Tuesday, September 25, 2007

Farmers being paid not to farm in Europe

Here's an interesting take on what is being described as one of the EU's "oddest rules." BBC:

    The European Union is going to get rid of one of its oddest rules, whereby farmers are ordered not to grow anything on part of their land and then paid for not doing their job.

    Instead of scrapping it, perhaps the European Union should be thinking of expanding the idea?

    Journalists could be paid by the "not word" for not turning in tedious articles, and whole pages could be left blank. In an effort to tackle climate change, car manufacturers could be paid for letting assembly lines run idle as workers watch not cars trundle off them. Politicians, perhaps, could reward their loyal foot soldiers with pints and pub lunches for not canvassing in not-to-be-held general elections.

We in the US have seen strange practices like this for many years. Paying farmers to leave fields empty seems absurd, but there is another side to the coin: part of it is a conservation effort to ensure that quality soil is always available.

The devil is in the details, and when it comes to US ag policy, those details run to hundreds of pages only a lawyer could love. The bills are nearly as labyrinthine as the tax code. Here's an excerpt from the 2002 Farm Bill Commodity Program:

    Income support for wheat, feed grains, upland cotton, rice, and oilseeds is provided through 3 programs: direct payments, counter-cyclical payments, and marketing loans. Support for peanuts is changed from a price support program with marketing quotas to a program with marketing loans, counter-cyclical payments, direct payments, and a quota buyout. To the extent possible, the sugar program is to operate as a "no net cost" program. A new dairy income support program is introduced.

That explains the large ag-law industry: farmers need help with a complex system, and the better they are at navigating this system, the more of my money they can get. In the US, farming is not farming. Farmers are part of the federal welfare system -- whether they're being paid not to farm, or getting money for growing specific crops. Here's what I've been paying farmers since 2002, for reasons no one can satisfactorily explain:

    Wheat $0.52/bu
    Corn $0.28/bu
    Grain sorghum $0.35/bu
    Barley $0.24/bu
    Oats $0.024/bu
    Upland cotton $0.0667/lb
    Rice $2.35/cwt
    Soybeans $0.44/bu
    Other oilseeds $0.008/lb

Some farmers are paid to farm some parts of their land, as well as paid not to farm other parts. I am in the wrong business.

I wonder what would happen if all subsidies and "conservation" style payments were stopped. Would there be famine? Very doubtful.

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