I remember listening to one of the talks on mises.org about agricultural subsidies and how when the government bought wheat and other grains they did a whole lot of stupid things with it. In particular there was an example where it first was left to rot on barges and then they even tried to use it as an additive for paving roads. Does anyone know of any literature that has these examples in them that shows how badly things go when they try to buy products and don’t have a market for them?
A good example is the EU’s Common Agricultural Policy (CAP). Under this system we’ve seen olive trees planted in the middle of mountains just to get subsidies, fishermen paid not to work, dairy cows slaughtered by the thousand to keep milk prices up and oranges crushed by tractors to respect quotas and hence drive prices up. Recently, in spite of all of this, dairy farmers went on strike because they deemed they were not paid enough for their milk. Obviously the government stepped in: since the largest purchasers of milk are not private firms like Ferrero but government-owned “dairy centrals”, a final higher price was negotiated. This was not the result of supply and demand but of simple political intervention.
They both show the devasting results of the government subsidizing gmo corn.
remember, its genetically engineered to withstand MORE pesticides! lovely. the corn itself, it unedible in regular corn form…its only usable to make High Fructose Corn Syrup and other horrible (for you) materials. i use the word materials, because it really isn’t food.
What is the “upside”? I do not see one. What you subsidize you get more of. So the USA Farmers oversupply the market place with products. The US Government then buys this at high prices and sends the product to foreigners at a loss. This keeps the USA buyers of food paying higher than market prices while putting foreign farmers out of business or reducing their profits.
To make matters worse, the US Government decides what it subsidizes and what it does not. This distorts production even further into those areas with the biggest subsidies.
Of course the biggest losers are tax payers who are forced literally at gunpoint to fund the system that in turn has them paying higher than market prices for food.