I read an interesting book recently (Seeing like a State) that makes the claim that large-scale monocrop industrial farming is only actually “optimal” if you don’t price in the heavy subsidy, and if you ignore the non-revenue contributions of small-hold agriculture (e.g. the land might provide fuel, crafting materials, and otherwise support the farmers in a way that doesn’t show up on the balance sheet). Not to mention that the larger farms tend to be extractive, in that they are using up water from the water table and nutrients from the soil, and so they will eventually degrade the land to the point where it cannot be productive any more.
I did some digging and the farm subsidies in the US are truly eye-watering, and particularly notable is that the biggest 10% of farms take 90% of the subsidy, so we are not even subsidizing “traditional working farmers” or anything like that, just shipping hundreds of billions to huge ag corps.
I wouldn’t claim to be an expert nor to be certain about those economic claims though, and would be interested in others’ thoughts here, particularly other books you found useful on the subject.
Well, yeah. The 90th percentile farm makes $7665 in farm income per year [1] so how much subsidies could they possibly absorb?
"Farms" in the US are overwhelmingly used as a tax avoidance strategy. Only a numerical minority of farms are actually designed to grow food.
Can you say more about this / link to some more info? It's an interesting premise and I haven't heard it before.
"Numerically", ok. But by landmass the majority is used to grow food, right?
How much crop production do the biggest 10% of farms represent?
And here's a more detailed NBER paper digging into distribution of subsidies: https://www.nber.org/papers/w16693
My general impression so far is that the subsidies are not being disbursed pro-rata to production rates, and larger farms (having more legal resources) are much more able to capture these subsidies; for example with exotic ownership structures of lots of subsidiaries, to maximize the capture of subsidies. These financial/legal engineering strategies simply aren't available to smallholders. It's the same sort of incentive structure that produces outcomes like the biggest companies paying the lowest tax rates.
Also, correction, I believe I have mis-quoted the stats off the top of my head -- the Cato article suggests it's more like 80% of subsidies to the top 10%. The general point still stands.
It's really the kind of thing you want to resolve before spreading a statistic like that.
So yes, you maybe said insightful things other than that comment, but you didn’t open up about critical content there.
Source is USDA (2020) America’s Diverse Family Farms.
This is the real problem.
I wish somebody would come up with a simple mechanism to stop all subsidies to companies over a certain size. Yes, it will be gamed, but it's still better than the outright crony-capitalism we have today.
Subsidies certainly are poorly applied and could use some serious work fixing them, but just getting rid of them outright is foolish.
In addition, the Center on Budget and Policy Priorities has written, "many low-income households that receive benefits still have trouble affording an adequate diet. An Institute of Medicine report identified several shortcomings with the current SNAP benefit allotment and noted that most household benefit levels are based on unrealistic assumptions about the cost of food, preparation time, and access to grocery stores. Many families face stark choices between purchasing food and paying for rent and other necessities. If they manage this shortfall by buying lower-cost but less nutritious foods, it can adversely affect their health." [2]
Directing farm subsidies or any other money to current and future SNAP beneficiaries would benefit millions, including working Americans: "The number of SNAP households that have earnings while participating in SNAP has more than tripled — from about 2 million in 2000 to 6.5 million in 2017. The share of all SNAP households that have earnings while participating in SNAP has also increased — from about 27 percent in 2000 to about 31 percent in 2017." [3]
Regardless of dealing with the very problematic farm subsidies, the president and congress must do something about food insecurity.
[1] https://www.salon.com/2014/01/19/what_i_learned_from_a_week_...
[2] [3] https://www.cbpp.org/research/food-assistance/the-supplement...
It's not like both of those things are not equally likely to happen (which is to say not likely)
One is long-term food security - even if global trade is mostly fine right now despite the current hiccups, there's no telling how it's going to be in a decade or two, and it's hard to ramp up production (due to lack of skillset, machinery and infrastructure) if you suddenly need it; so it makes all sense to pay some fraction of a percent of your GDP to ensure long-term strategic security of your food supply, especially if it looks like global tensions will eventually rise due to climate change.
The second aspect is that even in the current circumstances we're seeing rapid urbanization and depopulation of the countryside, which is generally seen as a problem for many areas. In a "natural" regime without rural subsidies this would happen even faster.
The subsidy argument is a scam anyway. It's a commodity market. The margins will be razor thin, the end. If you subsidize production, prices go down. It will eat the whole subsidy and leave the margins razor thin.
The only way the subsidy helps you is if you get more of it than your competitors. Now who do you think that applies to, the family farm or the huge corporation with lots of lobbyists?
Your misunderstanding is that a subsidy is not aimed at one US farm versus another, it's US farms versus foreign farms.
The reason should be pretty obvious, without the subsidies they would be no US farms. And then in time of war there would be trouble.
There are a huge number of US industries that exist only to make sure that US capacity will remain even in time of war.
The same goal could be accomplished with tariffs, but then the price of food would be higher.
The claim implied that the small farms get more of the subsidy, i.e. that they would be the ones wiped out without it.
