There’s billions on the line in the farm bill, but where does it all go?
June 23, 2012 at 4:10 pm in Grand Forks Herald
No matter how you slice the numbers, as the federal farm bill makes its way through Congress, Minnesota and North Dakota farmers have big money at stake. Since 1995, North Dakota farmers have received about $13 billion in subsidies. Minnesota farmers have received more than $15 billion. Continue Reading

What a racket and they don’t even need to use a gun!
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Damn Kevin….For once we see eye to eye on a topic….
Hot debate. What do you think?
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Yeah, me too. Makes a guy wonder just who other than the farmers and politicians are in favor of this fiasco.
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“the basic idea remains the same: A safety net to keep farmers from ruin should business take a hit.”
I’ve asked before and I will ask again: why do we subsidize one business over another? Why do we prop up unprofitable agribusiness farms and let the family owned sub shop go broke?
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In a way it does make sense with farming back when it was a family business. As we seen in the dirty thirties many farmers were forced off their farms when everything went to hell in a handbasket. If a farm loses it’s crops one year that’s bad, but a couple years or say a few meek years and they can’t survive.
Farming isn’t like a lot of other business models where you take raw or produced materials and do something with them. Farming and ranching is a business of creating from living material in one fashion or another. This is also in many ways a very skilled profession. We’ve already lost a number of generations of new farmers and are seeing fewer family farms…..Which is leaving us with these huge coporate farms that often aren’t eve local. If they have a few bad years locally they can take it (Especially with the subsidies) while their business might flurish in other states or even other parts of the region.
I’m all for helping the family farms survive the bad years and the crop damages. Even the coporate farms need family farms because not all those families will have kids continue on their own farms, but some will most likely want to stay in the farming business working on the big farms….It’s just not the same as helping out other business ventures because of its very nature…
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To get a comparable price for the $5.00 per bushel wheat for a brief period during the Nixon Administration a farmer would need to get nearly $28.00 per bushel today to keep up with inflation. Today wheat is somewhere in the vicinity of $8.00 per bushel. The farmer that sells his wheat today is paying top dollar for his inputs, combines and tractors that cost from $250,000 to $400,000 or more and fertilizer at $600 to $800 per ton as a couple of examples. Inflation hasn’t stood still in the rest of the economy. It doesn’t take any mathemetician to figure out why farm numbers are falling and continue to fall. I’d wager that there isn’t a single person posting here that is doing so while suffering from hunger. It is one of the duties of government to protect the population. Protecting the food supply is a legitimate function. We have been very fortunate in not having a widespread crop failure here and in the rest of the world. We currently have far less than a years supply of grains on hand. It is easy to be cavalier about the food supply when we have been blessed with more than enough. That outlook can change very rapidly.
Hot debate. What do you think?
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I am not arguing that protecting the food supply is not a function of government. What I am questioning is the degree. If all subsidies of any and every kind stopped tomorrow how many farms would still be here in 5 years? That is a legitimate question that needs to be answered.
The market is not perfect, but part of the reason you are only getting $8 a bushel when you say you need $28 is because the government is falsely propping the farmer up. If the law of the market were allowed to work, you would receive more for your bushel while probably paying less for the implements it takes to produce them.
I refer you to the corn/ethenol discussion on here. Price supports and protectionism (the sugar bill) are a lot like lying: once you start you have to lye more and more just to keep the house of cards from falling down.
France almost had another revolution when the government started dialing back their commodity supports (they could not pay for them) because everyone realized that while that bushel may sell for $5, when all was said and done it cost $10.50 to produce. Even the most dense consumer was smart enough to ask why they were producing it in the first place. This in a country that did starve.
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A majority of the farm bill goes toward foodstamps, conservation and the school lunch programs. Overall farmers get little of it. As it seems now, farmers will be losing their direct payments, which overall only made up a very miniscule percentage of their income anyways the past few years.
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The law of the market doesn’t work because the purchasers of the farm products determine the price that is paid. The farmer has no way to demand a fair profit above his cost of production. If the market was working you would have farm products priced competitively with 50-60 thousand dollar cars and pickups instead of Model Ts.
