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‘US agriculture is socialist’

By Staff | Jul 1, 2020

I think you can ask most any farmer if he wants socialism and you will get a “No””He!! No” or something even more negative than that answer from them. They have it in their narrative of the country that the urban liberal Dems are socialists who live in their basement and expect the government to take care of them. Pelosi, AOC, Bernie, Biden and the bunch are said to be all socialists that will tax anyone who has worked for anything to deathfor free health care, free college, free lunch, free everything for those who don’t work. That is the narrative. I think that it is true that liberals have a broader interpretation of what is in the public interest but I have never seen an avowed Dem or socialist who did not advocate a democratic pathway to attain their social goals. Where socialism as they advocate for it exists in countries like Canada and Denmark, it was approved by voters. There is as much socialism as voters approve of. Those countries seem to be happy with their choice. These budding socialists tend to be minorities and as the nation browns, growing minorities are then perceived as a threat to the balance of power still held by the right. The demographics of the nation are slipping away from them as ethnic, gender, and social minorities grow as a percentage of the population. They see Donald J. Trump (DJT) as an enemy of socialism so therefore he is their champion. Yet, he has issued more government checks to U.S. farmers than any other president ever to my knowledge. Whatever he does that is not right, his supporters express that it is better that letting the Dems replace him with socialism. I have gleaned all of this over the course of conversations. I think that I toned it down a little. I do not push back as I am not a fan of socialism either although I do not have as bleak and threatening a perception of where this will settle out.

What I usually push back with is “you knowU.S. agriculture is socialist”. I am surprised that most of these guys who profess to hate socialism do not argue much with the assertion that the ag sector is socialist. I am more likely to get a response like “Yeah, but we work for it.” Capitalism is about letting markets work and we have not allowed that for decades in the ag sector. Letting ag markets work would result in far more farmers going broke along with cycles of high food prices for U.S. consumers. Instead, when markets signal oversupply and that production should be reduced, farm subsidies supplement farmers income enough so that surpluses are instead sustained. Few farmers go broke and consumers get cheap food. Most are happy under this socialist system. When the corn market falls below the cost of production, farmers should cut back acres. These acres cut should be the high cost of production, least financially viable acres. Then why are they planting so much corn in the Dakotas? If we would allow the market to clean out the high cost of production least productive producers, the corn market would be profitable and subsides less necessary. The reason that we do not allow that is that so many farmers could not transition to a capitalistic farm economy and would fail. We avoid that with socialism. Yet the list of government payments to circumvent market forces and sustain subsidies has grown so large that it represents all of the net income insulating farmers from the market. We have gotten direct payments, EQIP, LDPs, crop insurance is subsidized, ARC and PLC payments, Conservation payments, MFP payments, PPP payments, CSAP and CCC paymentsheck even planting cover crops is subsidized. Some of these subsidies are indirect. Livestock producers often get to buy feed below the cost of production because farm subsidies sustain over-production supplementing farmers’ incomes so that they can continue to overproduce in a manner that the market would otherwise not allow. We have $250,000, $750,000 $900,000 subsidy limits all numbers that the socialists in town envy. They cannot even comprehend the subsidies that we farmers get. We need them with the system that we have. Taxpayers do benefit because they enjoy lower food prices due to perpetual subsidized surpluses. Most farmers do not argue that they operate in a socialized economic system. They will say that they would prefer not to take government money but they have to. Ironically however, many of these same farmers think food stamps are too generous, and Medicaid and welfare go to undeserving recipients and should be cut. That mindset comes from their perception that they work hard and those on food stamps and welfare are freeloaders. I disagree, thinking that most others work hard too.

I am part of it. Heck, I have championed it. In fact I think that I have become skilled in managing the farm safety net. That is how I approach each fiscal year. We have a taxpayer subsidized surplus where consumers do benefit with having the lowest cost food per disposable dollar that has ever existed. It is so cheap that consumers are willing to pay double or more for organic, natural, or other branded products with no real added value. There has never been a government check that I have not cashed and like it better that they now ACH funds to the account. Imagine what land prices would be if there were no farm subsidies. You only have to go back to the ag depression of the 1980’s to get a feel of what that would be like. Many of the farm subsidies that we have today grew out of those hard times. That crash almost broke the banks and the farm safety net that has evolved from that financial disaster was initially intended to bail out the banks by supporting the market value of their collateral. Landowners and bankers have a vested interest in our socialized ag economic system. If you asked conservative farm groups what they think of socialism they would tell you that they hate it. Yet I have never heard them call to end farm subsidies. An exception is made for ag socialism that farmers a few decades ago would have never made. One of the risks of socialism is that once adopted you can no longer afford to live without it. Are we there yet?

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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