Re: Social and Political Aspects
Bob MacGregor (firstname.lastname@example.org)
Wed, 07 Jul 1999 09:15:33 -0400
You seem confused about the way economics works. Dale never said that his hypothetical onion farm was "trying" to run anyone out of business, just that it naturally happens to the less efficient. Right after that you say, "I
would rather live in a community where there are so many organic farmers
that I would have to quit farming, find a job so I could buy all this
fresh, nutritious food ." This is a quite good statement of just my point. When agriculture overproduces, only the very most efficient stay in the business (organic or otherwise). If organic producers oversupply the market, the prices fall until output can be "cleared". Unfortunately, this market price is below cost of production for the less efficient producers, so they tend to go out of business. If there are scale efficiencies, then smaller producers are the ones who leave agriculture for farms in the cities and end up buying the "cheap" food.
This is reality whether we are talking about organic foods or high-chem foods. A major difference is that organic has (in my opinion) fewer hidden costs in the production process, so the nominal production costs are closer to the true COP. It is certainly hard to compete with a system that buries very real production costs in public welfare losses (eg, environmental damage). Nevertheless, in the end, the most efficient production system will prosper; the less efficient either go out of business, find a special niche or become a hobby subsidized by off-farm income.
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