# Farm Subsidies



## Bobm (Aug 26, 2003)

Because farm policy has a direct effect on our hunting I posted this here. I found this article informative and thought you might learn something. It sure opened my eyes
http://www.heritage.org/Research/Budget/bg1763.cfm

It seem as usual the little farmer is getting the shaft.


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## buckseye (Dec 8, 2003)

The federal government is on a historic spending spree. Current estimates reveal that it will have spent $782 billion more between fiscal years (FY) 2000 and 2003 than it did between 1996 and 1999. At over $73,000 per household, 2000-2003 is set to become the highest-spending four-year period in American history, with the exception of World War II. Taxes will eventually need to rise by over $5,000 per household to pay for this additional spending


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## nilsmaster (Sep 26, 2003)

bobm,

That article is going to take a lot of time to go through and comprehend. In the first few paragraphs I saw a lot of "may", "relatively", "most", "can be", "net", "sales", among other words that suggest rather than prove.

You will not find many farmers around that would keep subsidies versus a level playing field/market. A recent news release stated that the ag community recieving subsides will be repaying back a pretty large number of it. Here's the jist of it: The $8.5 million is from ND farmers. MN farmers will pay back $36 million and nationwide the total is $748 million.

As a closing statement I particularly loved how the article stated we are in a "booming economy". Huh, funny that Kerry and the Democrats stopped running on a lacking economy isn't it???

Just remember that the cost of farming compared to the profits is the leading factor of farmers struggling. My dad made about a quarter million in SALES last year but maybe took home 40,000 of that. Geez, that puts us in the poverty level like the article says doesn't it


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## Bobm (Aug 26, 2003)

Nils, I posted the article because I found it informative and I confess I started skimming it after a while I do think the source is credible but I'm certainly no expert on farm policy. I am amazed at how little interest the people on this site showed.  I know farming is a tough go for many I also know some probably work the system and screw the tax payer while most are honest. I was also amazed that the little guys don't seem to be getting a very big slice of the federal pie so to speak if I remember it correctly. I will have to re-read it I haven't got time this evening. I would like to hear from some of the farmers about the things in the article though......what do you think about the point it makes????
Maybe Dick Monson could digest it and comment on it. Like he needs something else to do :lol:


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## Brad Anderson (Apr 1, 2002)

Bobm said:


> I am amazed at how little interest the people on this site showed.


My attention span is only so long. Especially when reading stuff of which I know very little. It isn't that most people don't care, they just don't have the time.

Then there is the issue of who wrote the article. As I'm sure we all know, lotsa articles on the internet were wrote on people's opinions and beliefs, NOT facts.


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## Bob Kellam (Apr 8, 2004)

ok bobm I read the letter from the Heritage group
I guess I see a little of both sides. Would you like to see the subsidies go to the people who produce the food we eat, or to the retailers. I grew up on a farm, I know where I think subsidies should go

If the subsidies were eliminated it would be utter chaos.

Small farms would be eliminated first, why, because the ADM's of the country would be the only operations with enough capital to get thru the initial price increases, and prices would go up without question, everything from seed to fuel to interest rates etc.. you may ask why I say that. I think it is simple logic, the ADM's of the country would no longer get there subsidies, they have a board of directors and stockholders that requires and expects a profit, so they will force the prices up to make up for the subsidies.

Now take into account the snowball effect on small town America, they will no longer need the majority of farm driven businesses. land would be vacant or absorbed into the larger operations, there would be a glut of used farm machinery that will have a ripple effect thru the farm communities, shipping prices for farm commodities would go up as there would be less product to ship, the ADM's are deversified enough to have their own transportation.

Who would be the benifactor in this? Corporate farms like Archer Danials Midland, they would win, who else, the larger farms and co-ops, the suppliers to all of these surviving operations, a lot of them have the same situation, a board of directors and stockholders.

Who would loose, you & me, senior citizens, anyone else in the world that eats, prices will skyrocket out of sight. Do you think Corporate America will say "oh everything is getting so expensive I will increase your salary to make up for it" Somehow I do not see that happening. And for our seniors would the Gov. give them a little more social security so they could afford the more expensive product.

The only example of this that is already in place is the oil industry. How many small oil companies are left? the answer is none. they are all MEGA companies that can control the price of gas at the drop of a hat. Rumors have caused the price to rise on oil futures.

In my Opinion. The Rush Limbaugh think tanks of the world don't give a damn about anyone but themselves or their causes. I consider myself conservative, but I will not go so far as to say I support a conservative point of view to better myself at the cost of another.

And just another spoke in the wheel what would be the ramifications for the sportsmen? makes you think a little doesn't it?

