Although payments to farmers are always discussed as subsidies, I prefer to
think of them as covering the difference between marginal cost -- what the
farmer sells at -- and average cost, which includes overhead cost. Farmers
can't cover total costs while selling at marginal cost. So farming is not
a viable business, but we prefer to eat. And of course the US uses food as
a weapon in various ways.
The above ignores the reality that the Federal payments go mainly to
corporate agriculture, while family farmers gradually disappear from US
agriculture.
Gene Coyle
Nestor Miguel Gorojovsky wrote:
> En relación a [PEN-L:2216] oil, wheat, argentina,
> el 24 Sep 00, a las 22:33, Michael Perelman dijo:
>
> >
> > A recent report by the Worldwatch's Lester Brown points out that while
> > the U.S pays for its oil imports in part with grain exports, exports
> > of grain and oil are each concentrated in a handful of countries with
> > grain coming largely from NorthAmerica and oil mostly from the Middle
> > East.
> >
>
> Grain exports by the USA are very heavily subsidized. Part of this
> subsidization policy might be under stress by the hike in oil prices.
> Of course, the dominant position of the greatest grain exporter can
> become an asset, since the world market of basic foodstuffs such as
> wheat is more "marginalist" in its behavior than most markets (that
> is, the price of wheat will be set by strong difficulties to bend the
> consumption curve still further down).
>
> The problem with agricultural subsidies and how to finance them,
> however, will loom with a soaring price for oil. So that either the
> hike in oil will imply a hike in grains (implying more hunger), or
> the hike in oil will imply some sort of deep restructuring in
> American agriculture.
>
> Am I too rigid?
>
> Néstor Miguel Gorojovsky
> [EMAIL PROTECTED]
