The inputs to farming, especially seeds, fertilizer and machinery, are controlled by monopolies and near-monopolies. There have been too many mergers.
On the sell side, there's monopsony or near-monopsony, with very few big buyers.[1] Farmers are caught in the middle, with little pricing power on either side.
There's not much question about this. There are antitrust cases, but with weak penalties and weak enforcement.
No, much of this is a political issue. America wants food standards that are different from many trading partners; fair enough. But it makes it impossible to export many farm goods as a result. This is outside of the current political climate, and has been going on for ages. It's just coming it a head now.
People outside of the US look down on inferior products like HFCS, bleached chicken, hormones used in beef cattle, prevalence of GM crops, the preventive use of antibiotics in poultry, hen battery cages, and permissive-by-default use of additives.
If at least all those bad farming practices would lead to very affordable food, then one could make an argument for it... but currently the US just does worst of two worlds.
The existence of monopolies is a political issue, and it is a political problem that must be resolved in order to restore any semblance of a free market in the United States.
Yes, and they equipment size keeps becoming bigger and more expensive, making it harder to afford for smaller farms. Meanwhile, China is disrupting this by building small and affordable farm equipment for the rest of the world, thus lowering international prices.
Also new technology is helping previously nonviable soil to be useful.
Equipment makers in the US have been hammered by tariffs too, and they even manufacture in the US. Tells you something about how absurd the tariffs (taxes) are.
Of all the guns that rural Americans love, the humble foot-gun is the most beloved.
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Someone else can argue the morality, ethics, economics, and politics of it all, but VERY simply, US Federal Government Agencies are machines for redistributing wealth from cities to rural areas.
Rural America voted quite heavily to stop those subsidies. That's what efficiency means.
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Maturity means suspending judgement and listening to people you disagree with, but I feel that's very out of style these days.
I agree. Personally I don't understand the love that agriculture shows to the Republican party, but hey you get what you vote for.
It seems like this whole year has been implementing policy after policy that screws over agriculture.
USAid (big purchaser) gone. 40 billion sent to Argentina. Antagonize Canadians (Canadians !!) so they boycott American produce. Tarif China so they'll reciprocate on soy beans. Deport farm workers. Tarif imports of steel so machine costs go up. Tarif fertilizer so production costs go up. Tarif everything else to reduce consumer spending power.
Despite all this farmers will continue to vote republican this year, and in future years. I presume they have reasons, but I confess they are hard to understand.
The Republican party has a well polished message assigning blame to anyone else: gays, Muslims, illegal immigrants, trans people, feminists, government employees, etc etc etc. If only they can put those people in their places, prosperity will rain down on the proper Americans. As it did in the 1950s when those people didn't exist.
> Despite all this farmers will continue to vote republican this year, and in future years. I presume they have reasons, but I confess they are hard to understand.
All farmers are rich. You have to understand that "farmer" doesn't mean "someone who works on a farm". It means "someone who owns a farm".
If you own a farm today (meaning, you didn't go bankrupt sometime in the last 150 years and move on to something else), it is because you were successful at the business of farming.
Farming is a business that doesn't scale down. To be successful at farming in the last century, you need a lot of land. You also need a lot of equipment. Thus, the net worth of your "average small farmer" is 10's of millions of dollars.
When Republicans talk about tax cuts (especially the estate tax), who do you think they're talking to? Farmers.
My neighbor rents out his family farm he inherited. The farmer that rented it had his crop fail this year. Because of DOGE's actions, the Government isn't paying out the insurance (insurance that this farmer paid for). The farmer decided to just be done farming (he is old and his farm is small so he rents/farms all the small farms around him). Most of the farms he rented are owned by adult children that inherited the family farm and couldn't bring themselves to sell it but now that they aren't being farmed will probably be sold for rich people estates.
What is the alternative when the Democrats appear just as much beholden to corporate finance, and position themselves as the party for city dwellers?
I also disagree on the wealth redistribution. Government agencies are managers of risk. *
Is there a risk to the country's food security if farmers go bust on mass? Then the Government needs to mitigate that risk. Fairly simple.
* This was the explanation from the director general of non-US primary industries department as to the whole reason they exist. Managing biosecurity risks are particularly important, but also managing fishing stocks and helping farmers mitigate their risk.
I've been curious about this myself, and I listened to some pro-Trump people who seem otherwise intelligent that tried to explain this effect.
One common theme has been that farmers are by necessity highly independent. They can't rely on government services as much as city folk, because everything and everyone is potentially an hour's drive away. They don't see the effect of their taxes being spent, because their local roads are dirt roads, there's no traffic lights, no police cars[1] or ambulances zipping by on the regular, etc...
Conversely, they do get frustrated by the likes of the EPA turning up -- invariably city folk with suits and dress shoes -- telling them what to do. "You can't burn this" or "You can't dump that!". More commonly "you can't cut down trees on your land that you thought were your property".
Their perception of government is that it violates their God-given rights regularly and gives little in return.
The further the seat of power, the worse their opinion of it. Local councils they might tolerate, state governments they view with suspicion, and the federal government may as well be on another planet.
Hence, their votes are easily swayed by the "reduce federal government" rhetoric.
We all know this is as an obvious falsehood: Trump grew the size of the federal government with his Big Beautiful Bill! So did every Republican government before him for quite a while now!
That doesn't matter. Propaganda works. The message resonates. The voters will vote against their own interests over and over and over if they keep hearing something that resonates with what they feel.
PS: A great example of this are the thousands of unemployed people that lost their coal mining jobs. Trump lied through his teeth and told them they would get their mining jobs back. Hillary told them they could be retrained as tech support or whatever. They. Did. Not. Like. That. They wanted their jobs back! So they voted for Trump, who had zero chance of returning them to employment because they had been replaced by automation and larger, more powerful mining machines. Their jobs were gone permanently, so they doubled down by voting against the person who promised to pull them out of that hole. Sadly, this is a recurring theme in politics throughout the world.
[1] As an example, this is why they're mostly pro-gun! They know viscerally that if someone broke into their property, they'd have to defend themselves because the local police can't get there in time to save them.perception.
Isn't most ag in the US just big business at this point?
Sure, there are still some small farms.. but there are also rich folk like the Treasury Secretary who maintain farms for status and financial benefits(farms get all sorts of special treatment for taxes, bankruptcy and inheritance).
This is nonsense. The US has a 20B USD currency swap agreement with Argentina. Currency swaps aren't free money. It is basically a line of credit between central banks. When you use it, you pay interest on the borrowed money. You would be surprised how many of these exist with the Big Three (US/EU/JP) central banks with other, smaller central banks.
> In October 2025, U.S. Treasury Secretary Scott Bessent announced U.S. financial support for Argentina, including a $20 billion currency swap line financed through the Treasury Department's Exchange Stabilization Fund (ESF).
However, there is very little info about how and when Argentina used it. No tin foil hat here: I'm unsure if this lazy reporting, or lack of transparency (intentionally or accidental). Here is the best that I found: https://www.batimes.com.ar/news/economy/argentina-used-multi...
> Last Friday, Argentina fully repaid the US$2.5 billion it obtained from a US$20-billion swap line with the Trump administration
> “Our nation has been fully repaid while making tens of millions in USD profit for the American taxpayer,” US Treasury Secretary Scott Bessent wrote in a Friday post on X.
Final point: It seems like everything I read about highly developed nations: All of them have massive gov't subsidies for agriculture which makes sense from a food security (+influence) perspective. Weirdly, it also seems like most people involved in farming are also fiscally conservative and probably vote right of center. Are there any countries where this isn't true? (I think of one -- NZ has little to no farming subsidies now.)
I think it's actually because of the gun control crap that Dems push.
Farmers really like their guns, not because they need it to compensate for themselves, but because they really do largely live in areas where the local police response is 30+ minutes because they are in sparsely populated counties that are just farms, farms and more farms.
There was a NYT article about farmers going to a town hall meeting where they met their federal reps.
One farmer mentioned how they've done these meetings for years and nothing changes, maybe they get a handout from the feds, but he says they effectively just go to support the monopolies that they as farmers sell and buy from.
Same reps, same meetings every years, nothing happens. Farmer seemed to have all the pieces except the idea that he might want to vote for someone else ...
>Same reps, same meetings every years, nothing happens. Farmer seemed to have all the pieces except the idea that he might want to vote for someone else ...
I get it's funny to dunk on dumb Republican farmers voting for the same party for over and over again, and not getting what they want, but it's hardly a farmer or Republican issue. How is this any different than say, Democratic voters who want medicare for all (or whatever) and not getting that for decades?
