Posted on 04/11/2008 9:51:22 PM PDT by La Enchiladita
Energy: The world's poor are learning what happens when government subsidizes the burning of food. It's time to end this madness and let the market decide if any biofuels make sense.
For most Americans, the rising prices at the supermarket are definitely an annoyance, but hardly a threat to life and health. It's a different story in countries like Haiti, where food inflation has led to real hunger and, last week, to riots.
News reports say the poorest Haitians are trying to get by on cookies made with dirt, vegetable oil and salt. Food riots also have roiled Egypt and led to a general strike in Burkina Faso in West Africa. The high cost of corn, wheat, soybeans and other basics of the world's diet could soon start bringing down governments.
It already has set back the fight to reduce global poverty. World Bank Chairman Robert Zoellick estimates that "the effect of this food crisis on poverty reduction worldwide is on the order of seven lost years."
(Excerpt) Read more at ibdeditorials.com ...
Swiss— The people against ethanol all tell tall
tales about it. Like they bitch about subsidies
and no actual cash is paid now.. Just a tax credit to
BIG OIL. They tell about all the water use, but they add in what rain falls on each bushel of corn. Kinda crooked.
We here get 1 ft of precipitation in summer, which is
43,000 cu ft water per acre = 320,000 gallons falling on an acre in summer and you have 200 bushels per acre,
so for each bushel you have 1600 gal falling, but it is
always there, most of it soaks in and repenishes water
table, same would be there whether raising corn or pot
or peas. Those bogus scientists throwing out all the crap
is bulls$$$$, and an investment magazine puttiing out an article with out even acknowleging the critical role
investors has in driving up prices is really crooked.
But it along with all other crappy propaganda gets
results for their clientele, IE drives the speculating
price on options on farm products. Real crooked bunch
of skunks...Ed
I think you are both right.
The other day, I noticed another media uproar over a case of Mad Cow Disease in a human being. The fact of the matter is, this is not as unusual as they portray. But to make it seem unique and threatening serves their purpose.
Same thing with killer bees, etcetera.
Here is where low crop prices are from:
The programs, as briefly described below, were designed and refined to provide the most plentiful food ever, at the lowest prices in human history, not to help the farmers.
If you care to read it, here is how, and it is a tribute indeed to the skilled bureaucrats who put it all together. .
For the past 50 years or more the farm programs (really food programs, as they were designed primarily from the food available angle) have been carefully crafted and annually refined. .
The final acreage allotments, price supports etc. aren’t put into place until the very last moment, so that the desired crop size can be more precisely met. The goal is to produce just enough excess food stuffs to keep the price down, but not so much as to drive too many farmers out of business in that crop cycle. .
Price supports are in place so that farmers can count on a certain ‘floor’ price for their crop, sort of a minimum wage. This money will allow them to plan to be in business for the next year. .
Acreage allotments set by the USDA allow for a big crop, more than the consumers can use. As a result, there has always been a huge surplus hanging over the market, keeping prices down, sort of a maximum wage. .
Imagine some guy standing in your boss’s office asking for your job everyday, willing to work for just a bit less than you are. Not at the employment agency, but actually in his office. With that kind of situation, it’s going to be hard for you to ask for a raise, and it’s also hard for crop prices to rise significantly with the surplus. .
Fifty years ago, when this was just beginning, a lot of farmer didn’t enroll. As the years passed, these programs began to squeeze every farmer. It is now to the point where nearly every farmer in the United States is enrolled. Very few farmers have the financial resources needed not to enroll, because a particularly large crop can force prices so low they can be driven out of business within one crop cycle. That means that the government has control over nearly every aspect of crop size, how long the farmer will store his crop after harvest, and at what price he will sell it for. .
All of the above is designed primarily to keep food stock supplies up, prices down, and food cheap for the consumer. Secondarily, it’s designed to keep farmers poor, so they will be forced to enroll in the program next year. .
A quick trip through the Midwest, our breadbasket, will reveal the accuracy of the success of the Secondary target. Small towns, who rely on the financial earning of the farmers to survive are poor. A trip through the countryside will show farm families who live a very simple life. I’m not asking you to feel sorry for any of them, anyone could move elsewhere. I did. .
Ethanol has been the straw that broke the back of the cheap food train, but it could have been just about anything. .
With the introduction of ethanol, farmers found an escape route from their predicament. No longer is there enough money and power in the farm program subsidies to keep them trapped. .
Farmers are now free to do what their hearts have desired to do for decades, produce enormous crops……. And then get paid for those crops by willing buyers who will pay a price that ensures a fair profit. .
