Sunday, March 25, 2007

The fixed-payment funnel...

Like cattle down the loading chute, American farmers are cheerfully being herded to a WTO-compliant (Green Box) "fixed-payment" subsidy. This will prove to be the last gasp, I think, for ag subsidies here. At least, subsidies that affect how we do our job.

Why? Because fixed payments, however generous, will simply become "rent-stamps" for the real power brokers: landowners. Or they will become income streams that can be sold. And if you don't believe me, check out what the single payment system has done in Europe.
The EU pays £60 billion a year in farm subsidies, which were originally aimed at boosting production, but last year farmers were given — free — the automatic right to subsidies, known as the single farm payment entitlement, in return for reducing production. They were also given the right to trade the subsidy entitlements between themselves, but the legislation is so loose that in practice anyone can officially qualify as a farmer. [More]
My current thought is farmers will rejoice at the thought of Social-Security-like checks showing up annually per acre. Especially if told by Congress the total is above the baseline. Then when the viatical industry gets a whiff of this windfall, the results are pretty easy to predict.

That's the beginning of the end.

I can't wait.

No comments: