Our Congress may be on the verge of extruding yet another terrible farm bill. Which has been for seventy or so years a Government-Knows-Best train wreck. To alter slightly Ronald Reagans line:
Governments view of the (farm) economy could be summed up in a few short phrases: If it moves tax it. If it keeps moving regulate it. And if it stops moving subsidize it.
Over those seventy or so years our lather-rinse-repeat anti-free-market farm policy warped the emerging global farm market. The worlds growers saw our bad moves and matched them. Subsidy-for-subsidy tax-for-tax protectionism-for-protectionism.
Seven decades later we have a worldwide Crony Socialist nightmare mess. For instance sugar we are the worlds fifth largest producer. The four above us are at least as awful as are we.
1) Brazil.
…Brazils gi-normous sugar industry…subsidies: $2.5 billion worth (in 2012) alone….
Has Brazil grown their government-sugar industry with decades worth of these multi-billion dollar subsidies and regulatory mandates? Yes….
Does Brazil cut direct checks to sugar farmers? Yes….
Does Brazil give sugar farmers loans and then forgive and forget them? Yes….
Does Brazil give sugar preferential treatment in the countrys pension program essentially giving the farm sector a special break on social security taxes? Yes.
2) India.
India Poised to Boost Sugar Exports to Asia Mideast
India appears set to increase sugar exports to Asia and the Middle East if as expected the government extends production incentives to cash-strapped mills….
Jonathan Kingsman head of agriculture at data provider Platts said there was market talk that the government could move to give incentives to mills equivalent to up to $50 per tonne (3000 rupees) as long as the sugar is exported….
It is difficult to know how much of this has already been priced in the market" Kingsman said.
(Indian) Cabinet Okays Guidelines for Interest-Free Loan to Sugar Mills
The government made it clear to sugar mill owners on Thursday that the interest-free loan of Rs 6600 crore is meant exclusively" to pay the cane price including arrears to farmers.
3) China.
Brazils Sugar Ship Line-Up May Signal Surprise Chinese Demand
China brought in 3.8 million tons of raw sugar in 2012-13 estimates Kingsman SA a unit of McGraw Hill Financial Inc.s Platts. Thats almost four times the amount a U.S. Department of Agriculture unit forecast at the start of last season. Purchases beat estimates as a government stockpiling program attracted more shipments….
China may phase out its stockpiling program and partially replace it with direct subsidies to cane and beet farmers as early as the crop starting October 2014 Zhao Lihua a director at the economy and trade division of the National Development and Reform Commission said last month.
4) Thailand.
(Thai) Sugar Subsidies Poised to Rise
Delayed reforms and the governments plan to encourage farmers to switch from growing rice to sugar cane will drive up state sugar subsidies says the Thailand Development Research Institute (TDRI)….
The prime minister wants farmers to switch to growing cane hoping that it will ease the burden on state subsidies but she does not know that in reality the reform is unlikely to happen this year" said….
Subsidy Spotlight: Thailand
Price supports for sugar producers that totaled nearly $10 billion in 2010 as well as low-interest loans to sugar producers.
So we have Brazil dumping money into the sugar industry in a million different directions. India uber-subsidizing production. China gaming the system stockpiling product then shifting to direct payments. And Thailand providing multi-billion dollar price supports.
All of this central-planned directing of farm traffic Government-Knows-Best micromanagement of the sector.
And these are just some of the myriad ways these nations and many others are directly and indirectly manipulating the global market. None of this has anything to do with a free exchange of goods.
The solution? Negotiate a global across-the-board reduction in government.
This is where the World Trade Organization usually a colossal waste of space can actually be of some good use….
The worlds sugar-producing nations need to sit down together each with a copy of everyone elses lists of protectionist sugar policies. And start horse trading.
Brazil how about if you get rid of this subsidy well each get rid of one."
Mexico if you get rid of this tariff well each get rid of one."
Let the subsequent discussions ensue. Lather rinse repeat.
And then we do it on corn. And rice. And….
We get the idea. Heres hoping they do.
