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Supporting Farm Subsidies

Agriculture has been a major pillar, if not the foundation, of developing economies because it provides food security, creates employment and generates local capital. In the early 1900s, however, it was ruled that the government has no role in regulating its farmers thus even during the period of economic adversities, government safely stayed out of the farming business.

This was so until the Great Depression hit the United States and with an argument from former Presidents Hoover and Roosevelt that others must be taxed so that the farmers could be subsidized thus the beginning of farm subsidy which simply means a monetary support given by the government to farmer. This can be cash payment that farmer receive as checks or the other form such as loan. With a good purpose even so, this aspect of government trade policy has been contested for so many reasons.

The Environmental Working Group (EWG) stated that “just ten percent of America’s largest and richest farms collect almost three-fourths of federal farm subsidies such as cash payments that too often promote harmful environmental practices. ” With contentions that the farm subsidy block out foreign competition and that the agricultural subsidy system was already bloated that reward only a handful of rich farmers, it is objective to present its side which will justify why government should support this action.

Aside from the consideration that farm subsidies improve the food stamp initiatives of a government and boost one’s nutrition by providing affordable if not free fruits, vegetables and other agricultural crops to its citizens, it is rightful to disclose its benefits and beneficiaries. Such is the case of the Farm Bill of the United States, a massive piece of federal legislation and recently approved by its Congress, which aims to govern what children are fed in schools and what food assistance programs can distribute to recipients.

The bill provides billions of dollars in subsidies, much of which goes to huge agribusinesses producing feed crops, such as corn and soy, which are then fed to animals. By funding these crops, the government supports the production of meat and dairy products. Fruit and vegetable farmers, on the other hand, receive less than 1 percent of government subsidies. It was objected that for years, American taxpayers have provided tens of billions of dollars in federal farm subsidies to some of the largest and wealthiest farm businesses in the nation.

However, it is just a matter of unawareness that thousands of people benefit from the subsidy flow because they were shielded from public view behind layers of partnerships, joint ventures, limited liability corporations, cooperatives, and other business structures that obscured their personal subsidy claims. The EWG developed a subsidy record that provides nearly full disclosure of federal farm subsidy beneficiaries for the first time.

Individuals, sometimes numbering in the dozens, whose subsidy benefits pass through one or more plantation-scale farm businesses that produce vast quantities of subsidized cotton, rice and other crops were disclosed. Many of those businesses receive millions in crop subsidies each year, and according to the new data, more than six-figure benefits through to many people. In many cases, these individuals have not previously had subsidy benefits attributed to them by name.

The new EWG Policy Analysis Database manifests the need for government to rethink the fundamental aims of farm programs and to enact new rules for identifying who will benefit and how they will benefit from government assistance to agriculture and rural aspects in the future. To further made a strong stand on the need for the government to support the policy of farm subsidies, American Farm Bureau Chief Economist Bob Young debated the importance of this action. He stated that “it is difficult to imagine a world where governments will not be involved in something as basic as the nation’s food supply.

Rich countries do it by providing direct financial support to their producers. Poor countries tend to do it by providing high tariff protections. ” Young also said that a consumer does not want the government to make sure people will have a bushel too much or a bushel too little because it will be a dumb issue. Thus if people want to be sure that there is a bushel too much, the inflexible nature of food markets will make prices be lower than they used to be. This is in effect making an insurance policy where one pays only for the superior.

When government supports the policy of farm subsidies, people are assured that the soil resource is just as productive even how many years from now as it is today. Although farmers are the best environmental stewards in the country, the production practices they need to undertake to protect that soil resource will require them to be less than profit maximizing, at least in the short run and which is a some sort of an investment in society’s long-run benefit. Government’s support of the farm subsidies can be beneficial if it were farmer competing against farmer in international markets.

Unfortunately, it is clearly not the case as agricultural markets in the United States tend to be fairly open. In Young’s presentation of the US market, he said that “the average tariff faced by countries trying to land agricultural products here is around 12 percent. The average tariff faced by our farmers is around 62 percent. Our farmers work in a very different regulatory environment than exists in several other countries, and as consumers we’re glad of it. It is compensation to help level the playing field. We provide protection to other sectors of the economy when they face unfair competition. Why should agriculture be any different?

” Governments should be involve in agriculture and the nation’s food supply. With this scenario, people will want and in a way can dictate that the government will ensure there is enough or too much food, or more than a free market would ordinarily supply. With farm subsidies, government is involve in the agriculture and the country’s food supply and when the government uplifts its agricultural sector through their monetary assistance to their farmers, benefits are shared with the other sectors of the society such as the consumers who want to be on the side of more production and more agricultural supplies, not less.

Young also disputed the disagreement on farm subsidies when it comes to creating more burden on tax payers whose are less capable and whose hard-earned money are being spent to finance the policy. He said that “estimates of the future cost of subsidies are only estimates. But given the extent to which we have turned to agriculture to provide some of our nation’s energy needs, it is very likely that spending levels will decline significantly from those observed in previous farm programs. ”

Instead of contradicting the farm subsidies by government, the Physician’s Committee for Responsible Medicine (PCRM) expressed optimism on the US Farm Bill especially if “the amendment would have limited government subsidies of unhealthy foods, cut subsidies to millionaire farmers, and provided more money for nutrition and food assistance programs for Americans and impoverished children overseas. ” PCRM is also one the groups encouraging solons to cut subsidies for unhealthy foods and increase support for fruits, vegetables, and vegetarian foods.

This government policy fosters dependence for farmers to stay in unproductive and saturated markets as it was noted that farm subsidies are intended to raise farmer incomes by remedying low crop prices. Lastly, subsidy supporters argued that farmers are the backbone of any society and without it, they would be out of business because of cheap foreign labor. Farming is not an ordinary business because the laws of the market don’t work so well when supply and demand aren’t very flexible. Subsidies work to keep farmers churning out a dependable supply of agricultural products in spite of unpredictable commodity markets and weather patterns.

Not having farm subsidies could only hurt farmers as people would be relying heavily on others to supply the most basic commodity. Works Cited “Full Disclosure: Who really benefits from federal farm subsidies. ” 27 December 2007. Environmental Working Group. 29 December 2007 <http://www. mulchblog. com/>. Griswold, Daniel and Young, Bob. “Should the United States Cut Its Farm Subsidies? ” Center for Trade Policy Studies. April 20-27, 2007. The Physician’s Committee for Responsible Medicine. “Health vs. Pork: Congress Debates the Farm Bill 2007. ” Good Medicine. Volume XVI No. 4.

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