U.S. farmers set to get huge government payouts despite bumper harvest

[Brian4Liberty]

U.S. farmers set to get huge government payouts despite bumper harvest
By ROS KRASNEY and CHRISTINE STEBBINS

WASHINGTON • U.S. farmers are about to reap a bumper harvest not just in corn and soybeans but also in new subsidies that could soar to $10 billion, blowing a hole in the government's promise that its new five-year farm bill would save taxpayers money.

If payments for 2014, the first year the farm bill takes effect, do come in at that level — as some private economists have calculated — they would be more than 10 times the U.S. Department of Agriculture's working estimate and more than double the forecast by the Congressional Budget Office.
...
"The (farm) bill actually did little to rein in costs," said Republican Representative Tom Petri of Wisconsin, in an emailed statement. "What we're seeing is a program that still costs far more than it should and fails to include reforms that actually save taxpayer dollars."

The farm bill's new programs were meant to cost the taxpayer less by replacing a nearly two-decade-old scheme of direct cash payments to farmers, which were about $5 billion a year and were made regardless of need.

But the payouts for 2014 now look likely to far exceed that amount.
...
"Crop insurance has drifted away from that basic safety net concept and the farm bill has taken it even farther away," said analyst Craig Cox of the Environmental Working Group, a nonprofit, nonpartisan body that researches environmental health, food and agriculture.

'IT'S GOING TO BE EXPENSIVE'
...
"It's going to be expensive," he said, adding that Indiana would be fairly typical across the country where about 85 million acres could be sown to corn. "That's $6 billion for corn for 2014 alone. Maybe $8 billion to $10 billion is likely in the first year when you consider other crops," he said.

Patrick Westhoff, director of the Food and Agriculture Policy Institute, said he calculated payments could reach $8 billion for the 2014 crop for ARC and PLC. Congress set up the institute to prepare forecasts for the agriculture sector.
...
http://www.stltoday.com/business/loc...656d66545.html

[Natural Citizen]

This was predictable and is something that we had discussed in a few places here on the forum. This one, I remember just because I shared it in another thread somewhere recently.

Farmers Abandoning GMO Seeds: Non-GMO is more profitable

Originally Posted by Natural Citizen

The recent Farm Bill was a clear indicator of this. After the passing of the recent farm bill that basically says that if you plant these gmos we'll give you the subsidies, and given the fact that farmers are beginning to understand that the "substantially equivalent" model they have been sold by agribusiness is complete hogwash it was obvious that the organic farms would come under attack with sudden regulation. Especially considering that a lot of the so called statesmen who claim to be against the nanny state were the bill's biggest beneficiaries who own the largest farms, and, of course, we should expect big agribusiness money to start lining these representatives and state's pockets soon as well since the farmers are waking up to the monopoly and this is understood to be a threat.

I'd bet that if one spent some time researching this then we'd see that these subsidies come with strings that strongly encourage a specific model of agribusiness for these farmers to follow.

I don't know. I suppose we can lead our horses to water but if they are too stubborn to drink then it is what it is. Is unfortunate.

[donnay]

The carrot and stick approach is the only way government knows how to do business.

They should stay out of the food business entirely! Everything they get involved in cost the taxpayers more than they bargained for.

[oyarde]

As far as I know , these are not really US Farmers , or not where I live , they are usually large corporations owned by city dwellers ....

[oyarde]

There has never been anything the USDA has done in my lifetime that justifies the tax dollars wasted .It needs abolished .

[fr33]

As far as I know , these are not really US Farmers , or not where I live , they are usually large corporations owned by city dwellers ....

No. Literally every farmer/rancher around here take part in this and they ain't city dwellers or large corporations.

Less than 6 months ago cattle ranchers in Texas qualified for drought subsidies and today the price of cattle is high as hell. People are making a lot of money off this $#@!.

[oyarde]

No. Literally every farmer/rancher around here take part in this and they ain't city dwellers or large corporations.

Less than 6 months ago cattle ranchers in Texas qualified for drought subsidies and today the price of cattle is high as hell. People are making a lot of money off this $#@!.

