spending OUR money in an efficient manner.

This is the same gov't that would be running universal healthcare....right....I wonder how many dead folks will be given clean bills of health.

What could we do to reduce
subsidies to farms?

First, let's cut subsidies to any corporate farms. There's no reason to send tax money to a business.

Second, anyone who doesn't derive a majority of their income from farming shouldn't be getting tax money. Why continue to pay people like Ted Turner or Sam Donaldson, who may have interest in agriculture, but who only have it as a side interest?

It is called...
..."logrolling".The farm bills get the votes of city and suburban politicians in Washington because the politicians in the cities can depend on the politicians from the rural areas to vote for subsidies for city transportation such as the subways of New York City.I suspect that John Stossel has taken advantage of that subsidy.

Obviously if we are going to correct the situation,it would require a complete overhaul of the Federal government.A new constitutional convention maybe.

Good luck on that happening.

I'm surprised that you repeat common
misconceptions. Hatley seems to be the only one with a clue. You have to go a litle past the first page of the Environmental Working Group (EWG) statistics. The Conservational Reserve Program is called a subsidy. The government rents the land to provide flood control. People don't provide land free. A proper analogy would be government bonds. No one expects people to lend money to the government interest-free. That's their capital. Our capital is land. The rate of return is about 2%.
No family farms? Get out of the city! In New York State, 73% of the dairy farms milk less than 100 cows. We're milking 18. Lots of corporate farms exist, but there are lots of small farms.
The facile comment is that subsidies are paying farmers to grow more crops. Most of them are for environmental or research purposes. You don't want manure in the water supply. The gov't helps pay for the concrete barnyard to keep it out. New Zealand doesn't include research as a "farm subsidy." They pay the costs of the research and call it research. Research on energy from biomass? That's in "farm subsidies." Integrated pest management? The same.
Interesting. People want energy independence but aren't concerned about food independence. As Mugabe said, "Power is when a man is starving and you can give him food."
Check your facts. Get out of the city. And support your local farmer.

Central Planning
The ag bill from as far back as the 60's has led to nothing more than centralized planning in agriculture. The government is never willing to give money unless they get control. We all know how well that worked in the Soviet Union, don't we? The government needs to get completely out of farming.

Welfare Farming
Great article John, subsidies stimulate complacency and are counterproductive in the long run. After spending over two decades in Brazil, working with agriculture, I was intrigued about how quickly American farms are losing out to Brazilian farms in competitiveness even though, instead of subsidies, Brazilian farmers are actually forced to pay heavy taxes on all basic needs such as machinery and fertilizers. Could it be that is exactly why they are becoming so competitive?
Egon Martinovsky
West Palm Beach, FL

Need more researchs John
Sure there needs to be changes to the farm bill but by no means are farmers wealthier than the average American. In looking at the income by counties in my state, in the rural counties the individuals are making much less than their urban counterpart. Soft white wheat in 1974 was $5.20 per bushel. In 2005 the it was $3.58. Can you honestly say that equipment, chemicals, fertilizer, labor, land, taxes, or anything else is cheaper 33 years later? Does the average American make less per hour now than they did 33 years ago? For the past several years farmers have received a nickel for a loaf of bread and how much do you pay for it in a store?

Highly erodable land can be put into the conservation reserve program to help keep the soil in place to provide clean air and clean water and help with habitat for wildlife and fish which many non-farmers enjoy and even depend upon but it appears you aren't in favor of any of that. Maybe you should research the qualifications and conditions to idle land. There is no where that one is paid to simply not farm without providing some kind of management and crop cover.

It is also quite obvious you have done no research on how the market channels work. The farmer sells to a nearby local merchandizer who takes possession of the crop who usually works with a grain broker/exporter who has connections with the foreign countries. Margins are removed from the sale as it passes back to the farmer who receives what is left over. It isn't the farmer setting the price.

Please research the rest of the story and give me a break.

I demand
I demand that the gov't pay me to NOT WORK,,, just like the farmers getting paid to not plant crops....

OHHH wait,,, LIBERALS already do that with WELFARE..

Corporate Welfare Farming
Mr. Stossel,

To say I agree with you 100% sounds feeble. And there's hardly anything called a 'family farm' anymore. Most of those were swallowed up by the giant landowners long ago.

The conditions that led to the idea that farmers required welfare disappeared with the depression. The waste of paying farmers not too produce is collossal and an affront to every middle and working class person who struggles amidst having to turn over a third approaching a half of their income to various tax collectors to fund this corrupt and rotten structure which includes the producers and distributors.

Some rural type once noted that it's not the farmers that get the big return on expensive ag produce. This is probably true. Middle men take huge markups in delivering it to the consumers - because the market will bear it. IOW, the gov't basically subsidizes this ripoff activity.

It's about time farms were left to succeed or fail on their own due to market forces rather than gov't and politics manipulating the outcome.

Amen Mr Stossel
Good luck with getting anyone in Congress to pass it - many seem to be on the welfare roll.

John Stossel
Pork, oops, welfare, oops, subsidies for the rich that actually drives up and inflates the price of food.
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