Hmmmm... Farm Subsidies...

Being from a small Iowa farm, whenever farms and farm subsidies become the topic of politicians I become interested. In this post at glennreynolds.com Glenn discusses his ideas of subsidies, and as you can already see my esteemed colleague slowpitch has shared his thoughts.

Farm subsidies are not all bad. I would say the optimum approach would be reform, not removal of subsidies for farmers. Yes, it's true that the majority of the money goes to large producers, but it is largely untrue that subsidies raise prices for poor consumers in the US, and it is especially untrue that they raise prices for consumers outside the US.

The point that I'm making is that the "middle men" are the ones cashing in on subsidies. On the whole customers assume that the prices of milk, meat, and eggs are like the prices of batteries and magazines - fixed. The truth of the matter is that the prices for these commodities seem that way in the grocery store because packers and distributors maintain prices on these products regardless to their actual market price. These companies are the reasons for high product costs - not the subsidies.

Also, in my past as a college student I interned at a large agricultural company (that will remain nameless) that owned production, manufacturing, and distribution plants for a specific commodity. This practice is illegal and unethical because it allows a company to artificially control market prices. These are what keeps commodity prices high for the consumer.

A government payment of $.02 per bushel of corn in a season doesn't break the back of the American taxpayer, but it does help the individual with 350 acres of cash-rented corn ground to meet his bottom line. (By that I would mean the small American family farmer.)