Gallup unemployment falls to 8.4%, matching lowest level since Jan 2010

the only losers as you put it might be the farmers.....but its not the government's responsibility to insure farmers any more than they should insure home owners!

 

No, all lose. Nature of market failure for you

 

why? because prices go up temporarily? Long term prices are much lower as all the regulation stifles growth! Also as said before ....if you have a drought or freeze? those oranges or grapes or whatever can be had somewhere else at a competitive price!

 

Already said and you're asking for repetition. Its about long term supply, something you haven't appreciated

 

here in Canada we have the dairy and wheat boards....apart from increasing prices to average families on their grocery bills I really don't see any benefits apart from the fact it makes farmers earn a better living. In the US there are no such boards.....name me one shortage in milk or wheat that has ever occured?

 

Its actually difficult to find countries who don't use protectionism to secure long term supply. The only issue is whether its used to harm development abroad. See, for example, the debate into the effects of Europe's CAP

 

exactly....in fact I think Italy and France are the worst in protecting farmers....and so where are the benefits?

 

Already said! Its a market characterised by failure. Protectionism then has a motivation. Its only a problem if its used to hinder multilateralism in global trade

 

but it has already been argued that countries with no such protectionist laws also have no shortages in produce...so again I ask.....where is the benefits?

 

No. You've merely assumed that such protectionist laws don't exist. They do. Its the norm, reflecting a general understanding of the severity of market failure

 

if I am not mistaken, the US has fewer protectionist laws protecting farmers than most nations is that correct?

 

So? They all use protectionism. Using the EU as a means to hide from the general practice won't be useful

 

no subsidies means lower prices...its that simple.......OK so it benefits farmers and I dont want to see anyone starve.....but thats the only benefit.

Has it ever occured to you that if prices fall then yes some farmers will lose and go bankrupt......now an overly simplistic model will show a looming shortage as more and more farmers dissappear. But remember, if prices rise again then new would be farmers wil jump on the band wagon and start producing...as it should be!

 

This is just repetition of your failure to consider market failure.

 

because you just refuse to see the obvious!

 

Yeah. Watch out for the stuff that falls out of the back end of things that gallop.

 

The obvious isn't hard to note: your utopianism ensures an inconsistency with economic reality

 

Why isn't privately provided farmer's insurance not enough to overcome this market failure?

 

Two aspects. First, we have to refer to the inelasticity of supply and the subsequent likelihood of rapid price movements. Moon (2011, Is agriculture compatible with free trade?, Ecological Economics) sums it up neatly: "Farmers bear most of the adjustment costs because of asset fixity (disposable value much lower than acquisition value) and irreversible supply, whereas industrial producers can adjust by reducing output and the burden of adjustment falls largely on the workers who are laid off". Even a well working financial sector is unlikely to offer sufficient protection. Second, even if we could assume a perfect financial market, there will be underprovision of agricultural security. Domestic production becomes a merit good as it avoids the threats posed by the political instabilities associated with trade

 

That depends on how you view protectionism. Are you aware of how the corn subsidy works?

 

I heard of the corn subsidy but not sure of all the details!

 

In the U.S., the department of agriculture actually pays corn farmers to grow corn (on a per/production basis). Of course, they in turn produce more corn than they normally would keeping corn supply relatively high.

Guess what that does for corn prices?

 

yup.....it collapses LOL

 

So what is the rational trade policy? Why couldn't government instead provide the farmers' insurance, and do without explicit protectionism. Subsidies can encourage overproduction and unsustainable practices, so I would assume tariffs and quotas are preferable. However, we also must give due consideration to developing countries' income from agricultural exports.

Can you provide a link to this? I'm having trouble finding it through the usual channels. I'm at university, so a paywall isn't an issue.

 

Any assistance will be a form of protectionism. There's no way of getting around it. The issue is whether domestic rationality can have knock on effects which damage economic development. Its clear, for example, that the amount of agricultural subsidies dwarfs foreign aid. However, its not as clear cut as we'd expect. Some European subsidies, for example, have helped development in ex-colonies.

Agricultural protectionism will continue. In terms of multilateralism, that should mean 'special treatment' for developing countries. Rather than attempting to go for some unachievable free trade utopia, the focus should be on ensuring agriculture doesn't hinder a shift to supporting economic development

Try here