To subsidize or not to subsidize: Dairy

Yes, milk should be $7/gallon. Corn should be many times what it is selling for and my taxes should be many times lower than what they are. Simple as that, your paying for it one way or another, its just that the government is getting their cut instead of it going directly to the farmer like it should be.

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U.S. Constitution -10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

lol,How many auto mechanics do you know that have become dentists?

this is a poor comparision. All business owners go through rough patches, doesn't mean they go out of business. They may cut down but a good business owner knows how to fluctuate with the markets.

And so what if all dairies are contracted by Kraft,Cargill,ect? They will still be owned by the same people. Look at the chicken or turkey industry, They are all contracted by Perdue,Cargill,ect but they still are making a go of it.

It would give small dairies a chance to make it since it doesn't have to jump thru the red tape to get its share of the subsidies. It could charge market rate just like the big names and still make a go of it IF its a smart business owner.

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U.S. Constitution -10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

I haven't read the whole thread, so if this has been mentioned, sorry. How much of the rise in food costs can be attributed to the price of corn? Which is at a record high due to the gooberment meddling via the stupid ethanol mandate.

The amount of corn going to ethanol is nothing compared to the BILLIONS of dollars given to corn farmers in subsidies. In my opinion they need to end both. Of course that would raise the price of beef and milk but we should know how much our food costs instead of how much the government costs because we all know it is expensive...lol.

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U.S. Constitution -10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Oh boy, now we can debate ethanol all over again.....

There is about 5 cents worth of raw corn or wheat in your box of cornflakes or wheaties.

If the price of grain doubles, that should raise the price of your cereal 5 cents?

Processing and transporting and retailing food is what costs more. What your food cost increases come from.

The raw material - the corn, or the milk, or the wheat, actually costs _less_ in inflation adjusted dollars over the decades.

That is the point of this thread - parity price for raw milk should be double what it is, if we use the old formula to offer a parity price for milk.

Sort of like arguing the minimum wage is too high, it should only be half of what it is, or eliminated entirely. Let market forces determine minimum wage, no regulations.

Paul

I KNOW biz is not always right and fortunately, absent crony capitalism, the market weeds out the poorly run companies. Unfortunately, with Gov't, a failed program just gets more money so that it can fail bigger or a new program is created to band aid the damages of the first program.

I figure with the 1000s of long term gov't programs there must be some somewhere that are both good policy and wisely implemented. Can you name three?

~whhhhiiiinnneeee~ Do we *have* to?

Couldn't we argue, instead, that corn prices are through the roof because we have had 3 years now of horrible weather throughout the world (droughts in some place, floods in other, etc.) that have seriously damaged corn yields all over?

And that really has nothing to do with subsidies. No matter how much or how little money the government (or governments, considering a global scale) give to commodity farmers, it is not going to make more corn pop out of those weather-ravaged fields.

Corn prices are lower than they should be due to subsidies. Corn prices are reaching record highs because there is not enough corn, too many crops were destroyed.

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Peace,
Caliann

"First, Show me in the Bible where it says you can save someone's soul by annoying the hell out of them." -- Chuck

I like how you are thinking. Too often I get in trouble with folks that have a simple idea of how things are and a simple solution to solve it. When I offer another way of viewing the problem, and why the solution wouldn't work, I get called names. When we hear the word" subsidies" it brings to mind someone getting something for nothing. Perhaps a rich farmer's welefare check. Few think it far enough through to see that we can buy stuff cheaper because of the subsidies and that Big Business and Rich folks paid most of the taxes that funded the subsities.

A number of years ago, the government had a program that allowed farmers to borrow money to buy seed, fuel and fertilizer and then paid off when the crop was harvested. The government insured the loans at $3.00 a bushel of expected yield, by agreeing to take corn at the loan price. That was the break even point for the farmer. But prices dropped below $3.00 and millions of bushels of corn went to the government. I recall huge tarped areas that were constructed as low cost emergency corn storage. The consumers benifited by the low corn prices and farmers weren't bankrupted by the sudden low corn prices. The corn eventually made its way into the supply chain.

Today's farmers study futures contracts, put options, South American crop forecasts and a whole lot more.

Seems like the American farmer is the only one that is plowing his profits back into the economy, while the rich look for ways to syphon money out of the American economy.