If their representatives are voting against their interests, they should vote for someone else. If their representatives are trying but getting outvoted in Congress, why change them.
My favorite example of this is RFD TV [0], a tv channel dedicated to farmers.
The name came from Rural Free Delivery, which was a program by the USPS to ensure farmers in rural areas received mail because it was not profitable for private carriers to deliver in remote and rural areas.
Around 2010, realizing that the message of a government program was good for farmers they completely white washed and removed the concept of free [something] from big government being good from all branding, websites, and tv programs.
> Maturity means suspending judgement and listening to people you disagree with, but I feel that's very out of style these days.
This applies to all of us these days. I'll lump myself in there too. I don't care what "side" you are in, if you get angry hearing someone you disagree with politically you're not helping matters any. We're too polarized. I wish we could stop with the bickering and find common issues we agree on and agree on the solutions and push our reps from 'both sides' to fix the issues in a way we can all agree on. The political theater is too exhausting and unhealthy.
Political polarization is an active choice made by right-wing media in the US. Creating dissension and outrage is the bread and butter of Fox News, OANN, etc.
Funnily enough, British farmers did much the same thing. They voted for Brexit and now they are finding that the British government gives much less of a fuck about them than the EU did.
I think that our political class has been captured by corporate interests and both parties in the US are approaching supporting the executive class by manipulating their constituents. With social media it has become especially toxic. They have linked every possible issue to identity and now you need to perform some form of ego death to think independently in accordance to your best interests. Few people have the capacity to accomplish that.
We are all mostly voting against our interests. We need to be manipulating the political class to fulfill our needs. That manipulation should be driven by rational discourse informed by scholarly research in addition to respecting the various cultural needs of the society.
This particular situation we are in is grave and needs immediate correction.
> That manipulation should be driven by rational discourse informed by scholarly research in addition to respecting the various cultural needs of the society.
I don’t think this is possible any longer in times where everyone is “doing their own research.” Unfortunately there is no more “scholarly research” as each and every such “thing” would be (politically) scrutinized. We have lost a common sense of what is “truth” (not lost, politicians etc have successfully taken it away from “us”) and hence I don’t see a path forward in a sane way you are describing it
This question may be naive, but why is the agricultural industry so subsidized? I understand the moral argument, but why, economically, does subsidizing farms result in a more efficient allocation of resources? I've heard that it's because farming as a business is full of unpredictability, but if that were the case, wouldn't there be a significant market for private insurance, and wouldn't the cost of that insurance be priced into the cost of food?
1. Farmers vote. And, Farmers live in states where the value-per-vote is high under both state-vote balancing, and gerrymander. Farming is politically useful.
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).
America has a surplus of soy beans, it’s China that needs to import from us or Brazil. The mess farmers are in now is that China has decided Brazil is a better source for them given the current trade war going on.
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.
I agree with you that the food supply chain is vital to (any country’s) national security, but I don’t think anyone with any real power takes this seriously.
Not everything is about economics. As the romans said - you need bread and circuses to stay in power. Keeping food cheap serves an important political function. It also serves an important security function to keep food domestic because if you are at war with where your food is grown, you are not going to win that war.
> As the romans said - you need bread and circuses to stay in power
“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].
It keeps the farmers politically subservient and makes them dependent on the continuation of the establishment. Otherwise, they could become a power bloc unto themselves that could act against the establishment.
You have to realize the vast majority of farmland is in states suceptable to floods, droughts, hurricanes, pests, frosts, etc. You can read stories of an off year where locusts were so bad they darkened the skies, for example.
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.
You've repeated the part that the parent poster claimed to understand ("I've heard that it's because farming as a business is full of unpredictability"), but skipped over the part they didn't understand ("wouldn't there be a significant market for private insurance?") with the statement that insurance is a parasite.
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.
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.
The US produces an unbelievably enormous calorie surplus way beyond what is needed for the health of the country and in fact its detrimental.
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.
Your buffer here is meat. Cattle are tremendously inefficient consumers of grain. Eat your burgers in the bountiful years, then slaughter 75% of the herd in a hardship year, eat well for six months, then spend the next three, four, five years eating more grains while the herds recover.
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.
Some of them date back to 'westward expansion', where they were incentives to encourage settler immigration (e.g. Texas tax exemption from 1839). They've stayed on the books because nobody wants the trouble of suggesting their removal.
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.
It's out of political fear. The irony is that it doesn't actually work all that well.
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).
>Here in the EU, farmers are giving away subsidized potatoes in Berlin currently.
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.
Also the whole system is very exploited and rigged. Powerful people are pulling huge amounts of money out of the agricultural sector, and every government subsidy is feeding that engine so those people can continue doing that.
> This question may be naive, but why is the agricultural industry so subsidized?
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 similar to oil. Our people are very price sensitive to food and gas. It’s required in America at all economic classes fairly heavily in our society. So, politicians have decided to try to force prices low and keep hidden costs at the federal level. It allows for reallocation of wealth (a richer person’s taxes helps pay for a poorer person’s lunch and gas to the grocery store). Also, if taxes aren’t enough to cover it well we run our country at a huge deficit so it’s all a big illusion of sustainability that pretty much is destined to fail eventually anyway. I don’t think people or politicians really care about the future or what world their children will inherit as much as they act like they do here; or I’ve not been witness to that thought process in most of our systems.
… but why, economically, does subsidizing farms result in a more efficient allocation of resources?
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.
It's not always about price. Paying farmers to grow nothing ensures they stay open if we need them to grow something.
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 ability for a nation to feed itself is national security, period. Anyone who says otherwise is wishfully thinking or naive.
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.
At least in Europe they have inproportionally big lobby and food is considered a security issue. If it would not be subsidized it would probably be beaten by much more cheaper imports. You can see they ignored security issue with energy and it backfired pretty bad.
because the energy states of inputs are so massively beyond ordinary bounds that distortions of unexpected kinds develop and persist in markets that otherwise appear to be straightforward? And, this is not new, but more energetic and more far-reaching than ever before. (more comments would have to chose a lens through which to postulate e.g. economic, legal, energy exchange, human nature ... etc.. ?)
Because agriculture is hard industry. The producer prices that is what the farmer gets are often laughable cut from final product. And this is due to farmers having little or no power in the system. Their products are made at certain time. And then they start declining in quality and finally rotting away. Most of the value ends up in other parts of the chain.
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.
Ag. can't just be about profit. There's a dimension which is national-strategic interest. Food security, the domestic food economy is important.
It is my understanding that a lot of the US ag. sector is making inputs for processing for corn oil, fructose, ethanol, and for exports to markets which in turn target american ag, selling e.g. beef back to the US, fattened on US Soy.
It's a complex web. I don't want US farmers going broke, any more than I want Australian farmers going broke (where I live)
So getting this right, fixing farming sector security, is important.
I recommend checking history of deregulation of agricultural industry in New Zealand. It didn't lose the industry. Actually the opposite happened.
Persistent government subsidies are almost never a good idea long term. I understand that some temporary support might make sense in some cases, but not permanent one. It prevents innovation and optimization. And in the long run it usually makes more damage.
Having been in the NZ ag tech industry for the last 25+ years, US subsidies and tarrifs drove a lot of innovation in NZ (also Europe) and then US manufacturers in the spaces I've been in have pretty much collapsed when faced with better tech as farmers switched to using our ( or the European) tech.
It would appear that to remain competitive they had massive consolidation, and with that an increase in animal density leading to major issues with water pollution.
Growing excess amount of food is part of food security, but farmers are going bankrupt because they focused on labor efficient agricultural commodity products to the exclusion of everything else. For many farmers, it's not even a full time job
I rather we focus on increasing food security in other way.
Maybe we shouldn't be turning corns into cows as that reduce the amount of energy we are able to access. But how do we keep access to farmlands that we don't use now that we aren't turning corns into cows? I suppose we could just use these lands as pasture.
~60 million acres of corn and soybean in the US, the size of Oregon, is grown exclusively for biofuels. This is unnecessary as you mention, as are the subsidies to farmers for these row crops.
Everyone thinks their thing is too special for markets. I’m sure you’ve heard the argument for healthcare, education, energy, water, food, science, infrastructure, etc.
We need to realign on this politically; either we use markets to allocate scarce resources or we don’t.
The answer is probably that the public does not believe in markets. But we haven’t made that explicit, and instead have the worst combinations of policies; with worse service and enabling grifters.
Somewhere off in the distance I hear billionaires laughing.
This is only important if you care about the future of humans. At least in America, attention spans have shortened, empathy has decreased, and individualism has increased. Billionaires don't care about the future beyond their own life. And unfortunately, one of the worst of them is now the head of the country.
