The legecy of FDR

[zeitgeist]

From and earlier thread on gas prices we had this little discussion on farmer subsidies, unions

and the legacy of FDR.

TVDOC points out that I make a couple errors in broad brush comment which is fair; however, rather

than further discuss the issue on a thread related to gas prices I offered to continue that

discussion on a separate thread.

  Original thread link>

Quote from: zeitgeist on Today at 05:22:05 am
Now we charge to take the lead out and put ethanol in.  GO FIGURE.

Corn ethanol is just another form of farm subsidy to keep em on the democrat reservation.  

Again, I credit FDR with creation of that mentality.  Between unions and farmers his legacy is

still being felt today.

There are actually TWO problems with your broad-brush statement above.......

1.  There are damn few farmers here in Missouri, or in Kansas, or Nebraska for that matter that

are on the "Democrat reservation"........the vast majority of them (here it's around 70%) vote

reliably Republican.  I would be reluctant to lump farmers in with the unions.........

2.  Government subsidies are NOT given to farmers for growing corn for ethanol.  The subsidies for

ethanol are given to the manufacturers that produce the stuff from agricultural products,

in a hapless attempt to make it competitive with gasoline (which it's not).  Has ethanol use

increased the prices that the farmer receives for his corn crop?.....hell yes, and that is all he

is really interested in.  The only Federal subsidy given to GRAIN farmers is for not growing

anything (what used to be called the "soil bank").  The amount paid for this program

is so paltry that the only land that ends up there is usually that which is unsuitable for

production.

There are small grants, and low interest loans available to grain farmers for terracing, and

similar land improvements for erosion control, as well as conservation projects like "wetlands"

for wildlife preservation.  These are no substitute for producing fields and free market prices.

On our farm (totalling about 880 acres) we have 30 acres that we place in the "soil bank" because

it lies in the flood plain of a nearby creek, and anything planted there frequently is lost in the

spring.  How much is our "subsidy" for that 30 acres?  Last year we received a bit over

$1500........which is about what we'd receive at current prices from one acre of

productive land planted in corn.

There ARE subsidies for organic farming, and other such liberal hippy crap, but generally farmers

are only interested in maximizing their yield, and therefore their income, they are the

penultimate capitalists.

Dairy farming, and some types of meat production are subsidized to an extent.

doc

Farmers may well be penultimate capitalists. And we know the number of small family farms has

declined since the Great Depression. I am not sure where the cut off is determining the size of a

farm in terms of acerage but 880 acres seems to me to be a substantial operation. I did run across

what might provide a helpful guideline in determining farm 'size"

Noncommercial farms. Gross cash farm income less than $10,000.

Small commercial farms. Gross cash farm income of $10,000 to $249,999. Farms with gross

cash farm income in this range meet a threshold level of farm income that indicates a commitment

to farming. The $250,000 cutoff to identify small farms was recommended by the Small Farm

Commission.

Large farms. Gross cash farm income of $250,000 to $999,999.

Very large farms. Gross cash farm income of $1 million or more.



http://www.ers.usda.gov/AmberWaves/September10/Features/USFarm.htm

I am sure that given enough time it would be and effort a number could be ascertained for each of the

above categories but not by me at this point.  

To look more closely at my 'broad brush statement' I said ethanol is another form of farm

subsidy to keep framers on the democrat reservation. TVDOC says not so fast 70% are

Republican.  Ok that may be but what about the subsidies put in place by FDR?

The United States currently pays around $20 billion per year to farmers in direct subsidies as

"farm income stabilization"[9][10][11] via U.S. farm bills. These bills date back to the economic

turmoil of the Great Depression with 1922 Grain Futures Act, the 1929 Agricultural Marketing Act

and the 1933 Agricultural Adjustment Act creating a tradition of government support. A Canadian

report claimed that for every dollar U.S. farmers earn, 62 cents comes from some form of

government, with total aid in 2009 from all levels of government adding up to $180.8 billion.[12]

The beneficiaries of the subsidies have changed as agriculture in the United States has changed.

In the 1930s, about 25% of the country's population resided on the nation's 6,000,000 small farms.

By 1997, 157,000 large farms accounted for 72% of farm sales, with only 2% of the U.S. population

residing on farms. In 2006, the top 3 states receiving subsidies were Texas (10.4%), Iowa (9.0%),

and Illinois (7.6%). The Total USDA Subsidies from farms in Iowa totaled $1,212,000,000 in 2006.

[13] From 2003 to 2005 the top 1% of beneficiaries received 17% of subsidy payments.[13] In Texas,

72% of farms do not receive government subsidies. Of the close to $1.4 Billion in subsidy payments

to farms in Texas, roughly 18% of the farms receive a portion of the payments.[14]

"Direct payment subsidies are provided without regard to the economic need of the recipients or

the financial condition of the farm economy. Established in 1996, direct payments were originally

meant to wean farmers off traditional subsidies that are triggered during periods of low prices

for corn, wheat, soybeans, cotton, rice, and other crops." [15]

Top states for direct payments were Iowa ($501 million), Illinois ($454 million), and Texas ($397

million). Direct payments of subsidies are limited to $40,000 per person or $80,000 per couple.