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“The law of the market doesn’t work because the purchasers of the farm products determine the price that is paid. The farmer has no way to demand a fair profit above his cost of production.”
Brain: what you are describing is HOW the market works. Prices are not set by how much something costs to produce; they are determined by what the market will bear. Think of when DVD first came out. The machines were $1000. They did not cost anything near that to produce. The profits were huge, especially as they caught on. As DVD became more popular, more and more people produced them, trying to cash in on the demand. Now you can pick one up at WalMart for $50.
In farming think of corn. It is the crop of the moment. Its rewards are far in excess of what it costs to produce it. Cotton is another hot commodity. Since both are paying so well, more and more farmers are changing to corn and cotton. This will by definition drive the price down because of the increased supply.
These are normal market dynamics. Price supports and protectionist legislation prevent these changes from having their full effect.
Price has nothing to do with the cost of production. It is what someone is willing to pay. Remember pet rocks? People shelled out millions of dollars for something they could have gotten from their back yard.
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I’m going to the Obama Motors dealer tomorrow and tell him I’m only going to pay him $5000 for that brand new pickup and demand the keys.
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ECON 101 and Business 101: In America 80% of all new business fails. Why? It costs more to produce their product than they earn.
If a farmer cannot produce said crop for what he/she earns, then they either plant a new crop or go out of business. Having the government guarantee a profit is simply wrong.
It really is that simple.
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That’s exactly what happened. Look across the landscape of farming country on the great plains and all you see is monster farms and dried up rural towns. When the car companies go broke because their expenses outstrip their income the government bails them out and everyone marvels at the beautiful success of it all.The government by no means has guaranteed a profit for farmers. The subsidies in most cases just kept the fox out of the hen house for awhile.
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Not everyone Brain; definitely not me. There was a book in the 80s called the Reconing by David Halbertson (hardly the poster child of liberal thought). It detailed how the auto industry knew for 20 years the end was coming but union & management together chose to ignore reality until it was too late.
Because of their hubris an entire swath of the country – the rust belt – is a ghetto. I would not shed a tear if The Big Three car makers never produced another vehicle. You reap what you sew.
There is no such thing as too big to fail. Not for banks, car makers, real estate trusts or even governments.
You cannot expect the good without risking the bad
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Subsidies to farmers were set up as a safety net to, in a small way, partially offset perennially low prices. They are also used to help insure a food supply by promoting production of crops that may otherwise not be worthwhile to raise. Thye only times I have seen people screaming about farm subsidies is when prices get a little more favorable and farmers are able to upgrade their equipment. When farmers have to wire together their old junk it’s the world as it should be.
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Snort!
Bushels yield per acre:
1950: 19.5
1990: 61
Kansas Price Estimates
1950: $180 (/ton?)
2010-2012 $700
Price of cropland for SD /acre
1991: $223
2011: $1,374
Farm subsidies from the Feds for ND: 1995-2010 $12.9 billion
That is ‘entitlement’ for sure.
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One 1950 dollar equals $8.33 today. The price of wheat today is no better than what a dollar was worth in 1950. Snort on that awhile.
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The value of those 61 bushels of wheat in 1950 dollars would be about $7.50 or about 12 1/2 cents per bushel.
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Fly…without the farmer there wouldn’t be a sub shop.
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When farmers brag about how cheap food is in this Country, don’t forget to add these tax costs to the price we pay. What a racquet!
Hot debate. What do you think?
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In a $3.00 box of Wheaties, the wheat contributes $.03. In a $1.00 candy bar, the cost of the sugar is less than $.01. The amount you pay for your food in the U.S. is some of the cheapest in the world. The Farm Bill insures this.
I grew up on a smaller family farm and know the value of what certain aspects in the Farm Program can do when crop prices are poor and to insure that crop insurance is affordable. Unfortunately, there are very large farms that abuse farm program payments and crop insurance. They need to be made an example of.
