How Big, Free Market-Meddling Government Milks Consumers
James Bovard writes in the WSJ that milk, which now sells for an average of $3.53 per gallon, could soar to $7 a gallon:
If the price of milk zooms up shortly after Jan. 1, the increase will come courtesy of a venal and feckless U.S. Congress.No grocery store would hire a clerk who insisted on adding up a customer's purchases with an ancient abacus. Yet a similarly archaic standard is about to be inflicted on the nation's taxpayers and consumers.
Current farm programs--which consist of massive subsides, price supports and various marketing restrictions--were enacted in 2008 and expire on Dec. 31. That should be cause for rejoicing, except that the system is rigged against consumers and taxpayers.
Instead of Americans enjoying a bounty after the clock runs out, federal farm policy will automatically revert to a farm bill drawn up in 1949. That will compel the Department of Agriculture to roughly double the price supports for dairy and other farm products thanks to a mystical doctrine called "parity."
The doctrine was concocted by Department of Agriculture economists in the 1920s to "prove" that farmers were entitled to higher prices than the market provided. The official parity calculation was based on the ratio of farm prices to nonfarm prices between 1910 and 1914, the most prosperous non-wartime years for farmers in American history.
If the market price of milk, for example, fell below parity, the Department of Agriculture intervened in markets in various ways to provide a price floor to benefit dairy producers. This mechanism has been in place for generations, gouging taxpayers and consumers, long after full-time farmers became far wealthier than average Americans.
If you can't make it as a farmer without handouts from the rest of us, you should sell the farm and find work elsewhere. We have no business subsidizing farmers or any other business in this country.
UPDATE: The "dairy cliff" sounds like it may be avoided -- for now. From NBC News:
Farm-state lawmakers have agreed to a one-year extension of the expiring U.S. farm bill that, if enacted, would head off a possible doubling of retail milk prices to $7.00 or more a gallon in 2013.The compromise measure resulted from bipartisan discussions in the House of Representatives' Agriculture Committee and talks with colleagues in the U.S. Senate, Frank Lucas of Oklahoma, the House panel's chairman, said in a statement Sunday.
"It is not perfect - no compromise ever is - but it is my sincere hope that it will pass the House and Senate and be signed by the President by January 1," Lucas, a Republican, said.
It was not immediately clear whether House and Senate leaders would bring the measure to a vote soon enough to avoid putting the so-called "dairy cliff" milk price spike into action.
Pigs at a trough, fed by dairy industry lobbyists. If you think your lawmaker is better than that, well, we're so sorry about whatever happened to your brain.
Aside from government meddling of the type illustrated, I urge you to recognize something of farming which is not generally acknowledged:
No one can control the weather.
No individual farmer can control the competition for his product from another nation.
No farm exists without years of preparation. One does not simply rent a building and advertise.
I am amazed that people complain about farmers with their mouths full, even as I am surprised that they do not know how much of farming has been taken over by industrial collectives due to the economies of scale.
Protests framed in the manner above FAVOR conglomerate farmers, as does every other hardship, administrative or natural.
Radwaste at December 31, 2012 2:38 AM
Because heaven forbid that in the absence of "massive subsides, price supports and various marketing restrictions," we simply let the laws of supply and demand dictate the price of a gallon of milk.
Pirate Jo at December 31, 2012 10:57 AM
Actually, the Dairy Industry lobbied to stop the "subsidy." The way that subsidy law was written, it comes into effect if not overridden by other legislation, which it has been in the past by the agriculture funding laws - but that has, like the last three-fours budgets, in Congress.
John A at December 31, 2012 11:17 AM
Oops -"like the last three-fours budgets,"
--
"like the last three-four year's budgets, been lost"
John A at December 31, 2012 11:21 AM
Even if we didn't revert back to some archaic law, don't be surprised if when subsidies are removed milk jumps sky high.
