May 12, 2011

SOAK THE RICH:

Budget Presents Opportunities for U.S. Farmers (Andrea Hayley, 5/11/11, Epoch Time)

The most controversial part of the bill came in 1996 when good intentions by Congress went wrong.

“In an attempt to get rid of subsidies they created a program that turned out to be a disaster,” said Wiehoff.

It happened during a good year, like the current year, when commodity prices were high. Congress decided to get rid of subsidies, only to have prices suddenly drop, forcing an emergency bail out of the farmers.

The benefits, now entrenched based on historical allotments, currently go to farmers of major commodities like corn, soybeans, and wheat—products desirable on the global markets.

Farmers of other products, such as fruits, vegetables, and organic and urban growers for example, have no chance of support under this system. Over a billion dollars a year of direct payments are estimated to go to people who no longer farm their land.

“It is not a very rational system. It could be done in a much more thoughtful way,” said Wiehoff.

The federal government’s intervention in the markets has also created a system where certain farmers are encouraged to overproduce using modern, capital intensive farming techniques, which increase yields, but may devastate the quality of the land.

Excess crops are then dumped on the world markets at prices lower than the cost of production, leaving millions of farmers in developing countries unable to compete with the cheap American imports.

The United Nations, developing countries, and the WTO have criticized the United States and other developed nation’s agricultural practices on numerous occasions.

An overhaul of the system could benefit hundreds of thousands more American farmers, as well as provide relief to subsistence farmers in developing nations.

Enhanced by Zemanta
Posted by Orrin Judd at May 12, 2011 6:02 AM
  
blog comments powered by Disqus
« EXCEPT THAT IF HE ISN'T MAD THEN HE IS THE MAHDI: | Main | AUTOPHILIA YIELDS TO BASIC ECONOMICS: »