2. Food is part of national security. It's sensible to keep the sector working.
3. Consumers hate variability in food pricing. So, general sentiment at the shop is not in favour of a strong linkage of cost of production to price, and under imports, there's almost always a source of cheaper product, at the socialised cost of losing domestic food security: Buy the cheese from Brazil, along with the beef, and let them buy soy beans from China and Australia to make the beef fatter. -And then, you can sell food for peanuts (sorry) but you won't like the longer term political consequences, if you do this. See 1) and 2).
China actually imports a lot of food from us, they seem to be the biggest consumer of chicken and pork feet, for example, which we don’t seem to have much use for. The current subsidies are because that export trade, which farmers have depended on and invested in, has basically disappeared now.
“One thing, however, that I will note that Juvenal does not say is that the panem et circenses are either how the Roman people lost their power or how they are held under the control of emperors. Instead first the people lose their votes (no longer ‘selling’ them), then give up their cares and as a result only wish for panem et circenses, no longer taking an interest in public affairs” [1].
[1] https://acoup.blog/2024/12/20/collections-on-bread-and-circu...
Compounding this, farm equipment is freaking expensive. It's not abnormal for a large farm to have hundreds of thousands in payments on machinery. In a good year they make hundreds of thousands. In a bad year they're on the hook for hundreds of thousands. It can take only one bad year to wreck a farm, which is why their suicide rate is so high.
It's hard to imagine as a dev. But imagine you make 200k. Then next year, because of ransomware your boss installed, they tell you you owe 200k through no fault of your own. What would that do to your finances?
Insurance is a parasite. I'm usually against subsidies, but for as something as important as food, it seems reasonable.
Can you explain more why insurance is a parasite? Maybe a state-run insurance would be better?
Subsidies (AFAIK, please correct me if I'm wrong) typically either get paid when farming supplies (tractors, seeds, fertilizer, land etc.) are bought or when the final product is sold. So they are paid when things go well for the farmer, but not (or less so) when the farmer has a bad year.
I feel like the risk of bad years would be better managed by paying farmers when bad years happen. You know, like insurance.
Subsidies is a hugely loaded term that would take more than a few comments to even begin to cover, but yes, they do cover those things that you mentioned, but a lot more than that. Heck they even sometimes pay farmers not to grow things at all - we used to get a check not to grow tobacco. I was a child then, I don't remember all the details.
Importantly, subsidies already include a federal crop insurance program that the government pays most of. That would cover most reasons for loss of crops. But there's also payments when say, you had a great year, but prices crashed through no fault of your own. And separate payments for say, farm animals catching disease and dying, or natural disasters. And separate payments for things like the messy situation COVID created. And a lot, lot more.
My comment was mainly with the lens of 'get rid of subsidies and buy your own insurance', and well, we see how well that works with health insurance. "Oh sorry Mr Smith, those cicadas were underground when you bought the farm, pre-existing condition, denied."
Farmers typically have more knowledge and more budget for good advisors than consumer health insurance buyers. There are all kinds of business insurance, and I think these are not usually considered as horrible as health insurance. Also, with good insurance you've got a partner who is very invested in understanding the risks you're taking and letting you know (in the form of how much you have to pay).
Some subsidies are probably a good idea, especially where you want to encourage behaviors that would not naturally be encouraged by the market (e.g. getting farmers to not grow crops that you don't want them to grow, or do things that are good for the environment but not legally required).
Sometimes it's probably neutral, where the food is cheaper in the supermarket but taxes are higher and in the end it's just the consumer paying anyway. My guess is that this usually isn't the most efficient way to get money from consumers to farmers.
And sometimes subsidies are actively harmful, like when they encourage growing crops beyond what the market requires.
The consequences of not being able to produce enough calories is severe. It is much better to overproduce and everyone gets fed than producing just enough and a climate event erases out 20% of our calorie production.
Ethanol is another one.
That's the sensible way to do it.