It is the ecconomy. Harvest have been above average around the world the past few years. In turn supply and demand puts prices low. one bad year and harvests will be down and prices way up.
i've been working for John Deere for 15 years - I have seen this cycle several times already. people blame various politics when it happens, but the fundamentals are enough to explain nearly all of this. Anyone in farming knows this and plans for it (not always successfully)
> overall operating expenses remain well above pre-2021 levels. Rising costs since 2020 have been driven primarily by sharp increases in interest expenses (+71%), fertilizer (+37%), fuel and oil (+32%), labor (+47%), chemicals (+25%) and maintenance (+27%), alongside notable gains in seed (+18%) and marketing costs (+18%)
These numbers are huge though. I think it is fair to say that this time it may be different.
There’s only two meat packers… two. Where are the cattle farmers to go? It’s like this across the industry thanks to monopolies like ConAgra, Tyson’s, etc.
“The U.S. meatpacking industry is dominated by the "Big Four"—Tyson Foods, Cargill, JBS, and National Beef—which control 80-85% of the beef market and significant portions of poultry and pork”
The problem isn't with the farmers. The problem is the monopolies that surround the farmers.
They buy their seeds from massive corporations that have patents on seeds. They sell their produce to global multi-national corporations that set the prices they'll purchase at. They buy their machinery from John Deere or Case IH at extremely high prices.
They have no negotiating power and are squeezed between these massive corporations. This ends up leading to farmers having to sell land to corporations that will then farm it and extract subsidies from the government.
When a farmer receives a subsidy, it usually just ends up in the pockets of Cargill or Monsanto, with whom they already owe money to.
Yes, and the man who broke the system, who installed the loophole that allowed decades of mergers and trust-building, was even named Robert Bork!
He was a Nixon/Reagan flunky, naturally, but the Dems ignored the issue for a long time. It was exciting to finally see the first real pushback in the last administration under Lina Khan. So many upset businessmen on TV! Unfortunately, elections have consequences, and the work did not continue.
> It was exciting to finally see the first real pushback in the last administration under Lina Khan. So many upset businessmen on TV! Unfortunately, elections have consequences, and the work did not continue.
Perhaps one of the consequences of her actually pushing back on this was one of the many reasons the owner class overwhelmingly backed Trump.
Subsides tend to get absorbed by monopolists of all kind.
This is why UBI is a nonstarter. It will just get absorbed by landlords. This is why you need to break up monopolies or tax them. The problem is societal endorsement of monopoly rights all kind to the point of invisibility. Witness any conversations about IP rights and lands.
But also farmers are in this situation because they chosen to compete in an overcrowded commodity market rather than specializing in profitable but more labor intensive crops.
> This is why UBI is a nonstarter. It will just get absorbed by landlords
Not necessarily. People live where they live because there are jobs. If they don't need jobs because of UBI, or they can take lower-paying jobs, they can move wherever housing is plentiful.
> But also farmers are in this situation because they chosen to compete in an overcrowded commodity market
Hard to predict the future. It was only a few years ago when crop prices were at record highs and some countries were on the brink of starvation because we weren't producing enough community crops.
The cure for high prices is high prices. But also, the cure for low prices is low prices. The older farmers are used to it. It seems the problem right now is that a lot of the younger guys went through an unusually long stretch of good times and have never felt the bad times before.
Commodity markets are necessary for survival. If we cannot make them work as a society something is deeply wrong.
Someone needs to be farming the food we all eat... If every farmer decided to just plant saffron who would farm the wheat and rice and vegetables that it is used to season?
Everyone loves the mom and pop businesses but shops at walmart for those rock bottom prices.
We can have our fresh family farms back, but you're paying double for your food. We have the system we have because people value cheap/affordable over everything, regardless of what they upvote on the internet.
That’s not really true, but we’ve incentivized mass scale farming. I know farmers who can sell produce at competitive prices growing in Upstate NY, but they only get a couple of harvests of most crops, even with advanced techniques that let many crops get planted in March.
The government spent lots of money to turn the California and Arizona deserts into the garden of America. New Jersey planted subdivisions.
A better way to do this to remove the transportation subsidy for big businesses. Trucks do most of the damage to roads (4th power of weight) but consumers bear the brunt of road maintenance. If big vehicles paid their fair share of oil taxes for roads, it will even the playing field for local farmers and businesses.
Not true - the fix is to start enforcing the Robinson-Patman Act, the Sherman Act, and every other piece of legislation already on the books which was written and passed by congress for the purpose of eliminating private monopolies. Walmart and other monopolies are using their monopoly power to put small businesses of all kinds out of business and raise prices at the same time. Here's some info on exactly how they do that: https://podcasts.apple.com/us/podcast/the-secret-scam-drivin...
> Everyone loves the mom and pop businesses but shops at walmart for those rock bottom prices.
People shop where they can afford to shop. Walmart is famous for not paying people enough to shop anywhere except walmart. The fix is to make sure that people earn a living wage and to actually enforce the Robinson–Patman Act and aggressively go after price fixing. Suddenly walmart's prices won't undercut the mom and pop places and they won't have to charge as much to just barely survive. Opening a store that isn't part of some massive chain would stand a chance at being profitable and affordable. More competition leads to more innovation and more opportunities.
Dang. What are the good options here (without throwing people under the bus)? IMHO, the patents on seeds has been an immense pain to the midwest and should be made void with a phase out plan that starts with the most common seeds (which are causing legal havoc by mixing into neighboring farms via wind).
Can you elaborate on the "immense pain"? I don't disagree that monopolies in big AG are a huge problem, but last time I saw someone make this point, I looked into it, and there were relatively few cases of big AG suing small farmers over stuff like this. My understanding of one of the main cases that gets referenced in these discussions was where a farmer bought roundup ready seed, promised not to use it to breed, per standard EULA, then bred with it, and intentionally selected offspring to breed further which showed the roundup ready trait. Am I missing something?
It's not just that; being a very small undifferentiated supplier in a volatile commodities market with very high fixed capital costs, unpredictable/uncontrollable production capacity and long production lead times is a very difficult business, regardless of the industry.
Canada has a thing called "Supply Management". It means that for some agricultural industries, we limit how many people can produce, for example, milk.
This restriction keeps the price of milk stable, and high enough that farmers can make a profit. It may seem strange to some, but the goal is to ensure that we don't have to bail out our farmers.
The alternative is as in the US, where anyone can produce milk, and the price craters, and farmers need to be constantly bailed out.
Canadians watch crazy things like for example the US Federal government buying millions and millions of gallons of milk, making cheese, and storing it for decades. All to reduce supply/create demand, and keep the price artificially high. I suppose one bonus is the US government gives some of this cheese to the poor.
The other crazy part is the US federal government has repeatedly bought dairy farms out, to reduce supply. Literally bought entire farms, and closed them down.
Canada wants a stable supply of milk. We don't want to rely upon a foreign power for basic food-stuffs. And we don't want to spend untold billions. Thus, supply management.
Meanwhile, the US runs around saying we're crazy commies because we have price and supply control, says free market is perfect, then spends endless billions over decades to pretend the market works.
Oh and also, the US screams about how our market isn't "open", how we unfairly manipulate the market, then... wants to inject super cheap, underpriced milk, all of the result of US federal tax dollars spending billions.
Finally, it is illegal to use growth hormones in Canada on cattle. Not so in the US. With the excess supply issues in dairy in the US, maybe the US should do the same?
> The alternative is as in the US, where anyone can produce milk, and the price craters, and farmers need to be constantly bailed out.
Do you have references to bailouts specifically for dairy farms? The big bailouts recently were due to reciprocal tariffs. There is the Milk Loss Program but that is limited to 30 days of production per year. I would also classify this more of an insurance program than bailout.
The PDF has some data showing how much post-market intervention costs.
It's particularly infuriating how US politicians will stated "we have a free market". whilst intervention happens, and then get upset that Canada does it differently.
Even more bizarre, is Canada has only 1/10th the population of the US. Both countries carve out exclusions, but the US side goes bananas that we don't have completely open markets on the agricultural side. So? We can both exclude each others markets, for agriculture, who cares?
With 1/10th of the population, if you manages to get 10% of the Canadian market, that's one hundredth of the whole US market. It's such a tiny amount.
Everyone here suspects the US just wants to drive all Canadian agriculture to bankruptcy, making us entirely dependent upon the US. No way. Not going to happen. That's madness.
In terms of market intervention, we can't afford to do it the way the US does. We don't have billions to buy up excess milk, or buy out farmers to reduce supply. It's immensely wasteful to the taxpayer.
