End Farm Subsidies

[trplnkl]

AGWired, a agri-industry publication just released it's own poll of republican candidates for President. Are farmers themselves saying something about subsidies too?

I'm not really all that surprised actually. At least some farmers realize that subsidies come and go depending on the party in control at the time. Maybe they think Paul would start eliminating the crippling regulations that make subsidies necessary. It would have been nice if the article went into the cause of the seeming shift of political support.

Why would someone go into farming when the government will pay you to not farm?

WAIT! Are you getting a government check for not farming? I know I'm not, are they short changing me? Never heard of anyone being paid by Uncle Sam for not going into farming.

 

[UpstateNYUPSer(Ret)]

Why would someone go into farming when the government will pay you to not farm?

I could never understand this--farmers being paid not to plant certain fields.

 

[wkmac]

How'd you find that? (real question as I am actually sitting here with my mouth open)

My dad's retired from the agra bidness and still gets many trade and industry publications. He showed it to me but I've also learned that LRC posted it up as well.

 

[av8torntn]

WAIT! Are you getting a government check for not farming? I know I'm not, are they short changing me? Never heard of anyone being paid by Uncle Sam for not going into farming.

I think it's called the crop rotation program. There are ways to put a double whammy on the taxpayers. I can think of one program off the top of my head where you can buy farmland get the government to pay you to plant trees on it and also get them to pay you to not farm it. There is another program that several of my friends have used to get the government to pay you to build a duck pond on your land and also pay you to not farm it. Around here you can then turn around and lease your land to hunters for a premium. Of course there is no requirement that you are an actual farmer or anything. One of my friends cannot even grow grass in his yard yet Uncle Sam pays him to not farm.

 

[trplnkl]

I think it's called the crop rotation program. There are ways to put a double whammy on the taxpayers. I can think of one program off the top of my head where you can buy farmland get the government to pay you to plant trees on it and also get them to pay you to not farm it. There is another program that several of my friends have used to get the government to pay you to build a duck pond on your land and also pay you to not farm it. Around here you can then turn around and lease your land to hunters for a premium. Of course there is no requirement that you are an actual farmer or anything. One of my friends cannot even grow grass in his yard yet Uncle Sam pays him to not farm.

I am familiar with the CRP. A farmer puts a certain % of his land aside to grow a specific type of grass that is supposed to replenish minerals that are sucked out of the soil do to consistently planting the same crop (example cotton) year after year. The time required is 10 years I believe. During this time, nothing else can be planted on that land but that type of grass and they can not derive any other revenue off that land without repaying part of the money received for the program back to the government. The exception is they can lease the land out for hunting, but the "premium" is in question because the hunting is limited. No game feeders, hunter blinds , etc. can be constructed during the "set aside" time. The land can be sold and the program money transferred to the new owner that is bound by the same restrictions.
Around here a lot of older farmers use the CRP as a retirement fund. They put the maximum allowed acres in the program, lease the remained of their land to other farmers or sell it with the restrictions attached. They then, knowing they are done farming for a living, sell all of their equipment and move to town.

 

[av8torntn]

I am familiar with the CRP. A farmer puts a certain % of his land aside to grow a specific type of grass that is supposed to replenish minerals that are sucked out of the soil do to consistently planting the same crop (example cotton) year after year. The time required is 10 years I believe. During this time, nothing else can be planted on that land but that type of grass and they can not derive any other revenue off that land without repaying part of the money received for the program back to the government. The exception is they can lease the land out for hunting, but the "premium" is in question because the hunting is limited. No game feeders, hunter blinds , etc. can be constructed during the "set aside" time. The land can be sold and the program money transferred to the new owner that is bound by the same restrictions.
Around here a lot of older farmers use the CRP as a retirement fund. They put the maximum allowed acres in the program, lease the remained of their land to other farmers or sell it with the restrictions attached. They then, knowing they are done farming for a living, sell all of their equipment and move to town.

I am no expert on this subject. It is my understanding that the states get block grants and they then come up with their own rules as long as they fall within certain guidelines. I know for a fact that in my state that you do not have to be a farmer and that you can combine this program with other programs. In my state they also set aside certain amounts for each county. My county is not a rural farm county so it becomes easier to get approved because they have to spend the money. I know multiple people that participate in this program and none of them grow grass on their land so I'm guessing that is not a requirement here or that nobody checks. In all the cases that I know of they at least planted part of the land with timber. I am thinking for some reason that here you have to stay on ten year blocks also. My "family in law" also have thousands of acres of timberland and have large chunks in this program. I think last Christmas they were saying they get enough to cover all their property taxes. They also have a very nice hunting club that is very expensive to join so just as a guess I'm thinking here you may have income gains from hunting rights.

I also have a very good friend that bought some farmland and entered it into this program. He found a government program where the government payed to build a pond. He had no issues with getting payment. He got it certified as some type of duck hunting flyway or something(I've never been able to get into duck hunting so I am unfamiliar with all the terms). He put the hunting rights on ebay and got over a hundred bids in three days.

