cancel
Showing results for 
Search instead for 
Did you mean: 
Senior Contributor

Government Handouts

With the recent drumbeat of how to slow down the ridiculous spending of the federal government, farm subsidies usually rise to the top of the list.  I agree that we have become a nanny state where the government is looked to for a solution of all our troubles.  The permanent politicians use our dependence to keep reelecting them. How could we get along without their handouts??

 

What would happen if they just stopped supporting us?  What would happen if they dropped all of the direct payments?  Do we really need the Department of Agriculture?  After all, 75% of the department's budget is for food welfare programs. Most think that the reason the food stamps, WIC, etc. are there is to get the majority of congress to go along with the farm support programs.  Do we need the government to guarantee conservation practices, crop insurance, low interest bin loans?

 

Is the up side that they would get out of our business? (dream on...) Personally I would not miss them a bit.  It might be tough when prices are below the price of production. The John Deere's, Monsanto's, mom and pop stores on main street, the pickup manufactures, the fertrilizer monopolies would have to just go pound sand or reduce their prices.

 

I see two pluses to the government farm payments:  Stimulus for the above mentioned businesses (give a farmer money and he will spend it!) and in effect a tax refund.  I have always looked on my payments as a tax refund, since I don't agree with most of what the government spends OUR money on. (exceptions: defense and roads).

 

What would happen?

0 Kudos
18 Replies
Honored Advisor

Re: Government Handouts

Like you, I regard the meager payments we get as the means to fund unfunded Federal mandates to the localities we farm in, a sort of reasonable offset, if you will.  It is not so much a tax refund as it is that sort of covering the payments for Medicaid and such for larger landowners, which farmers tend to be. 

 

I think the worst downside is in the making in a way...it is a bit convoluted in thinking, but that is how my brain does it.  We are seeing EPA atart to pile onto row cropping wiht scads of proposed regulations...we hog farmers warned you it was coming. 

 

Now, if you fail to adhere to environmental regulations, or undo a conservation contract prematurely, for example, they can take their money back, and deny you further program payments.  People only accept payments now because you really have no reason not to take them.   

 

When the program payment machinery is dismantled - and it will be increasingly difficult to argue for its continuance with farm gate prices where they are now - the Feds will need a new stick to wield over farmers.  In my mind, they will keep program payments in the mix until those regs can be put into place. 

 

Once the new and cumbersome regulations, and fines for failing to meet them, are established, payments will have no real rationale for continued existence.  To keep farmers under the thumb of government - which is where we all know we belong, right? - a regulatory revolution will occur. 

 

 

These folks will make OSHA look like kindergarten cops, mostly not a damend one of them knows diddly about agriculture, and may not even know anyone who does know anything about it.   With satellite oversight so well developed now, they won't even have to leave their desktops to invsitigate and document your activities. 

 

Welcome to my world.  It is a rough neighborhood. 

0 Kudos
Senior Advisor

Re: Government Handouts

It's getting harder and harder for me to rationalize why I should take any payments. The lack of enthusiasm for ACRE was the indicator, I think, that many farmers are fed up with the system.

There have been times the payments were very welcome.  Now, they're nice but not so essential.  I'd like to see them dropped. 

0 Kudos
Honored Advisor

Re: Government Handouts

At some point, too, Jim, it is inevitable that the generation of farmers for whom programs were survival mechanism will age out of active farming. Average age is what today? It was late fifties several years back.

Younger guys with no true attachment to the safety net will know mostly the golden age that is the commodity market of today. Until you know failure, no matter how hard you work and how smart you are, because the economics just aren' t feasible, you do not think it's can happen to you.

There is always some sense that the government won't let but so many farms and farmers fail, too. That is what started the stabilization efforts of the Depression era, that morphed what we have today. The sense of essentiality was probably more valid in a less globalized supply chain.