[15]

The subsidy programs give farmers extra money for their crops and guarantee a price floor. For

instance in the 2002 Farm Bill, for every bushel of wheat sold, farmers were paid an extra 52

cents and guaranteed a price of 3.86 from 2002–03 and 3.92 from 2004–2007.[16] That is, if the

price of wheat in 2002 was 3.80 farmers would get an extra 58 cents per bushel (52 cents plus the

$0.06 price difference).

Corn is the top crop for subsidy payments. The Energy Policy Act of 2005 mandates that billions of

gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand, but US corn

ethanol subsidies are between $5.5 billion and $7.3 billion per year. Producers also benefit from

a federal subsidy of 51 cents per gallon, additional state subsidies, and federal crop subsidies

that can bring the total to 85 cents per gallon or more.[17] (US corn-ethanol producers are also

shielded from competition from cheaper Brazilian sugarcane-ethanol by a 54-cent-per-gallon tariff

[18][19]





http://en.wikipedia.org/wiki/Agricultural_subsidy

Yes, that is from Wikipedia, but is it factually wrong?  If so, how about this one?

Corn Subsidies** in the United States totaled $73.8 billion from 1995-2009


http://farm.ewg.org/progdetail.php?fips=00000&progcode=corn

But what about the conventional wisdom that Ethanol is good for the environment?  Here we have an

interesting article by Slate of all places.

Corn Dog
The ethanol subsidy is worse than you can imagine.
By Robert Bryce
Posted Tuesday, July 19, 2005, at 8:12 AM ET

Running on empty: Is ethanol the answer?
For the last generation, ethanol has been America's fuel of the future. But there has never been

more hype about it than there is today. Green-energy analysts like Amory Lovins, environmental

groups like the Natural Resources Defense Council, neoconservatives like James Woolsey, and farm

groups like the American Coalition for Ethanol are all touting the biofuel.

{snip}


But the ethanol critics have shown that the industry calculations are bogus. David Pimentel, a

professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and

Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent

report that estimates that[b} making ethanol from corn requires 29 percent more fossil energy than

the ethanol fuel itself actually contains.[/b]

The two scientists calculated all the fuel inputs for ethanol production—from the diesel fuel for

the tractor planting the corn, to the fertilizer put in the field, to the energy needed at the

processing plant—and found that ethanol is a net energy-loser. According to their calculations,

ethanol contains about 76,000 BTUs per gallon, but producing that ethanol from corn takes about

98,000 BTUs. For comparison, a gallon of gasoline contains about 116,000 BTUs per gallon. But

making that gallon of gas—from drilling the well, to transportation, through refining—requires

around 22,000 BTUs.



{snip}
http://www.slate.com/id/2122961/

Then too corn can be burned in a pellet stove I guess, and, I guess if you are a penultimate capitalist

you plant what sells regardless of whether you vote Republican or dem regardless of why it sells.

Corn prices were so low at one point that it was actually burned as a fuel.  

Lincoln, Neb. — Nebraska’s corn farmers intend to plant 9.5 million acres of corn this year, an

increase of 350,000 acres from last year’s 9.15 million acres, the U.S. Department of Agriculture

said today.

“If realized, this would be the most corn acres planted by Nebraska’s farm families since the

early 1930s, surpassing the recent high of 9.4 million planted in 2007,” said Kelly Brunkhorst,

the Nebraska Corn Board’s director of research.

“Farmers respond to market demands and as demand increases, so has their intention to plant more

acres and to produce more corn from those acres by increasing yields,” he said. “It’s an incentive

for farmers to innovate, to produce more corn more efficiently while sustainably managing crop

inputs.”



http://www.journaldemocrat.com/news/x583203589/Nebraska-corn-farmers-to-plant-9-5-million-acres

But is seems some in the bellwether state of Missouri want out.

WOULD QUIT MISSOURI.; Democratic Farmers Want Counties Annexed to Arkansas.


http://query.nytimes.com/gst/abstract.html?res=FB0E14F7395E12738DDDA00994D9415B848CF1D3

Then there is this interesting tid bit,

Politics
 
Tilted beds of the Middle Precambrian Thompson Formation in Jay Cooke State Park, Minnesota.
Beginning of spring in Wisconsin.
Badlands National Park, South Dakota.
The Mackinac Bridge, a five-mile span connecting Michigan's two peninsulas.
A Great Blue Heron and immature Bald Eagle on the Platte River in Nebraska.
Indiana sunset.Midwestern politics tends to be cautious, but the caution is sometimes peppered

with protest, especially in minority communities or those associated with agrarian, labor, or

populist roots. This was especially true in the early twentieth century when Milwaukee was a hub

of the socialist movement in the United States, electing three socialist mayors and the only

socialist congressional representative (Victor Berger) during that time. The urban Great Lakes

region tends to be the most liberal area of the Midwest, and the liberal presence diminishes

gradually as one moves south and west from that region into the less-populated rural areas. The

Great Lakes region has spawned people such as the La Follette political family, labor leader and

five-time Socialist Party of America presidential candidate Eugene Debs, and Communist Party

leader Gus Hall. Minnesota in particular has produced liberal national politicians Walter Mondale,

Eugene McCarthy, and Hubert Humphrey, as well as protest musician Bob Dylan.