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I’m in transportation….I see a small part of of the sosts that get added from start to the grocery shelves…..Like you say…That 300% mark up or more from the farm to the store shelf is because of a huge amount of nickle and dime crap that goes on inbetween. Here’s a prime example. We pick up a load of Jenni-o Turkey and bring it to some major distribution centers……Now when I started 20 years ago drivers could either hire a lumper to unload (Generally independant workers who’d agree to do it for a certain price) or we could go in ther ourselves and use their power jacks. They came up with the idea of actually unloading it like warehousing is supposed to do, but they all have what they call “Lumper Services” which is generally their own employees. They actually charge quite a bit more than the independants did and there’s no negeotiations. So to assure that we use them they keep adding new rules to make it tougher and tought for driver to unload their own load.
Anyway that’s just one of the tricks of the trade…Here’s another I’ve seen…Bringing produce from one area of the country to someplace like MN and then it gets repackaged with their local label so you have no idea if that produce is actually from MN or say NY…..Not that there’s anything wrong with the NY, but the MN would bring a better price….I know one driver who brought oranges from CA to FL where they got repackaged to sell up north in NY for much higher prices (Back when fuel prices weren’t so high)
Lots of tricks between the farm and our table…..
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Sounds like the in-house lumpers are union.
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I don’t know why you’d assume that when I just got done saying that management came up with the idea to charge transportation to do the unloading by creating their own lumper service…..Except that you have such a dislike and possibly misunderstanding about unions that you assume everything bad has to be union connected. Hell…Wally World who has fought hard to keep unions out was one of the first to do this. They were also very early in making more and more rules to discourage drivers from trying to unload their own trucks. You seem to put one hell of a lot of faith in upper management when I’ve seen very little to trust about most upper management.
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“adding new rules to make it tougher and tougher for drivers to unload their own load”
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That’s the recieving dock rules put out by the companies. First it was we could only operate power equipment if we had training (We can handle 65′ of tractor and trailer, but might not be able to handle a battery operated power jack), and eventually that became we had to have training from their company….And then for those hardy young guys still willing to use the Armstrong manual floor jacks…The company dock hand who checks in the loads will get to all the trucks lumped by the company before they get to the driver unloaded (Not everywhere…But a lot of places)
I think most of these are just company rackets up and up, but I see your point…A union shop would do the same thing…But in the end it still comes down to the company man checking your load once it’s on the dock.
Regardless…Here’s the real point. Depending on the load we’ll end up paying between $100 up to $500 for unloading. Our costs ends up being passed on to the shipper and the shipper prices the goods accordingly. Before they de-regulated trucking (Way before my time) Transportation only transported. Shipping and receiving had their own warehous personal to load and unload trucks….At a fraction of what this system costs. On some loads I’ve figured we’re paying in the neighborhodd of $100 or more per hour to unload…..I don’t know what general hourly wages are any more (Get paid by the mile) But I’m guessing in house workers would get it done at around a quarter of that or maybe a bit more.
I just get tired of all these schemes to make big money of the process that only serves to inflate the whole process….While a few reap the rewards……You know it isn’t the lumpers…
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Those are pretty good examples. A couple other examples on the farmer expense side is seed companies and even more so fertilizer companies. The cost of seed and fertilizer isn’t tied so much to the cost of producing their product at a reasonable profit. The cost to farmers of the seed and fertilizer is a direct calculation by those companies of the piece of the pie they want with no cosideration given to the farmers greater risk. The seed and fertilizer companies get their piece of the action up front long before the crop comes in.
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To some degree, it is the farmers fault for what they pay for inputs, such as fertilizer, as well as the fuel used to fuel the machinery.
A local cenex coop had an annual meeting. A higher up representative of the coop (Minneapolis, etc.) told the farmers about all the money that cenex made the previous year on selling fuel.
One of the older farmers got up and chastised the rep. He said that the coop was supposed to be getting the best price for farmers.
Here lies the problem: Why are these “farmer” coops not getting the best price for fertilizer, oil, etc. for the farmer???
See the problem! If the farmers coop really served the customer (farmer), they would be buying fuel, fertilizer in large quantities and passing the savings along to the farmer.
Something is fishy. It is not being done. In fact, the coop should be purchasing shares in agribusiness companies, such as Potash miners/distributers. Own part of the companies that they buy from.
Since there is “no” good deal for the farmer in buying fertilizer, fuel, etc. who is profiting??? The farmers need to demand who in the coop is not doing their job/skimming the money.
