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hobbyfarm2145365
Senior Contributor

local economies

Just read in IFT how crop ins (taxpayer money) helps local ecnomies thru local spending.  Four states were listed SD,Iowa Neb & Wyo where  farmers recieved $4.48 billion in 2012 crop indemnity payts (tax money).     This really is nothing but a govt spending program putting tax money back thru economy, not really a capitalistic run economy.  .  The unemployments check (tax money)  that people are recieving are doing the same thing tax money plowed back into economy.    Don't both these govt spending programs do the same thng!!!     Why is one bad the other OK according to many.

29 Replies
BA Deere
Honored Advisor

Re: local economies

Well, we're all Keynesians now. None of it's "good" but how do you untangle it with low-information voters? And without tanking the economy, check the vid on the marketing page where "what would happen if the fed quit adding $85/m to the economy?".
Samnospam
Advisor

Re: local economies

Call your congressman and complain. They ignore my wishes.
hardnox604008
Advisor

Re: local economies

http://farmdocdaily.illinois.edu/2013/03/prices-paid-farm-inputs-received-crops.html

 

People will resort to most any argment to justify why they should receive money (or not pay taxes) and why the opposite is true for someone else.

 

Anyway, if you want to define local economy pretty widely, like the Western Corn Belt, I'd say government policy has brought a degree of comparative prosperity. But not sure how much has tricked down in all those little former farm towns- more to the JD UAW workers,e tc.

kraft-t
Senior Advisor

Re: local economies

Money gets targeted to where the government wants it to go. Tax cuts are directed to taxpayers and may or may not cure any social ills.

 

Crop insurance gets acres planted, a tax cut does not.

Nebrfarmr
Veteran Advisor

Re: local economies

I wonder if it isn't just using the idea of funneling money to the areas, under the guise of 'helping the farmers'.

On the other hand, the subsidies, and espeically the insurance, gets more acres planted, than normally would.

On the flip side, it also gets land that really should not be farmed, planted to row crops.

bruce MN
Advisor

Re: local economies

A couple of really good poits there NF. 

 

I'd add that while there are still most likely many farm commuites where the supply and service sector remains somewhat as it was a few decades ago, the most frequent comment ,or semi-complaint, that  I hear from people all over the country about the changes in and industrialization of production agriculture is that it has done very little for the revolving local economies. th eold "If a farmer makes a dollar it moves through the community 7 times" sort of thing,  Millions in business margins and wages paid to employees by sole proprietor farm supply stores, feed mills, livestock buying stations, vet clinics,  seed and fertilizer dealerships, one or two truck fuel suppliers running out of filling stations etc. etc. gone and not coming back.  It was the people who realized those margins and recieved those wages that filled up and and maintained all of those house in those little towns that are scattered all over the corn belt.

 

That's all so "1950s", I know, and has taken it's time moving inward from the old money east and the already, and always, expansive operations to the west. And efficiency, partiulcarly moder efficiens that can be so significantly affected merely by scale, is important to seasonal and long term profitiblity, but it is also a certain reality.

 

The folks in the towns don't always know it is happening as they see crops growing in every field.  Not many farm kids on a % basis anymore in the local schools is one real reliable tell. 

 

No turning back though, short of some sort of revolutionary change which would have to be totally spontaneous in reaction as how could it be by edict or policy?  But a good conversation to be having and one that the reality of doesn't often find it's way into policy and decision making.

Nebrfarmr
Veteran Advisor

Re: local economies

A comment on the 'every dollar a farmer spends goes through the community 7 times'.

I think that saying is becoming outdated.

For example, we have a very big feedlot/rarming operation not far from here in NE, that does very little in terms of aiding the local community.

For example, they put up big tanks, and built a warehouse, for their fertilizer needs.   They don't go through anyone local.   They buy from the terminals, and have it trucked in.

They are their own seed dealer, all seed is 'in house'.

They have gigantic equipment, and when they buy equipment, they go with whoever gives them the best deal.   Last year, they bought 3 or 4 new combines, from  a dealer in Colorado.  Ditto their fleet of work pickups.  Usually, they sell the used ones to employees, or at least give them first chance, at them.

They feed their own corn, to their own cattle, they have their own elevator.

They ship their cattle out, directly to the packer, I belive in Iowa.

They have their own fuel storage units set up so it comes by the semi load, direct from wherever, not through a local dealer.

 

So, we have a gigantic farm, that sources as much as they can 'direct' from the source, and trucks it in, doing almost nothing for the local economy, except for hiring a crew, paying property taxes, and buying groceries.
When they started building, there was a lot of buzz about them 'buying local', because they called the local ready-mix concret place, and had them pour a bunch of footings, and concrete slabs, and a short drive.   After that was done, they built upon those footings, their own cement plant, and poured the rest of their concrete in-house, getting materials direct.

 

While they may be stimulating the economy somewhere, it really isn't locally.

To top it off, to attract this large cattle feeding operation (investor owned) the county board gave them a 10 year waiver of property taxes, for everything that company builds (which includes the housing for the higher ups that are around here, because they are 'company' houses.

 

hobbyfarm2145365
Senior Contributor

Re: local economies

Gee, no one answered the queation.............Why is one  bad govt spending but farm support are good govt spending.    We were  in a bad drought area but land sold last week for 11,500, purchased by a farmer. I guess its no problem with the govt (safety net) support programs .... a business venture that carrys no risk anymore. .  

bruce MN
Advisor

Re: local economies

bump