> programs, they will be even scarcer. The mechanism lives on in the guise
> of export enhancement -- that's right, subsidies to ship U.S. commodities
> abroad using fossil-fueled vessels. Price-reducing mechanisms do exist
> under federal law, but they blast farm incomes in foreign countries.
> Because these farmers don't vote, the only real restraints on export
> enhancement are international pressure (GATT, NAFTA, etc.) and fiscal
> watchdogs who dislike the amount of direct federal spending.
The EEP is promoted to counter the subsidies that competing countries
give agriculture so the US farmer has an equal chance to sell. You can
certainly make that case that selling grain overseas increases prices at
home. I'm puzzled by your reference to fossil-fueled vessels. I don't
know of any other reasonable way to ship grain, so the comment is either
pushing some further agenda or is gratuitous. There is a requirement
that some of the grain be shipped on very expensive US bottoms, which
means money you thought you spent to send grain to Russia got spend to
make US shipowners rich. I don't have a position on maritime subsidies,
other than that it would seem more open if they didn't hide within an ag
> Price-based income support, on the other hand, is quite popular. First,
> the government sets a support price by lending funds secured only by the
> value of an expected crop. If the market price is below the loan rate, the
> farmer simply defaults, and the Commodity Credit Corporation takes title.
> If the market price is higher, the farmer sells, repays the loan, and
> pockets the difference.
Previous paragraph is not accurate. The government will forward half of
the deficiency payment, but no loans. If the deficiency payment isn't
warranted later, the farmer repays it. When the crop is grown, the
farmer can put it into government storage and take a loan on it. Most do
this for cash-flow, not because they expect the cash value to fall below
loan value. That is pretty rare.
GATT is going to end a lot of the EEP type programs and some of the
> Either way you look at it, bigness wins.
This is a common belief. When comparing big corn to little corn, it
might work. When comparing big hogs to little hogs, It's less certain.
Most farm economists I've read say the medium sized producer has all the
economies of the largest. It gets down to management and maybe the
ability to weather bad years. However, a farmer will starve on his land
before a corporation will, so I think it is mainly management. It's not
get big or get out. It's get smart of get out. You may have to change
your product mix.
> Moral: If you really want to restore small-scale farming, you must restore
> small-scale consumption and small-scale personal ambition. Now there's a
> daunting chore, one that makes price-and-income farm policy look like
> child's play by comparison. "Man is conceived in sin and born in
> corruption. From the stench of the didie to the stink of the shroud, there
> is always something." Greed will rule as long as this earth spins. Sad,
> perhaps, but undeniably true.
I don't have any morals to impart, nor biblical style references to back
them up. Farming is a business and some will fail. The government ought
to get out of it and let us get on with things, is my own opinion.
However, as long as the government is in farm subsidies, I'm going to
consider it as part of the environment and manage accordingly.