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Thread: Accounting for Farm price supports?

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    Accounting for Farm price supports?

    Accounting for Farm price supports?


    10%of USA farms receive 75% of federal commodity price support payments.


    PresidentTruman's Secretary of Agriculture proposed that larger corporations should be denied federal commodity price subsidy payments.
    I've read that 10% of USA farming enterprises currently receive 75% of such federal expenditures at great costs to our annual federal budgets.


    The Truman administration's plan would not retain stored commodities, but rather pay the farm enterprise any differences between prices they received and some proportion of the commodities' federal designated supported price; i.e. federal price support expenditures would continue to be, (as they are now) market determined.


    There's legal and public accounting differences and restrictions upon the common form of corporations, or small corporations, (i.e. "C" or "S" Corps), and other forms of partnerships or single owner commercial entities.

    May not a partial solution be the prohibiting those federal payments for crops derived from land even partially owned or controlled by any "C Corp" or any entity that's not a legal U.S. resident, or recognized by our IRS as a dependent of an individual USA income taxpayer.

    Can any of this group's members suggest why this concept would not be worthy of consideration?
    I'm a city guy and you'll have to walk me gently through any agricultural terms or concepts.

    Refer to: S corporation - Wikipedia
    Respectfully, Supposn

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    Re: Accounting for Farm price supports?

    Perhaps I fail to get your point. Is that the number of owners (or their nationalities) of a US (agricultural) business should be used to determine whether or not they get federal subsidies or, as you put it, "price supports"?
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: Accounting for Farm price supports?

    I am not entirely sure what the OP is really asking for. Are we talking about subsidies based on farming corporation type?
    "Democracy without respect for individual rights sucks. It's just ganging up against the weird kid, and I'm always the weird kid." - Penn Jillette.

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    Re: Accounting for Farm price supports?

    Quote Originally Posted by I'm Supposn View Post
    ...PresidentTruman's Secretary of Agriculture proposed that larger corporations should be denied federal commodity price subsidy payments.I've read that 10% of USA farming enterprises currently receive 75% of such federal expenditures at great costs to our annual federal budgets.There's legal and public accounting differences and restrictions upon the common form of corporations, or small corporations, (i.e. "C" or "S" Corps), and other forms of partnerships or single owner commercial entities.
    May not a partial solution be the prohibiting those federal payments for crops derived from land even partially owned or controlled by any "C Corp" or any entity that's not a legal U.S. resident, or recognized by our IRS as a dependent of an individual USA income taxpayer? ...
    TTWTT78640 and OrphanSlug, wasn't farm commodities purpose to somewhat protect smaller farm enterprises from their great vulnerability to the radical variations of weather, climate, and global trade? These factors are all beyond the farmers' control and their general capabilities to deal with. Commodity price supports were not envisioned to be a subsidy for farmland owned and controlled by huge corporations.

    Wouldn't adopting this proposal significantly reduce the federal price supports costs within our federal budgets while effectively not eliminating federal payments to other than “C” corporations?

    I'm supposing all, (or at least almost all) of the owners or controllers of larger farmlands, (for good legal and financial reasons), are “C” corporations.
    I'm also supposing that it would be more financially feasible for “C” corporations to sell those farmlands, rather than illegally receiving federal commodity price subsidies for crops derived from those farms they would continue to directly or indirectly own or control.

    Respectfully, Supposn

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    Re: Accounting for Farm price supports?

    Quote Originally Posted by ttwtt78640 View Post
    Perhaps I fail to get your point. Is that the number of owners (or their nationalities) of a US (agricultural) business should be used to determine whether or not they get federal subsidies or, as you put it, "price supports"?
    TTWTT78640 and OrphanSlug, I suppose the worst consequence of this proposal would be no reduction of federal costs but every receiver of a federal price subsidy payment would be an individual USA resident and taxpayer or their legal dependents. Respectfully, Supposn

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    Re: Accounting for Farm price supports?

