From: Alex.Strasheim@bbs.oit.unc.edu (Alex Strasheim)
Newsgroups: alt.org.food-not-bombs
Subject: Re: Food not bombs?
Date: 9 Oct 92 21:34:46 GMT
Organization: Extended Bulletin Board Service

In article <1992Oct8.180232.4296@harlow.harvard.edu> job@head-cfa.harvard.edu (Jeffrey Oliver Breen) writes:
>On a serious note, I think slashing farm subsidies would probably do
>more to drive down the cost of food than gutting the defense budget.

Although it *seems* logical that slashing farm subsidies would lower food
prices substantially, I don't think that it would.  The first and most
obvious reason for this is that only a small percentage of what consumers
pay at the grocery store goes to the farmer.  The rest goes to grocery
wholesalers and retailers, taxes and insurance, food processing companies,
etc.  Commodity prices fluctuate wildly, and this really doesn't show up
at the grocery store (at least not at the one I shop at);  and it is
unlikely that whatever price changes in the underlying commodities that
slashing crop subsidy programs would produce would have much of an effect
on what consumers pay for food.

Additionally, I think that there is good reason to believe that slashing
subsidies might even have an advere effect on consumer prices.  This is
because slashing subsidies would be disastrous for family farmers.  Most
farmers don't own their land outright -- they have borrowed money against
it, either to buy the land in the first place or to purchase equipment
used in working the land.  The price of farmland is directly releated to
the income it produces -- and for a long time, the income has depended
upon subsidies.  Most farmland has changed hands since subsidy programs
went into effect, and most farmland has been mortgaged based on values
that assume that crop subsisdy programs will be in place.  

This means that if subsidies were removed suddenly,
farmers would have mortgages they couldn't pay and most banks in farm
states would have loan portfolios that were primarily made up of unsound
loans.  Many (if not most) of these banks would fail, and this would put a
tremendous amount of stress on the regional economies of farm states, and
on the nation's economy in general.

Right now, we have a system of family farms in this country.  One of the
big advantges of a farm system of this type is that prices can't be
controlled by a handfull of large corporations who control the nation's
food supply.  I know that sounds paranoid, but think about soda prices. 
Most of the cola market is controlled by two giant companies, and as a
consequence soda costs at least two or three times as much as it would
under free market competition.  Someone's got to pay that $20 million to
Michael Jackson.  Removing crop subsidies would put family farmers out of
business, and corporate farming would take their place.  That would not
be good for consumers.

And as for the connection between food and bombs...

We spend an enormous amount of money on defense (i.e. "war") equipment. 
If we took a fraction of that money and redirected it to feeding people,
there would be a lot less grief in this country.  You can buy a lot of
bread for the cost of a single stealth bomber.
--
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