Senior Debate Topic: Should Farm Subsidies Be Abolished?

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I have my Senior Debates coming up i been working on it for better part of 2 months now thats my topic, i am arguing they should be abolished which is awesome because thats what i believe, our teacher randomly assigned us For or against(Pros or Cons) so im happy with it, my group is the only one in the school doing this topic because im in Ag Econ/Government and my teacher asked me personally to do this one since its a special one and she knew i would love it lol i love my Ag Teachers but anyway getting off topic i posted it because i would love to hear your opinions on the matter?

I Don't think they should be abolished but i don't know that the grain belt should be living on the dole either.

To some extent if you can't make any money doing what you're doing, you're in the wrong line of work and you should do something about that.

But there are compelling reasons to have domestic suppliers, and sometimes foreign nations heavily subsidize their exports, which makes it impossible to compete on any kind of level ground without government intervention.

But that does not mean that we should be paying corn farmers to produce far more corn than we need, and then in turn coming up with subsidies for ways to use that corn. The market distortion around corn is just bizarre, and the ethanol subsidies had far ranging effects including other crops which became scarcer due to farms converting to corn for better profits.

Hops, for example. Beer producers went through some rough years due to hop farms converting to corn.

I think we should probably be subsidizing corn only to the extent that we actually need corn.

And we should probably think about doing things like eliminating the import tariffs on cane sugar which serve only to protect the corn syrup industry.

Why do farmers need a dole?: We all have to eat. A farmer should be able to sell his product without too much trouble.

ruveyn

As it was explained to me, admittedly 20 years ago so if you are entering formal debate you should check if it's still true, California produces more rice vs. it's land mass than any other state.

Which is nonsensical, because water is scarce in california, so it is more expensive to produce a ton of rice in california than it is anywhere else that produces rice in the USA.

So california rice growers receive a subsidy on each unit of rice they produce, which in turn makes it the most profitable state to grow rice in.

The defense of corn farming, that i hear from people in the grain belt, is that it costs a huge amount of money to re-tool a farm.

But the farmers who are related to me bitterly complain that they have to re-tool about every 10 years regardless, because the new equipment is so much better that they have to upgrade to compete, and so they re-mortgage the farm to buy new gear again and again.

Maybe we should subsidize diversification of our crops?

I am against subsidies in principle. I believe in the nearly total separation of government and private business.

The people who are currently running U.S. government are not competent to run a lemonade stand at a profit.

ruveyn

I figure sometimes the government has to intervene, whether it's through subsidies, tariffs, or import/export restrictions.

Nitrate ferilizer was developed because germany couldn't produce enough bread to feed itself. Except it did produce enough bread to feed itself - it was just that it was more profitable to export it.

A few years back there was a global rice shortage, with accompanying price spike. Not a huge deal in the USA but a lot of the world lives on rice.

In Japan, they mandated that every bag of japanese-style calrose short grain (much of which comes from california - ever wonder where it got the name?) should include 20% korean calrose - which is cheaper.

That didn't help. You can't cook korean and japanese calrose in the same pot, because they cook at different rates. So every 10 pound bag of calrose had a 2 pound bag of korean calrose in it. Which the consumer pitched in the trash. All they succeeded in doing was subsidizing the import of korean rice and increasing the effective cost of japanese-style calrose.

In India, they restricted exports of rice so that it was only legal to export premium basmati. This annoyed rice exporters but ensured that there was enough cheap rice in the country to prevent a famine.

We are also a net exporter of rice, iirc, and all the effect it had here was some higher prices and some hoarding by restaurant owners - who went from storing 2 weeks supply of rice to 2 months supply of rice, just in case.

It is good to have enough of staple foods produced within your own borders to prevent instability that may harm your economy.

But we're miles past that in our own farm subsidies.

thats my standpoint in it as well and the fact we have subsidies shows that our agriculture is socialist which is against American beliefs though in my argument i am suggesting that it would be hard to completely abolish subsidies so in my paper i am recommending that the Government can substitute them with tax break instead, i will bring that out when they are arguing their side that the Government should keep subsidies. and because we have subsidies that makes the price artificially cheaper since they can sell below cost of production since subsidies will cover losses and that makes farms in developing countries disappear since its cheaper(artificially) to import from US than to buy local and that prevents developing countries rto trade their way out of poverty

The agricultural subsidies end up raising the price of agricultural lands, and the subsidies are extracted by landowners in higher rents. If someone wants to rent some land to grow some crops, the landowner knows that the value of the crops is raised to due to federal subsidies, and can raise the rent to the farmer accordingly. The land-owner who wants to sell some land can raise his price because the value of the crops that will be grown on the land will be higher as a result of the federal subsidies.

