The main reason for US farm subsidies is to ensure a minimum price each year. When there's low yields, prices rise due to scarcity. A productive farmer profits, an unproductive farmer scrapes by. When there's high yields, prices fall due to abundance. The problem is the price can fall enough to make it unprofitable to even harvest if crops were sold at true market rate, so the USDA buys what it must to keep farmers from bankruptcy. Remember, each year involves tremendous outlays in seed, machinery, fuel and chemicals. Farmers usually manage to predict the market, but nobody can really predict the weather. So when there's a record-breaking harvest of corn, which has minimal margins to begin with, the government has to buy up the surplus or else farmers will lose more money harvesting (and thus feeding people) than they will not harvesting (and thus not feeding people).
The USDA also pays farmers who let acres go fallow because it reduces their need to subsidize the crops which might have grown, reduces fuel, seed and spray demands, and also to continue the general reforestation of the United States. I'm surprised this is under criticism here, being a very enviromentally friendly idea and less expensive than subsidizing further planting. It basically amounts to the USDA paying people who allow forests and meadows to reclaim their underproductive fields.
I'm afraid you're all quite wrong about what would happen globally if the US stopped food subsidies. The price of US grown grain, currently kept up by subsidies, would plummet during good years. The price of US meats, which depends on US grain, would plummet as well. The US would actively try to sell abroad to keep its farmers from going bankrupt, but the US agricultural machine (now replanting their once-subsidized fallow fields) would be producing food so much cheaper than foreign developing farmers that other countries couldn't afford to allow US food into their market, for fear of destroying their own agricultural sectors. Refusing cheap food means a populist riot during a famine, accepting cheap food means a peasant revolt. This is what happened to Somalia. A mild famine, everyone threw food aid at them, and the farmers couldn't sell what they grew next year because the people could just get it for free from UN camps. Most countries prefer to feed their people internally and export cash crops as an agricultural policy to avoid this, limiting food imports to what cannot be produced locally or their own farmers can still compete with. Its a very protectionist enviroment abroad and the US has difficulty finding markets in the developing world for exactly this reason. Our current subsidies keep farmers from going bankrupt and foreign farmers able to develop. It isn't ideal, but it is worth the money.
Aqizzar's third point is entirely moot since the Senate represents states, not people. Congress represents people. So if the Senate disproportinately empowers 1/6th of the country who happen to be in half the states, its working as intended. Furthermore, the majority of farming is not done by huge conglomerates but large family farms. From USDA.gov:
This is a good post. However, the chart at the bottom shows one thing that hasn't been addressed. A large number of small farms are unable to afford the capital for extensive cultivation of their land. By this I mean an efficient tractor and plow with a decent back-hoe at the very least to dig holes/landscape.
Small farmers are currently required to either use outdated tools (often an old tractor, rototiller or even hand tools), which greatly limits productivity, or to contract out or otherwise come to an agreement with the holders of the capital goods.
While returning the environment to forest and such is all well and good, not being able to utilize the little land you have is a very real problem to this day.
I think if the local government offered plowing services it would be that much easier to put some seeds in the ground for example.
EDIT: In addition perhaps some incentives to fertilize the land with naturally occuring fertilizers wouldn't hurt. A basic education about how putting bio-matter into your garden is usually a good thing maybe included.
EDIT2: Also I should note that my family has yet to receive an agricultural subsidy despite living on a 20+ acre farm. Do they think we wouldn't work towards a profit? Or is it because someone is squeezing us out?
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Topic: Farming subsidies (Read 3210 times)