Wednesday, June 30, 2010

Subsidize me

Subsidize me

The illusion of a subsidy is a helping hand to a person or industry that needs it. Generosity is fine as long as its genuine. A subsidy by design is for control.

Farming and ranching is so burdened with government intervention that it is not a viable operation without government money, Behind every successful farm is a subsidy. For example you can't buy a farm for the current market price and run it at full capacity and make enough from your crops to make the payment. It doesn't matter weather its crops or livestock or a combination of both. The numbers don't work. Its not that farming has failed but government price fixing has tightened the a grip, giving them total control over the farming industry.

On the other end of the spectrum an industry with no government subsidy is the repair industry. I was a heavy duty mechanic for many years. I have on several occasions opened a shop and made money the first few months of operation. Basically you lease a building and hang up a sign, its more involved but the idea is no government intervention and the market adjusts itself. It has to, otherwise there would be no trucks to haul food to the stores or fuel to the gas station.

The government doesn't pay shops NOT to work on trucks, They do pay farmers not to farm, programs like CRP and several other similar programs do just this. Every industry is like a chain, if one link is disturbed it will affect the entire chain.

An appalling example of farm subsidies is during the great depression. The farms were being subsidized not to grow crops, Thereby decreasing supply, since demand stayed the same, it caused prices for crops to raise. The stated reason for subsidized farming was to allow them to remain in operation making enough money to afford the payments. For the man working in the city (if he was lucky enough to have a job) the taxes deducted from his pay were spent to insure his food prices were high. Artificially inflated beyond what a natural market would bear. Since food is a necessity he had little choice but to survive as best he could.

The key to successful farming or ranching without the controlling hand of uncle control freak is to own your ground outright, and creative income tax (no income tax is better, Wink-nudge) angles.


  1. Interesting you should mention subsidies since we live in a farming/raching oriented county and it is one of the first words I hear from people here when starting something "what government perks are available." They'll verbally pound welfare people into the ground but do not see the hypocrisy when they get tens if not hundreds of thousands a year in government 'assistance'

    If people want to read about the U.S. government stupidity in the farming/ranching sector at its finest research the Agricultural Adjustment Act done by Roosevelt. We have old timers around here who still remember getting forced to destroy perfectly good cows and goats for some minimal amount.

  2. Yes,Our entire governmental infrastructure is riddled with hypocrisy.
    It would take a war or complete collapse to unravel this mess.