I'm suggesting that if we (as a country) are so concerned that food must be made to be cheap so lower incomes can afford it we could put tax dollars to better use and cutting the subsidy payments 100%, reserving some of that money for shaving down the crisis budget, and put less money than we waste in subsidies to better use by better supporting food for the truly needy via food stamps and emergency food pantries.

Help for the budget, and Washington still gets to feel it's warm fuzzies for "helping people".

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There is a time and a place for decaf coffee.
Never, and in the trash.
Are you an AZ farmer too? Arizona Backyard Farmers on facebook

Now, haypoint, even though I mentioned with starting this thread that I didn't have a dog in this fight, I admit that I came into it with a gut feeling of "subsidies = bad". For one, I admit to having a deep, abiding hatred of Big Agribusiness, for the many crimes against small farmers, migrant workers, the land itself, that B.A. has committed through the years, and the idea of even a penny of my tax dollars going to support their interests sort of made my stomach do uncomfortable flip-flops.

But I have been reading. Both you and Paul have been very good about writing clear, understandable posts on the subject. I will likely never get to the point where I can say "subsidies = good", I believe I am at the point where my mind thinks "subsidies = necessary in this economic model".

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Peace,
Caliann

"First, Show me in the Bible where it says you can save someone's soul by annoying the hell out of them." -- Chuck

You are the one who hasn't thought it through far enough.

Let's pretend you are the only citizen and tax payer. You send $10 in taxes to the gov't. The gov't only program is to lower the price of the only gallon of milk in the world from $10. It isn't unusual at all for the US gov't to operate programs at a 50% overhead cost, some programs are much worse. At 50% overhead, the gov't burns up $5 in program administration and pays down the cost of the gallon of milk by $5 from $10 / gal to $5 / gal.

You buy the milk for $5 and are glad the gov't subsidized milk and made it cheaper for you. But you spent $10 on taxes and $5 on milk so the milk cost you $15 / gal.

In my unsubsidized world, where i actually think it through rather than just claiming to, the gov't stays out of the way and collects no tax because there is no milk program to run. Milk costs me $10 / gal, $5 less than your total costs.

Gov't is not free. Even the most efficient, the most beneficent, well intended, Kum Ba Yah singing gov't still operates at a cost, so any subsidies it offers ends up making everything cost more and merely shifts costs from losers to winners.

Thank you.

So, currently we spnd about 75% of the 'Farm Program' on Snap (food stamp program), school lunch program, WIC, and so forth.

We spend about 10% of the Farm Program on administering the program.

And we spend about 15% of the Farm Program on farm subsidies to farmers.

You are saying we should cut out the 15% to farmers, and add it to the 75% we spend now on food stamp type programs, making it 90% of the Farm Program spent on welfare stuff, and 10% spent on administration of the program, and none on farmers.


That is an interesting thought. Can't say as I care for it.

The 15% being spent on farmers is changing - whenever congress gets over this fiscal cliff junk - and whatever they passed yesterday is not getting over the cliff, just postponing it again a few months.... But anyhow, when they get back to business and work out a new 'Farm Program' they already had agreed to end one of the subsidies to farmers, the Direct Payment. They were tinkering with some others, more to crop inurance, but none to disaster aid so overall those parts also were lower. So the 15% is decreasing - tht is a given. I'm good with that. Make the 15% to farmers a little less. At this time, that is very cool, we don't need more govt in farming, we can do with some less right now. Maybe some day will be different, but right now, cut it back some.

I'd like to see the other side decrease as well, tho, not add more to it. I don't want to starve out childeren, but I'd think there is a lot of waste in Snap and other assistance programs that could be cut back some too.

My opinion.

--->Paul

Well here is our problem, We're looking at the percentages. The percentages are not the problem, its the total amount spent.We're talking $100,000,000,000/yr that will be $1 trillion over the next 10 years. How much of that money is wasted?

Heck, I'll be happy with 1% of it if you wanna talk percentages...lol

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U.S. Constitution -10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

If you are looking for a perfect program, I'm afraid you won't find it. But hundreds have done real and lasting good for individuals and the nation as a whole, in spite of the waste, fraud and corruption that inevitably accompany all human endeavors. The USPS, the federal highway system, Social Security, and yes, even WIC and SNAP.

Obviously we can debate the merits of those programs until the cows come home, but I think it's helpful to remember that most were instituted in response to a perceived need. (For instance, I've read that school lunch programs came about because during WW I, many young recruits were found to be unfit for service due to childhood malnutrition.) And those who ignore history are condemned to repeat it.