Now that the complainers about the farm program subsidies have gotten their wish, they are complaining that food prices are too high. .
Rush has stated that the most expensive commodity traded in the United State is ignorance. The ignorance, even here at Free Republic, about where and how our food is produced, and how it comes to our tables, is a good example of the accuracy of that statement.
And farmers really aren’t absolutely free to
produce on a scale they’d like, as high energy costs
have driven up their seed, fertilizer, fuel,
land, prop taxes, repairs and machinery. These
has become a huge economic barrier.During planting season 500 plus dollars a day fuel through tractors
is common, and these guys around here aren’t huge
operators either. They aren’t much further ahead than
when getting supports as costs are killing them.
And you are correct about farm programs, they were designed
to keep us in cheap food and just barely keep farms
in business.The powers to be didn’t want poor working
stiff to have to pay parity for food, as they were afraid
there’d be revolutions putting them out of office.
And hung up in a trees, or up against firing wall.
From 1950 to now if we had parity, milk would be
10-12 bucks a gallon, if you used fuel, gold,
lawyers fees, hospital costs, taxes, etc, as
benchmarks to go by. Ed
Yes I would. But I can understand why some people who have been sucking on the federal tit for years would think that government is the source of all life.
Federal involvement with railroads can be argued because it makes it easier to get the right-of-way but there is no reason that a product such as ethanol would need a federal subsidy if it were truly a competitive product.
Yes, I would have opposed federal subsidies to the highways on the grounds that it will be used as a precedent by other rent-seekers and parasites feeding at the public trough. Marvelous infrastructure like the Internet have been built without public funding.
Hell you think there would be airlines today without government support back in the early days.
Back in the early days of aviation, a guy named Samuel Langley wasted a lot of taxpayer money trying to build an airplane. It took a couple of bicycle mechanics, spending their own money to do the job right.
Government just gets in the way and wastes money.
90% of the corn farmers don’t irrigate their crops.
Good farmland with good rainfall has not been sitting idle just waiting for someone to grow corn on it. I would wager that most of the new corn farming in the last few years is being done with irrigation. And if we have a dry spell, and that is very possible, we will be in serious trouble if we have become dependent on ethanol.
Sure. As long as the government requires that we burn it. What are the farmers going to do after people realize how expensive "clean air" is and how minuscule is the effect of oxygenates in fuel? What will they do when people realize that "global warming" is a scam?
If the past foretells the future, farmers will be as hooked on ethanol as drunks are hooked on, well, ethanol.
That wasn't the point of my post. There are a lot of reasons to be opposed to ethanol, including those you've outlined. Lack of ability to produce enough is not one.
My point was that AMericans have gotten used to cheap food, the cheapest and most varied food supply in history, and much of that was a result of a long term government plan and at the expense of the farmer.
It really comes at everyone's expense.
The Soviet Union was the world champion at agricultural planning. Over seventy years the communists and their five year plans reduced the Soviet Union from the largest food exporter to the largest food importer. They guaranteed bread at five cents a loaf. It was so cheap farmers were selling bread to their pigs (at least they didn't burn it) while others would stand in line for hours to buy bread.
Let's go back to a free market. If the farmers and ethanol producers can sell it for a profit without government help then I'll shut up.
They couldn't hold a candle to our bureaucrats. Our bureaucrats were able to refine their plans annually, and provide a plethora of cheap food to American consumers for over 50 years.
Let's go back to a free market. If the farmers and ethanol producers can sell it for a profit without government help then I'll shut up.
We may very well get to see just what you wish for occur.
If you're unhappy now, you're going to be absolutely miserable with what you are wishing for.
If it turns out that things work better under government control, it will be the first time in history.
But suppose you used the price of computers, TV sets, phone calls, or airline fares as benchmarks? It's a good thing we don't have "parity" in other industries.
It's too bad ethanol is so darned expensive, because then you could use that.
Take a re-read of that post from me to you on another thread about how we came to have all these decades of cheap food.
I'm not trying to support the government interference in our food market, the same result may very well have been achieved in some other fashion. BUT, for those decades the consumer was clearly the winner.
The problem, as I see it, is that now those birds are coming home to roost, as the crop markets haven't been entirely rational since the 50's.
With the government continuing to tinker, juggling an irrational energy policy with a somewhat irrational food policy, we have a terrible mess, nearly all of which is irrational.