> The reason should be pretty obvious, without the subsidies they would be no US farms.
Why would there be no US farms? Real estate in San Francisco is much more expensive than it is in Mexico City or the like, but farmland in Oklahoma is not uncompetitive with farmland outside of the US.
If this was the real reason then the subsidies wouldn't be suspiciously concentrated at the location of Iowa caucuses.
Politicians are crafty buggers who will repurpose anything they can to provide themselves with an edge, so that doesn't necessarily say anything about the theory behind the subsidies.
I would definitely argue that there are simpler ways of helping low-income families to afford food though, if that is your goal... just lower their taxes further, or give them negative tax / UBI if they are already paying no taxes, rather than adding lots of complex gears to distort the economy to try and affect the same outcome. Or more food stamps if you don't like the idea of poor people spending their tax rebate dollars on non-food items that they prefer.
That's assuming that you would lower taxes uniformly instead of e.g. lowering them for the lowest tax bracket, which is in no way required.
As I understand it, during a bread riot, free marketeers get eaten first.
I would add that small farmers are typically not mono culture. We used to have various fruit varieties. One neighbor is mixed veggies, another cattle and flowers.
Our farm has been forced out of fruit because of corporate mono farms who inevitably cause gluts in the market due to over supply. In my local experience, corporate farms are typically 5-10 bigger as a minimum than their surrounding neighbors.
When a small farmer loses any percentage income, he must quickly change income stream. Hence, our fruit trees are gone, and we're now raising sheep, and are forced to be double income. Our tractor & other super reliable (but very clunky) machines remain.
If it would be OK can you try contacting me directly through my profile? I'd like to find somebody in the US who is dealing with sheep and what they are doing with them. I have a product we would like to export to the US but I am really struggling to get a handle on the market there, it's very different to Australia/NZ etc.
It’s the story of humanity moving on from “I am my own industrial island” to inclusive effort at scale to automate away and normalize often dangerous logistical work (I am 41 and have limbless, digit less peers who had to work on family farms as teens.)
Family farms are, to me, simply a legacy social and technical effort.
The problem is old politics refusing to take reality seriously. Americans who carry on about their legacy of revolution, moving history forward, disruption!, exporting that mentality to the world, are all sad their lives are disrupted by others wanting the same agency.
Moral relativism worked for Americans while we bombed the world, impeding other nations progress, but they caught up anyway.
“There’s a warning sign on the road ahead; a lot of people saying we’d be better off dead. Don’t feel like Satan; but I am to them; so I try and forget it any way I can.”
If you didn’t sign a contract to be a family farmer for life, oh well. America.
In the Netherlands there's renewed attention to stimulate small-scale farming and agriculture for various reasons.
For many years large supermarkets have been increasing pressure on the entire supply chain to produce as cheap as possible. It has its effect on all products, where more processed foods gradually replace 'genuine' produce. The larger margins are at the supermarket top of the chain, while farmers are the ones getting squeezed the most. To the extent that they are almost forced to scale up, but even then may find it hard to earn a decent living.
Now Netherlands farm industry is producing an insane amount of meat and vegetables. A tiny country and one of the larger exporters in the world. All this has had very detrimental effects on the environment. Our 'Green Heart' (the region circled by Dutch big cities) is basically a wasteland with little insects or birds, soil compaction. Only fertilizer and pesticides keep it all going. And we have a nitrate problem, caused by both farming and traffic, that is threatening the sparse natural reserves that are patched between argicultural lands.
All this is entirely unsustainable. It is also dangerous. A new pandemic may well find its source in the intensive livestock sector with its mega-stables.
As a result there's now a lot of political attention to doing things differently, scaling down farms, re-introducing old farming practices and experimenting with new ones. Small-scale farming is beginning to look more attractive again, and there's a growing consumer-base ready to pay a somewhat higher price for that as well.
There's very few operations running that way anymore, the "odd construction contract" market for them dried up before and faster than the farming side of those operations. USDA Soil Conservation flood control projects used to be a large source of work there.
The good news is nature abhors a vacuum and will heal if we let it. The wu Wei. Small farms will rise, food is just too important for the economy and with rapid inflation there is no way around it. We are all going to have to become farmers or know our farmers.
At this rate, the entire planet will be ruled by a few dozen mega corporations. This sucks, but I don’t know what can be done to mitigate the situation.
Why do you say this? I don't randomly change pharmacies for my prescriptions, so I can't think of a "mom and pop pharmacy" off hand, but non-Starbucks coffee shops are everywhere. This has been my experience everywhere I've been in eastern states in the US from Virginia to New York.
My perception is that Starbucks is primarily a place to get milkshakes, and their coffee is undrinkable, and their food is worse.
Most other coffee shops do much better in those two categories. Some are also chains, but many aren't.
Starbucks is a great case study because they can even afford to give away free coffee long enough to shut down any small business - they have an unbeatable advantage. Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby.