Somehow I doubt that it's the way we do it... But maybe the variability is coming from world trade and developing nations.
Part of the cull would likely be shifting towards more grass fed production. Another part would simply be prioritizing chicken or pork for a while.
Most crops grown in the US are used as animal feed. They are dependent on arable land that could be used to grow food for humans directly and much more efficiently. We just like the taste, so we accept the inefficiency.
I don't care to research it further, but I own a small 5 acre farm and can attest that some crops grow in some areas and some don't. So even if you did map it all out on a piece of paper where you'd get all your beans and lentils and whatnots I doubt it would work in real life. Cattle can handle a couple hard freezes. My tomatoes can't.
Indeed the argument to remove beef production has always struck me as an interesting starting point to a longer conversation.
So ok, cattle are gone, and there's now say 30% more grain on the market. Presumably this lowers prices to humans? Do people suddenly eat 30% more bread?
Health, and weight, issues aside (not sure an increase in carbs at the expense of protein is a win), do people just shift to other protein (like chicken). Does this mean a huge oversupply of grain, and a consequent drop in prices?
Let me put it another way. Does removing a market currently consuming 30-50% of the crop make things better or worse for farmers?
IMO Having livestock feed as a market keeps prices up, and as this article points out they're still too low. Killing off the cattle market kills off grain farmers too. I'm not sure that's the win people think it is.
The biggest is not even used as food, over half of corn acreage is used for ethanol. That's an amount of land that's truly beyond comprehension. Its a horrible program as well, corn ethanol is worse than the gasoline it replaces in terms of carbon footprint when taking land use into account. And it raises the price of food. And we even subsidize it multiple times, we subsidize the crop as corn and then we subsidize it as ethanol. Biodiesel and renewable diesel (different products) have spiked in recent years as well, most of that is made from soy, canola, or corn oil. They have similar problems though aren't as bad as corn ethanol.
Another huge negative surplus is the amount of liquid calories, mainly soda, that are consumed. Most nutrition science that I've read points to the enormous amount of liquid calories as the part of the US diet that is driving obesity epidemic. There are of course other aspects to the obesity as well.
Finally, substituting some of the US consumption of beef with chicken and some of the chicken with beans.
To recap US overproduces calories to the point that it hurts the country. It damages the land, the ocean with dead zones, the climate with carbon. We pay for it multiple times in subsidies and with higher food prices. It hurts our health which we pay for in suffering, shortened lives and health costs.
That doesn't mean much without more details. Corn is used as a tool in the crop rotation to enable growing foods for humans to eat. As we learned before ethanol's time in the sun, farmers are going to grow it anyway to support their rotations. The only question is if it is better to recapture that into usable energy or to let it rot out in the field.
> ... when taking land use into account
But if not taken into account? The harsh reality is that ethanol plants are unable to pay cost-of-production-level prices for corn. It now typically costs $5+ to produce a bushel of corn, while ethanol plants generally start to lose money as the price rises above $4.50 per bushel. You're not growing corn for ethanol. You accept selling corn to ethanol buyers when you can't find a better home for it.
Corn especially is a tough one to predict. A couple of years ago yields around here were nearly 100 bushels per acre higher than normal! Even if we put in the mightiest effort to grow exactly the right amount of corn for reasonable food uses, that 100 bushel surprise means a good 1/3 of your crop has no predetermined home right there. Of course, it can go the other way too. If you end up 100 bushels per acre short of what you expected...
Between needing to grow extra to protect against unexpected low yields, combined with unexpected high yields, half to the corn crop having no home (and therefore ending up as ethanol) isn't that far outside of what cannot be reasonably controlled for.
> To recap US overproduces calories to the point that it hurts the country.
That's fair. We don't have the technology to do better, unfortunately. Maybe once LLMs free up software developers once and for all they can turn their focus towards solving this problem?
