alt Hacker NewsSignificant US farm losses persist, despite federal assistance
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Of all the guns that rural Americans love, the humble foot-gun is the most beloved.
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Someone else can argue the morality, ethics, economics, and politics of it all, but VERY simply, US Federal Government Agencies are machines for redistributing wealth from cities to rural areas.
Rural America voted quite heavily to stop those subsidies. That's what efficiency means.
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Maturity means suspending judgement and listening to people you disagree with, but I feel that's very out of style these days.
This question may be naive, but why is the agricultural industry so subsidized? I understand the moral argument, but why, economically, does subsidizing farms result in a more efficient allocation of resources? I've heard that it's because farming as a business is full of unpredictability, but if that were the case, wouldn't there be a significant market for private insurance, and wouldn't the cost of that insurance be priced into the cost of food?
Ag. can't just be about profit. There's a dimension which is national-strategic interest. Food security, the domestic food economy is important.
It is my understanding that a lot of the US ag. sector is making inputs for processing for corn oil, fructose, ethanol, and for exports to markets which in turn target american ag, selling e.g. beef back to the US, fattened on US Soy.
It's a complex web. I don't want US farmers going broke, any more than I want Australian farmers going broke (where I live)
So getting this right, fixing farming sector security, is important.
Mildly surprised that this domain belongs to the Farm Bureau. Maybe they should sell it to Meta and donate the proceeds to the money-losing farms...
It is the ecconomy. Harvest have been above average around the world the past few years. In turn supply and demand puts prices low. one bad year and harvests will be down and prices way up.
i've been working for John Deere for 15 years - I have seen this cycle several times already. people blame various politics when it happens, but the fundamentals are enough to explain nearly all of this. Anyone in farming knows this and plans for it (not always successfully)
Sarah Taber for the lowdown all things US Farming https://www.youtube.com/@FarmToTaber
The problem isn't with the farmers. The problem is the monopolies that surround the farmers.
They buy their seeds from massive corporations that have patents on seeds. They sell their produce to global multi-national corporations that set the prices they'll purchase at. They buy their machinery from John Deere or Case IH at extremely high prices.
They have no negotiating power and are squeezed between these massive corporations. This ends up leading to farmers having to sell land to corporations that will then farm it and extract subsidies from the government.
When a farmer receives a subsidy, it usually just ends up in the pockets of Cargill or Monsanto, with whom they already owe money to.
The whole system is broken from top to bottom.
Canada has a thing called "Supply Management". It means that for some agricultural industries, we limit how many people can produce, for example, milk.
This restriction keeps the price of milk stable, and high enough that farmers can make a profit. It may seem strange to some, but the goal is to ensure that we don't have to bail out our farmers.
The alternative is as in the US, where anyone can produce milk, and the price craters, and farmers need to be constantly bailed out.
Canadians watch crazy things like for example the US Federal government buying millions and millions of gallons of milk, making cheese, and storing it for decades. All to reduce supply/create demand, and keep the price artificially high. I suppose one bonus is the US government gives some of this cheese to the poor.
The other crazy part is the US federal government has repeatedly bought dairy farms out, to reduce supply. Literally bought entire farms, and closed them down.
Canada wants a stable supply of milk. We don't want to rely upon a foreign power for basic food-stuffs. And we don't want to spend untold billions. Thus, supply management.
Meanwhile, the US runs around saying we're crazy commies because we have price and supply control, says free market is perfect, then spends endless billions over decades to pretend the market works.
Oh and also, the US screams about how our market isn't "open", how we unfairly manipulate the market, then... wants to inject super cheap, underpriced milk, all of the result of US federal tax dollars spending billions.
Finally, it is illegal to use growth hormones in Canada on cattle. Not so in the US. With the excess supply issues in dairy in the US, maybe the US should do the same?
Because*
This is a result of subsidies distorting market prices and encouraging malinvestment.
There’s only two meat packers… two. Where are the cattle farmers to go? It’s like this across the industry thanks to monopolies like ConAgra, Tyson’s, etc.
