This morning on CBC news, there is an article by regular American correspondent Neil MacDonald about the subsidies to American farmers. I have long disliked the fake free market surrounding farming. Farmers form a relatively strong lobby amongst North American politics, and they tend to get their voice heard with greater volume than other larger groups (such as farm product consumers!) do. Even without the out-right cash payments Neil illustrates, farmers get massive amounts of support in fuel subsidies, tax relief, and other goodies that take them out of the challenging free market that any other small business owner leaps into. I suspect a lot of farmers would tell you a story about how hard it is to make end meet, but take a drive past almost any farm in Canada and you'll see the most expensive trucks on the road (I'm not talking about the farm's work trucks, I'm talking about the top of the line up duelly long-box that drives to church on Sundays), and some of the biggest and fanciest houses in middle-class Canada. Farmers don't like having this sort of thing pointed out to them partly, I think, because of a culture of entitlement. Many farmers seem to think it is their inherent right to be a farmer and to be able to earn a living at it. If I more competitive farmer produces a better product cheaper than they do, they don't seem to grasp the free market concept that other businesses do: you're going to go out of business if you can't compete.
This post is not a rant against farming. I know that many farmers work long hard hours all alone. I know they get dirty, and I know they put an essential product in the market place. I'm not blaming farmers for the state of the system. I'm blaming, once again, politicians. As Neil MacDonald points out, government, especially in the United States, throws trillions of dollars at farming in a sort of ongoing great social experiment. With the advent of the global market place and free-trade agreements, government has had to simply increase the amount of money so that American farmers can remain "competitive" in a larger market place. Here is the cold harsh reality of a globalized free-trade agreement: if an American corn grower can't compete with one in another country, then they should go out of business. In a globalized economy, there is no inherent right to stay in business when someone on the other side of the world can produce the same thing more cheaply. Of course, voters want it both ways: they want to be able to buy cheap stuff from China, but they still want the rest of the world to buy their expensive food and autos. What is government forced to do? Subsidize, subsidize, subsidize. That way, American producers keep the illusion that they are productive and competitive.
A few numbers from the article by Neil MacDonald:
- between 1995 and 2012, the U.S. government has paid its cotton producers $32.9 billion
- America paid Brazilian cotton growers $147 million a year keep quiet let the Americans keep subsidizing their cotton grower
-Congress just passed a massive farm bill that will spend $1 trillion over 10 years ($100 billion per year - of the equivalent of Russia's entire defense bill each year)
This is anything but a free market. And, worst of all, this is just one example. Don't even get me started on the oil industry in Canada. Talk about an unfair advantage to the richest part of the private sector. I'm not necessarily a fan of an entirely free market, or of a globalized market. I don't think either are the best scenario for the average citizen. I think that in the past two decades, corporations have found a new way of lobbying government to enrich themselves by fantastic amounts of money. This includes the free-trade agreements and globalized market place combined with huge government subsidies and, worse, bail-outs in the case of corporate losses.