Which is very strange, because it's often parties on the right in the US, which do buyouts.
Quite surprised there wasn't mention of the Trump tariffs on China causing the collapse of China imports of US soybeans, which by the way, has persisted even though the original tariffs were reduced, causing lasting damage to farmers.
Almost 78% of farmers voted for Trump [1]. These are the guys that got Trump elected. Polls show that support for President Trump among farmers remains high, hovering around 50-60%. That means these are the guys that are keeping Trump in power. When support among farmers drops to 20% level GOP legislators will feel emboldened to remove Trump from power.
It's just shocking to me how certain demographics are so eager to vote against their own interests.
I mean, name one thing that Trump has done to help farmers more than he hurt them with the tariffs? (Subsidies they already had, regardless of the party in power.)
What are they getting in return for their vote? The safety of knowing that trans athletes are banned and some Guatemalans in far away "liberal" cities have been "gotten rid of"? None of those benefit them in any way. I still can't quite understand.
I don't really like Trump, but to be fair here, China does things like this all the time. They did the same thing in Canada, because we didn't want their spy-cars in our country.
We'd really be better off if we had zero trade with them. They're poison.
They described a lot of data. Then, toward the end, they say:
"These loss estimates reflect national averages; actual costs of production and returns vary by region, management decisions and ownership structure. For example, producers who own their farmland may face lower total costs by avoiding cash rental expenses, resulting in higher returns."
So, can we trust this to say what it appears to be saying? Or might it be meaningless like many broad averages, and we should use more specific data that includes supplier behaviors?
It's so obvious why.
Money is created by governments and banks and it goes right back to them. Money doesn't stay in the system for too long because it's taxed each time it hops between people/companies. If you assume a 30% tax each time a dollar moves from one person to another, after just 6 hops, almost 90% of that dollar is gone... So people who are just 6 steps removed from the money printers live in a monetary environment where a dollar is 10 times rarer! That's not even factoring in inflationary Cantillon effects... It's Cantillon effects on crack...
Most independent farmers live in remote areas, far from money printers; they exist in a scarce monetary environment. It's hard to compete when your big corporate competitors exist in an environment where money is more abundant.
Oddly enough the way to help is to removing the subsidies. Exploiting famers, using them as a middleman to the American taxpayer, is extremely lucrative.
Of course, I'm sure a temporary one might be useful once a decade or century.
My point is this exactly mirrors the situation in health insurance, university degree prices, and many other industries we permanent subsidize. Companies create machines to use people to access the nearly unlimited pool of money available.
It’s likely the land would be far more valuable as something else.
Small family farms, while romanticized, have all the problems of any small business competing with larger professionalized businesses; consistency in operations, consistency in output quality, access to resources - including people and machines.
Additionally, for their own operational simplicity big buyers prefer interacting with as few suppliers as possible - so, market forces have been driving consolidation for decades.
I am told that farms are optimized for labor efficiency rather than profits. These farmers often have a second job when they're not out there farming.
With a low tax on land, we may not actually be encouraging the most efficient use of farmlands.
Given that people are loathed to sell their land for any reason, this makes it impossible for farmers to start new farm, leading to a gradual depopulation and collapse of rural economies.
It really depends on the farm, unlikely it will be used for anything else.
90% likely what would happen is an adjacent farmer would buy the land. You want all your land to be near each other, like defragementing a hard drive ;)
I wonder if at some point before large corporations finish buying up the last of the family farms in America, if rural America will figure out Trump and his maga republicans were never their friends.
I don’t think it would. Humans really like to blame other people for things they inflict on themselves. This is less painful than learning self-awareness.
The current Republican Party blatantly preys on this weakness and gives people an enemy to hate so they can keep fleecing them.
This is different than the Democrats, who can’t get their shit together and have a common goal.
Don't you worry, deposed farmers (those farmers squeezed between their mega-size suppliers and mega-size customers who had to sell their farms) voted for Trump last year.
This video is very liberal but does a good job of explaining which companies and industries pay for breaks and which don't. And uses soy bean farmers as a prominent example of a group who haven't been giving Trump bribes https://youtu.be/RPzcGeiNYvk?si=bfy_5KEo_ZUxOBHu
Any handouts for farmers go straight into the coffers of multinationals to pay for farm equipment, support for the locked down farm equipment, the patented seeds, the pesticides for the patented seeds and so on. The entire subsdization model is a profit opportunity for agricultural companies.
And what do those companies wnat to do? Buy up the farms and run them themselves for more profit. Because they don't have to charge the same amount to their own farms of course.
It's also why the wealthy and big companies like illegal immigration. It's an endless supply of underpaid workers who can be exploited for even more profits. Document these people and everybody's wages go up.
The only country I can think of that is really effectively managing its agriculture and food supply is of course China. China had some food shortages in the late 20th century and a result food security became a primary concern of the CCP. China has to feed 20% of the world's population and decided that food need to be plentiful and affordable. There were a seris of agricultural reforms through the 1970s to 1990s and then China used its increasing wealth to pay farmers when they had to and subsidize food when they had to to manage the supply. It's managed to the highest levels of China's government [1].
Here we have rent-seeking corporations and billionaires (eg the Resnicks [2]) where subsidies are just a wealth transfer to the already wealthy. food prices are out of control. But nobody cares because the profits have to keep going up.
As an American, farmers here fucked around and found out. Last time Trump and Congress bailed them out in the last “trade war”, didn’t happen this time. Screw ‘em.
Farmers in the USA have to pay far higher wages than other countries due to labor protection laws, and have to pay far higher equipment and chemical costs than other countries due to environmental laws.
We need either massive subsidies to make up for the effect of these laws, or massive tariffs to even the playing field with countries using slave labor and toxic lakes.
Much of this is an antitrust problem.
The inputs to farming, especially seeds, fertilizer and machinery, are controlled by monopolies and near-monopolies. There have been too many mergers.
On the sell side, there's monopsony or near-monopsony, with very few big buyers.[1] Farmers are caught in the middle, with little pricing power on either side.
There's not much question about this. There are antitrust cases, but with weak penalties and weak enforcement.
[1] https://equitablegrowth.org/competitive-edge-big-ags-monopso...
No, much of this is a political issue. America wants food standards that are different from many trading partners; fair enough. But it makes it impossible to export many farm goods as a result. This is outside of the current political climate, and has been going on for ages. It's just coming it a head now.
People outside of the US look down on inferior products like HFCS, bleached chicken, hormones used in beef cattle, prevalence of GM crops, the preventive use of antibiotics in poultry, hen battery cages, and permissive-by-default use of additives.
If at least all those bad farming practices would lead to very affordable food, then one could make an argument for it... but currently the US just does worst of two worlds.
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The existence of monopolies is a political issue, and it is a political problem that must be resolved in order to restore any semblance of a free market in the United States.
Could America meet those standards and export at a higher profit though? If not, it’s not what’s contributing to their poor financial situation
Antitrust is a political issue. Or lack of political will issue.
Yes, and they equipment size keeps becoming bigger and more expensive, making it harder to afford for smaller farms. Meanwhile, China is disrupting this by building small and affordable farm equipment for the rest of the world, thus lowering international prices.
Also new technology is helping previously nonviable soil to be useful.
Equipment makers in the US have been hammered by tariffs too, and they even manufacture in the US. Tells you something about how absurd the tariffs (taxes) are.
Of all the guns that rural Americans love, the humble foot-gun is the most beloved.
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Someone else can argue the morality, ethics, economics, and politics of it all, but VERY simply, US Federal Government Agencies are machines for redistributing wealth from cities to rural areas.
Rural America voted quite heavily to stop those subsidies. That's what efficiency means.
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Maturity means suspending judgement and listening to people you disagree with, but I feel that's very out of style these days.
I agree. Personally I don't understand the love that agriculture shows to the Republican party, but hey you get what you vote for.
It seems like this whole year has been implementing policy after policy that screws over agriculture.
USAid (big purchaser) gone. 40 billion sent to Argentina. Antagonize Canadians (Canadians !!) so they boycott American produce. Tarif China so they'll reciprocate on soy beans. Deport farm workers. Tarif imports of steel so machine costs go up. Tarif fertilizer so production costs go up. Tarif everything else to reduce consumer spending power.
Despite all this farmers will continue to vote republican this year, and in future years. I presume they have reasons, but I confess they are hard to understand.
The Republican party has a well polished message assigning blame to anyone else: gays, Muslims, illegal immigrants, trans people, feminists, government employees, etc etc etc. If only they can put those people in their places, prosperity will rain down on the proper Americans. As it did in the 1950s when those people didn't exist.
It works. And it will keep working.