I do not know anyone close by me that takes anything , I never would .Beef prices have been so high I do not even buy anything or use any unless it is family raised or discounted by half at my butcher

[oyarde]

Last guy I ever actually meet within 40 or 50 miles of me who accepted govt money was a Senator who lived in DC .

[fr33]

I do not know anyone close by me that takes anything ,

That blows my mind. Literally everyone around here runs to the FSA office to file for their government checks. I don't really blame them for doing it anymore than those out there applying for any other welfare. It's hard to make a living farming when your product should probably be worth about quadruple what it is currently in many instances.

[Working Poor]

Monsanto's welfare payment.

[jbauer]

We have had a cheap food policy since the Great Depression. Something that has kept us as the lowest cost of disposible income spent on food. This year because of low pricing most corn and bean growers are far into the red per acre. $200-500/acre negative is what I'm hearing.

I'm fine with turning off subsidies but the don't bitch if you go hungry. Something Americans haven't experienced in most our lifetimes.

Unfortunately crops are different then most products. You can't ramp up
Production or slow it down. Which is why the USA has always sought for overproduction.

[JustinTime]

A large portion of which will find its way back into politicians pockets in the form of campaign donations. They know they are basically voting themselves money.

[donnay]

That blows my mind. Literally everyone around here runs to the FSA office to file for their government checks. I don't really blame them for doing it anymore than those out there applying for any other welfare. It's hard to make a living farming when your product should probably be worth about quadruple what it is currently in many instances.

They also pay farmers to plant nothing as well. It's become one big welfare racket too.

[Acala]

We have had a cheap food policy since the Great Depression. Something that has kept us as the lowest cost of disposible income spent on food. This year because of low pricing most corn and bean growers are far into the red per acre. $200-500/acre negative is what I'm hearing.

I'm fine with turning off subsidies but the don't bitch if you go hungry. Something Americans haven't experienced in most our lifetimes.

Unfortunately crops are different then most products. You can't ramp up
Production or slow it down. Which is why the USA has always sought for overproduction.

Oh please. Without government interference in farming we are going to starve? Hahahahahahaha! The purpose of government interference in agriculture is, as usual, lining the pockets of crony-capitalists at the expense of the public. I don't know where you got the idea that government policy is to keep food prices low. It is just the opposite. Government price supports, marketing orders, and other interventions are designed to keep prices HIGH by limiting production and protecting markets from "surplus".

[Cleaner44]

I was in D.C. a few years ago and was amazed at the size of their building.



This is a massive drain on the U.S. taxpayers.

[Spikender]

I was in D.C. a few years ago and was amazed at the size of their building.



This is a massive drain on the U.S. taxpayers.

Building?

No no, you are mistaken...

That is a palace.

[Spikender]

Screw double posts.

[ClydeCoulter]

A friend of mine came by yesterday, and said that they are having trouble getting rail cars to move the corn (busy moving coal). He said some farmers are being paid to let them dump mountains of corn on their property because the stops are already full of mountains of corn, just laying on the ground.

[jbauer]

Oh please. Without government interference in farming we are going to starve? Hahahahahahaha! The purpose of government interference in agriculture is, as usual, lining the pockets of crony-capitalists at the expense of the public. I don't know where you got the idea that government policy is to keep food prices low. It is just the opposite. Government price supports, marketing orders, and other interventions are designed to keep prices HIGH by limiting production and protecting markets from "surplus".

I didn't say that starvation was imminent. But walk this through for a bit. Lets assume that your average farmer has $100/acre loss (which is very conservative) this year. Lets say they are running 750 acres. Thats a $75k loss this year. Prices are going to be depressed next year and likely for several to come. How much till they quit? How many of you are willing to put up $500k in input costs and make a negative salary?

What happens if 5 yrs from now (current estimates) prices are still deflated and we have a really rough weather year like we did 2 & 3 years ago. You've already reduced production on top of a crop failure. Then what?

