From: bill@chaos.cs.umn.edu (Hari Seldon ... psychohistorian)
Subject: subsities et al  was:Capital Suicide
Organization: University of Minnesota
Date: Tue, 15 Sep 1992 13:48:04 GMT

In <1992Sep11.093052@IASTATE.EDU> darcher@IASTATE.EDU (David W Archer) writes:

>In article <FKITTRED.92Sep11084526@spchp11.BBN.COM>, fkittred@spchp11.BBN.COM
>(Fletcher Kittredge) writes:
>> In article <1992Sep10.132611@IASTATE.EDU> darcher@IASTATE.EDU (David W Archer)
>writes:
>> That would be my point wouldn't it?  So I take it you are in favor of
>> abolishing all subsidies paid to farmers.
>> 
>I personally am in favor of this, however I do have some misgivings.

>It is entirely possible that abolishing all subsidies paid to farmers may
>be a good thing.  The idea is that this would promote a more efficient
>allocation of resources, which theoretically would increase social welfare.
>It is also thought that this may lead to more diversified, less capital
>and energy intensive production in the U.S.  A good share of the farmers

it would not lead to the type of economic warfare seen in other industries?
i can sell for less than you for longer than you 'cause i'm bigger than
you. and when you go bankrupt i'll buy you and maybe you might be able
to work for me? could you please point me to the nearest domestic
consumer electronics manufactuer? and the plants where they make their product.
how much real growth has the transportation industry gained in the past
decade? us mfgr only please. oh and where is the closest railroad?

>in this country would probably applaud such a move simply because it would
>give them more freedom to decide what to do with their land.  

>However, there are some other things to consider.  There is a national
>interest in preserving a stable food supply.  There is a fundamental

but no interest in preserving the small producer, ah how soon we forget
genetic diversity, and what can happen if we don't have it.

>difference between depending on foreign sources for something such as
>oil compared to depending on foreign sources for food.  If we beleive
>that there is the possibility that these sources will be cut off, then
>people CAN survive without oil, but they CANNOT survive without food.

the current farming practices can't survice w/o oil. period. small farms
would /should be able to shift with market conditions faster than large
corporate farms.

>Also, the effects of abolishing all subsidies paid to farmers would likely
>result in some significant shifts in regional economies.  Although society
>as a whole may benefit, alot of individual families would be devistated.

so who cares if your after the big picture? go see who gets the most 
transportation $$ in the us. then tell me if they *need* it. nothing
is fair. so lets just kill all of those small family farms and go
big corp farms. oh btw hows russia and china doing with their food supply?
how about the old country of yugoslavia? i wonder how their food distribution 
system is. do we think maybe they will be changing things a bit sometime
in the future?

>From an economists point of view, there are also market failures to consider.
>There are cases when the free market does not capture all of the relevant
>effects.  Agricultural production can result in environmental damages, most
>commonly through erosion and chemical run-off.  One way to regulate the levels
>of these externalities is to require that preventative measures be taken in
>order to receive government subsidies.  Whether or not this is the most

oh you mean like lake erie, and open pit mining, and oh what was the name
of that place up in alaska, you know where they spilt a little oil? nbd

>efficient means of regulation is open to debate.  My contention is that
>eliminating government subsidies may lead to production practices that are
>more environmentally friendly.  Farmers don't enjoy applying large doses of

no the market will need to direct farming practices to sustainable ag.
no other thing will do it.

>chemicals to the land, after all they have to live there too.  If they have
>more freedom to choose their production methods, they may reduce their use
>of chemicals without any outside regulation.

they'll need to be reeducated with the same fervor that they were taught with
that converted them from sustainable ag in the first place. with similar
incentives.

>As for me?  I plan to eventually return to the farm, subsidies or not :)

>This is an interesting thread.  Comments?

i've added a few. after reading them (written yesterday) they almost seem
disjoint. i hope i was able to convey my general dislike for large corporate
farms, monoculture, and the harvard busness school method of business
operations. but then many companies that follow hbs end up calling me in to fix
their info systems when they try to use hbs methods as design methods. so i
suppose i shouldn't complain to much huh?

>Dave

>___
>Dave Archer
>Department of Agricultural Economics

i lay no claim to being an economist. so please correct me where i may have
erred in simple well understood, *agreed* upon economic theory. please also stay
out of the stratosphere where economist argue with each other over which is the
correct model.

bill pociengel

ps pbs had a nice piece about somalia last night. pleanty of food all the wrong
places, the people in real trouble have had the ability to grow their own food
supply destroyed. now i wonder if there is any difference in having this ability
destroyed by fighting or by economic warfare????


--
bill@chaos.cs.umn.edu
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