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Significant US farm losses persist, despite federal assistance

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Re: Significant US farm losses persist, despite federal assistance

#11
post #7

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 farm…

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Re: Significant US farm losses persist, despite federal assistance

#12

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…

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.

Re: Significant US farm losses persist, despite federal assistance

#13

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…

Pricing anything into the cost of food would be political poison. Paying farmers to grow nothing is considered preferable to that

Re: Significant US farm losses persist, despite federal assistance

#14

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…

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.. ?)

Re: Significant US farm losses persist, despite federal assistance

#15
post #7

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 farm…

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.

Re: Significant US farm losses persist, despite federal assistance

#16

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…

most of the subsidies are insurance not direct payments.

Re: Significant US farm losses persist, despite federal assistance

#17
post #8

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

Small farmers are not good policy despite the romance. A large farmer can afford soil investments that small ones cannot

Re: Significant US farm losses persist, despite federal assistance

#18
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...

Re: Significant US farm losses persist, despite federal assistance

#19
post #8

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.

Re: Significant US farm losses persist, despite federal assistance

#20
post #7

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 farm…

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
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