Like it, love it or hate it we as a country have gone down the "cheap food policy" since the great depression. We've created a price floor to encourage excess production on purpose. This has obviously led to increased production all the while allowing Americans to spend the least amount of their disposable income on food of any developed nation. This "savings" has allowed americans to have the lifestyle that so many of us are accustom to.

Frankly, I don't care if they completely gut the farm bill, as long as they take the food stamp program with it. But just like foreign policy when you go down a road not traveled there is always unforeseen consequences.

Go ahead and neg rep me by the way. This forum is always better when we only have one "right" line of thought rather then discussing alternative views on the issues.

[oyarde]

Building?

No no, you are mistaken...

That is a palace.

In 1839 Congress set aside $1000 in the patent division for Agriculture .What we see now came to life in 1862 .Annual budget 2009 , 110 Billion , 2013 , 155 Billion .

[Acala]

I didn't say that starvation was imminent. But walk this through for a bit. Lets assume that your average farmer has $100/acre loss (which is very conservative) this year. Lets say they are running 750 acres. Thats a $75k loss this year. Prices are going to be depressed next year and likely for several to come. How much till they quit? How many of you are willing to put up $500k in input costs and make a negative salary?

What happens if 5 yrs from now (current estimates) prices are still deflated and we have a really rough weather year like we did 2 & 3 years ago. You've already reduced production on top of a crop failure. Then what?

Like it, love it or hate it we as a country have gone down the "cheap food policy" since the great depression. We've created a price floor to encourage excess production on purpose. This has obviously led to increased production all the while allowing Americans to spend the least amount of their disposable income on food of any developed nation. This "savings" has allowed americans to have the lifestyle that so many of us are accustom to.

Frankly, I don't care if they completely gut the farm bill, as long as they take the food stamp program with it. But just like foreign policy when you go down a road not traveled there is always unforeseen consequences.

Go ahead and neg rep me by the way. This forum is always better when we only have one "right" line of thought rather then discussing alternative views on the issues.

Why would I neg rep you? I think I have given like three neg reps in the entire time I have been here. And then only for really egregious conduct having nothing to do with positions taken.

Your analysis of Federal policy doesn't make sense. How can price supports that RAISE prices be part of a cheap food policy? How can paying farmers to let fields lie fallow be a cheap food policy? How can burning crops and killing livestock (in the Great Depression) be a cheap food policy? Please direct me to one resource that shows how government maintains a cheap food policy.

And your analysis of the economic consequences of an end to subsidy also doesn't make any sense. If farmers need to raise their prices in order to make a profit, they will. Why wouldn't they? It's not as if people are going to stop buying food if the price goes up. Markets are REALLY good at allocating resources and matching supply with demand through the price system. In a bad year, the prices go up. In a good year prices go down. If there are too many farmers producing too much food, the less efficient ones will go out of business and the resources will move elsewhere. This is not complicated.

Of course, as with kicking any addiction, there will be disruptions when the ag business gets cut off its government largesse. But there is no reason at all why farmers cannot produce food profitably. They have done it for literally thousands of years. You think that now, with all of the advances in agriculture that suddenly people will stop producing food because it is an unsustainable business model?

[fr33]

They also pay farmers to plant nothing as well. It's become one big welfare racket too.

They don't always offer that subsidy. It's not always available. The massive production of crops like wheat is used as a political tool to give away to poorer countries. Sometimes they determine that more wheat is being produced than they can give away and then they make the "no-grow" subsidy available for a while.

[Natural Citizen]

They don't always offer that subsidy. It's not always available. The massive production of crops like wheat is used as a political tool to give away to poorer countries. Sometimes they determine that more wheat is being produced than they can give away and then they make the "no-grow" subsidy available for a while.

It's also used as a political tool here in the states to get these farmers to plant what biotech wants. How many of the representatives or so called opponents of the nanny state who passed the recent farm bill are recipients of these subsidies by way of owning the largest farms?

As far as these other countries you mention, we should maybe be a little less disingenuous if we're going to explain the phenomenon. What they are doing is forcing these nations to deal in biotechnology. Try this on... http://www.ronpaulforums.com/showthr...=1#post5709335

[fr33]

In a bad year, the prices go up. In a good year prices go down. If there are too many farmers producing too much food, the less efficient ones will go out of business and the resources will move elsewhere. This is not complicated.