To make a long story concise I know multiple people that participate in these programs and not one could grow corn, soybeans, rice, cotton, or any other type of crop outside of timber. As a reply to your original statement that you wish you could get paid to not farm I think that it is nothing more difficult than to purchase land in an area that qualifies for the programs.

 

[av8torntn]

My dad's retired from the agra bidness and still gets many trade and industry publications. He showed it to me but I've also learned that LRC posted it up as well.

After I asked the question I saw it on LRC. I am stunned that any farmer would support Paul for no other reason than most of my older family members were farmers and they all voted dimocrat like it was a religion.

 

[trplnkl]

I am no expert on this subject. It is my understanding that the states get block grants and they then come up with their own rules as long as they fall within certain guidelines. I know for a fact that in my state that you do not have to be a farmer and that you can combine this program with other programs. In my state they also set aside certain amounts for each county. My county is not a rural farm county so it becomes easier to get approved because they have to spend the money. I know multiple people that participate in this program and none of them grow grass on their land so I'm guessing that is not a requirement here or that nobody checks. In all the cases that I know of they at least planted part of the land with timber. I am thinking for some reason that here you have to stay on ten year blocks also. My "family in law" also have thousands of acres of timberland and have large chunks in this program. I think last Christmas they were saying they get enough to cover all their property taxes. They also have a very nice hunting club that is very expensive to join so just as a guess I'm thinking here you may have income gains from hunting rights.

I also have a very good friend that bought some farmland and entered it into this program. He found a government program where the government payed to build a pond. He had no issues with getting payment. He got it certified as some type of duck hunting flyway or something(I've never been able to get into duck hunting so I am unfamiliar with all the terms). He put the hunting rights on ebay and got over a hundred bids in three days.

To make a long story concise I know multiple people that participate in these programs and not one could grow corn, soybeans, rice, cotton, or any other type of crop outside of timber. As a reply to your original statement that you wish you could get paid to not farm I think that it is nothing more difficult than to purchase land in an area that qualifies for the programs.

You are probably correct about regional or state rules for the crp. If I was coming across as a self appointed expert I apologize, I am far from that, but I do know some details.

The hunting lease I was involved in a few years ago was on a ranch used to raise breading bulls. The outlay of the land was varied, some wooded, some cultivated, some open pasture and some crp. We were free to erect blinds or feeders everywhere but the cultivated and crp acres and out price per acre did not include those acres. We were also free to hunt the crp land but not the cultivated(for obvious reasons). To surmise, we were only paying for the non-crp and cultivated land based on how the ranch manager explained it to us.

I guess it could depend on what the state ag agency thinks the best way to rotate crops for certain types of land. Maybe the grass we have here will not suit their purposes.

Bottom line is, anytime there is a government program that gives money to people for doing nothing with restrictions, crooks are going to figure out a way to get their paws into the till.


give me a hint...what is "LRC"? I'm drawing a blank.

 

[av8torntn]

give me a hint...what is "LRC"? I'm drawing a blank.

LewRockwell.Com

Also I do remember people saying that they couldn't make improvement to their land (like buildings) on the CRP part of land.

 

[trplnkl]

thanks for the info.

 

[wkmac]

After I asked the question I saw it on LRC. I am stunned that any farmer would support Paul for no other reason than most of my older family members were farmers and they all voted dimocrat like it was a religion.

WOW! That poll didn't surprise me not because I like Ron but because the many farmers I've come across over the years, it does respect a more common view than you might think.

Trp, Sorry about the "LRC" shorthand.

 

[wkmac]

I think it's called the crop rotation program. There are ways to put a double whammy on the taxpayers. I can think of one program off the top of my head where you can buy farmland get the government to pay you to plant trees on it and also get them to pay you to not farm it. There is another program that several of my friends have used to get the government to pay you to build a duck pond on your land and also pay you to not farm it. Around here you can then turn around and lease your land to hunters for a premium. Of course there is no requirement that you are an actual farmer or anything. One of my friends cannot even grow grass in his yard yet Uncle Sam pays him to not farm.

This is just a general response and not specific to AV. But AV raised valid issues and to those is what I'm addressing. That said....

Several years ago I worked with a manager at UPS who was planning his retirement (now retired) and being from Montana (still had family there) he was looking out west for some land. He ended up staying in Georgia go figure! As he was looking, a lot of the land came with a gov't program where the owner was literally paid to not farm that land. I was shocked (and it takes a lot when it comes to gov't doing that) at how many properties would just about pay for themselves over the years just in subsidies to not grow any crops. And most of these properties were not even farms to begin with as many were just raw unimproved land that may have a house on it. I'm talking about the subsidy literally making your monthly mortgage and in some cases even paying the property tax too. Whose to blame here for this?

Before we go there, let's just for the moment discuss what IMO is a basic economic principle that we need to consider before we go look for the guilty. I drive in to a given marketplace and I'm the only one with tomatoes and I only have a bushel to sell and lots of customers just watering at the mouth for a good ole' tomato sandwich. Odds are I will get a premium price for those tomatoes. Yeah, yeah basic supply and demand right? What happens to that price if I have 100 bushels or better yet 100 farmers come to the market with their own bushels of juicy tomatoes. Damn, now I want a BLT!