The average dairy farmer is not making more money than the average person...on paper it might look like that, with high dollar assets of land, tractors, milking equipment, etc. For every profitable year, there are the years with too much rain, too little rain, too cold, too hot, 'causing the farmer to spend that profit on more grains to keep the cattle, and then, the milking machine breaks, and the tractor dies, illness strikes the cattle and the vet takes his share, coyotes start spooking the cows and they dry up too early, fences need fixed, etc. Get rid of subsidies, but be prepared when milk can go from 4 dollars a gallon to 14 dollars a gallon with a few tornadoes ripping through the west. Or they could just bankrupt, or simply stop farming...good luck getting a gallon of milk, then.
Cat at December 31, 2012 1:48 PM
Well then Cat, the people who want it can buy it and I wont have to spend my money on taxes to buy shit I will never get to eat myself
lujlp at December 31, 2012 3:35 PM
Preface this with I do tech work now, but I have done everything from working on a dairy farm, restaurant cooking, and other working level scut jobs in my past.
Thank you for preaching to the choir. I'm more than willing to be a member of your choir.
I'd love to see the USDA go away. I am more than willing to pay $10 a gallon for milk. Or $10 a pound for ground beef. That means that market forces are working, not government intervention.
My neighbor used to raise hogs, is a butcher, owned a butcher shop, and has several hundred acres under various grains. He is essentially a working stiff like me that is a few years older. His body isn't holding up. His dream is to get a tiny RV and travel the country. He's now teaching butchery at the local community college.
I know several other area farmers. They wanted to pass on their farms to the kids. To do it they are now "corporate" farms. They had to do it because the 5000+ acres of land they own are worth in excess of $5M. The fact that it only brings in about $400K a year for about six families makes them millionaires when dad dies and the property is subject to inheritance taxes.
If you take the federal government (a 1000 pound gorilla) out of equation everything changes. The price of milk, soybeans, corn, bacon, tobacco, eggplant, beef and all the rest become susceptible to market forces.
If a summer sucks in California, and is too dry -- the price of tomatoes will go up. People will then have to decide if they want tomatoes on their homemade tacos.
But this price rise is an artificial response from an arcane law.
Jim P. at December 31, 2012 3:53 PM
Pirate Jo, read some more.
If Kroger or Albertson's or Safeway decide to buy Argentine beef for a year, that'll put American ranchers in the toilet. You may not have heard of huge drought problems in the USA last year, because imports put stock on store shelves even as Americans COULD NOT produce.
Those of you who claim you want the market to operate unmolested: I call bullshit. You want to pay the least you can for everything. To that I say, at least look at what has to be done to bring anything to market - and recognize how little you care about migrant workers, too. Their working conditions and status as low-class people are the product of this market you're admiring.
Radwaste at December 31, 2012 6:14 PM
No fucking shit. Thank you for stating the obvious.
Now if I had to pay $15 per pound for beef -- do you think I would have it every night? But at the same time if a farmer could come up with a way to sell steaks at $11.25 per pound, and still be competitive, do you think he will?
Jim P. at January 1, 2013 2:00 AM
Jim, more of the obvious: the farmer will try to get as much as he can.
Meanwhile, you're not even in the ballpark. It's not the farmer getting that much per pound.
Again: look at what has to be done to get anything on a farm to market. I haven't seen anything here that indicates such an understanding, and I'm not an expert.
Hint: the "American farmer" (in quotes because of conglomerates), or rancher, is not in competition with anyone she can see, and is not even the major player in trading those commodities we see at the grocery.
Radwaste at January 1, 2013 6:30 AM
Radwaste, migrant workers are not slaves.
The way I see it, we have three choices:
1) Pay higher taxes in return for lower food prices.
2) Pay the same taxes, get lower food prices, and make up the difference with government borrowing.
3) Keep taxes out of the equation entirely, and pay what food costs based on supply and demand.
So, I choose #3. If you prefer #2, you're probably pretty happy right now.
Also, I live in Iowa, so yes I am QUITE familiar with last year's drought. Less corn to feed the cows, therefore fewer cows, and higher prices for beef. I can't exactly wave a magic wand and make it rain. That shit happens, and if higher beef prices are the unfortunate result, then so be it.
Pirate Jo at January 1, 2013 7:33 AM
How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too
Jim P. at January 1, 2013 8:25 AM
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