    We have been supporting people who were/are out of work. Now we have to support farmers a bit more than usual. Does anyone at least wish that we will eventually less people on the dole? More people to work, more people buying our own products?
    If we supported our workers in our country and stood behind FAIR trade, as it is proposed, perhaps the Chinese would come to the table a bit faster?
    Let go and let God


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    Re: Accounting for Farm price supports?

    Quote Originally Posted by I'm Supposn View Post
    TTWTT78640 and OrphanSlug, wasn't farm commodities purpose to somewhat protect smaller farm enterprises from their great vulnerability to the radical variations of weather, climate, and global trade? These factors are all beyond the farmers' control and their general capabilities to deal with. Commodity price supports were not envisioned to be a subsidy for farmland owned and controlled by huge corporations.

    Wouldn't adopting this proposal significantly reduce the federal price supports costs within our federal budgets while effectively not eliminating federal payments to other than “C” corporations?

    I'm supposing all, (or at least almost all) of the owners or controllers of larger farmlands, (for good legal and financial reasons), are “C” corporations.
    I'm also supposing that it would be more financially feasible for “C” corporations to sell those farmlands, rather than illegally receiving federal commodity price subsidies for crops derived from those farms they would continue to directly or indirectly own or control.

    Respectfully, Supposn
    I guess I understand where you are going with this.

    We probably need to divorce two concepts to get started. Subsidies for any product are not entirely about protecting any one domestic business model over another, no matter how large or how small and no matter what the corporate structure is (in terms of tax code, like C corps or S corps.

    Another myth we need to deal with is the idea of "small farms" sometimes called "family farms." All those terms means is any farm where the "majority" of the business is owned by the principal operator and individuals related to the principle operator. Something like 90% of million dollar farms are considered family farms, and they account for over 90% of all farm production output in this nation. What we are basically calling commercial farms for your "huge corporations" still end up being a minority. The business or tax structure of these million dollar farms can be any number of things and still qualify for subsidies as the benefit is based on the product produced not the farm that produced it.

    And the basic why is subsidies are designed to be protections for a nation's product no matter who is doing the production. In this case farming outputs protected against lower cost competition from offshore, and in that context it does not matter if someone outputting cotton (for example) does so from 100 acres or 5,000 acres the output is what is protected.

    I get the complaint that subsidies checks to large farming just protects large farming, but the subsidy itself is about the product. The number of bails of cotton a farmer can bring to the market does not necessarily mean a subsidy should tilt based on total output, if so then the subsidy already creating a price distortion would create a secondary distortion inside the very market it is trying to protect.

    So it makes sense that the majority of subsidies end up going to farms with the greatest income and wealth, those business models tend to output the most product being protected by that subsidy. BTW, for clarity, according to the US Department of Agriculture "Midsize" and "Large" farms still take home the majority of subsidies and produce the majority of farming output. Does not matter how they are structured or if they all fall into the "family farms" designations.

    And note, I am not for subsidies in the first place or your 'import certificates.'

    Just illustrating that structuring subsidies to have different benefits inside the nation being protected by that subsidy will end up creating other economic distortions. All those outputs end up on the market and if we tilt that one direction then there will be a business model response changing how to benefit.

    It is a common failure of economic thinking, that changing a subsidy will not change behavior. We know it will no matter what is done with "family farms," C corps and S corps, or other designations.
    "Democracy without respect for individual rights sucks. It's just ganging up against the weird kid, and I'm always the weird kid." - Penn Jillette.

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    Re: Accounting for Farm price supports?

    Quote Originally Posted by Lovebug View Post
    We have been supporting people who were/are out of work. Now we have to support farmers a bit more than usual. Does anyone at least wish that we will eventually less people on the dole? More people to work, more people buying our own products?
    If we supported our workers in our country and stood behind FAIR trade, as it is proposed, perhaps the Chinese would come to the table a bit faster?
    LoveBug, I know what's meant by pure free trade, quota's, tariff's, and Import Certificate trade policies. What's meant by Fair, or fair, or good, or nice, or equitable trade policies?
    Respectfully, Supposn

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