This is going to continue to be painful, and very expensive. It didn
Right, and the taxpayer and the farmer were the losers. That's what happens when the government gets into the act. It is a zero-sum game because the government does not add value. They just redistributes the wealth.
Frankly, when I read your other post, I wasn't sure if you were being sarcastic or not when you were talking about our skilled bureaucrats.
Managing an economy should not be done by a centrally planned authority like it was in the Soviet Union because, even if the managers are honest (they never are) no human could possibly do the accounting properly because of the myriad details and complexity. The Soviets came to realize that and they had hope that computers would save the day. But, as we see with climate models, a computer is no better than the data, formulas and assumptions given to it by programmers.
The best way is the free market.
Politicians don’t like big, contentious pocketbook issues. This year they have at least two, gas prices and food prices.
Farm programs began to be implemented in the 50’s , and given a huge boost in the 70’s, and their prime objective was to take the food issue off the political table.
Those programs were able to consistently count on something the Soviet Union didn’t have, farmers like my father. His desire and the desire of every American farmer even today is quite simple: grow as large and as high a quality crop as he could on whatever land he had available to him.
So the bureaucrats ‘problem’ was simple, determine how much of which crop was needed, and carefully release the reigns just enough to allow the farmer to produce that much of that crop. To enforce that upper limit, force those farmers who produced too much to compete on the open market to sell the excess (as determined by the government). Seldom has there been a viable market for that excess, and the farmers who went there too often went broke.
Up to this point, about 2004-06, the bureaucrats were very successful. Hate them or love them, you’ve got to admire their success in keeping food prices off the political pages. AND the politicians got to denigrate the farmer whenever they were in the city, because it was “The FARM Program”, and it wasn’t named “The Cheap Food for Consumers Program”.
Until ethanol. Suddenly, there is a viable alternative to the government structured crop price, there is the open market, the ‘behind the scenes’ ethanol subsidies not withstanding.
Given what is happening in the world, if it wasn’t ethanol, it would have been something else, as the weak dollar and the dramatically increased standard of living around the world has increased the demand for our crop production.
Overproduction has, and will continue to be, the nemesis stalking farmers, especially the American farmer. It will be interesting to see what happens when the next mountainous surplus occurs, and how the farmer will respond.
Why do you give politicians credit for that? What about the market? -- A million speculators signaling farmers what the price and demand is going to be months in the future.
That's why I referred to it a somewhat irrational price structure.
It's been a calculated mixture of free market forces and government control.
One particularly painful lesson was learned by me and a lot of other farmers in the early seventies.
After years of wrangling for an increased export market, a large shortage of grain in the USSR developed. US exporters scrambled, and landed several enormous grain export contracts with the USSR. Grain prices shot up, beans from $3 to over $10, corn similarly. The US government panicked, their Cheap Food Program in jeopardy.
Naturally, they stepped in a voided all the contracts. Overnight, for me what was to be a new truck and a nice vacation vanished into thin air. For cheap food.
As a young farmer idealist, I was stunned. We had followed all the 'rules' worked for and got those contracts, just as we had been hectored by all those speechwriters to do. And we ended up with nothing to show for it.
We have a free market, within the parameters set forth by those bureaucrats.
I never like those programs, neither did my father, but that’s what we had.
If we hadn’t, we would have had more money, and perhaps we wouldn’t have ethanol today.
That wasn’t a good answer, it didn’t go to the heart of your question. I’ll get back tommorrow.
I remember that, but I didn't know that the feds had voided the contracts. What was the constitutional authority?
Nothing wrong with sucking the government teat if the calf grows up nice and strong and independent and gives more milk than it sucked from the teat.
Wilbur and Orville needed the government to make their invention a success. Without the Army contract they got the Airplane may of took much longer to be commercially viable.
The Internet wouldn’t be around without early government funding and support.
I understand and respect your libertarian thoughts and I love the works of people like Ayn Rand who believed in little government support.
But when I look at American history of the period before the Civil War I see the North where government (many times foolishly) supported industry and provided infrastructure like canals and roads for business use.
I see the South where the Planters controlled the governments and wanted low taxes and therefore low government services. They didn’t help other industry develop they didn’t see the need to educate poor whites and the area stagnated. If you was part of the Cotton industry things was good but by all standards the middle class and poor of the South fell behind those of the North.
Everything from the Coast Guard to the Weather Service has their roots in government helping commerce. If a good workable alternative fuels program comes out of this then like computers which also came out of government programs it is a good thing. If it is just a big boondoggle and we has wasted billions well at least the government wasted it in this country for a change.
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