I don't know what the best prescription is, but I would imagine you and I would probably agree that subsidizing certain crops, to the benefit of certain firms and the detriment of others, is a practice that should be done away with. The US currently grows around 4500 or so calories per person per day. Waste in the system in endemic, but currently the incentives encourage waste. The question is can we envision what the state of farming would look like were subsidies and fertilizer regulations eliminated? Subsidies were first introduced in great numbers as a reaction to the Dust Bowl, if I'm not mistaken. The Dust Bowl itself resulted from a combination of sub-optimal farm practices and drought. Subsidies were introduced to help struggling farmers, as well as to encourage price smoothing, so that markets would be less volatile. The effect has been to encourage as much growing as possible, precisely because of the lack of volatility in the market. If we were to eliminate the subsidies, my guess is that we wouldn't all of a sudden have an idealized market, but rather we would revert back to boom and bust agriculture (this time aided by a lack of regulation about how much fertilizer we can dump in the water, perhaps exacerbating the booms), something no one wants. Another alternative is to incentivize (subsidize) crops that are good for us, but of course that opens up a debate about what, exactly, "good for us" means (and I can guarantee that the greedy leeches who make the food pyramid and its ugly bastard cousins would get to tell us what's good and what isn't--Frosted Flakes for everyone!!!). Despite that over abundance of calories, we currently don't grow enough fruits and vegetables in the US for each of us to eat our daily recommended portions. This is sad, but I don't think more subsidies will fix the problem. The problem (to be clear, the problems to which I'm referring are disease and environmental catastrophes) appears to be intractable. The markets can't be trusted to be rational. The externalities are too great and too protracted to be built into prices. For example, diabetes from eating nothing but corn byproducts could take 30 years to set in. No market that reacts with daily speed will account for the trillions we will spend in the coming years treating diabetes and cardiovascular diseases. My gut is to tax corn, but were corn eliminated altogether another stand in would take its place. We could tax foods that derive a certain percentage of calories from processed sweeteners, but we saw the outrage the Bloomberg felt after his bungled elimination of large size sodas. People won't stand for taxes on bad behavior; and anyway, I'm not sure taxing poor people is ever a good solution to any problem. Maybe we could offer tax credits for people buying vegetables. This is problematic, because whenever there's a government handout, lobbyists will line up to make sure they get theirs. Preferred government vegetable growers would be popping up in short order. It's a tough problem. For now, I subside on mostly fruits and vegetables bought and paid for by my work in the stroke field. I guess I get the best of both worlds. It's perhaps a cynical way to exist, but I wouldn't mind being put out of business by a healthier population.I submit that the way to cure this disease is to eliminate it, not to beg people with compromised incentives to rejigger it so it will possibly be it less harmful.
briandmyers said that New Zealand is getting by without subsidies. Why assume there will be disastrous booms and busts? Legislation won't prevent drought; farmers already have incentive to take precautions against irregularities. You recognize that any legal remedy will lead to unwanted side effects. Waste is bad, it costs resources. But fighting waste also costs resources. Why not let the people closest to the problem, the ones who have something to gain or lose, make their own decisions about how to deal with these challenges? Why assume that Washington can do it better? Yeah. I trust you won't be surprised when the people you perceive as incapable of making good food decisions discover that cheap frozen peas are a good substitute for pickup truck ballast and beer cooler ice packs. So much for opposing waste. Maybe we could allow the market to continue to make all kinds of food, including fruits and vegetables, ever more convenient and affordable:The question is can we envision what the state of farming would look like were subsidies and fertilizer regulations eliminated?
Maybe we could offer tax credits for people buying vegetables.
For commonly consumed fresh fruits and vegetables for which quality has remained fairly constant, analysis of price trends reveals a price decline similar to that of dessert and snack foods.
Specifically, from 1980-2006, inflation-adjusted prices of chocolate chip cookies, cola, ice cream, and potato chips fell by an average of 0.5-1.7 percent each year. During the same period, inflation-adjusted prices of Red Delicious apples, bananas, Iceberg lettuce, and dry beans fell by an average of 0.8-1.6 percent each year.
Because the transition was brutal. Yeah, they recuperated from it but Argentina recuperated from Pinochet, too. A 66% reduction in profits is the kind of thing your average industry doesn't accept with a smile. briandmyers said that New Zealand is getting by without subsidies. Why assume there will be disastrous booms and busts?
I also believe that the reason profits (not revenues) dropped so much, was at least partially because of increased investment by farmers.
It's not so bad making less profit, if you are actively investing in your future profitability.
Brutal is a harsh term; maybe accurate, but I'm not so sure.
NZ farmers not only recuperated, they have gone on to positively thrive.
