I hope you don’t like corn…

Because you are going to pay a lot more for it.

Almost every person running for President is supporting some type of corn agricultural subsidy.

This is because they believe they are “investing” in Ethanol, in where?
yes, Iowa. How convenient.

A subsidy in this case is when we give a direct payment from the taxpayer to the farmer who is growing corn, in this case.

Current candidates have moved towards saying that its in the “national security interests” to not be dependent on foreign food and that corn subsidies will make more Ethanol. So we are paying farmers to farm more corn than the market wants. As if you understand capitalism, the market should set the fair price for corn and makes the domestic farmers compete fairly on the world market. They don’t, they get these government handouts like welfare for farmers.

Then to protect the farmers from the low price of their new surplus, the government uses price supports to keep the price high. The federal government then uses your tax dollars again to buy the surpluses. Now you are bidding against the government for your food, which artificially makes the price high.

The Office of Budget and Management stated that in 2005 we paid $26 Billion dollars a year in farm subsidies. This is coming straight out of your’s and my pockets, not including the surplus management and the competition with the government.

There are obviously even more problems than just your high price and overproduction.

1) We ship some of the extra stuff to other countries as “aid.” Ask the African corn farmer after he is put out of business because he can’t compete with free corn that floods his market.

2) The constant overproduction hurts the environment. If Farmer John could farm 30 acres of corn because thats how much he can make without losing money to a fair market price then he should do that. The government will then pay him to farm more acres because he knows the government will buy it at the same price. He will be hurting the extra land for no reason at all.

3) We pay farmers that are already well above the average income of Americans.

4) Oh I almost forgot guess who pays to store the corn waiting for it to go to Africa or rot? We do!

So back to Ethanol. Now that there is a higher demand for corn to use to make Ethanol, you will see prices rise even higher. And as these candidates support more subsidies you will see more tax money thrown away, more environmental damage, more foreign farmers go out of business, and more unnecessary costs.

I probably missed some of the negative effects of subsidies but I say this to the candidates:

When did the interests of America, security or non-security, include charging consumers more than they should by competing against them, wasting tax-payer’s money (in more way than one), paying farmers to hurt the environment and put poor nations farmers out of business?

My solution: if an increase in demand for Ethanol raises the price and that in turns causes people to farm more corn, then great. But let the market do it! Don’t wake up one morning, to the Ethanol lobbyists, and say “more subsidies will fix this nations energy problems.”

….and let’s not even go into whether or not Ethanol is the future energy source….

~PCCapitalist

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One CommentLeave a comment

  1. Amen. Why would you cause a ton of problems to not really help anything or anyone. Sure we should help other countries, yet we can’t let ourselves slip in the process. That and I don’t see people in an uproar in other countries because of it, and if they are the solution is go to the UN or the US they’ll help! Once again, Amen. Don’t support something that isn’t going to help anything.


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