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> Despite all this farmers will continue to vote republican this year, and in future years. I presume they have reasons, but I confess they are hard to understand.
All farmers are rich. You have to understand that "farmer" doesn't mean "someone who works on a farm". It means "someone who owns a farm".
If you own a farm today (meaning, you didn't go bankrupt sometime in the last 150 years and move on to something else), it is because you were successful at the business of farming.
Farming is a business that doesn't scale down. To be successful at farming in the last century, you need a lot of land. You also need a lot of equipment. Thus, the net worth of your "average small farmer" is 10's of millions of dollars.
When Republicans talk about tax cuts (especially the estate tax), who do you think they're talking to? Farmers.
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My neighbor rents out his family farm he inherited. The farmer that rented it had his crop fail this year. Because of DOGE's actions, the Government isn't paying out the insurance (insurance that this farmer paid for). The farmer decided to just be done farming (he is old and his farm is small so he rents/farms all the small farms around him). Most of the farms he rented are owned by adult children that inherited the family farm and couldn't bring themselves to sell it but now that they aren't being farmed will probably be sold for rich people estates.
I am not a US citizen, just an observer.
What is the alternative when the Democrats appear just as much beholden to corporate finance, and position themselves as the party for city dwellers?
I also disagree on the wealth redistribution. Government agencies are managers of risk. *
Is there a risk to the country's food security if farmers go bust on mass? Then the Government needs to mitigate that risk. Fairly simple.
* This was the explanation from the director general of non-US primary industries department as to the whole reason they exist. Managing biosecurity risks are particularly important, but also managing fishing stocks and helping farmers mitigate their risk.
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It's all cultural. The Republicans captured the messaging around "ordinary folk."
I've been curious about this myself, and I listened to some pro-Trump people who seem otherwise intelligent that tried to explain this effect.
One common theme has been that farmers are by necessity highly independent. They can't rely on government services as much as city folk, because everything and everyone is potentially an hour's drive away. They don't see the effect of their taxes being spent, because their local roads are dirt roads, there's no traffic lights, no police cars[1] or ambulances zipping by on the regular, etc...
Conversely, they do get frustrated by the likes of the EPA turning up -- invariably city folk with suits and dress shoes -- telling them what to do. "You can't burn this" or "You can't dump that!". More commonly "you can't cut down trees on your land that you thought were your property".
Their perception of government is that it violates their God-given rights regularly and gives little in return.
The further the seat of power, the worse their opinion of it. Local councils they might tolerate, state governments they view with suspicion, and the federal government may as well be on another planet.
Hence, their votes are easily swayed by the "reduce federal government" rhetoric.
We all know this is as an obvious falsehood: Trump grew the size of the federal government with his Big Beautiful Bill! So did every Republican government before him for quite a while now!
That doesn't matter. Propaganda works. The message resonates. The voters will vote against their own interests over and over and over if they keep hearing something that resonates with what they feel.
PS: A great example of this are the thousands of unemployed people that lost their coal mining jobs. Trump lied through his teeth and told them they would get their mining jobs back. Hillary told them they could be retrained as tech support or whatever. They. Did. Not. Like. That. They wanted their jobs back! So they voted for Trump, who had zero chance of returning them to employment because they had been replaced by automation and larger, more powerful mining machines. Their jobs were gone permanently, so they doubled down by voting against the person who promised to pull them out of that hole. Sadly, this is a recurring theme in politics throughout the world.
[1] As an example, this is why they're mostly pro-gun! They know viscerally that if someone broke into their property, they'd have to defend themselves because the local police can't get there in time to save them.perception.
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Isn't most ag in the US just big business at this point?
Sure, there are still some small farms.. but there are also rich folk like the Treasury Secretary who maintain farms for status and financial benefits(farms get all sorts of special treatment for taxes, bankruptcy and inheritance).
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This is nonsense. The US has a 20B USD currency swap agreement with Argentina. Currency swaps aren't free money. It is basically a line of credit between central banks. When you use it, you pay interest on the borrowed money. You would be surprised how many of these exist with the Big Three (US/EU/JP) central banks with other, smaller central banks.
Source: https://www.congress.gov/crs-product/R48780
However, there is very little info about how and when Argentina used it. No tin foil hat here: I'm unsure if this lazy reporting, or lack of transparency (intentionally or accidental). Here is the best that I found: https://www.batimes.com.ar/news/economy/argentina-used-multi...
Final point: It seems like everything I read about highly developed nations: All of them have massive gov't subsidies for agriculture which makes sense from a food security (+influence) perspective. Weirdly, it also seems like most people involved in farming are also fiscally conservative and probably vote right of center. Are there any countries where this isn't true? (I think of one -- NZ has little to no farming subsidies now.)
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I think it's actually because of the gun control crap that Dems push.
Farmers really like their guns, not because they need it to compensate for themselves, but because they really do largely live in areas where the local police response is 30+ minutes because they are in sparsely populated counties that are just farms, farms and more farms.
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> I presume they have reasons,
They vote with the one party because they didn't had a lot of problems with it in power and, when they voted something else, it was worse.
Between two evils, people prefer the "familiar" one. Works the same in Europe's "democracies".
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There was a NYT article about farmers going to a town hall meeting where they met their federal reps.
One farmer mentioned how they've done these meetings for years and nothing changes, maybe they get a handout from the feds, but he says they effectively just go to support the monopolies that they as farmers sell and buy from.
Same reps, same meetings every years, nothing happens. Farmer seemed to have all the pieces except the idea that he might want to vote for someone else ...
>Same reps, same meetings every years, nothing happens. Farmer seemed to have all the pieces except the idea that he might want to vote for someone else ...
I get it's funny to dunk on dumb Republican farmers voting for the same party for over and over again, and not getting what they want, but it's hardly a farmer or Republican issue. How is this any different than say, Democratic voters who want medicare for all (or whatever) and not getting that for decades?
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If their representatives are voting against their interests, they should vote for someone else. If their representatives are trying but getting outvoted in Congress, why change them.
My favorite example of this is RFD TV [0], a tv channel dedicated to farmers.
The name came from Rural Free Delivery, which was a program by the USPS to ensure farmers in rural areas received mail because it was not profitable for private carriers to deliver in remote and rural areas.
Around 2010, realizing that the message of a government program was good for farmers they completely white washed and removed the concept of free [something] from big government being good from all branding, websites, and tv programs.
[0] https://en.wikipedia.org/wiki/RFD-TV
> Maturity means suspending judgement and listening to people you disagree with, but I feel that's very out of style these days.
This applies to all of us these days. I'll lump myself in there too. I don't care what "side" you are in, if you get angry hearing someone you disagree with politically you're not helping matters any. We're too polarized. I wish we could stop with the bickering and find common issues we agree on and agree on the solutions and push our reps from 'both sides' to fix the issues in a way we can all agree on. The political theater is too exhausting and unhealthy.
Political polarization is an active choice made by right-wing media in the US. Creating dissension and outrage is the bread and butter of Fox News, OANN, etc.
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Funnily enough, British farmers did much the same thing. They voted for Brexit and now they are finding that the British government gives much less of a fuck about them than the EU did.
I think that our political class has been captured by corporate interests and both parties in the US are approaching supporting the executive class by manipulating their constituents. With social media it has become especially toxic. They have linked every possible issue to identity and now you need to perform some form of ego death to think independently in accordance to your best interests. Few people have the capacity to accomplish that.
We are all mostly voting against our interests. We need to be manipulating the political class to fulfill our needs. That manipulation should be driven by rational discourse informed by scholarly research in addition to respecting the various cultural needs of the society.
This particular situation we are in is grave and needs immediate correction.
> That manipulation should be driven by rational discourse informed by scholarly research in addition to respecting the various cultural needs of the society.
I don’t think this is possible any longer in times where everyone is “doing their own research.” Unfortunately there is no more “scholarly research” as each and every such “thing” would be (politically) scrutinized. We have lost a common sense of what is “truth” (not lost, politicians etc have successfully taken it away from “us”) and hence I don’t see a path forward in a sane way you are describing it
Corporations show up to every election.
It's more that farmers are through feeding city leeches. I don't think they care a lick about your "wealth"
That would bankrupt the farmers so I don't get this?
Says the guy on a computer.
This question may be naive, but why is the agricultural industry so subsidized? I understand the moral argument, but why, economically, does subsidizing farms result in a more efficient allocation of resources? I've heard that it's because farming as a business is full of unpredictability, but if that were the case, wouldn't there be a significant market for private insurance, and wouldn't the cost of that insurance be priced into the cost of food?
1. Farmers vote. And, Farmers live in states where the value-per-vote is high under both state-vote balancing, and gerrymander. Farming is politically useful.
