Comment by elsjaako
17 days ago
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.
Fair! My comment was probably more dramatic than it needed to be, but I was trying to paint a picture as it kinda irks me when a lot people act like farmers are 'welfare queens' just taking money and living the good life. Not that OP did that, but it makes subsidies a 'dirty word.'
Subsidies is a hugely loaded term that would take more than a few comments to even begin to cover, but yes, they do cover those things that you mentioned, but a lot more than that. Heck they even sometimes pay farmers not to grow things at all - we used to get a check not to grow tobacco. I was a child then, I don't remember all the details.
Importantly, subsidies already include a federal crop insurance program that the government pays most of. That would cover most reasons for loss of crops. But there's also payments when say, you had a great year, but prices crashed through no fault of your own. And separate payments for say, farm animals catching disease and dying, or natural disasters. And separate payments for things like the messy situation COVID created. And a lot, lot more.
My comment was mainly with the lens of 'get rid of subsidies and buy your own insurance', and well, we see how well that works with health insurance. "Oh sorry Mr Smith, those cicadas were underground when you bought the farm, pre-existing condition, denied."
I see your point a bit better. I definitely agree that insurance can be terrible. I will say that with US health insurance you've pretty much picked the worst possible insurance to compare it to.
Farmers typically have more knowledge and more budget for good advisors than consumer health insurance buyers. There are all kinds of business insurance, and I think these are not usually considered as horrible as health insurance. Also, with good insurance you've got a partner who is very invested in understanding the risks you're taking and letting you know (in the form of how much you have to pay).
Some subsidies are probably a good idea, especially where you want to encourage behaviors that would not naturally be encouraged by the market (e.g. getting farmers to not grow crops that you don't want them to grow, or do things that are good for the environment but not legally required).
Sometimes it's probably neutral, where the food is cheaper in the supermarket but taxes are higher and in the end it's just the consumer paying anyway. My guess is that this usually isn't the most efficient way to get money from consumers to farmers.
And sometimes subsidies are actively harmful, like when they encourage growing crops beyond what the market requires.