Here's a Libertarian take on the whole thing (which I am no expert on, by the way) :
I dunno, man. France is extremely protectionist in regards to its agricultural segment; its stuff remains luxury in the rest of the world. NZ lamb used to be a delicacy, now it's commodity. Kiwis around here mostly come from Equador. I'm allergic to libertarians so I'm not going to go toe-to-toe with the Cato institute any more than I'd debate the divinity of Christ with a Pentecostal, but I can't imagine NZ had 66% profits to give up any more than the US does. The United States has remained the agricultural capital of the world only through brutal consolidation and the elimination of small farms. The subsidies do a lot more to shape the type of agriculture than anything else. What have you seen happen to the diversity of product in NZ over the past 20 years?
I don't know anything about product diversity, sorry. I don't know what the answer is for the USA, but removing the subsidies was a big positive for the farming industry here. No one ever talks about going back to the old ways. Farmers have powerful collectives, and make good money. Before removal of subsidies, productivity improvements were below 1% per year; it's reported at nearly 4% per year since. That shit adds up fast.
The data presented in that link aren't conclusive. The CPI adjusted prices show a sharp rise in vegetable prices compared to snack foods, but the authors qualify with arguments about quality. After reading the paper, I'm left with a sense of ambiguity more so than the abstract would have one believe. But anyway, it doesn't matter. We're talking incentives, not absolute prices. Friedman was the one who stated that government's role in the economy should be to use taxes to incentiveize or disincentivize behaviors considered positive or negative, respectively. I'm not arguing that we should pay people to eat better. However, whether or not we should do that has little to do with the current market price of snacks vs. vegetables. Clearly, at current levels, our nutritional-social system is failing. I don't think you will find many health experts who think our trajectory is positive. There may be more to this trend than food, but food is an undeniable and significant major contributor. I think as the epidemiological evidence mounts, we will see public policy catch up to the reality that sugar is poisonous when consumed at the levels at which we consume it (made all the easier by massive subsidies to the corn producers). What our policy response will be is anyone's guess, but unless we want cardiovascular disease to consume an unreasonable percentage of GDP, some trends will have to be shifted.Yeah. Or maybe we could allow the market to continue to make all kinds of food, including fruits and vegetables, ever more convenient and affordable:
I suspect you refer to Figure 1. This graph shows the Bureau of Labor Statistics' inflation-adjusted indexes for fruits and vegetables versus snack foods. The paper explains that this index is misleading because it compares 1980 apples to 2006 washed, peeled, sliced, packaged, organic apples. The BLS index does not track a standardized shopping list; it is proportional to the food that shoppers actually buy each month. The paper describes many changes in the typical shopping cart, all of them good news for fruit and veggie lovers: • Reduced seasonality (foods like strawberries were formerly unavailable much of the year — more accurately, they were prohibitively expensive to carry — now they are available much of the year) • Increased variety ("From 1987-97, produce departments nearly doubled the number of items sold") • More convenience (spinach, broccoli, and carrots are mostly sold already prepared; 69% of carrots sold are cut and peeled) These changes represent real increased value in the produce we take home. Oreos have not had an innovation since Double Stuf appeared in 1974. The obvious way to correct for these trends is to compare prices for whole, unprepared fruits and vegetables. USDA selected 11 fruits and vegetables "that were largely the same product in 1980 and 2006." These histories mostly look like this one for celery: This is from the same data set, but simply compares Red Delicious apples to Red Delicious apples over time rather than an evolving typical shopping cart. The only clear increased price was that of broccoli, and it turns out that BLS has a broader definition for this category, including "head broccoli (with stems), crowns, and bags of washed florets," so this index reflects the increased popularity of prepared food. Healthy food is not the only thing that is getting more abundant and affordable. Ice cream is too, and I don't see that as a terrible thing, though like anything else there are good and bad consequences. Information about nutrition is more available than ever before, and if it comes to that medical treatment for diabetes and heart disease is better and more widely distributed than it has ever been. You directly associate the nation's biggest food and health problem to federal policy. Why not advocate the No Policy option, and just let people buy groceries as they choose?The data presented in that link aren't conclusive. The CPI adjusted prices show a sharp rise in vegetable prices compared to snack foods, but the authors qualify with arguments about quality.
I'm not advocating anything, to be clear. I'm just advancing the idea that the status quo is unsustainable, and that there are problems with any alternative I can think of.You directly associate the nation's biggest food and health problem to federal policy. Why not advocate the No Policy option, and just let people buy groceries as they choose?
Okay, simply pointing out challenges without offering solutions is fine. It's just that when I read "The markets can't be trusted to be rational" I expect "Something must be done" to come next and I just want to keep doing nothing on the table.
Current US agricultural policy is a vestige of Nixon-era Cold War economic warfare. We grow the crops we do the way we do because it gave us leverage over the Soviet Union. We continue to do so because it gives us leverage with the WTO and the World Bank. "Crops" are corn, wheat, soy and potatoes because they can be banked, siloed and otherwise warehoused for protracted periods, making them "conflict stable." "Food aid" to foreign countries is never fresh produce. There is no way to coax North Korea into behaving with apricots.