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).
America has a surplus of soy beans, it’s China that needs to import from us or Brazil. The mess farmers are in now is that China has decided Brazil is a better source for them given the current trade war going on.
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.
I agree with you that the food supply chain is vital to (any country’s) national security, but I don’t think anyone with any real power takes this seriously.
Not everything is about economics. As the romans said - you need bread and circuses to stay in power. Keeping food cheap serves an important political function. It also serves an important security function to keep food domestic because if you are at war with where your food is grown, you are not going to win that war.
> As the romans said - you need bread and circuses to stay in power
“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...
It keeps the farmers politically subservient and makes them dependent on the continuation of the establishment. Otherwise, they could become a power bloc unto themselves that could act against the establishment.
The romans got their grain cheap from egypt.
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You have to realize the vast majority of farmland is in states suceptable to floods, droughts, hurricanes, pests, frosts, etc. You can read stories of an off year where locusts were so bad they darkened the skies, for example.
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.
You've repeated the part that the parent poster claimed to understand ("I've heard that it's because farming as a business is full of unpredictability"), but skipped over the part they didn't understand ("wouldn't there be a significant market for private insurance?") with the statement that insurance is a parasite.
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.
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You can't eat private insurance.
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.
The US produces an unbelievably enormous calorie surplus way beyond what is needed for the health of the country and in fact its detrimental.
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.
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Your buffer here is meat. Cattle are tremendously inefficient consumers of grain. Eat your burgers in the bountiful years, then slaughter 75% of the herd in a hardship year, eat well for six months, then spend the next three, four, five years eating more grains while the herds recover.
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.
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Some of them date back to 'westward expansion', where they were incentives to encourage settler immigration (e.g. Texas tax exemption from 1839). They've stayed on the books because nobody wants the trouble of suggesting their removal.
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.
It's out of political fear. The irony is that it doesn't actually work all that well.
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).
>Here in the EU, farmers are giving away subsidized potatoes in Berlin currently.
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.
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Also the whole system is very exploited and rigged. Powerful people are pulling huge amounts of money out of the agricultural sector, and every government subsidy is feeding that engine so those people can continue doing that.
> This question may be naive, but why is the agricultural industry so subsidized?
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 similar to oil. Our people are very price sensitive to food and gas. It’s required in America at all economic classes fairly heavily in our society. So, politicians have decided to try to force prices low and keep hidden costs at the federal level. It allows for reallocation of wealth (a richer person’s taxes helps pay for a poorer person’s lunch and gas to the grocery store). Also, if taxes aren’t enough to cover it well we run our country at a huge deficit so it’s all a big illusion of sustainability that pretty much is destined to fail eventually anyway. I don’t think people or politicians really care about the future or what world their children will inherit as much as they act like they do here; or I’ve not been witness to that thought process in most of our systems.
… but why, economically, does subsidizing farms result in a more efficient allocation of resources?
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.
Pricing anything into the cost of food would be political poison. Paying farmers to grow nothing is considered preferable to that
It's not always about price. Paying farmers to grow nothing ensures they stay open if we need them to grow something.
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.
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The ability for a nation to feed itself is national security, period. Anyone who says otherwise is wishfully thinking or naive.
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.
> so subsidized
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.
At least in Europe they have inproportionally big lobby and food is considered a security issue. If it would not be subsidized it would probably be beaten by much more cheaper imports. You can see they ignored security issue with energy and it backfired pretty bad.
because the energy states of inputs are so massively beyond ordinary bounds that distortions of unexpected kinds develop and persist in markets that otherwise appear to be straightforward? And, this is not new, but more energetic and more far-reaching than ever before. (more comments would have to chose a lens through which to postulate e.g. economic, legal, energy exchange, human nature ... etc.. ?)
most of the subsidies are insurance not direct payments.
Because agriculture is hard industry. The producer prices that is what the farmer gets are often laughable cut from final product. And this is due to farmers having little or no power in the system. Their products are made at certain time. And then they start declining in quality and finally rotting away. Most of the value ends up in other parts of the chain.
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.
Ag. can't just be about profit. There's a dimension which is national-strategic interest. Food security, the domestic food economy is important.
It is my understanding that a lot of the US ag. sector is making inputs for processing for corn oil, fructose, ethanol, and for exports to markets which in turn target american ag, selling e.g. beef back to the US, fattened on US Soy.
It's a complex web. I don't want US farmers going broke, any more than I want Australian farmers going broke (where I live)
So getting this right, fixing farming sector security, is important.
I recommend checking history of deregulation of agricultural industry in New Zealand. It didn't lose the industry. Actually the opposite happened.
Persistent government subsidies are almost never a good idea long term. I understand that some temporary support might make sense in some cases, but not permanent one. It prevents innovation and optimization. And in the long run it usually makes more damage.
Having been in the NZ ag tech industry for the last 25+ years, US subsidies and tarrifs drove a lot of innovation in NZ (also Europe) and then US manufacturers in the spaces I've been in have pretty much collapsed when faced with better tech as farmers switched to using our ( or the European) tech.
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It would appear that to remain competitive they had massive consolidation, and with that an increase in animal density leading to major issues with water pollution.
https://en.wikipedia.org/wiki/CraFarms
So I guess yay deregulation, now with more capitalist privatized profits with socialized costs!
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Growing excess amount of food is part of food security, but farmers are going bankrupt because they focused on labor efficient agricultural commodity products to the exclusion of everything else. For many farmers, it's not even a full time job
I rather we focus on increasing food security in other way.
Maybe we shouldn't be turning corns into cows as that reduce the amount of energy we are able to access. But how do we keep access to farmlands that we don't use now that we aren't turning corns into cows? I suppose we could just use these lands as pasture.
~60 million acres of corn and soybean in the US, the size of Oregon, is grown exclusively for biofuels. This is unnecessary as you mention, as are the subsidies to farmers for these row crops.
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>Maybe we shouldn't be turning corns into cows
Why? We like beef. I don't want it to go away.
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There is also a dimension which is about caring for your fellow man and caring for the land which the food you grow depends on.
Which society seems to have lost because we've focused too much on the one metric, "money", over all others.
Agreed, in addition there is the dimension of I don’t want to starve to death, so we should make sure we have a viable regulated agriculture industry.
Subsidies also lead to surpluses that can help buffer price shocks during supply crises; here is a recent example: https://www.nature.com/articles/s43247-024-01638-7
Everyone thinks their thing is too special for markets. I’m sure you’ve heard the argument for healthcare, education, energy, water, food, science, infrastructure, etc.
We need to realign on this politically; either we use markets to allocate scarce resources or we don’t.
The answer is probably that the public does not believe in markets. But we haven’t made that explicit, and instead have the worst combinations of policies; with worse service and enabling grifters.
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"Ag. can't just be about profit."
Somewhere off in the distance I hear billionaires laughing.
This is only important if you care about the future of humans. At least in America, attention spans have shortened, empathy has decreased, and individualism has increased. Billionaires don't care about the future beyond their own life. And unfortunately, one of the worst of them is now the head of the country.
It is the ecconomy. Harvest have been above average around the world the past few years. In turn supply and demand puts prices low. one bad year and harvests will be down and prices way up.
i've been working for John Deere for 15 years - I have seen this cycle several times already. people blame various politics when it happens, but the fundamentals are enough to explain nearly all of this. Anyone in farming knows this and plans for it (not always successfully)
> overall operating expenses remain well above pre-2021 levels. Rising costs since 2020 have been driven primarily by sharp increases in interest expenses (+71%), fertilizer (+37%), fuel and oil (+32%), labor (+47%), chemicals (+25%) and maintenance (+27%), alongside notable gains in seed (+18%) and marketing costs (+18%)
These numbers are huge though. I think it is fair to say that this time it may be different.
Looks like inflation to me - we all pay the same interest and everything else has been going up.
JD Vance’s acretrader app is making out like bandits selling that farmland they are buying for cheap. This is on purpose
There’s only two meat packers… two. Where are the cattle farmers to go? It’s like this across the industry thanks to monopolies like ConAgra, Tyson’s, etc.
Breaking up monopolies and giving farm workers strong unions would go a long way to improving the situation.
You'll never guess which group is consistently against unions!
There are many many meat packers, or you just mean two big ones?
“The U.S. meatpacking industry is dominated by the "Big Four"—Tyson Foods, Cargill, JBS, and National Beef—which control 80-85% of the beef market and significant portions of poultry and pork”
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The problem isn't with the farmers. The problem is the monopolies that surround the farmers.
