2/09/2005

It's Budget Cutting Time, and all us big city types are tossing shit at the farmers. I wrote a peice about two years ago and attached is the last half of if.

CHEAP FOOD FOR THE PEOPLE IS THE NUMBER ONE JOB OF ALL GOVERNMENTS

Forgetting the individual farmer, let's just look at the money. The government sent out 22 million farm subsidy checks just two years four years ago. Starting with sugar; cane sugar subsidized eighteen cents a pound and beet sugar at twenty-two cents a pound; the world price is between five and seven cents per pound.. The sugar subsidy cost you and me $1.4 billion per year in higher food costs. According to the GAO study, 33 sugar farmers have received more than $1 million each in government subsidies, with one Florida family receiving $65 million in one year alone.

Because the subsidies go directly to sugar processors and not the farmers there is a labyrinth of business and farming interests involved in keeping the sugar program in place. Growers are part owners of processing plants and so on.

ADM and Carghill, who are CORN processors, lead the charge for higher SUGAR subsidies. Corn processors? Sugar? Corn farmers and processors need higher sugar prices in order to force candy, soft drink, and other users of sweeteners to use expensive corn syrup, and the only way they can do this is if sugar costs more than sixteen cents a pound.

Get it? If domestic sugar costs more than sixteen cents a pound instead of the world price of seven cents a pound all the farmers and grain processors get to shove expensive corn syrup down the throats of all the soft drink and candy makers. As part of the subsidy no foreign sugar can be imported. This corn agribusiness interest is also behind the unnecessary corn created gasoline additive called ethanol. Ethanol costs us around two or three cents per gallon of gas. Corn subsidies are a part of the sugar deal. And it's deeper than that but you get where I could go here.

Then we have cotton, a water sucking crop with almost no equal (only rice, sugar, and coffee suck up as much). Cotton is now subsidized at seventy something cents a pound while the world price usually hovers around fifty plus cents a pound [Now forty two cents]. (a "corn subsidies" Google search ). Before August of last year (2004), you have to all the way back to 1998 to see cotton briefly sell at seventy cents or higher, meaning we are guaranteeing farmers the highest price in recent history for growing it and tossing it on the world market at forty two cents. Now here's the boring capitalistic data. Hold your nose. The top 10 percent of cotton farmers got 73 percent of the handouts of $5.3 billion of total payments from 1996 through 2001 (subsidies ran to $4 billion plus in 02 and 03). These cotton producers received an average payment over this time period of $286,007, an average of just over 55K per. However, the top 1 percent, which only represents 1,858 recipients, collected nearly 25 percent of total payments of $1.7 billion with an average payment of $913,478, that's more than $120,000 per year, guaranteed. Worse, (if you need worse) this subsidy is also destroying cotton farming in Africa because those poor dopes can ONLY grow cotton in their soil and they are so stupid they practice capitalism. They have to sell their cotton at low world market prices which we depress even further by dumping ours. Every acre of cotton farmland in the US attracts a subsidy of $230. The total cotton subsidy is three times higher than the entire USAID budget for Africa's 500 million people. Capitalist enough for you? For an accurate but needlessly anti-Bush data link go HERE.

Other crops like rice, soybeans and wheat get plenty through farmer co-ops. The data is only available for the Clinton years which shows five out of the top ten subsidies went to Arkansas farming co-operatives.. Number one was Riceland Foods in Stuttgart AR who picked up a nifty $222 million, however $220,821,863 of the total came in the last two years of the Clinton administration. Riceland is followed by Producers Ricemill also in Stuttgart that only pocketed around $70 million. Why Arkansas? It just so happens that these farmer co-ops are there.

But these U.S. subsidies go even deeper, if that is possible. Farms are also owned by prison systems, jails, cities, and hospitals. They get paid off too. Jails? Yes. Cities? Yes. Why? Well they just do, they have political clout and they want more in handouts. So they get them. Haven't you ever heard of Georgia Correctional corn? Sing Sing wheat? This means the big city pols want in on the subsidy gravy train too. You see why subsidies have lasted so long?

How about the farmer? You know, that guy who gets up at 4AM and works in the hot sun til sunset every single day. What about him? He wakes one morning in April and looks out upon nothing. Just land. Planting is coming so he has to "work" the soil, meaning he tills his acres to prepare the ground, usually plowing under a legume crop that fertilizes the soil. This costs money. Then he goes to the bank to borrow money for seed, fertilizer, and pesticide or herbicide. The bank will lend him the money IF he also buys crop insurance. This means if the weather destroys the crop the bank will be paid. The farmer will not be paid if there is no crop to deliver to the government. Now let's look at cotton. He will get 72 cents per pound IF there is a per pound to harvest. Too much rain, too little, too hot or too cold and there won't be enough per pounds to feed him and his family through the winter even at $2 per pound. The cotton farmer can't plant until the soil is the right temperature. Then he will seed it. During the growing season he has to weed it (more money), remove insects (more money), and be sure there is enough water (irrigation is more money). If things go right he harvests the cotton (more money). Rain, even one drop during pollination period of a single day will ruin the entire crop. So will not enough rain. A farm will average around 700 pounds per acre on a good year. It's the cost and grade that has to work out. 500 acres (average size of a cotton farm) may yield 350,000 pounds of cotton that cost the farmer at least $200,000 to grow. IF the cotton grades well he may get around $.45 at current prices; much higher if bad weather hit other parts of the world or country; a hell of a lot lower if everybody in the world has a big crop. If he has to sell at market he will lose everything unless the market is at $.62 or higher. He has to pay interest on the loan to the bank and he is out the crop insurance. At sixty two cents times 350,000 he would make $17,000 out of which he has to support a family, maintain his farm, his home, etc. At the subsidized price of seventy two cents per pound he will make $52,000 [which is what he will do if the price stays under .$72]. Keep in mind that a yield of 700 pounds per acre is on the very good side. If the yield is only 600 pounds per acre he is in big trouble. It is a boom or bust existence for a farmer who works longer hours than any two men any of us know. The AVERAGE farmer is still getting screwed. He can grow other crops but where cotton can be grown it offers the best return if the weather is good. Without a subsidy the average cotton farmer doesn't farm, but neither does anyone else.

To sum up this state of things, every major country is subsidizing their agriculture, not a bad thing in and of itself. As I said at the beginning of this piece, the number one job of any government is to assure cheap food for their own people. The French Revolution was not caused by any yearning for democracy but because good old King Louie had refused to pay the farmers (barons and counts) a high enough price for their wheat so they refused to deliver wheat to Paris. Paris ran out of bread and Louie became toast. "Let them eat cake," still resonates today. Every country on the planet has to have cheap food or their governments are done.

Which means things ain't gunna change real soon no matter how many Africans who we really don't give a rats ass about die. Do you care? I mean really care enough to risk the day when we must have foreign food to exist because our own farmers can't possibly earn a living on $1 corn or fifty cent wheat? Think about that one while you watch the whimpering whiners on PBS and FOX, and read the usual shit in the press..