There was that brief period where subsidies were enacted to spur on construction of ethanol plants to take up the excess corn that was rotting leading up to that time. They have long since come to an end. You could still call E10 requirements a subsidy, but you'd only be paying for that if you willingly chose to consume the product.
> Now consumers have to buy more and eat more calories to get the same nutrition.
Why?
> All so we can have net negative ROEI ethanol?
I'm not sure your math is mathing. Recapturing something, even with some marginal loss, is still a greater return than nothing.
This doesn't make sense in light of the large expansion of corn acreage that corresponds to ethanol policy.
https://afdc.energy.gov/data/10323 https://ycharts.com/indicators/us_corn_acres_planted
Corn acres have expanded, but the same is also true of other crops. Given corn's role in the crop rotation, it stands to reason that when other crops expand, corn comes with it. There are a lot more mouths to feed nowadays. The world's population has grown by approximately 30% since the last change in ethanol policy.
> that corresponds to ethanol policy.
The ethanol subsidy in the last policy change ended in 2012, yet, as you point out, corn acres have continued to expand, which seems contrary to what you are trying to suggest. What specific correspondence are you finding?
More generally, however, it's a cost that is paid to support massive efficiency gains in other sectors. Like roads, aviation or the military. The freight system particularly would be unreliable if food prices floated according to only supply and demand, due to freights vulnerability to political upheavals, militias, etc.
Apparently, New Zealand abandoned all farm subsidies at some point and while the transition was abrupt and rough for farmers the farming sector recovered and is now performing much better. They abandoned it because they could no longer support it economically. They were producing lots of sheep that couldn't be sold. Now they produce much more meat with much less sheep.
Farming subsidies aren't unique to the US. Here in the EU, farmers are giving away subsidized potatoes in Berlin currently. You can literally go to a collection point and pick up some free potatoes. They have so much over production that farmers literally don't know what to do with it. Nobody wants them. In the same way there's a history of subsidized beetroot farming for sugar production, too much wine in France, butter and milk surpluses, etc. This happens over and over again.
In the US, the two main crops that are being subsidized are corn and soy beans. Corn syrup isn't exactly a thing that the rest of the world needs in their diets. It's a very uncommon ingredient outside the US. And commonly associated with obesity issues inside it. Soy beans are useful for export and for feeding animals. Exports are problematic (tariffs) currently and animals can also be fed with corn.
And of course much corn is also used for ethanol production, which in turn is used to greenwash fuel usage in the ICE vehicles that burn it. Bear in mind that intensive corn farming is very CO2 intensive. The extensive mono cultures in the US are destroying the landscape and contributing to desertification. It's not great the environment or global warming. It doesn't make any economic sense to be subsidizing corn production at this scale.
The problem here is that these are relatively low value crops that would not be produced in anywhere near the current volumes without subsidies. They aren't actually needed in these volumes either. Farmers mainly grow it because they get money to grow it. They would be growing more valuable things without subsidies. Or at least be diversifying what they do. The irony of this is that many farmers don't even like being that dependent on subsidies.
The whole system perpetuates but there's no solid argument for it. Everyone could arguably do better without that. But it's easier/more convenient to not change the system. So politicians keep on "protecting" the farmers (i.e. their own seats).
I looked into this story because it doesn't sound correct. It seems the potatoes were indeed sold but due to an unusually high yield this year, the trader decided not to pick them up so the farmer gave them away rather than try to find another buyer. And it was just one farm in Saxony. So this is not an EU or even a Germany wide issue.
https://www.dw.com/en/berlin-germany-potatoes-eu-agriculture...
I believe this is the same tune we hear in other industries: it’s the effect of the consolidation of companies which provide the inputs (seed and chemicals) leading to a lack of competition and the increase in prices on a captive consumer base.
When farmers feel the crunch due to macro forces in the market (and tariffs), the government effectively acts as a backstop for the conglomerates providing the inputs. Think of the farmer’s hand as an open palm, the subsidy flows through it directly to the company to which they are indebted (“the money is in the ground” as I used to hear during a brief time in crop insurance).