They buy their seeds from massive corporations that have patents on seeds. They sell their produce to global multi-national corporations that set the prices they'll purchase at. They buy their machinery from John Deere or Case IH at extremely high prices.
They have no negotiating power and are squeezed between these massive corporations. This ends up leading to farmers having to sell land to corporations that will then farm it and extract subsidies from the government.
When a farmer receives a subsidy, it usually just ends up in the pockets of Cargill or Monsanto, with whom they already owe money to.
The whole system is broken from top to bottom.
Yes, and the man who broke the system, who installed the loophole that allowed decades of mergers and trust-building, was even named Robert Bork!
He was a Nixon/Reagan flunky, naturally, but the Dems ignored the issue for a long time. It was exciting to finally see the first real pushback in the last administration under Lina Khan. So many upset businessmen on TV! Unfortunately, elections have consequences, and the work did not continue.
> It was exciting to finally see the first real pushback in the last administration under Lina Khan. So many upset businessmen on TV! Unfortunately, elections have consequences, and the work did not continue.
Perhaps one of the consequences of her actually pushing back on this was one of the many reasons the owner class overwhelmingly backed Trump.
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Subsides tend to get absorbed by monopolists of all kind.
This is why UBI is a nonstarter. It will just get absorbed by landlords. This is why you need to break up monopolies or tax them. The problem is societal endorsement of monopoly rights all kind to the point of invisibility. Witness any conversations about IP rights and lands.
But also farmers are in this situation because they chosen to compete in an overcrowded commodity market rather than specializing in profitable but more labor intensive crops.
> This is why UBI is a nonstarter. It will just get absorbed by landlords
Not necessarily. People live where they live because there are jobs. If they don't need jobs because of UBI, or they can take lower-paying jobs, they can move wherever housing is plentiful.
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> But also farmers are in this situation because they chosen to compete in an overcrowded commodity market
Hard to predict the future. It was only a few years ago when crop prices were at record highs and some countries were on the brink of starvation because we weren't producing enough community crops.
The cure for high prices is high prices. But also, the cure for low prices is low prices. The older farmers are used to it. It seems the problem right now is that a lot of the younger guys went through an unusually long stretch of good times and have never felt the bad times before.
Commodity markets are necessary for survival. If we cannot make them work as a society something is deeply wrong.
Someone needs to be farming the food we all eat... If every farmer decided to just plant saffron who would farm the wheat and rice and vegetables that it is used to season?
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The fix is more expensive food.
Everyone loves the mom and pop businesses but shops at walmart for those rock bottom prices.
We can have our fresh family farms back, but you're paying double for your food. We have the system we have because people value cheap/affordable over everything, regardless of what they upvote on the internet.
Europe has a very robust, high quality and cheap food system.
Food is extremely high quality, environment is managed and wealth is distributed with support for small farmers.
High quality food is a fraction in Europe of what you pay in the US.
There is additional cost to taxpayers of Europe but US taxpayers are paying a ton for the US system too but just getting worse outcomes.
This can be done.
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That’s not really true, but we’ve incentivized mass scale farming. I know farmers who can sell produce at competitive prices growing in Upstate NY, but they only get a couple of harvests of most crops, even with advanced techniques that let many crops get planted in March.
The government spent lots of money to turn the California and Arizona deserts into the garden of America. New Jersey planted subdivisions.
A better way to do this to remove the transportation subsidy for big businesses. Trucks do most of the damage to roads (4th power of weight) but consumers bear the brunt of road maintenance. If big vehicles paid their fair share of oil taxes for roads, it will even the playing field for local farmers and businesses.
This is true to a degree, but, if big ag subsidies were phased out, small local farms would have a better chance of being viable.
I guess you could say this raises prices, but on the flip side, small farm prices could start to come down if they were more viable.
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Not true - the fix is to start enforcing the Robinson-Patman Act, the Sherman Act, and every other piece of legislation already on the books which was written and passed by congress for the purpose of eliminating private monopolies. Walmart and other monopolies are using their monopoly power to put small businesses of all kinds out of business and raise prices at the same time. Here's some info on exactly how they do that: https://podcasts.apple.com/us/podcast/the-secret-scam-drivin...
> Everyone loves the mom and pop businesses but shops at walmart for those rock bottom prices.
People shop where they can afford to shop. Walmart is famous for not paying people enough to shop anywhere except walmart. The fix is to make sure that people earn a living wage and to actually enforce the Robinson–Patman Act and aggressively go after price fixing. Suddenly walmart's prices won't undercut the mom and pop places and they won't have to charge as much to just barely survive. Opening a store that isn't part of some massive chain would stand a chance at being profitable and affordable. More competition leads to more innovation and more opportunities.
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Paying double for food is a great idea until you realize that now we need to subsidize everyone else just so they can eat.
Dang. What are the good options here (without throwing people under the bus)? IMHO, the patents on seeds has been an immense pain to the midwest and should be made void with a phase out plan that starts with the most common seeds (which are causing legal havoc by mixing into neighboring farms via wind).
Can you elaborate on the "immense pain"? I don't disagree that monopolies in big AG are a huge problem, but last time I saw someone make this point, I looked into it, and there were relatively few cases of big AG suing small farmers over stuff like this. My understanding of one of the main cases that gets referenced in these discussions was where a farmer bought roundup ready seed, promised not to use it to breed, per standard EULA, then bred with it, and intentionally selected offspring to breed further which showed the roundup ready trait. Am I missing something?
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Which patents in particular are you concerned about?
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It's not just that; being a very small undifferentiated supplier in a volatile commodities market with very high fixed capital costs, unpredictable/uncontrollable production capacity and long production lead times is a very difficult business, regardless of the industry.
> it usually just ends up in the pockets of […] Monsanto
Who? Monsanto closed up shop and sold off its assets to Bayer and BASF many years ago.
Oh yup, you're right on that. I guess my point still stands as Bayer and BASF kind of fit the bill as well.
The New York Drought is real.
Sarah Taber for the lowdown all things US Farming https://www.youtube.com/@FarmToTaber
Canada has a thing called "Supply Management". It means that for some agricultural industries, we limit how many people can produce, for example, milk.
This restriction keeps the price of milk stable, and high enough that farmers can make a profit. It may seem strange to some, but the goal is to ensure that we don't have to bail out our farmers.
The alternative is as in the US, where anyone can produce milk, and the price craters, and farmers need to be constantly bailed out.
Canadians watch crazy things like for example the US Federal government buying millions and millions of gallons of milk, making cheese, and storing it for decades. All to reduce supply/create demand, and keep the price artificially high. I suppose one bonus is the US government gives some of this cheese to the poor.
The other crazy part is the US federal government has repeatedly bought dairy farms out, to reduce supply. Literally bought entire farms, and closed them down.
Canada wants a stable supply of milk. We don't want to rely upon a foreign power for basic food-stuffs. And we don't want to spend untold billions. Thus, supply management.
Meanwhile, the US runs around saying we're crazy commies because we have price and supply control, says free market is perfect, then spends endless billions over decades to pretend the market works.
Oh and also, the US screams about how our market isn't "open", how we unfairly manipulate the market, then... wants to inject super cheap, underpriced milk, all of the result of US federal tax dollars spending billions.
Finally, it is illegal to use growth hormones in Canada on cattle. Not so in the US. With the excess supply issues in dairy in the US, maybe the US should do the same?
Ok great, now do maple syrup
https://www.canada.ca/en/agriculture-agri-food/news/2024/04/...
https://ppaq.ca/en/sale-purchase-maple-syrup/worlds-only-res...
> The alternative is as in the US, where anyone can produce milk, and the price craters, and farmers need to be constantly bailed out.
Do you have references to bailouts specifically for dairy farms? The big bailouts recently were due to reciprocal tariffs. There is the Milk Loss Program but that is limited to 30 days of production per year. I would also classify this more of an insurance program than bailout.
Examples:
https://www.nytimes.com/1986/03/23/nyregion/us-offers-dairym...
https://www.fsa.usda.gov/Internet/FSA_File/1_2_overview_brow...
The PDF has some data showing how much post-market intervention costs.
It's particularly infuriating how US politicians will stated "we have a free market". whilst intervention happens, and then get upset that Canada does it differently.
Even more bizarre, is Canada has only 1/10th the population of the US. Both countries carve out exclusions, but the US side goes bananas that we don't have completely open markets on the agricultural side. So? We can both exclude each others markets, for agriculture, who cares?
With 1/10th of the population, if you manages to get 10% of the Canadian market, that's one hundredth of the whole US market. It's such a tiny amount.
Everyone here suspects the US just wants to drive all Canadian agriculture to bankruptcy, making us entirely dependent upon the US. No way. Not going to happen. That's madness.