Cenex: Where the customer is the company used to be the slogan. Looks like someone turned it into profit for someone other than the customer sho owns the place.
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Not the way the forum made an example of a select few farmers in the paper. I can tell you straight out that there are FOR SURE farmers on the list that were printed that are honest and hard working people and WOULD NOT abuse this.
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Most of us have seen that list repeatedly since the beginning of the ACSC lock out. The link has been added to comments over and over again. It wasn’t anything new for the avid reader. I thought this article was a repeat of an old one. It seems to be quite out-dated IMO.
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One of the reasons the COOPs show such large profits and don’t discount the price of the Fertilizer, Seed, Chemical, Etc. is that the managers of the COOPs are paid a nice bonus on the profit, so it is in their best interest to charge as much as possible so they get a very large bonus. Take away the Bonus structure and just pay them a competitive wage and the farmers will recieve inputs at a lower cost or get paid more per bushel for their production.
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It doesn’t say here, but I wonder how much we’re giving to tabacco growers? If that isn’t about as bass ackwards as you can get. They spend all this money trying to get people to either stop smoking or not start in the first place, and then give money to those who grow the stuff. that’s never made sense to me.
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I thought you said tabasco growers at first. I had to look that one over.
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You’re right when you take a quick glance…..Now tabasco…..That’s something I definately get behind….Especially those little jars of pickled peppers that are so hard to find anymore…
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Corn: subsidize the farmer to grow it, subsidize the ethanol maker to convert it, subsidize car makers to produce flex fuel engines, and when all of the above raises the cost of corn to the point that pig farmers cannot feed their stock: subsidize the pig farmer (this scenario is true, my cousin is a pig farmer in NE).
Where does it stop?
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Make that racket; I’m a tennis player.
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Farmers are nothing more than glorified welfare recipients. Just think those farmers who receive millions in farm welfare still don’t pay tax on the farmstead. Guess they cant afford it on my tax dollars
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You obviously dont know anything about farming. Maybe there are some farmers out there that abuse the system (as there are people out there that abuse other resources) , but do NOT lump all farmers together.
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It was from disaster aid. Farmers pay ALOT in insurance every month and year. The more land you farm, the more you pay in. But i guess if your house gets ripped away in a tornado you shouldnt get money from your insurance agency to rebuild. Or if you total your car, guess you should be sol, because apparantly thats the way you think this aidand insurance should be handled. Not just you, but alot of people posting on here.
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The classic insurance structure you are describing does not fit in this discussion because the government is directly subsidizing the premiums. WE are paying a good portion of the farmer’s premiums for them.
This is the exact same scenario envisioned under healthcare/insurance reform.
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Really? Because i write the checks out to pay insurance premiums for our farm… As far as the structuring, yes it is different, but yet not.
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Certainly though, Ky, you can see the difference between crop insurance and the home and car insurance that you are comparing it too. Taxpayers fund 62% of the insurance premiums for crop insurance. That means that if the private insurance companies were not underwritten by the Fed’s for the crop policies they write, the premiums that you pay would be roughly 3 times higher than what they are. Homeowner and car insurance get no such subsidy, so therefore it not a fair comparison.
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People are blind if they think farmers don’t pay insurance or taxes on farmstead. Every farmer pays the taxes on their property they own, plus the insurance and the crop insurance which is quite expensive. insurance prices vary depending on coverage level. Higher the coverage, the higher the price.
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Your statement is correct, eldredton, with one exception.
Agreed….farmers pay property tax on the value of the property they own, just like everyone.
Agreed….. farmers pay insurance premiums on the value of the property they own, just like everyone.
But…. farmers pay about 38% of the premium cost of crop insurance and taxpayers pay about 62%. These are facts, not opinions.
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In North Dakota, farmers can be exempt from paying property taxes on their farmstead. See North Dakota Century Code 57-02 for details.
I would imagine that at one time, that farmstead exemption was enacted when there were small farms. Now there are not many small farms, just bigger ones.
The larger farmers are subsidized and buy the smaller ones out.
