AG Subsidies....

[Darian]

In an era when the every politician's mantra is to cut out of control government spending, congress is debating over how to increase expenditures for crop subsidies in the form of supplementing payment of premiums for crop insurance. The government already pays for a large portion of existing crop insurance premiums. This proposal is even more lucrative than the direct cash payment of subsidies from the past. Check out the article in yesterday's SacBee:

http://www.sacbee.com/2012/05/13/4486481/debate-over-crop-insurance-subsidy.html

Under the current federal/state system of subsidizing agriculture, cash is paid direct to some growers who don't even have to plant a crop. For example, the state "Williamson Act". Talk about stacking the deck.... :-s

[Mike Churchill]

Darien,

I'm the first to agree that Ag subsidies are wrong and should be ended, but the provisions of the Williamson Act that I am familiar with pertain to the valuation of agricultural property for tax purposes rather than direct payments to landowners. The county assessor must appraise property enrolled in a Williamson Act "contract" as "agricultural" property rather than valuing it based on its potential for development for some other use. In return, the property owner's ability to develop the property is restricted. (The owner can "opt out" of the contract on 10 years notice with declining tax benefits over the 10 year period.)

There are reasons to criticize the Williamson Act--such as its effect on the tax base in small rural counties and the fact that it has turned out to be a bad deal for some property owners--but I don't think it is the example you were looking for. (I could be wrong, I haven't done any research to see if there is more to the act than the provisions I have dealt with in the past.)

Mike

[Darian]

It (Williamson Act) is still an example of an ag related subsidy that results in money in the pocket of growers/owners (many large corporate entities) regardless of what the intent of the act is. It's just one example of many when added to all of the other subsidies available to growers/ranchers.

My understanding of the act is that it's supposed to provide an incentive in the form of money (direct or indirect) to retain ag land (good) rather than to sell it to developers (bad). The monetary benefit goes to ag land owners who are not necessarily growers. Payments actually appear as an item in the state budget.

The act may be one of the lesser evils but, IMO, it hasn't really met it's supposed goal by stopping development of rural ag areas in this state. So, I guess before I change my mind on this, I'd like to see some actual evidence of where it has paid for itself over time rather than lined the pockets of developer/owners such as AKT development or Stuart Resnick, etc.

I'm not anti agriculture or business but I think this practice of subsidizing them has gone on too long and for too much money.

[Mike O]

Worse than these are the water subsidies for SJ Valley farmers who continue to biyotch abount not being able to grow their (mostly) water intensive crops...think cotton or alfalfa, which are not really needed.

And they own our senators, and their congresscritturs

[Darian]

"....congresscritturs...." :lol: :lol: Good one. ;-)

All growers/ranchers seem to be paranoid about the weather (too hot, too cold, too dry, too wet, etc.), flooding, reduced water allocations, government regulations, ad nauseum. As long as the water being used by irrigators is paid for at reasonable market value, is used with efficiency and the waste water treated before being drained into local lakes/rivers/streams I have few complaints. After all, we all like to eat fruit, veggies and nuts, wear cotton clothing and alfalfa does provide food for farm animals....

What I object to is the attempt to make billionaires into trillionaires by providing direct cash payments to mid/large corporate farms who already enjoy low tax rates, have private crop insurance provided by the feds (the premiums for which are paid for by tax dollars) that, in some cases, pays benefits whether crops are planted or not. All the while contracting for delivery of water at $50 per acre foot (ACF) and reselling excess water at $800 an ACF. (Excess water should be returned to the pool for later use) Not to mention that when polluted drainage water is discharged into local waterways, growers are exempted from penalties for polluting; demanding that the feds pay for treatment research and facilities (not cost beneficial you understand). BTW, mid/large growers need undocumented workers, not only to work in the fields but to keep costs very low by paying some of the lowest per hour wages and providing substandard housing anywhere. Imagine having to pass a law requiring that laborers be provided drinking water to avoid heats stroke as growers would not do so on their own. And, since none of these workers have health insurance, when ill they have to go to an ER for treatment. Another form of subsidy.

In a truly free enterprise system, operations that were as uneconomical as growers would have us believe in order to justify these subsidies, would be in bankruptcy or cease to exist. The truth is that agri-business generates wealth and subsidization of prices isn't necessary in the domestic market. IMO, as long as politicians are growers/ranchers this will never change....

I've got to get off this soap box for now. This rant is probably unjustified but.... Just gets my goat!!!

[Mike O]

In a free market economy, american farmers, especially the "farmers" of the sj valley, would be obliterated.

[Mike Churchill]

Mike O,

I think you have to be a little more subtle about it: In a free market economy--without all the stupid rules that drive up the cost of hiring legal labor, drive up the cost of transportation (including a lot of really stupid costly rail regulations), and all the other legislation, regulation, and subsidies that distort the price signals that farmers and everyone else in the American ag industry face--MANY American farmers would go out of business, but nowhere near all of them. The least productive acreage would go out of production but the most productive acreage would stay in production, if not in the hands of its current owners.

But there would sure be a hell of a lot of shakeout--particularly of those growing subsidized crops, with subsidized water, pumped with subsidized electricity, on soil contaminated with Selenium and other mineral salts. (Yeah, those few hundred ag welfare queens southwest of Los Banos known as the Westlands Water District.)

[Darian]

Can't disagree with the gist of your statement. Not sure I see where regs/rules impact growers who don't generally use legal labor, tho.

Most of the mid-size/large growers deliberately hire undocumented, illegal farm laborers/workers through farm labor contractors or at the parking lot at Home Depot. They do this as they claim that US Citizens can't or won't do the hard work involved in hostile conditions for the amount of money paid. Also, there's an additional benefit to growers who can terminate and deport one or more workers who aren't performing up to their standards. There's really no downside for growers here.

A study of farm workers by UC Davis (I believe) indicated that the average education for farm workers in the San Joaquin Valley was 4 years. undocumented workers are paid very poorly for the work they perform and the work is/has been seasonal. the unemployment rate in that area is always high but in the off season usually exceeds 30 %. This tends to bring the cost of doing business down but also lowers standard of living for everyone down there. it, also, points out the fallacy in the claim that high unemployment in that area is due exclusively to lack of water.

In spite of all the regs/rules that apply to laborers in other industries in this state, growers who employ undocumented/illegal farm workers have been generally ignored, as has the farm labor contractors who send out those workers. All in recognition of the contribution/value to this economy of production of food & fiber.

Mike, please understand that none of this is aimed at you. It's just a sore subject for me. I've had to chase some real low life farm labor contractors in my time working with the state.

OK, I've used enough bandwidth. Enough from me.... :-|