From: adesai@leland.Stanford.EDU (Atit Dinkarrai Desai)
Subject: Re: Real world example of society profiting from startup subsidies.
Organization: DSG, Stanford University, CA 94305, USA
Date: Wed, 14 Oct 92 19:38:42 GMT


Although I know nothing about the agri-business, I will give this a shot:

In article <1bhff2INN80@armory.centerline.com> mrh@centerline.com (Mike Huben) writes:
>In article <qsg2o4g@zola.esd.sgi.com> thant@void.esd.sgi.com (Thant Tessman)
>writes:
>
>>You have done nothing to show that the costs in taxes of
>>subsidization balanced against the beneifits are any better than would
>>have happened in the free market.
>
>The answer is that the free market doesn't do this on any sort of scale
>needed. 

How can you say whats NEEDED? Doesn't it seem strange that farmers sometimes
dump milk at the same time as the STATE is trying to improve milk yields?

>Look to nations which don't have state agricultural research programs
>new varieties are RARELY produced.  The same was true of the USA before
>subsidies for agricultural research.  The reason is that the entry cost has
>been high: development of a new variety and increase to marketable volume
>takes a minimum of 5 years in most cases, usually quite a bit longer.
>It's not unusual to take 20 years for tree crops.

Development of cars used to take 8 years, new plane models still take
a long time, yet the government is not neccessary for new models to be
created. So development costs can't be a valid reason. Since you say
the government has been involved in agri research since the last century,
who know what would have been the case? Maybe most of the varieites were not
NEEDED. Plus people have always been fidling around with crop varieties, I
would have to see real data that new varieties were RARELY produced
privately. Although roses are not food, look how many varieties are produced
all the time. I'm sure they don't all come from the STATE.
>
>The costs and benefits have been weighed in 50 states.  These states are
>competing to give their farmers an advantage (many crop varieties perform
>better in specific locations.)  The states know how much agricultural
>income these crops bring in, and they know how much production is improved.

Is one state's kind of seedless watermelon better than another state 
seedless watermelon? Was the cost of developing seedless watermelon
worth it? How are states going to measure that? Maybe, when seedless
watermelon was developed, people just ate less of seeded watermelons and
say cantelope. Did the government measure losses in those markets? Were
these people compensated for the damage to their livelihood? 
>>And given that grain-sales are
>>subsidized as well the research, I find it a particularly ironic choice
>>of an example.
>
>If anything, agricultural subsidies should spur the market to leap into
>the gap and grab the money (as they have with corporate ownership of farms.)
>However, they've hardly lifted a finger to develop new varieties of major
>food crops.

Would you if you knew the STATE was going to give them to you for free!

>
>Just as the US is the only world military superpower, so we are the only
>world agricultural superpower.  This is because government has taken on a task
>that where the free market doesn't work (like military forces): development
>of crop varieties.  This sticks in the libertarian craw because it illustrates
>clearly that there can be effective, productive competition between divisions
>of government, and not just in the free market.

You are telling me that the waste is military spending is only equal to the
waste in argricultural spending. Fine, I agree with you on that. $300 Billion
to fight terrorism, sounds really effiecient to me. i think the same can be 
said for agriculture. Its a case of overproduction!
>
>Some federal agricultural policies are grotesque, and quite a few others
>are much more useful than is apparent on the surface.  For example, notice
>any dust bowls lately?  Lose any cattle to screwworm flies lately?

Notice any DDT killing of species lately? Lets feed that to the FEDs. How about
salinity problems in the central valley in california from massive irrigation.
In california, there seems to be some bug or another threthening crops every
year. Maybe whats happened is that one set of bugs are no longer a problem, but
another steps in. Yet the endless agricultural subsidy game goes on, replacing
one problem with another.

>The really pathetic part of O'Rourke's tirade is that agriculture is one of
>our nations largest industries, yet the amount spent by the federal government
>on it is really not that large.  The result is the lowest food prices and the
>most abundant food the world has ever known.

Was food ever a problem in the states, expect when the Europeans first came
and did not know what would grow? There is so much good land, food is of course
abunduant. Thats like saying in Suadia Arabia, we have the most abunduant oil
production in the world, and damm cheap gas too. You can see the difference in 
Saudia Arabia and Russia's production  when comparing State intervention. 

When the government spends its money, of course SOMETHING is produced.But is 
it what people want and is it produced efficiently (without getting into the
ethics of transfers)? WE can spend $300 Billion a year while Germany spends
$30 Billion and then have the most guns in the world. We can also spend
oodles on agriculture, and have lots of food. But maybe that money was better
spent elsewhere. A person can only eat so much in one day. Maybe thats why
we produce so much sewage. 

I don't think I have completly answered your arguments about the narrow 
case of subsidizing new crop yields. Since I know little about
it, its hard to refute some of your claims. I will certainly read more
about it if I ever get the time. One thing I liked to know is that is
there such a thing as patents on new crop varieties?
>
>Mike Huben
>
>"Education is what survives when what has been learnt has been forgotten."
>						B. F. Skinner