Mises Daily

A
A
Home | Library | Cheeseburgers When Subsidized

Cheeseburgers When Subsidized

July 1, 2008

Tags Free MarketsInterventionism

Corn, wheat, sugar and a dozen other crops all got increased subsidies in the recent Farm Bill, signed with terrifying agreement. Is there an end in sight?

One overlooked clue while those crops are fetching sky-high prices in that other system known as the free market is data showing farms took acreage from pastureland, which livestock need to graze. So, ranchers have been liquidating herds and giving up in the battle against soaring feed costs.

Food manufacturers have eaten many of these rising crop prices and many grocery shoppers can still dance between the raindrops of inflation's storm at the store if they really try. But there is no place to hide between beef and the butcher paper, so by this time next summer, with supply disappearing, get ready to pay more for that burger.

I'll predict that when it finally hits the American grill, politicians will finally get barbequed and changes finally get chewed on. If not, history will not look back too kindly on our decisions. Another convenient truth about free markets, as opposed to subsidies, is that they would help the poor even more than would the rich trying to save them all the time. Instead of donating, how about hiring? Poverty often shares an address with fertile pieces of land around the world — land that could be farmed if not for crushing import taxes in addition to those local subsidies, preventing sales of many crops into the United States and Europe. Many countries would rather sell us food than be given food out of guilt.

After all, don't most of us still believe that it is better to teach a man to fish than to give him a fish? Your Congress overwhelmingly objects. The Farm Bill pays fisherman not to fish.

We do pay Kentucky horse owners to race though. We help "geographically disadvantaged farmers" in … Hawaii! If they are avoiding those intolerable conditions by staying inside and watching TV, they might see a "Got Milk" ad — which the Farm Bill also pays for.

Meanwhile sugar farmers are glad corn is taking all the heat because they have an even sweeter deal. The world-market sugar price is currently 12 cents a pound, but Americans pay 23 cents guaranteed to our farmers. Not done yet, we then turn around and sell that same sugar for an 80% loss to ethanol plants. A trade desk like that would lose all its investors in a day, unless their contributions are mandatory, as this one's are.

So, what if a farmer wants to opt out of his subsidy not to plant more than 34 million acres? What if he'd rather sell much needed supply to meet swelling demand? There are harsh penalties for not fulfilling a 10–15 year contract to do nothing! Talk about the American dream turning into a nightmare.

I want to disclose my severe bias right here. I owe everything to a farmer. My father grew up on a farm that his father worked his entire life on, dirt poor in the middle of Texas. He believed in hard work. He taught me how to hunt, to drive a tractor, to split open a watermelon by hand, to roast marshmallows, to play baseball — all on that farm. But before any of that, he showed me how to work from morning darkness till after sundown. I mean work hard, relentlessly, into the punishing summers down here. A fresh apricot cobbler from my grandma was the only subsidy he ever wanted — from his own tree in the front yard. I never recall him asking for help, not once; he was too busy working.

Enjoy a good BBQ on July 4th, because next year's meat will be marinated in a distasteful concoction.

 


Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

Follow Mises Institute