Subsidies - Friend or Foe?

Should the government be subsidizing farms?



photo borrowed from: pccapitalist.wordpress.com/.../farm-subsidies/



An agricultural subsidy is a government subsidy paid to farmers to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities. Is this really helping Canada's farmers? To me it seems like having implications like this make our society seem socialist rather than capitalist. These government handouts only make the rich richer, the poor poorer, and help out the lazy farmer. The money put into the system appears to be quite high to those who do not understand it. However, the majority of the it goes into the implementation of the program plus employing people to relay the information and distribute the subsidy to the farmer. 



Farmers love what they have, the government
shouldn't destroy it!

Yes, I am a farm girl and no, I don't have the typical farmer opinion on this particular topic. I don't really understand how this system makes sense. Imagine the result if Canada tried to solve poverty by creating a welfare program that applied only to workers in the fast food, cleaning, and retail industries. Everyone in those occupations would receive a government check, with the richest executives receiving the largest checks and the poorest workers receiving the smallest. Workers in other industries would receive nothing, no matter how poor they were. Does that make any logical sense to you? Because it doesn't to me. This is the way it works for the agricultural subsidies - the large farming corporations receive the biggest subsidy, which are the ones who need it the least.  The program was developed to help out the small, family farms; however, its only driving these operations out of the business. Brian M. Riedl argues that the subsidy money is helping large farms buy out small farms. "Specifically, large farms are using their massive federal subsidies to purchase small farms and consolidate the agriculture industry. As they buy up smaller farms, not only are these large farms able to capitalize further on economies of scale and become more profitable, but they also become eligible for even more federal subsidies—which they can use to buy even more small farms."

When you read the above, it would appear that the reason that large corporations have the ability to receive the subsidies is because they actually may be doing a better job, right? Well, that's not really true, the subsidy system does not let the small farmer utilize an actual "wage" expense for themselves or family members, yet the large corporations can. The small farmer could utilize the wage expense only if they are hiring someone who is not directly related to them (ie: wife, son, daughter). So the government system is really enabling the large corporations to slowly take over the small family farm by forcing them into selling out to save some of the capital they have worked so hard for over the years.



High costs of equipment can drain the small farmer!



These government subsidies don't only affect Canadians but the entire world. The subsidies depress world prices and mean that unsubsidized developing-country farmers cannot compete. The effects on poverty are particularly negative when subsidies are provided for crops that are also grown in developing countries since developing-country farmers must then compete. The wealthy countries, that can afford domestic subsidies, almost promote poverty in developing countries by artificially driving down world crop prices. This results in a process called "international dumping". It is in which subsidized farmers are able to "dump" low-cost agricultural goods on foreign markets at costs that un-subsidized farmers cannot compete with, encouraging developing countries to be dependent upon wealthy countries and not supporting their own market.  How are small farmers, or developing countries, supposed to try and keep up with the large farming corporations receiving twice the subsidy as them?

I think we should abolish the agricultural subsidies altogether. Farmers how much is it really helping you? On my farm the subsidy is not enough to matter or do anything. These government hand outs are succeeding in creating monopolies with large farming corporations and driving small farms out of the agricultural business with the competition.



Check in tomorrow to see my agricultural artwork :)

-Carling