Agricultural subsidies have been blamed for the decline of rural communities.

Last edited by pandabear on 27 Oct 2011, 12:12 pm, edited 1 time in total.

I think that it is extremely difficult to look at agricultural subsidies in isolation from agricultural policy more broadly.

Cyclical production tends to work to the detriment of farmers--in bumper years prices are depressed by abundant supply whereas in lean years, income is depressed by limited supply. This becomes an even greater pressure on farmers when there are a limited number of participants in the marketplace. To a greater and greater extent, the purchase of farm crops is falling into a smaller and smaller number of hands. It's all well and good to speak of farmers having the freedom to participate in the marketplace, but when there are only a handful of food processing and distribution interests that will buy your crop, you have significantly less bargaining power.

This only gets compounded when price volatility gets passed on to consumers. Food prices are an enormous political problem for government, and the United States took a very deliberate decision to move to a cheap food policy in the 1970's. If farm subsidies are to be abolished (which is no bad thing, in theory) that decision must extend to an examination to the larger question of food security. Are we, as consumers, well served by the current system of food production and supply, and are there knock-on effects that will occur in the marketplace with the elimination of policies (not limited to subsidy) that are intended to maintain price stability?

It is a very complex problem indeed. I'm not fully versed on the subject, but I think price control and stability has a lot to do with it. I used to live in farm country and most of the farmers I heard speak were barely getting by. I think government sets the market price so in many cases, farmers have to sell their product below cost, particularly with dairy. Without some sort of subsidy, they would go out of business. As it was, many of the farmers I knew of were deeply in debt, just trying to stay above water.

So, I think, if all subsidies were to be eliminated, then government would have to stop fixing the price, in which case food prices would rise dramatically for domestically produced food. But on the flip side, maybe some of the strawberries on store shelves would come from someplace closer than California (here on the east coast).

Something's definitely warped in the market. Way too much corn, way too few local producers. But if the government just jumps out entirely, how many families could continue to afford the basics like milk, eggs, and bread? There is much to examine and work out here.

thats why they dont just jump out they need to gradually leave thats why i will be suggesting in my debate that they get rid of subsidies and have tax breaks instead that will save them money

I think subsidies in general are not inherently wrong or good. However, once a government begins subsiding things, it is assuming control on the market and this control requires responsibility.

Merely starting a subside and not constantly analyzing whether the subside should stay or not is really stupid.

In the case of the corn subside, it has been time for long to stop it. Its crazy and unrealistic cost reduction is going to cause issues in the future and is already making the whole industry over-dependent on corn, which is ridiculous and all caused by an excessive subside.

As I hear it, and I am phrasing this on purpose so you know you need to do your homework and figure out if it is true, the majority of subsidies end up in giant agri-business, which has wonderful lobbying arms, but actually end up squeezing out the family farmers the subsidies were originally designed to benefit. A large corporation can and should create it's own reserves to ride out the cyclical issues; they just lobby under some hocus locus about international competition, keeping prices low, etc.

But the reality is that our food industry is turning out crap that isn't even good for us. Food has become THE social divide, with close to earth, local produce being the choice of those who are well off enough to afford it. I don't believe these small, premium farms get any of the subsidy, and yet they are the ones producing the food everyone SHOULD be eating.

The odd play out of the subsidies has given us storehouses full of crap food that ends up in school lunches, because nothing else can be produced for anywhere near it's low cost. But it is still crap food, and crap food costs our society in many ways large and small over time. Parents in pockets all over the country are hard at work trying to change the tide on what gets fed to kids.

I think you need to start with the statistics, and see where the money is going, and see what you can find on the themes I've outlined. There is a LOT out there, and it is a big topic of discussion around here, the whole issue of how we eat and what government involvement may have done in the way of unintended consequences, but it isn't something I have gotten all that close to; I don't feel I can talk all that smartly about it, except to let you know what some of the smoke is. Is there fire where that smoke is? You'll need to do some research.

You can do what my uncle does. Take the subsidies for the failed crops and then reinvest it in your tobacco plants. Then sell your tobacco to European markets. He does pretty good. (There is more money for tobacco in the abroad markets. he sells the good stuff there and the swag gets sold in the US.)

There should be no subsidies for failed crops. That is socializing loss and privatizing profit. No fair.

ruveyn

Isn't that what those mining and oil companies are doing when they screw up? Leaving an ecological mess that takes millions for their (local) government to clean up? =/

I'm largely against subsidies mostly in regards of crops (mostly corn) that is being used to make ethanol. I think subsidies should at the very least be to encourage farmers to provide food, alimentation, for their nearest town. =/