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It seems to me there are 2 people making money here. The great big rich farms and the insurance companies. This nonsense needs to stop it’s too big to fail round two. Wallahalla’s largest employer recently just closed up shop and left alot of people in that community unemployed I’m left to wonder if the 5 million dollars to 1 multi-millionaire would have been better spent keeping those jobs in the community.
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I looked over the farm bill and it seems fair.
1. Crop insurance is too big to be handled by the private sector. Subsidizing crop insurance is the cheapest way to ensure there’s enough of a safety net for farmers and avoid mistakes of the past.
2. The direct and counter-cyclical payment structure is getting too hard to defend in today’s environment. The level of support from the US has been a pittance compared to other countries, and American farms have survived, so let it go.
3. Why are we supporting farmers and not main street businesses? Food production is a matter of national security. A nation that can’t feed its people won’t be a nation for long. Also, as stated previously, there’s only $.03 of wheat in a box of Wheaties. Where does the other $2.97 go? Your main street grocery store and their 50% markup takes the largest cut, but the other $1.50 or so goes to the processors, warehouses and truck drivers that get it to your main street. There may be millions of dollars in subsidized wheat, but that wheat supports billions of dollars worth of payroll in both agricultural jobs that are not directly farming, but also main street business.
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Some excellent points, Jeff. I too agree that there needs to be a farm bill, and I also agree that using crop insurance premium subsidies is an excellent way to provide that support.
But……here is where I need to jump off the train.
Under this bill, there is no tiering of crop insurance premium supports until a grower reaches a level of $750,000 in adjusted gross income. Up until that point, crop insurance premiums are supported in exactly the same way for everyone. By not phasing down the premium supports at lower levels than this, we are actually escalating the continued consolidation of farms.
In some states, the age of the avereage farmer is now over 60 years old. We have created a system of support that encourages huge, old farming operations that gobble up more and more land at the expense of anyone who wants to enter the industry. You can farm without a lot of things, but you can’t farm without land. Large, older farms use the insurance subsidies, along with their economies of scale, to basically shut out younger farmers trying to enter the profession.
And, if you ask me, while we are having a conversation about needing a farm bill to insure the security of the United States, that disscussion needs to include the fact that we need to promote young farmers entering the industry.
My solution…. phase out these insurance subsidies at much lower levels of income. If some large corporate farms want to rent or buy up the entire landscape and farm it, tell them to go ahead, but do it without the support of the American taxpayer. Save the taxpayers support for younger, smaller startup farms that will continue to live in and support their local communities.
Not gearing our system of support toward smaller operations has only escallated the demise of rural America. It has led to a decay of small towns and small business all across the country. And in doing so, has led to fewer (and older) farmers controlling the nation’s food supply. Limit subsidies to larger farms, so that younger growers have a chance to enter the industry. That is what is in the best interest of our nation.
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I do not think that the Farm Bill is fair.
Why? There is nothing in the US Constitution that states that is the role of the Federal Government to fund it.
The Constitution states that its can coin money, collect customs, raise an army, etc.
Nothing in the Constituition says it can provide subsidies to farmers. Wonder why this country is in bad shape? We do not go by the Constituition.
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Like most pieces of legislation, the farm bill has some good and worthwhile components. It is also chalked full of pork. Look at the response of agribusiness to capping the amount of subsidies according to ownership structure (family farm vs agribusiness) and income.
Food is a national defense issue but what we do goes well beyond what is required to insure an adequate and safe food supply. The government teat is addicting. It is crack for the capitalist set. People quickly forget that the farm bill as we understand it is a product of post WWII. In other words is is less than a century old. It is not enshrined in the Constitution. It is not a pillar of American civilization. It is a government program that may have run its course.
Time will tell
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I need to reiterate I am not against farmers (everyone on my mother’s side farms) & I am certainly not against making money.
I am opposed to protectionism & price controls. They prevent the market from doing what it is supposed to do: meet the demands of the market.
People here freak at the thought of sugar beets becoming unregulated (subsidized & protected). If both the farm bill & the sugar bill went away tomorrow the land would not sit fallow. A new crop & new industries would rise to take its place.
Will some people lose their jobs? Without a doubt. Will another job in another industry rise to take its place? Yes.