Good. Actions have consequences it seems
Oddly enough the way to help is to removing the subsidies. Exploiting famers, using them as a middleman to the American taxpayer, is extremely lucrative.
would this actually be enough such that farmers have to sell their land and new small family farmers cam get started?
or only a new set of bankruptcies and the same farmers stay on?
https://m.youtube.com/watch?v=xon9A5_4tQw&pp=ygUKZmFybSB0YWJ... was very illuminating
This video is very liberal but does a good job of explaining which companies and industries pay for breaks and which don't. And uses soy bean farmers as a prominent example of a group who haven't been giving Trump bribes https://youtu.be/RPzcGeiNYvk?si=bfy_5KEo_ZUxOBHu
I wonder if at some point before large corporations finish buying up the last of the family farms in America, if rural America will figure out Trump and his maga republicans were never their friends.
They described a lot of data. Then, toward the end, they say:
"These loss estimates reflect national averages; actual costs of production and returns vary by region, management decisions and ownership structure. For example, producers who own their farmland may face lower total costs by avoiding cash rental expenses, resulting in higher returns."
So, can we trust this to say what it appears to be saying? Or might it be meaningless like many broad averages, and we should use more specific data that includes supplier behaviors?
I watched a YouTube video that made me really worried about this, hopefully there are smart people on here that can see a bigger picture.
It's so obvious why. Money is created by governments and banks and it goes right back to them. Money doesn't stay in the system for too long because it's taxed each time it hops between people/companies. If you assume a 30% tax each time a dollar moves from one person to another, after just 6 hops, almost 90% of that dollar is gone... So people who are just 6 steps removed from the money printers live in a monetary environment where a dollar is 10 times rarer! That's not even factoring in inflationary Cantillon effects... It's Cantillon effects on crack...
Most independent farmers live in remote areas, far from money printers; they exist in a scarce monetary environment. It's hard to compete when your big corporate competitors exist in an environment where money is more abundant.
Quite surprised there wasn't mention of the Trump tariffs on China causing the collapse of China imports of US soybeans, which by the way, has persisted even though the original tariffs were reduced, causing lasting damage to farmers.
https://www.forbes.com/sites/kenroberts/2026/01/17/china-pur...
Capitalism. The problem is capitalism.
Any handouts for farmers go straight into the coffers of multinationals to pay for farm equipment, support for the locked down farm equipment, the patented seeds, the pesticides for the patented seeds and so on. The entire subsdization model is a profit opportunity for agricultural companies.
And what do those companies wnat to do? Buy up the farms and run them themselves for more profit. Because they don't have to charge the same amount to their own farms of course.
It's also why the wealthy and big companies like illegal immigration. It's an endless supply of underpaid workers who can be exploited for even more profits. Document these people and everybody's wages go up.
The only country I can think of that is really effectively managing its agriculture and food supply is of course China. China had some food shortages in the late 20th century and a result food security became a primary concern of the CCP. China has to feed 20% of the world's population and decided that food need to be plentiful and affordable. There were a seris of agricultural reforms through the 1970s to 1990s and then China used its increasing wealth to pay farmers when they had to and subsidize food when they had to to manage the supply. It's managed to the highest levels of China's government [1].
Here we have rent-seeking corporations and billionaires (eg the Resnicks [2]) where subsidies are just a wealth transfer to the already wealthy. food prices are out of control. But nobody cares because the profits have to keep going up.
[1]: https://www.csis.org/analysis/chinas-food-security-key-chall...
[2]: https://perfectunion.us/how-this-billionaire-couple-stole-ca...
Much of this is an antitrust problem.
The inputs to farming, especially seeds, fertilizer and machinery, are controlled by monopolies and near-monopolies. There have been too many mergers.
On the sell side, there's monopsony or near-monopsony, with very few big buyers.[1] Farmers are caught in the middle, with little pricing power on either side.
There's not much question about this. There are antitrust cases, but with weak penalties and weak enforcement.
[1] https://equitablegrowth.org/competitive-edge-big-ags-monopso...