While these subsidies may have initially began with the quaint notion of protecting against scarcity (as many sibling replies seem to believe), the reality is that farmers are being squeezed just as the rest of us. Profits are way up while competition is way down.
It’s doesn’t.
Agricultural subsidies in the US, and I presume most states but I’m not as well read on their policies, are a mixture of realpolitik, war preparedness, and graft.
If you are trying to square the circle, you can’t, because economic efficiency was not an input for the decisions on these subsidies.
When I farmed we had set aside land paid for by the government. When there were predicted shortages on food in the future, we were allowed to farm that ground.
You don't want farmers going under. It just takes one bad year that way and we're all fucked. I've never lived through a proper famine, but Grandpa talked about the dust bowl and depression. It sounded fucking awful.
The fuss made about agricultural subsidies by non-farmers is misguided. Dropping subsidies doesn't make food cheaper, it makes it go away.
Consumers are addicted to cheap food, so they pay taxes instead to make up the difference. Given a progressive tax system this actually is a very efficient approach to take. And overall, as a % of the total budget, these subsidies are insignificant.
What is hurting farmers are reduced markets. USAid used to buy up a lot of surplus production (effectively a back-door subsidy), lots got exported to China et al. Given the economic antagonism towards the US (thanks to things like tarifs and insults) demand for US food exports either dropped naturally (eg Canada) or with reciprocal tarifs (eg China).
Politicians like to say "we don't make things here anymore" ignoring the most fundamental production of all (farming). They destabilize foreign trade, and (if we look at more labor intensive crops) target farm workers for deportation.
To be fair, agriculture states are also red states, so it's fair to say they voted for this.
Tariffs were one way to pry open those markets, but of course, the few agricultural products that were already selling , were affected in the retailiation . It will take some time for things to sort out.
Unfortunately though I don't think US tarifs are the solution here. Leaving aside that antagonizing the end-consumer seems unproductive (eg canada) there's also a perception in Europe that US food products (especially meat) are of low quality.
Whether that perception US true or not US immaterial. (My own visits to the US and experience of US food would suggest the US optimizes for quantity not quality, but anecdotes are not data.)
Much of the barrier with exporting beef are the higher food standards, and documentation, required in Europe. Lowering the standards doesn't seem to be politically acceptable either.
I know there is a rule about reading the article, but did you? This [trend] is nothing new, USAid has nothing to do with it other than short term changes.
1. Keep strategic production capacity alive.
2. Spread American soft power.
3. Get warm fuzzy feelings because you prevented millions of people from dying of starvation.
The quickest way for a government to collapse is famine.
IMO it is the role of the federal government to ensure that the US is not dependent on another country to feed its people. This is probably not popular here, but its a fact.
Emphasis on "so", i.e. past obvious strategic rationale like food "security", there's reason to believe US ag has excessive subsidies. IMO answer is like every other "strategic" sector, farmland political economy has been captured by wealth (i.e. Bill Gates largest farmland owner). There's a fuckload of tax haven / loop holes tied to farmland that defers capital gains tax, estate/inheritance tax, property tax. Farmland is stable investment (because land) used to park wealth - it's an asset class, hence if held as asset, wealthy will double down / double dip to make sure it doesn't go idle, so they lobby all the "easy" crops to get massive subsidies and now something like 80% of subsidies goes to top 10% of recipients. US doesn't need to produce that much surplus corn/soy, but it's relatively easy to grow so big agri with capital sunk on those crops will lobby for continued subsidy of said crops, build up even more wasteful sectors like agri to energy (30-50% of corn goes to ethanol), and next thing you know a very inefficient ground water to subsidized agri commodity to gdp generator takes on it's own logic. TLDR, people good at at spread sheets rigged US agri like they rigged everything else.
You could increase prices relatively little and farmers would earn lot more. But no one else is willing to allow that to happen. As such directly subsidizing them is more efficient.