In terms of market intervention, we can't afford to do it the way the US does. We don't have billions to buy up excess milk, or buy out farmers to reduce supply. It's immensely wasteful to the taxpayer.
Which is very strange, because it's often parties on the right in the US, which do buyouts.
Canada dumps good milk down the drain while people go hungry and suffer high food prices. The supply management system is not perfect.
You can't produce an exact amount of food. It isn't an assembly line, it's farming, it's biological.
You need to aim for excess, to ensure enough is produced during drought, animal sickness, and other variability.
What Canada does is ensure there is excess, but not crazy amounts. It also ensures the market price is fair to farmers.
What you call "high food price" we call "farmers not going bankrupt".
And while nothing is perfect, supply management is far better than the alternatives.
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>Canada dumps good milk down the drain while people go hungry and suffer high food prices
I'm not sure if you realise this, but the exact same thing happens in the US.
Quite surprised there wasn't mention of the Trump tariffs on China causing the collapse of China imports of US soybeans, which by the way, has persisted even though the original tariffs were reduced, causing lasting damage to farmers.
https://www.forbes.com/sites/kenroberts/2026/01/17/china-pur...
Almost 78% of farmers voted for Trump [1]. These are the guys that got Trump elected. Polls show that support for President Trump among farmers remains high, hovering around 50-60%. That means these are the guys that are keeping Trump in power. When support among farmers drops to 20% level GOP legislators will feel emboldened to remove Trump from power.
[1] https://www.yahoo.com/news/u-farmers-voted-trump-feeling-210...
[2] https://www.bbc.com/news/articles/cjedvwed1xgo
It's just shocking to me how certain demographics are so eager to vote against their own interests.
I mean, name one thing that Trump has done to help farmers more than he hurt them with the tariffs? (Subsidies they already had, regardless of the party in power.)
What are they getting in return for their vote? The safety of knowing that trans athletes are banned and some Guatemalans in far away "liberal" cities have been "gotten rid of"? None of those benefit them in any way. I still can't quite understand.
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I don't really like Trump, but to be fair here, China does things like this all the time. They did the same thing in Canada, because we didn't want their spy-cars in our country.
We'd really be better off if we had zero trade with them. They're poison.
They described a lot of data. Then, toward the end, they say:
"These loss estimates reflect national averages; actual costs of production and returns vary by region, management decisions and ownership structure. For example, producers who own their farmland may face lower total costs by avoiding cash rental expenses, resulting in higher returns."
So, can we trust this to say what it appears to be saying? Or might it be meaningless like many broad averages, and we should use more specific data that includes supplier behaviors?
Mildly surprised that this domain belongs to the Farm Bureau. Maybe they should sell it to Meta and donate the proceeds to the money-losing farms...
https://www.fb.org/news-release/agricultural-groups-sound-al...
It's so obvious why. Money is created by governments and banks and it goes right back to them. Money doesn't stay in the system for too long because it's taxed each time it hops between people/companies. If you assume a 30% tax each time a dollar moves from one person to another, after just 6 hops, almost 90% of that dollar is gone... So people who are just 6 steps removed from the money printers live in a monetary environment where a dollar is 10 times rarer! That's not even factoring in inflationary Cantillon effects... It's Cantillon effects on crack...
Most independent farmers live in remote areas, far from money printers; they exist in a scarce monetary environment. It's hard to compete when your big corporate competitors exist in an environment where money is more abundant.
I watched a YouTube video that made me really worried about this, hopefully there are smart people on here that can see a bigger picture.
Farming. The only industry where you can make a loss year after year, and for some reason people keep doing it.
Because*
This is a result of subsidies distorting market prices and encouraging malinvestment.
Oddly enough the way to help is to removing the subsidies. Exploiting famers, using them as a middleman to the American taxpayer, is extremely lucrative.
Some subsidies are useful. Some aren't. The trick is to stop the ones that aren't helping without collapsing our food supply.
Of course, I'm sure a temporary one might be useful once a decade or century.
My point is this exactly mirrors the situation in health insurance, university degree prices, and many other industries we permanent subsidize. Companies create machines to use people to access the nearly unlimited pool of money available.
Good. Actions have consequences it seems
would this actually be enough such that farmers have to sell their land and new small family farmers cam get started?
or only a new set of bankruptcies and the same farmers stay on?
https://m.youtube.com/watch?v=xon9A5_4tQw&pp=ygUKZmFybSB0YWJ... was very illuminating
It’s likely the land would be far more valuable as something else.
Small family farms, while romanticized, have all the problems of any small business competing with larger professionalized businesses; consistency in operations, consistency in output quality, access to resources - including people and machines.
Additionally, for their own operational simplicity big buyers prefer interacting with as few suppliers as possible - so, market forces have been driving consolidation for decades.
I am told that farms are optimized for labor efficiency rather than profits. These farmers often have a second job when they're not out there farming.
With a low tax on land, we may not actually be encouraging the most efficient use of farmlands.
Given that people are loathed to sell their land for any reason, this makes it impossible for farmers to start new farm, leading to a gradual depopulation and collapse of rural economies.
It really depends on the farm, unlikely it will be used for anything else.
90% likely what would happen is an adjacent farmer would buy the land. You want all your land to be near each other, like defragementing a hard drive ;)
Small farmers are not good policy despite the romance. A large farmer can afford soil investments that small ones cannot
I wonder if at some point before large corporations finish buying up the last of the family farms in America, if rural America will figure out Trump and his maga republicans were never their friends.
I don’t think it would. Humans really like to blame other people for things they inflict on themselves. This is less painful than learning self-awareness.
The current Republican Party blatantly preys on this weakness and gives people an enemy to hate so they can keep fleecing them.
This is different than the Democrats, who can’t get their shit together and have a common goal.
Don't you worry, deposed farmers (those farmers squeezed between their mega-size suppliers and mega-size customers who had to sell their farms) voted for Trump last year.
Strangely no mention of the climate crisis.
Thankfully (smug response)
Not every topic needs to discuss every tangent problem.
Climate is obviously relevant to agricultural production.
This video is very liberal but does a good job of explaining which companies and industries pay for breaks and which don't. And uses soy bean farmers as a prominent example of a group who haven't been giving Trump bribes https://youtu.be/RPzcGeiNYvk?si=bfy_5KEo_ZUxOBHu
Capitalism. The problem is capitalism.
Any handouts for farmers go straight into the coffers of multinationals to pay for farm equipment, support for the locked down farm equipment, the patented seeds, the pesticides for the patented seeds and so on. The entire subsdization model is a profit opportunity for agricultural companies.
And what do those companies wnat to do? Buy up the farms and run them themselves for more profit. Because they don't have to charge the same amount to their own farms of course.
It's also why the wealthy and big companies like illegal immigration. It's an endless supply of underpaid workers who can be exploited for even more profits. Document these people and everybody's wages go up.
The only country I can think of that is really effectively managing its agriculture and food supply is of course China. China had some food shortages in the late 20th century and a result food security became a primary concern of the CCP. China has to feed 20% of the world's population and decided that food need to be plentiful and affordable. There were a seris of agricultural reforms through the 1970s to 1990s and then China used its increasing wealth to pay farmers when they had to and subsidize food when they had to to manage the supply. It's managed to the highest levels of China's government [1].
Here we have rent-seeking corporations and billionaires (eg the Resnicks [2]) where subsidies are just a wealth transfer to the already wealthy. food prices are out of control. But nobody cares because the profits have to keep going up.
[1]: https://www.csis.org/analysis/chinas-food-security-key-chall...
[2]: https://perfectunion.us/how-this-billionaire-couple-stole-ca...
The US also took food security seriously after WW2. Now it's all devolved into HFCS.
Or they exported the good food, because they could get a better price for it.
When i want real quality food for a good price in my own country, i have to go to another country to actually get it.
Again, i can't condemn them for trying to make more profit, but somewhere in the line it gets pretty weird and annoying.
Ok, another capitalism bad post, great.
What is your solution then? Explain how that happens/migrates to, in the US?
Solution is to prosecute private monopolies out of existence, by enforcing the Robinson-Patman Act and the Sherman Act.
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As an American, farmers here fucked around and found out. Last time Trump and Congress bailed them out in the last “trade war”, didn’t happen this time. Screw ‘em.
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This isn't reddit.
Farmer here.
Farmers in the USA have to pay far higher wages than other countries due to labor protection laws, and have to pay far higher equipment and chemical costs than other countries due to environmental laws.
We need either massive subsidies to make up for the effect of these laws, or massive tariffs to even the playing field with countries using slave labor and toxic lakes.