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View Diary: U.S. Agricultural Policy: The Farm Bill Debate (Very Wonky) (45 comments)

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  •  As to the inherent risk of farming, (0+ / 0-)

    if it is indeed an efficient industry it should be able to make profits over time.. So farms should probably save their proceeds for a not-so-rainy day.  If they cannot make money over time... this is the sort of characteristic we see in the long lost industry of moving sand hills with toothpicks for example.  I would say it would be better for them to leave it to those who need to farm and can for cheaper rather than preserving this silly pioneer narrative for the benefit of the few at the expense of everyone.  And the low profit margin of farming as well as its high investment costs might help explain agriconsolidation.  Preventing this might be an argument for subsidization.  One argument I might buy would be for means-tested subsidization for organic and ecologically friendly methods.  The environment is a source of externalities and this might also help smaller farms stay afloat.

    •  You're missing the point. (0+ / 0-)

      Food isn't one of those things humans can do without simply because growing it doesn't happen to be profit-competitive.  Agriculture not, to use a common classic example, "buggy whip making."

      Human beings must eat to survive.  That means we need food, regardless of whether it's profit-competitive to farm.  While you say we could simply abandon American agriculture in favor of cheaper overseas farming, in fact there are three large downsides there.

      First is the cost of transportation efficiency.  In simple terms, the nearer the farm to the kitchen, the more efficient the food cycle.  Less is spent on transportation, and less is lost to in-transit wastage.  The transportation costs also include the CO2 dumped into the atmosphere by diesel freighters hauling vegetables from Chili or Peru that we could and should be growing here.

      Second is local food source displacement.  If the people of Chile are farming to feed the U.S., that is acreage they can't devote to feeding the Chilean people.  And in fact agricultural globalization has had precisely that effect, increasing poverty and malnutrition in places that become satellite farms for U.S. consumers.

      Third is arable land preservation.  Fallow farmland will, inevitably, be converted to other uses.  Once converted, it's a lot more difficult and expensive to recover arability should the need arise.  Oddly, the universe has a habit of serving up such needs.

      You've fallen into a classic contemporary trap: equating profit utility and social utility.  ROI is not a measure of social value or necessity.  There are some things that we need, as individuals and as societies, that simply aren't profit-competitive enough to attract capital.  We still need them.

      The United States of America is a constitutional republic, not a capitalist laboratory.

      •  I don't think you understand my argument. (0+ / 0-)

        I'm arguing that agriculture IS profit-competitive.  If it isn't, it's because there is no one who wants to buy it.  It is a fundamental premise of supply and demand, and has been universally confirmed.  Perhaps the Chilean people can't feed themselves because they don't have money to buy food.  So redistribute income.  The answer is simply not to fudge with markets, and you haven't made a convincing argument why if people need food, they won't buy it.  If it's expensive, that means that it takes a lot of resources to make.... so people will factor that into their decision, weighing the costs to society against the benefits, at least to themselves.  If it's so expensive as to be unpurchaseable, it is exactly that profit incentive that will MAKE agriculture profit-competitive and induce more farming.  Don't demagogue about capitalism.  What do you think would happen if we stopped subsidizing agriculture?  Food would disappear?  The rural poor would stop farming because all of a sudden they would be able to sell their crops and make money instead of being drowned by the U.S. treasury?  The rural poor around the world only have agriculture to turn to.  If you want to dispute basic price mechanisms, fine, but then come out and say it.  Humans desire what they need, and if they cannot get what they desire, it's because they don't have enough income... it's not because we haven't screwed around with prices enough.  As to your comment about social utility versus profit utility... economics does not consider profit utility, it considers social surplus.  The only two objections one might make to this is that the poor cannot represent their desires through their purchasing decisions, which, again, calls for income redistribution, or that there is some sort of externality in the production of food, meaning outside of the producers and the consumers of the food.  I have suggested the national security externality as one a person might claim, but you are not making that argument.  Can you think of any others?  Otherwise, it is basic laws of supply and demand you are challenging.  If people want something, they will be willing to spend their income on it.  It works in every market and in food as well.  The reason we have a global food crisis is that developed world subsidization has driven the global rural poor out of the market.  With barely any income, it is hard to purchase the food they need, especially when politically connected, ill-advised special interests like the biofuel movement consume a huge market share, increasing demand and driving global prices sky high.

        •  Just because American agriculture isn't (0+ / 0-)

          profit-competitive doesn't mean global agriculture isn't.  Is it very important to you that the person who farmed your food was a middle-class American rather than someone outside the country if the same safety standards are applied?  Might I ask why?  And if you truly believe internationally that no industry is profitable except high tech or whatever is sexy at the moment, may I ask about the probably 99% of industry that is not in this category?  Why does it exist?  Why doesn't everyone become software engineers?  If you say because they don't have the opportunity, you are right... some only have the chance to farm, and that is a chance we should give them, especially considering that they are more efficient at it than we are.

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