Nothing is permanent. Not even in ND
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They should call this program by it’s proper name. It is actually the Food, Conservation, and Energy Act. The title Farm Bill is misleading.
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They should call it the Farm Welfair or Farmers Food Stamp Act. The correct name dosen’t have anything to do with what is going on.
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Farming is the biggest welfair program in the US besides the military. Millions of dollars are going to millionaire farmers who spend the winters in Arizona. We have the most heavily subsidized farming system in the world. You know the old joke. How does a farmer double his income? He puts up another mail box for farm subsidy checks.
Not only do we needlessly subsidize farm crops but we subsidize crops that are bad for our health such as sugar and potatoes. Both are part of the increasing obiesity problem in our country. Oil companies get subsidies. The wealthiest Americans get tax breaks. Everyone is lined up at the public hog trough.
So who do we pick on? Working people. We lower thier wages, bust thier unions, take away thier health benefits and thier retirement. This country has it’s priorities very screwed up. It helps the rich and robs from the poor to make it happen. It’s pretty sad. The orgy of money and greed from the Bush years is now the norm in the USA. If this is not reversed our economy will never recover.
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I will have you know that what you said is not true. Farmers (at least my family and neighbors) put their lives into farming. It is not a welfare program. You want to talk about the “working people”? I DARE you to try and be a farmer, or even farm for a month. Anyone on here who is badmouthing farmers or big farmers has no clue what goes on or what it takes. It is so infuriating to see comments like yours. Get real- you have no idea.
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Why is it that everyone thinks that they work harder than the next guy? What do your neighbors and family do between the months of November and April to work so hard? They have a six month vacation. For a real breakdown on who gets what from the farm payments there is a website with the first letter being E and the second being a W and the last G and it is an org. Some reason if you write the website down the Herald won’t post it. Search around for the link and you can see county by county what farmers got for their checks.
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Another reason why you know nothing abt farming. November until april is def not a vacation. There is still alot of work going on during the winter. I am just tired of seeing on here people saying stuff likethis when they obv know nothing abt farming. I was not saying one guy works harder than the next. Just simply letting some of you know that it is a very hard occupation and shouldnt be made out to be a piece of cake, or welfare. Also, alot of the big farms are big because they worked to get it that way, it wasnt handed to them. If you were offered a promotion would you turn it down, just to be fair to the guy in the cubicle next to you? Prob not.
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Also, i just love how you flat out say, april to november they are on vacation. Too funny!!
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*nov- april. Lol
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The farmers that I respect, are those that raise cattle during the winter months. They work year round.
I see too many farmers take the winter off and frequent the bars and cafes, with their diesal pickups idling outside.
One young farmer I respect is one of my cousins that farms. He had a bad crop one year. The next winter he worked as a short order cook, in a bowling alley to earn money to make a living. He could have sat in the bar or cafe and complained, he did not.
Not all farmers are welfare reciepients, but there are some that are.
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Ky, as I said I am not a farmer, but I am related to a slew of them. Some things are certain: if you are young & want to start farming, if you have to buy your land you will probably fail (see a number of excellent studies out of the University of NE). If you are young & inherit your land, you might stand a chance, provid you have a decent tax lawyer.
Either way you are signing on to a multimillion dollar business & better look at it as such. The “family farm” of mythical lore; the one where almost everything is old, paid for, held together with bailing wire, bubble gum & sweat and where you take a loan on this years crop to buy seed is largely a thing of the past.
Most farms are way too large for one extended family to manage. They have to be. You cannot make a living off of a couple hundred acres & a few head of cattle with some chickens for personal use.
That was the farm my mom grew up on. Her brothers that still farm do the same thing, but on a scale that would horrify my grandfather.
Modern farms are multi million dollar enterprises & need to be thought of as such. The mental image of the 1940s family farm has to be done away with if this discussion is to have any meaning
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Its called universal entitlements. Everyone gets a check.
Wait until the checks stop. The crying will begin…
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a conservative farmer won’t see any effect when they disappear, it doesn’t amount to much of anything anyways. Will some that thought they could bank on it, possibly. hope it pulls the big renters under.
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