Our Congress may be on the verge of extruding yet another terrible farm bill. Which has been for seventy or so years a Government-Knows-Best train wreck. To alter slightly Ronald Reagans line:
Governments view of the (farm) economy could be summed up in a few short phrases: If it moves tax it. If it keeps moving regulate it. And if it stops moving subsidize it.
Over those seventy or so years our lather-rinse-repeat anti-free-market farm policy warped the emerging global farm market. The worlds growers saw our bad moves and matched them. Subsidy-for-subsidy tax-for-tax protectionism-for-protectionism.
Seven decades later we have a worldwide Crony Socialist nightmare mess. For instance sugar we are the worlds fifth largest producer. The four above us are at least as awful as are we.
1) Brazil.
…Brazils gi-normous sugar industry…subsidies: $2.5 billion worth (in 2012) alone….
Has Brazil grown their government-sugar industry with decades worth of these multi-billion dollar subsidies and regulatory mandates? Yes….
Does Brazil cut direct checks to sugar farmers? Yes….
Does Brazil give sugar farmers loans and then forgive and forget them? Yes….
Does Brazil give sugar preferential treatment in the countrys pension program essentially giving the farm sector a special break on social security taxes? Yes.
2) India.
India Poised to Boost Sugar Exports to Asia Mideast
India appears set to increase sugar exports to Asia and the Middle East if as expected the government extends production incentives to cash-strapped mills….
Jonathan Kingsman head of agriculture at data provider Platts said there was market talk that the government could move to give incentives to mills equivalent to up to $50 per tonne (3000 rupees) as long as the sugar is exported….
It is difficult to know how much of this has already been priced in the market" Kingsman said.
(Indian) Cabinet Okays Guidelines for Interest-Free Loan to Sugar Mills
The government made it clear to sugar mill owners on Thursday that the interest-free loan of Rs 6600 crore is meant exclusively" to pay the cane price including arrears to farmers.
3) China.
Brazils Sugar Ship Line-Up May Signal Surprise Chinese Demand
China brought in 3.8 million tons of raw sugar in 2012-13 estimates Kingsman SA a unit of McGraw Hill Financial Inc.s Platts. Thats almost four times the amount a U.S. Department of Agriculture unit forecast at the start of last season. Purchases beat estimates as a government stockpiling program attracted more shipments….
China may phase out its stockpiling program and partially replace it with direct subsidies to cane and beet farmers as early as the crop starting October 2014 Zhao Lihua a director at the economy and trade division of the National Development and Reform Commission said last month.
4) Thailand.
(Thai) Sugar Subsidies Poised to Rise
Delayed reforms and the governments plan to encourage farmers to switch from growing rice to sugar cane will drive up state sugar subsidies says the Thailand Development Research Institute (TDRI)….
The prime minister wants farmers to switch to growing cane hoping that it will ease the burden on state subsidies but she does not know that in reality the reform is unlikely to happen this year" said….
Subsidy Spotlight: Thailand
Price supports for sugar producers that totaled nearly $10 billion in 2010 as well as low-interest loans to sugar producers.
So we have Brazil dumping money into the sugar industry in a million different directions. India uber-subsidizing production. China gaming the system stockpiling product then shifting to direct payments. And Thailand providing multi-billion dollar price supports.
All of this central-planned directing of farm traffic Government-Knows-Best micromanagement of the sector.
And these are just some of the myriad ways these nations and many others are directly and indirectly manipulating the global market. None of this has anything to do with a free exchange of goods.
The solution? Negotiate a global across-the-board reduction in government.
This is where the World Trade Organization usually a colossal waste of space can actually be of some good use….
The worlds sugar-producing nations need to sit down together each with a copy of everyone elses lists of protectionist sugar policies. And start horse trading.
Brazil how about if you get rid of this subsidy well each get rid of one."
Mexico if you get rid of this tariff well each get rid of one."
Let the subsequent discussions ensue. Lather rinse repeat.
And then we do it on corn. And rice. And….
We get the idea. Heres hoping they do.