Farm subsidies in many respect came about as an FDR program during the depression as a central planning regime to stabilize farm prices. WRONG! Well partly wrong. I use to believe this myself until I learned about the 1922' Grain Futures Act which helped create what we know today as the Farm Commodities Trading business. That's right, commodity trading in farm products as we know it today was in effect started by a gov't action and not a purely market action so just make note of that. And no, I don't believe this was do-gooder liberalism but rather pure market intervention and protectionism at the behest of special interest players who stood to benefit. As bad as the mortgage mess blew up, don't think for one minute that this whole mess wasn't as much industry driven as it was gov't driven because one doesn't exist without the other.

OK continuing, now that we have a commodity market that invests money hedging on certain farm commodities in a market place, what happens if you have a whole bunch of little farmers who at any given time can grow or not grow a certain crop which thus effect supply which thus effects.....drum roll please...price. If the farm market is broad, diverse and more important, free to open competition, how hard would it be to hedge a commodity investment to achieve a profitable outcome? Further importance, how can a big agri-bidness put a food product on the consumer market with a price based on a certain profit model and then a handful of dirt farmers have a fresh bumper crop of same and this plummets the retail price? These big agri-bidness concerns could lease these farmers out of the market to achieve the same ends but what does that do to their profit bottomline? That is an unsustainable business model for them. But what impact would it have if they could lobby Congress to take taxpayer dollars and in effect lease those farmers out of the market for them?
AH-HA!

If I can't tell at any given minute what the real potential is for the total amount of product to be placed on the market is, how can I assure the risk/reward is not any better than buying a Mega-Millions lottery ticket? Regardless of the fools who buy lottery tickets, trying to part money from a wise investor for such a marketplace seems a bit dicey to say the least. However, if I can account for known total acreage planted in a given season and of what crop, this makes the risk of such investment a lot less riskier and it also makes it possible to grow that investment market as well. What if I'm able to even buy much of that land and still keep the price supports in place to boot, what then? Ever give serious question as to why the number of farmers is shrinking and who has the regulatory power to push the smaller operators over the edge?

Now if you can shift the burden of controlling that market from the market itself and onto the backs of taxpayers who absorb the risk costs, you've now achieved the best of both worlds. This in my opinion is pure mercantilism (a neo-mercantilism at the least with nationstates replaced by multi-national corporations) where the lords and barons in league with the king burden the serfs and pleasants while they (corp. and state) are able to rake off the creme. BTW: If you think NOAA and all those weather satellites were put up just for the local weather forecast, think again. Knowing weather thus reduces the marketplace risks and the taxpayer footed the information bill.

This is also another reason that modern American capitalism as opposed to an older laissez-faire tradition of the physiocrats, is as much opposed to true free market economics because modern American capitalism is only possible in a big gov't environment. This is another reason when the republicans are in power, gov't still grows. I know many here on both sides of the isle want to take the position that these markets are pure free market operations for ideological manipulation but the facts of history truly IMO distort that view once you really begin to look into it. The many arguments given in defense of free market ideals are correct but what you defend using this is not what you think it really is when you drill down into it.

jmo.

 

[wkmac]

Other ways in which gov't benefits the industrialized food industry.

November 17, 2011

Food Fight - Deciding Who Profits from Taxpayer-Subsidized Lunches

Posted by Karen De Coster on November 17, 2011 04:03 PM
If you read this article in full ("Pizza is a vegetable? Congress says yes"), it'll read like a comedy skit. The USDA, Congress, food companies (including huge players like ConAgra Foods and Schwan Food Company), and industry lobbyists (for frozen foods, potatoes, and salt) have been fighting over what non-food foods will be available for subsidized school lunches for the kiddies whose parents have higher priorities than feeding their own children.
Congress has released the final version of a spending bill that will declare that frozen (processed) pizza is officially a vegetable. You see, federally subsidized lunches have to include standard amounts of vegetables, that is, vegetables as defined by government and myriad special interests that influence government bills. The USDA would like it so that it would take a half cup of tomato sauce to equal a vegetable, but Congress, in order to please the industry lobbies and corporations that fill the congressional coffers, has said, no, no - two tablespoons of tomato sauce counts as a vegetable. Thus frozen pizza becomes a vegetable that conforms to government dietary guidelines. Thank goodness that, in Congress, we have a central source of truth for such matters, such as with the federal dietary guidelines.
After all of the promises, handshakes, and exchange of cash-for-coffers, the American Frozen Food Institute complimented Congress for its "balanced approach to implementing new school meal standards."

Gee, I wonder what would happen to certain profits lines if the public schools were de-centralized and small scale independent schools and home schools replaced the large institutional structure that is public education?

Makes you question where certain powerful interests stand in Washington when it comes to what is really best for our kids!