It's the same with Walmart, Amazon, Google, etc - once a company becomes big enough, it's literally impossible for small business to compete. Quality suffers, and consumers don't get fair prices that come from healthy market competition. Everything is standardized at the largest scale at which the monopoly operates, so Starbucks in bumfuck, Arkansas charges the same as Manhattan or Beverly Hills. This creates vulnerabilities in the ecosystem of markets that are similar to the dangers of monocrop cultivation, with complex failure modes that endanger entire market segments.
If Starbucks fails, coffee everywhere suffers. If Microsoft fails, the long tail effects endanger western civilization. Monopolies aren't just a matter of paychecks and fairness for the little people, but are threats to the well-being of civilizations as systems and supply chains have single points of failure.
It may be desirable to cap the wealth and/or market share of a given company. Once a company achieves its legal limit, it can no longer advertise or market existing products, or something like that. This could force markets to create interoperability standards to achieve maximum roi, diversifying competition in all markets, and create better incentives for long term supply chain security. It also removes many opportunities for graft and corruption.
I understand that storytelling is a basic human thing, and repeating a good story is something virtually everybody does, including me, constantly and compulsively.
But a story that is false can't provide useful guidance, can it? What is the attraction in repeating it in the face of incompatible facts?
>Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby.
I literally used to work in the downtown of a small city, diagonally across an intersection from a Starbucks, and it was, for a time, an almost daily ritual for my office to go there.
But there was another coffee shop basically the same straight-line distance to the west.
And there was a donuts & coffee place a few meters to the north.
Some people (well, a lot) only go to Starbucks. But that's a choice, or peer pressure, or a mental trap, not some kind of economic hegemony. Or for all I know people actually like the coffee.
Why do similar businesses locate near each other? Many people have noticed this pattern besides me; I bet you can find more by searching the internet, if you will accept that it happens in the first place.
Another instance: I can think of two places in my area right offhand where there is a Rite-Aid and a CVS as close as possible to each other.
source if fact?
https://nymag.com/intelligencer/2017/12/open-markets-institu...
There are myriad examples of Starbucks predatory pricing strategies, among all sorts of other global monopolistic hijinks over the last two decades.
Someone asserts a fact, someone else counters with incompatible (asserted) facts, and then the first person comes up with more things in support of their original claim.
How is that supposed to work, in the abstract?
If I say swans are white, and you say "there are black swans everywhere where I live", what is the relevance of me countering with evidence (of whatever quality) of swans being white?
For most of my life, I've separated this sort of behavior from "real life" and kind of assumed that there were "internet people" who always will be inscrutable to me.
But disturbingly I've run into a few people IRL in recent years who do it too.
Something about the means of production, perhaps.
Number of small cafes or pharmacies within walking distance? Big fat zero. This situation will happen first in big cities, then proceed to smaller areas too (as long as there is profit).
I was looking for an apartment. Guess what? Multiple buildings in the area I looked at, owned by the same company.
Consolidation is not new. But the scale at which it is happening is, and it is terrifying.
Just 4 companies control 80% of American meat supply, for example.
While true, you can lease the land making a decent income without effort. Which is the best case scenario as many older farmers retire and leave the land to family.
On the other hand, if people still are looking to make a living, it's more focused on livestock such as cattle, chickens, pigs, etc often niche animals.
I know several people who effectively support Tyson: https://www.tysonfoods.com/who-we-are/our-partners/farmers/c...
Source is USDA (2020) America’s Diverse Family Farms.
There is value in small-scale farming. If there is one thing urban hipsters love to pay for, it's artisanal, high quality organic food. There are farms where you can see pictures and datasheets of all the animals living there and you can pre-order certain cuts of the specific animal once it is slaughtered and processed.
The problem with this is it works because it's socially acceptable unpaid child labor. I do think that there's value to the work ethic it can build, but I also worry about overwork, how it sacrifices education, and how it encourages larger families where all the kids end up being disadvantaged as adults.
The problem with this model is that, as the sibling comment already pointed out, harvest is done typically within one or two weeks or even in two days, depending on the weather. Harvesting too late can make the crop go bad. So renting the equipment and getting it to the field can be a hassle. It's still being done a lot but it's not risk free.
The older strategy is for a farm to be no bigger than a single family can handle, and to be as self-sufficient as possible. Here equipment is run as close to breaking down as it can be without actually being broken down. A tractor would be used <30 days a year (planting, fertilizing, weeding, harvest) and sit idle otherwise. It doesn't make sense to pay for a super-expensive machine to sit idle. The optimum is lowest cost to purchase, lowest cost to repair, cheapest option that can get the job done. A farmer builds a collection of nearly-broken down machines over years to have backup options if one isn't working when needed.
The other optimum is to have the largest, most effective, most efficient machines and use them enough to justify it. This makes sense at the industrial farming scale or as a contracting business where the equipment is owned by someone who does contract jobs for many smaller farmers. For this case the tractor needs to be running and making money as many days a year as it can; any down time is money lost.
The shift over years has been that the second strategy produces more crops with lower expenses than the first, and is taking over to the extent it is almost impossible to run a small farm without going bankrupt.