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The Water Cooler
General Discussion
Farm bill ends subsidies, cuts food stamps
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<blockquote data-quote="farmerbyron" data-source="post: 2395887" data-attributes="member: 4953"><p>In principle I actually agree with you on this if there were not such meddling in the marketplace. But the US govt has decided it has a vested interest in a cheap food supply as hungry people are unhappy people and unhappy people overthrow govts. So in the interest of the "common good", they distribute production information from the USDA to the market traders and give them tremendous leverage over the farmer by exposing their production and using that information to stabilize prices. If the grain markets were a true free market, the end user would not know how much grain there is. They would have to raise the price they were willing to pay until the farmer were willing to sell his grain. But the way it works now is that it is public knowledge what the farmer has in his bins so the end user will wait it out until the farmer has to clear out his bin before the next harvest(kind of simplified analogy there).</p><p></p><p>Incidentally, shifting to a crop insurance based system makes all of this information much more easily monitored. Through insurance paperwork, they will have an even more accurate accounting of acres planted, past yields, and storage capacity than ever before. In a perfect world, I would love to see the USDA go away but if you think people squawk about grocery bills now, they could not handle the price increase that would occur if their food supply followed the same laws of economics as everything else. So here we are. Stuck subsidizing an industry to keep people happy and the farmer in business. Really though, you should look up what percentage of the USDA budget goes to subsidies and what percentage goes to food stamps. The subsidies are a non factor compared to the rest of the federal budget.</p></blockquote><p></p>
[QUOTE="farmerbyron, post: 2395887, member: 4953"] In principle I actually agree with you on this if there were not such meddling in the marketplace. But the US govt has decided it has a vested interest in a cheap food supply as hungry people are unhappy people and unhappy people overthrow govts. So in the interest of the "common good", they distribute production information from the USDA to the market traders and give them tremendous leverage over the farmer by exposing their production and using that information to stabilize prices. If the grain markets were a true free market, the end user would not know how much grain there is. They would have to raise the price they were willing to pay until the farmer were willing to sell his grain. But the way it works now is that it is public knowledge what the farmer has in his bins so the end user will wait it out until the farmer has to clear out his bin before the next harvest(kind of simplified analogy there). Incidentally, shifting to a crop insurance based system makes all of this information much more easily monitored. Through insurance paperwork, they will have an even more accurate accounting of acres planted, past yields, and storage capacity than ever before. In a perfect world, I would love to see the USDA go away but if you think people squawk about grocery bills now, they could not handle the price increase that would occur if their food supply followed the same laws of economics as everything else. So here we are. Stuck subsidizing an industry to keep people happy and the farmer in business. Really though, you should look up what percentage of the USDA budget goes to subsidies and what percentage goes to food stamps. The subsidies are a non factor compared to the rest of the federal budget. [/QUOTE]
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