Have a good one!!


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## nilsmaster (Sep 26, 2003)

Good post Bob. And Bobm, I am also pretty shocked about the reaction to your article. Brad said he doesn't have the time to take some time to look at what the farmer is facing. The very farmer/landowner that has the land he and myself ask to hunt on. This is an example of how we as sportsmen have to I guess FORCE ourselves to know what it is like out there. There is a new dilehma of access today in ND and I'm here to say because a lot of it has come from ever degrading landowner/hunter relations and an struggling farm economy. Everyone says things were so cherry back in the day and if you look at it so were the rewards of farming both financially and lifestyle.

I think we as sportsmen should show some more concern. The farmer deals with all aspects of life say a "city boy" does but unlike the city boy the farmer has a life blood to that land and to the economy that can rip it all away from him. Tack on people thinking the way they do and it's no wonder a mine, mine, mine...I don't care if it's yours, yours, yours phenomenon is building up. It was the same back in the day too. People owned land and they wanted it to be respected that they did. Back in the day it was respected as such...today it's every increasing not.

Sorry, off the subject here but I just had to say it. Gotta go to a wedding in Minnesota...argh...my ten pound walleye will have to wait another day


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## Bobm (Aug 26, 2003)

Bob I have some questions, you say


> I think it is simple logic, the ADM's of the country would no longer get there subsidies, they have a board of directors and stockholders that requires and expects a profit, so they will force the prices up to make up for the subsidies


1)Specifically how would they do that and if the ADMs had the power to force prices up ( I am assuming you are talking about the price of food) why would they not have already done so to increase their profit margin?
2) why would seed and fuel prices rise, demand for food is not going to go down
3) if prices for food stuffs go up why would smaller farmers not benefit from that price increase just like the large ones
4) you say shipping cost would go up because there would be less food to ship, why is that who is going to stop eating and reduce demand for food?
5) gas and oil are commodities like food and oil companies cannot change the price at the drop of a hat, deregulation made it more efficient not less competitive. Food prices should actually get cheaper as the food industry gets more efficient. Economy of scale is why the big guys are slowly ending the family farms. I am not saying this good for hunters I'm just talking about the theory of farm economies in this comment.
6) the insinuation the the heritage foundation is somehow connected to Rush Limbaugh .....what sense does that make? Anyone that wants to paint a conservative group as extreme always come up with that tired BS can we leave it out of this conversation.
7)I agree with you that elimination of farm subsidies would throw the system in chaos....unless it was done very slowly. 
And Bob I'm asking these questions because I want to have a better understanding of farm policies, not to be confrontational. And you have a great first name :lol:


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## Bob Kellam (Apr 8, 2004)

Bobm
The ADM's and Cargills of this country are the biggest feeders at the Govt. smorgasboard. My logic is that if they were the only producers and there were no subsidies, how would they be able to sustain the same GPM with out a price increase, they could probably do it with a greater volume of goods at less GPM, however, is that Corporate America?

The same logic follows with seed and other production based products, wouldn't there be fewer people buying these products , we are all well aware of the fact that a gas station owner bases his profits on volume.

Right now today I personally know farmers that work unbelievably hard, and even with the subsidies they have net incomes that fall below the poverty level. Do you realize that if a farmer has federal crop insurance and has a hail storm that destroys his crops, the payment he gets does not cover the cost of planting that crop. If farm subsidies were eliminated the exodus of small farmers would be rapid. there would be no safety net. Yes price increases for food would be good for the remaining small farmers.

Shipping is a variable, with the exodus of small farmers, would the big boys increase production by buying up the small operations? or would they hold their production static to create a "shortage" The big boys play by rules they make.

Deregulation is what we are talking about here Bob if we deregulate the farm industry, we will have MEGA farms Just like we have MEGA oil companies. And I disagree that the oil prices change rapidly, Futures are all over the place in the last 20 days.The Media has reported that the price increases had something to do with shutting down a refinery, I don't remember where, however if one refinery can cause such a fluctuation in the price, why are the oil companies not building refineries all over the place? the answer must be that they are to expensive to build, or they are happy with todays prices, crude must not be a problem as we have many wells that are capped in western ND that are waiting for what? are they part of the strategic reserve? Who Knows!

