I'm going to start out by assuming that farmers have a moral and legal right to be subsidized by the government. After all, our politicians seem to begin there anyway.
Based on that premise, there is a certain amount of money that we are doomed to spend on these deserving folks. Now let's look at how we can get the best value for our money.
The current policy for many crops is for the government to buy any excess production at inflated prices. This drives up prices and ensures that farmers will have a strong incentive to grow too much food in the future.
I have an alternative. Let's take some of the recent plans to pay people not to farm one step farther. Instead of paying farmers to keep a particular number of acres idle (which drives up prices in a different way), what if we just establish (perhaps based on last year's subsidies) how much money each farmer is entitled to and agree that we will write him a check for that amount plus inflation every year for the rest of his life. Under this program, no one cares whether he keeps farming or lies on a beach in Tahiti. He gets the money because he is entitled to it as payment for his vote.
The beauty of this is that we don't waste any more money than we do today. We don't distort the price of food, and we even end up with about the number of farms that we're supposed to have since the farmers who can't make a profit will just retire. The program will even phase itself out if we don't allow new farmers to get these benefits. After all, who knows who they voted for before they started farming.
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timeasmymeasure
Ok, so they are entitled to be paid not to farm
Date: 2002-07-09 04:09 pm (UTC)Based on that premise, there is a certain amount of money that we are doomed to spend on these deserving folks. Now let's look at how we can get the best value for our money.
The current policy for many crops is for the government to buy any excess production at inflated prices. This drives up prices and ensures that farmers will have a strong incentive to grow too much food in the future.
I have an alternative. Let's take some of the recent plans to pay people not to farm one step farther. Instead of paying farmers to keep a particular number of acres idle (which drives up prices in a different way), what if we just establish (perhaps based on last year's subsidies) how much money each farmer is entitled to and agree that we will write him a check for that amount plus inflation every year for the rest of his life. Under this program, no one cares whether he keeps farming or lies on a beach in Tahiti. He gets the money because he is entitled to it as payment for his vote.
The beauty of this is that we don't waste any more money than we do today. We don't distort the price of food, and we even end up with about the number of farms that we're supposed to have since the farmers who can't make a profit will just retire. The program will even phase itself out if we don't allow new farmers to get these benefits. After all, who knows who they voted for before they started farming.
Telnar