From what I've witnessed this isn't true. In a bad year, more subsidies become available to the farmer. In a good year less are. So what is happening is rich people/corporations have been buying up land as an investment in the farm bill. But they are people who can afford to lose some times while depending on the steady gains of corporate welfare over the years.

It's ridiculous to say that govt subsidies inflate food prices while less than 1% of the population grow the food. Using your ideals on how the market works, then surely way more than 1% would be in agriculture. The truth is the subsidies keep food prices low.

I've seen people work their ass off to produce and wind up losing money and then a few years later with the same amount of work they made money. It's a very volatile market and people with capital to risk are the safest in it.

[fr33]

It's also used as a political tool here in the states to get these farmers to plant what biotech wants. How many of the representatives or so called opponents of the nanny state who passed the recent farm bill are recipients of these subsidies by way of owning the largest farms?

As far as these other countries you mention, we should maybe be a little less disingenuous if we're going to explain the phenomenon. What they are doing is forcing these nations to deal in biotechnology. Try this on... http://www.ronpaulforums.com/showthr...=1#post5709335

I just wonder if you've ever met with and talked about it with anyone who chose to grow biotech seeds? I have. It wasn't some corporation that was plotting to poison the rest of us. It was a small family farm that was interested in reducing fuel costs while practicing no-till planting so they could not have to plow out noxious weeds and grasses. (roundup ready corn)

[Natural Citizen]

I just wonder if you've ever met with and talked about it with anyone who chose to grow biotech seeds? I have. It wasn't some corporation that was plotting to poison the rest of us. It was a small family farm that was interested in reducing fuel costs while practicing no-till planting so they could not have to plow out noxious weeds and grasses. (roundup ready corn)

I think that you'd be hard pressed to find in any of my thousands of postings or discussions on the issue where I've ever said that it was some corporation that was plotting to poison the rest of us. That's simply not how I approach the issue. And it never will be.

But, yes, I have talked to farmers who do business with these companies. I know exactly what you're talking about. Well...in a general way. I don't know which farm you're referencing, nor should I, but there are many who get into the business and make that trade-off but there are also many other reasons. Of course, we then get into the larger farms once we go into it to that extent.

I think I've mentioned the fact that I grew up in a place where we grew our own food. Acres of it. Was all hand work. Ever pull weeds on a 4 acre field? I have. Ever plow it with a horse? My dad did. Well...after he finished up with the mowing side. Of course, he had a tractor. He just didn't feel like paying for fuel. As well, that was what we genuinely reference as a "small family farm". That term is largely exaggerated and very deceptive term in today's world. What would you say defines a small family farm?

[Acala]

From what I've witnessed this isn't true.

What I was describing is how free markets work. We don't have a free market. Not even close.

It's ridiculous to say that govt subsidies inflate food prices while less than 1% of the population grow the food. Using your ideals on how the market works, then surely way more than 1% would be in agriculture. The truth is the subsidies keep food prices low.

I don't understand your economics at all. I am talking about the following:

1. Government increases demand for food through subsidy of consumers (food stamp program) and direct purchases. Increase demand and price goes up.

2. Marketing orders and other programs that limit the supply by paying farmers to keep fields fallow or preventing them from bringing more to market. Reduced supply equals higher price.

3. Direct price supports where government actually sets prices for ag commodities and if all the product doesn't sell, the government buys the surplus. This is simply holding prices higher than the market as a matter of law.

What are you talking about?

In any event, the idea that a basic market function like producing food can't exist without government intervention is absurd and countered by thousands of years of history.

[Occam's Banana]

3. Direct price supports where government actually sets prices for ag commodities and if all the product doesn't sell, the government buys the surplus. This is simply holding prices higher than the market as a matter of law.

I remember how I first discovered this phenomenon ...

