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  • From: "Rick Williams" <mrfarm AT frontiernet.net>
  • To: "Marketfarming" <market-farming AT lists.ibiblio.org>
  • Subject: [Market-farming] Farmers and Trade and Subsidies
  • Date: Mon, 10 Mar 2003 22:43:32 -0600

Leigh Hauter wrote:
> subsidies are a way of screwing farmers. Subsidies are a form of
> charity. And as Aristotle said, speaking for the wealthy (loosely
> quoted), 'we need the poor because charity makes us feel so good'

While I do agree that one of the reasons that subsidies are possible to even
get through Congress for farmers is that they have a LOT of political
capital that other special interests don't have. It is very hard to claim
that farmers are unworthy etc. But the subidies are certainly not a way of
"screwing" farmers. At least it is unlikely that was in the minds of those
who agreed to the subsidies, even though they certainly are a form of
charity as you point out.

We need to ask ourselves, who lobbies for the farm subsidies in the first
place? Is it the average city dweller? The large corporations? No and no. It
is primarily from the efforts of the farm special interest groups who ask
for a farm bill and it is almost always assumed that means money for farmers
in some subsidized way.

Not all subsidies are necessarily bad things as I have mentioned before.
Most people do think they are good ideas for those who can not take care of
themselves. And similarly, many people support environmental subsidies,
especially for farmers. This is well reflected in the "Green Box" trade
rules since they generally have UNLIMITED amounts of money permitted in that
area.

> Farmers should be guaranteed a minimum wage for their hard work just
> like any other worker.

I am not sure where this idea ever came up but it shows a widely different
view of who farmers are and how they fit into society. We have to ask
ourselves. Who are farmers? In fact, farmers are business persons. They are
certainly not employees. They are foremost the CEO of their business. We do
not pay CEO's a minimum wage.

It is like comparing ranching and cowboying. A rancher is one who owns and
controls a ranching operation. They may or may not do any physical work in
the business depending upon their size of operation. In many cases, they may
want to do some of the cowboy work, but it is often not economically
feasible to do so.

For those who are familar with Michael Murphy, the dairy farmer from Ireland
who is well known in grazing circles, it is pointed out by him that those
who do the physical work are at the $10/hour level, and those who manage are
at the $50/hour level and those who are the owners and planners, $500/hour.
And a $500/hour person has to really think twice about doing $10/hour type
work. Even if they like to do it, they have to treat it as a more of a hobby
and not economically feasible work. (These above numbers are for
illustration purposes that he chose to use and will vary considerably
depending upon the business entity, region, etc.)

> Minimum prices are like minimum wages. We modify the market in all
> sorts of ways, this should be one. We have modified the market by
> rationalizing currency, by setting loan rules, by setting contract
> rules. We modify the market by observing that certain industries are
> natural monopolies and therefore should be regulated. We regulate
> interstate commerce, we regulate international commerce.
>
> But what we, as farmers, should be doing is looking at the fine print
> of those regulations, instead of just doing praises to the market.
> Because, the fine print is where the rules are. I know people who do
> nothing else but work on those rules, market rules. the ones that you
> and I play by. the ones that allow or disallow contaminated honey
> into the US.

All good points.

> Right now those trade rules, though free market rules are being
> written to benefit banks and investors. Look at the language of loan
> guarantees and repayments and currency exchanges. The rules are also
> written on labor standards, mostly against. They could just as
> easily be written for, such as, Chinese peasants should be paid a
> minimum wage for the honey they produce if it is to be exported to
> the US.

Could you give us some examples of what rules you speak of and how they
affect the other party? We still have to have some autonomy as a nation and
we have to be very careful what decisions are made that relinquish our
rights to self determination. We certainly would have no business dictating
any minimum wages for owners of businesses in another country. That could
come back to haunt us later on. You have to look at the long term effects on
such things and especially the unintended consequences.

> I could go on but I hope you get the point. You have admitted that
> there are trade rules that we all follow. I agree. We need to look
> closely at these rules. Right now groups who know how to play the
> game are busy influencing those rules. Those are the groups that are
> benefiting from trade. And the ones who do not play that game. They
> can't find a market for their beef.

We all have special interest groups that we support who are constantly
perusing the trade agreement proposals. And lobbying directly to those trade
representatives and our legislators. We may not all agree on what those
rules should be, but politics is the ability to make joint decisions where
each party has to give up something to get something. It is the basic quid
pro quo of life.

Sincerely,

Rick Williams
Misty Ridge Farm
Direct marketed dairy beef and produce
(also dairy heifers and beef stockers)
Viroqua, WI



  • [Market-farming] Farmers and Trade and Subsidies, Rick Williams, 03/10/2003

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