Also, keep in mind that human societies, left to their own devices, tend to result in power consolidating in the hands of the few. Throughout history, you will find kings and serfs, and not much in between. If we want a different system in this country, it will require some artificial constructs (such as the Declaration of Independence) and some meddling with the natural order of things.

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"I love all of this mud," said no one, ever.

You accuse me of not thinking it through far enough and then give an example of one person and one gallon of milk. How about we take this out to 196,216,000,000 pints? That’s last’s year’s US production.
Maybe a better way to look at is as an insurance policy. Sort of a protection against bankruptcy causing price fluctuations. It would benefit the farmers, every business attached to farming, production of milk and milk products and the industry attached in some way to that production. It protects banks, investors and those of us with a savings account.
This isn’t needed with one farmer and one gallon of milk, just as I wouldn’t need insurance on the only house on earth.
By limiting the subsidy to a specific limit of milk production, over production is discouraged and maximum production is encouraged. This results in a steady supply.
Canada does it differently. Seems to work for them. The government limits your production. You get a good price for your milk up to your allowed limit and then you can’t sell any more. Keeps their prices stable and everyone in business. Thousands of Canadians come to the US to buy our milk because it is so much cheaper.
Since you are “into” pretending, let’s walk through an elimination of milk subsidies and we go back to the old way of the government support pricing. Dairies would be wildly profitable. Land prices would shoot up. Property taxes would jump. Milk production would increase. The government would be awash in milk. The support prices would need to be adjusted down. The generally underfunded family dairies would be the first to feel the squeeze. With most of the support price money going to Big Ag, the government would be pushed to stop helping Big Dairy. All support from the government would go away. Without any support, an over production of milk would drive the price of milk below production costs for most dairies. More would be bankrupted. The well-funded Big Ag could buy up all remaining crop land, driving more small farmers off their land. Once the small dairies are shuttered, land sold, Big Business controls the price of milk, just like they control everything from the fuel in your tractor to the cost of your cable TV. You do understand where those prices are heading, don’t you?
That is how get-out-of my-way-Capitalism works.
I don’t like the level of efficiency that our government operates at, but it is a lot better than the National Vietnam Veterans Foundation, that uses 80% to pay professional fund raisers. And everyone seems to love them.
Give me a plan that stabilizes milk prices at a level farmers can live on and poor people can afford to buy, without government intrusion.

And what is wrong with the price of everything else? We pay what it is worth. Nothing at all wrong with it in my book except for the devaluing of the american dollar due to the money printed to support big government

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U.S. Constitution -10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Funny, I get accused of supporting Big Government and Big Business and you want to give more power to Big Business and that shifts more government cooperation with Big Business.

A couple hundred years ago, if the richest citizens would have bought off the government like they do today, there's be a run on pitch forks and torches.

Yet you want to turn the farming community on its ear because you fear someone is getting something for nothing. Ruining the lives of the American dairyman will not cut your taxes, will not lower the price of milk and will not promote small farms. Exacttly the opposite will be the likely outcome. Bring it on if that's what you want.

The price any commodity is worth is linked to supply and demand. Reduce the supply -- for instance, by bankrupting thousands of American dairy farmers -- and the price will reflect that shortage. Of course, international producers would be happy to fill the gap.

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"I love all of this mud," said no one, ever.

No question, the SNAP system is bloated and the loose income regulations for the WIC program is a joke.
But if it's all about spending money to help the needy at least it can go in a more appropriate column in the budget.

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There is a time and a place for decaf coffee.
Never, and in the trash.
Are you an AZ farmer too? Arizona Backyard Farmers on facebook

I'm not looking for the perfect program. You said good policies wisely implemented would be good. And I asked you to identify a long term program that is good policy and wisely implemented. I didn't just ask for programs with good intentions, there are plenty of those paving the road to you know where.

And I ask you, keep in mind that human gov'ts, left to their own devices, tend to result in power consolidating in the hands of the few and not to the benefit of the many. Please don't create a false dichotomy that when I am against big gov't that I am therefore advocating no gov't. I acknowledge that some gov't, where the rule of law is applied and respected, but where gov't generally stays out of trying to manage industries, results in the greatest benefits for all.

The economies that have prospered the most during the last 50 years are not rich in natural resources, land, or critical technologies, nor, sadly, are they the most democratic. It is the countries that have enforced private property law and allowed mostly free capitalism, or at least made moves in that direction, that have prospered the most.