Back in the '90s, I lived one town over from my mom. She called me once for the sole purpose of exclaiming with enthusiasm over the low price of ground beef. Apparently, a local supermarket chain was selling the stuff for $0.29 per pound. I checked it out, and sure enough, she was right. It didn't last long, though - and I didn't really wonder or think anything about it at the time. (The only reason I remembered it at all was because it wasn't the sort of thing that usually prompted my mom to call me.)

Several months later, I read a bit in Liberty magazine about how "over-production" of beef had caused prices to plummet. In order to "fix" this terrible "problem," Bill Clinton had issued an executive order (at the urging of the beef and cattlemen's lobbies, of course) directing the federal government to purchase massive quantities of beef for use in public school lunch programs. Subsequent to the enactment of this EO, beef prices shot right back up. (And I never heard a thing about any of this from any other source - certainly not from the mainstream media of the day. Had it not been for Liberty's reportage, I would have remained in complete ignorance.)

Just to cap it all off, at roughly the same time, Clinton (along with Newt Gingrich and all the other usual suspects) was indulging in the latest round of D.C. back-biting and sniping/counter-sniping - this time over what should be done to "help" middle-class consumers deal with rising oil/gas prices. In all of the Establishment's wailings over the issue, I heard nary a peep from any of the bastards (left or right, Republican or Democrat) about how the feds had $#@!ed over tax-payers and consumers in general ("middle-class" or otherwise) - and beef consumers in particular - for the sake of keeping a favored lobby's bank accounts flush and plump.

This particular chain of events was very formative for me - it fully brought home to me the fact that politicians are little more than two-faced, mealy-mouthed jackals who pander to the public while stabbing them in the back. This sequence of revelations was a seminal event on my journey to becoming a full-blown an-cap voluntaryist. In terms of politics, it's "ancient history" - but to this day, it still chaps my ass to think about it ...

[fr33]

What I was describing is how free markets work. We don't have a free market. Not even close.



I don't understand your economics at all. I am talking about the following:

1. Government increases demand for food through subsidy of consumers (food stamp program) and direct purchases. Increase demand and price goes up.

2. Marketing orders and other programs that limit the supply by paying farmers to keep fields fallow or preventing them from bringing more to market. Reduced supply equals higher price.

3. Direct price supports where government actually sets prices for ag commodities and if all the product doesn't sell, the government buys the surplus. This is simply holding prices higher than the market as a matter of law.

What are you talking about?

In any event, the idea that a basic market function like producing food can't exist without government intervention is absurd and countered by thousands of years of history.

None of that in your list leads me to believe that the subsidies inflate food prices, like you originally said. Instead it's the opposite. They do all of that to keep food prices low and keep people living in cities and dependent upon them.

Paying for fallow fields makes up such a small part of the subsidies. It's really just an example of how they mismanage things.

I'm not disagreeing that producing food without government intervention is possible. I see the evidence of that all around me. There used to be a lot of people and homesteads where I live. Those people were raising a lot of kids without government intervention. They left when the profits were removed via intervention.

[Occam's Banana]

Apropos from another thread: http://www.ronpaulforums.com/showthr...anksgiving-NOT

Record Harvest Means Cheap Cranberry Sauce for Thanksgiving: NOT

Posted: Wednesday, November 26, 2014 --- 7:39 a.m.

MADISON, Wis. (AP) -- An oversupply of cranberries from record harvests in Wisconsin and Canada has prompted the U.S. Department of Agriculture to buy up to 68 million pounds of berries.

The result will be more stable prices for cranberry growers. The oversupply means growers are getting between 10 cents and 19 cents a pound.

Wisconsin State Cranberry Growers Association (http://bit.ly/11t4CU8 ) says growers need 25 cents to 30 cents a pound to break even.

Association spokesman Tom Lochner tells Wisconsin Public Radio News (http://bit.ly/11t4CU8 ) growers asked the USDA to buy around 30 million pounds of excess cranberries. The agency instead said it would more than double that.

The cranberry products will likely be distributed to school lunch programs and food pantries.

Copyright: Associated Press 2014

http://www.nbc15.com/home/headlines/...283955191.html