There is always going to be a faction that wants to stick with the devil they know. There will always be some who want a totally free market, or who at least thnk thendo. The majority will fall in the masses between the extremes.
0 Kudos
Veteran Advisor

Re: Government Handouts

 

.The abuses of a few always create a dismantling of the honest jo--- trying to play the fringes of the gray area are real fine until big brother checks on things---free $$$ and cheaper  are really a political pipe dreams clamoring for votes---NAFTA is starting to show it's results in several different financial fronts  ---ultimately there is "very little" ""FREE LUNCH ""

0 Kudos
Advisor

Re: Government Handouts

there were no farm program payments when I started in 1977. Federal crop insurance was very "lightly" used by people in my part of the corn belt. the first farm program that I remember p[articipating in was 1983.  after that, there were some years in the late 80's and early 90's that my net income was about what I received in program payments.

0 Kudos
Veteran Advisor

Re: Government Handouts

 

US farming subsidies will decrease over time----regulations will increase

 

Today, if we want to sell ethanol into the EU, we have to be able to track the corn used to make that ethanol all the way back to the producer level so we can show it was not made by clearing forestland......

 

EU is developing tough regs for soybeans, too.....link to DM Register article

 

http://www.desmoinesregister.com/article/20110529/BUSINESS01/105290326/1030/EU-rules-biofuel-concern...

0 Kudos
Honored Advisor

Re: Government Handouts

Stabilization programs began in the Depression, and have ebbed and flowed whenever farm income fluctuated. Yes, the jseventiesnwerenanother golden era in commodities. I recall my father saying so, and the family's financial welfare increasing dramatically...
I left for college in 1972, and forgood in 1973, and they had done a lot of remodeling on the house, bought a luxury car, lots of newer, bigger equipment, etc., starting at about 1970. Mike and I started small row crop farming in 1975, and I do not recall much in the way of support, either.
When we move to NC to expand and reconfigure our hog operation in 1994, I would drive back to VA to buy seed for the forages we wanted on our land app acres. Everything here was cotton and peanuts, and none of then dealers were interested in selling grass, alfalfa, and clover. The guy who always helped me ring up my seed and load th sacks would always say the same thing when I asked how farming was there:"They are farming thhe programs...."
Tpical remark of that period, along with, "If the mailbox fell off the post today, most of them would be out of farming tomorrow."

We have to be honest...something got American ag across the gap (really, a chasm) between the seventies and today. That is a forty-year, two generation leap. I would venture a guess that neither of us knows ten farms that made it without support payments.

Agree?
0 Kudos
Highlighted
Senior Advisor

Re: Government Handouts

It seems to me that in spite of government hand outs to american farmers, there are few that appreciate them. Most are certain that they themselves are deserving but not those other folks.

 

Those BYO's that get higher payments, the landlord benefiot because most tenants give it all to the land owners (right?tight!) Subsidized crop insurance but woe be to the guy that wants to subsidize health insurance.

 

Farmers getting instant writeoffs for machines of $100K or $200k while griping about a city guy that got a small cash for clunker check.

 

For the most part farmers are whiners,complainers, and belly achers and don't even know what the hell they want.

 

The ag economy has had some historical bad days. Government intervened to make sure the fields got planted. They did not move in on robust ag economy and try to EFF it up. A prosperous ag sector radiates throughout the whole economy. Perhaps ag exports even balance out some of the importation imbalance.

 

The truth is we have enjoyed some prosperous times and some of us have taken advantage of it. I don't care what they do for the farm programs. CUT  the PAYMENTS S+++CAN THE CROP INSURANCE BUT LETS NOT STOP FEEDING THE HUNGRY.

 

Lets put tax payers on a diet. Eliminate most of the tax incentives so that people pay on what they earn instead of passing the burden on to others. Tax avoidance is not a virtue. It's avoiding responsiblity. Pay up and shut up. You never had it so good.

Senior Contributor

Re: Government Handouts

I really don't know much about government programs.  But as far as I can see as a dairy farm not much government money comes into this household.  But then I don't really know.  I just know if there is money to buy groceries or if there wasn't money to buy groceries.  Milk prices are good right now but I don't see what the government had to do with it.

 

I have heard my husband say that the goal of the government was to have plentiful and  affordable food for the American citizens.  I do know we pay a much smaller percentage of disposable income for food that many other places in the world.  So maybe the government's ultimate goal at one time  was that.  If so then shame on you that abused the programs.  But then that seems to be what is becoming the American Way.  Get as much as you can off the backs of as many below you as you can.  And it looks to me as if our stellar elected officials want to continue in the "American Way".

0 Kudos