Milking the taxpayers: As crop prices fall, farmers grow subsidies instead

cow2

Farming policy in this country is a travesty.

If your crop is subject to uncomfortable swings in price and you can’t handle the swings, then stop growing that crop. Don’t take money from taxpayers just because you don’t like the volatility of your chosen profession.

Subsidizing crops and non-crops creates distortions in the marketplace which then in turn create more distortions which then for some reason must be corrected with money from American taxpayers.

It’s a legal scam.

(From The Economist)

Ominously, on February 10th the USDA predicted that net farm income would decline by 32% between 2014 and 2015. Commodities such as corn (which in America is used to produce everything from biofuel to syrup) and soya have become less valuable of late thanks to soaring supply and weak demand. Falling prices reduce the cost of subsidised crop insurance to the taxpayer (since less valuable crops cost less to insure). But those gains will be wiped out and more by the cost of compensating farmers for their lower incomes.

Any new rules designed to stop non-farmers from getting payments will be unlikely to work, predicts Mr Smith. While it may be possible to stop some landowners from claiming payments, they will adapt: “You hire a good agricultural lawyer and redefine the structure of the farm.”

Click here for the article.