This is a some what controversial point but Govt. Subsidies have also done some very bad things for Rural America. case in point CRP. Crp has been a blessing for sportsmen and a bane for Small Town ND, Why. Let me explain. I can speak from experience on this because our farm is an example, Mom and Dad worked the farm with the help of the kids and we did OK we had some very good years and some strings of very bad years, Dairy and Beef cattle paid the bills, crops were not for selling they were for feed, My parents wanted a better life for their children so they sent us off to college, I will never forget what dad said to me the day i left
He said "go to college get your degree and make something of yourself" so one by one we all did. Mom and Dad were left on the farm, they wanted to enjoy life a little and they sold the livestock and signed up the cropland into the CRP program that would give them a steady income for awhile. Those decisions were good for Mom and Dad but the small town took al little less, no more vet bills for the livestock, no more parts bills at the local machinery dealership, no more large fuel bills for the bulk fuel service, and on and on and on. then Dad Died. Mom no longer even wanted to live on the farm as it is somewhat isolated, so she moved to the nearest large town. The county that I grew up in has a very high percentage of CRP acreage. I would love to get into farming again but age and cost are not in my favor. When the price of one combine is $300,000.00 and you have tractors that get into six figures, one bad year and all of that debt is more of a risk than I want to take.

Maybe I am all wet Bob, but when I was in college (a long time ago) I had an economics teacher that lectured about this very thing happening.

And I really believe if you polled the farmers of this country the majority would probably say git rid of the subsidies, if you level the playing field, they would rather see a world wide fair market system. With our deversified world that is going to happen about 1/2 hour after hell freezes over.

Sorry about the Rush Comment I listen to him and sometimes he just irritates the heck out of me.g


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## Bobm (Aug 26, 2003)

Bob, Thats is a pretty good explanation thanks. I still have a couple more questions. Isn't Gpm decided by the difference of the market and how efficient they are I understand that the big boys are more efficient but I don't understand how they could just arbitrarily raise prices because if they did the little guys would undercut them and the price would probably settle out pretty quickly to a true market price wouldn't it? Why would the little guys leave if food prices rose and I guess my next question will answer this but if they can't produce profitably in an unregulated market maybe they should get out of farming. If the goverment allowed farmers to sell their products everywhere in the world without government interference would they would be able to produce at a profit?
Heres the part I truly don't understand how does a farmer get paid with subsidies is it a per bushel thing per acre what is it based on?
The oil futures are mostly fluctuating because of speculators I think. I do know that the shortage of refineries is the result of eviromentalist factors obstructing their construction ( the not in my backyard reasoning) and the federal rules making them too expensive to build. The fuel shortages we have here are a result of too few refineries our demand has risen very much in thelast 25 years and we haven't built a single new refinery to meet the demand. The other big factor is that the feds require different blends for different areas of the country and different seasons so if any of the refineries has a down time problem the other refineries cannot take up th slack. In otherwords the whole problem is primarily the result of beuracrats tinkering with the market forces. Markets left alone without allowing monopolies always have the profit motive to rely on to produce enought to prevent shortages and keep prices where they should really be. I suspect that the Farm subsidies started out well intended and have since over the years grown to a giant vote buying complicated typical wasteful government scheme that hiurts the people it was supposed to help and makes them dependent on politicians. I guess I don't have any faith in any bureaucrat making business decisions, 90% of our poiticians have never ran a business. As for Rush I listen to him when I get the chance, most of the time I think he nails it, but once in a while he is full of BS but aren't we all :lol: Thanks for taking the time to explain this as only a farmer could.


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## Bob Kellam (Apr 8, 2004)

Bob

Some of the subsidies are based or I should say were based on per bushel, others are based on percentages, crop losses are adjusted as a percent of loss. The Govt. used to pay farmers to not sell wheat. (I do not know if this program is still in existence) The way I understand it the Govt. would pay farmers to store wheat and not sell it, I think that was based on how many bushels were stored.

The farm program is like a double edged sword, it is so jumbled up in politics that it is almost impossible to understand, Check out the USDA website, the Farm part is just one small piece of the entire package, Food Stamps, WIC, School Lunch Program, and other things are all lumped into it.

The Farmers of our Nation are very very very good at what they do. The area that I live in has some of the best farm land in the world, The Red River Valley is flat for miles, the topsoil is heavy, black and deep. amd most farms here are large, 50 miles west and 30 miles east it is a different story, you start to get into rolling hill country. Farming is still good but you have new obstacles, rocks are one.

At home our soil was rocky and sandy. If the rains came at the right time things were good if they didn't yields fell quickly.

I suppose it would be possible for the small farmers to compete efficiently with the large opertations, and many hve by forming co-op's, there have been a large number of so called farm organizations that talk the talk, Farm Bureau, NFO and others. Do they do the best they can for farmers?
it seems that everytime you get and organization such as these they get politically involved and end up being a "special intrest group" That is a whole other subject.

Sorry it took so long to reply it was a beautiful weekend here and I went out and enjoyed it!

Have a good one.


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## Bobm (Aug 26, 2003)

Thanks


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