Political trends
One of the two major political parties in the United States, the Republican Party, originated

partially in the Midwest. One of its founding places was Jackson, Michigan, or Ripon, Wisconsin,

in the 1850s and its origin included opposition to the spread of slavery into new states. Most of

the rural Midwest is considered a Republican stronghold to this day. From the American Civil War

to the Great Depression and World War II, Midwestern Republicans dominated American politics and

industry, just as Southern Democrat farmers dominated antebellum rural America and as Northeastern

financiers and academics in the Democratic Party would dominate America from the Depression to the

Vietnam War and the height of the Cold War.

As the Midwest's population shifted from the countryside to its cities, the general political mood

moved to the center, and the region is now home to many critical swing states that do not have

strong allegiance to either party. Upper Midwestern states, such as Illinois, Minnesota,

Wisconsin, and Michigan have proven reliably Democratic, while even Iowa has shifted toward the

Democrats. Normally a Republican stronghold, Indiana became a key state in the 2006, mid-term

elections, picking up three House seats to bring the total to five Democrats to four Republicans

representing Indiana in the U.S. House. The state government of Illinois is currently dominated by

the Democratic Party. Both of Illinois's senators are Democrats and a majority of the state's U.S.

representatives are also Democrats. Illinois voters have preferred the Democratic presidential

candidate by a significant margin in the past four elections (1992, 1996, 2000, 2004).

The same is true of Michigan and Wisconsin, which also have a Democratic governor and two

Democratic senators. Iowa is considered by many analysts to be the most evenly divided state in

the country but has leaned Democratic for the past fifteen years or so. Iowa has a Democratic

governor, a Democratic senator, three Democratic congressmen out of five, has voted for the

Democratic presidential candidate in three out of the last four elections, (1992, 1996, 2000). As

of the 2006 midterms elections, Iowa has a state legislature dominated by Democrats in both

chambers.

Minnesota voters have chosen the Democratic candidate for president longer than any other state.

Minnesota was the only state (along with Washington, D.C.) to vote for Walter Mondale over Ronald

Reagan in 1984 (Minnesota is Mondale's home state). In Iowa and Minnesota, however, the recent

Democratic pluralities have often been fairly narrow. Minnesota has elected and reelected a

Republican governor, as well as supported some of the most pro-gun concealed weapon laws in the

nation.

By contrast, the Great Plains states of North Dakota, South Dakota, Nebraska, and Kansas have been

Republican strongholds for many decades. These four states have gone for the Republican candidate

in every presidential election since 1940, except for Lyndon B. Johnson's landslide over Barry

Goldwater in 1964. However, North Dakota's congressional delegation has been all-Democratic since

1987, and South Dakota has had at least two Democratic members of Congress in every year since

1987. Nebraska has elected Democrats to the Senate and as governor in recent years, but the

state's House delegation has been all-Republican since 1995. Kansas has elected a majority of

Democrats as governor since 1956 and currently has a 2-2 split in its House delegation but has not

elected a Democrat to the Senate since 1932.

Missouri is considered a "bellwether state." Only once since 1904 has the state not voted for the

winner in the presidential election, in 1956. Missouri's House delegation has generally been

evenly divided between Democrats and Republicans, with the Democrats holding sway in the large

cities at the opposite ends of the state, Kansas City and St. Louis, and the Republicans

controlling the rest of the state. Missouri's Senate seats were mostly controlled by Democrats

until the latter part of the twentieth century, but the Republicans have held one or both Senate

seats continuously since the 1976 elections.

Around the turn of the twentieth century, the region also spawned the Populist Movement in the

Plains states and later the Progressive Movement, which largely consisted of farmers and merchants

intent on making government less corrupt and more receptive to the will of the people. The

Republicans were unified anti-slavery politicians, whose later interests in invention, economic

progress, women's rights and suffrage, freedman's rights, progressive taxation, wealth creation,

election reforms, temperance, and prohibition eventually clashed with the Taft-Roosevelt split in

1912. Similarly, the Populist and Progressive Parties grew intellectually from the economic and

social progress claimed by the early Republican Party. The Protestant and Midwestern ideals of

profit, thrift, work ethic, pioneer self-reliance, education, democratic rights, and religious

tolerance influenced both parties despite their eventual drift into opposition.

The Midwest has long mistrusted Northeastern elitism. Some favor isolationism, a belief held by

George Washington that Americans should not concern themselves with foreign wars and problems. It

gained much support from German-American and Swedish-American communities, and leaders like Robert

La Follette, Robert A. Taft, and Colonel Robert McCormick, publisher of the Chicago Tribune.[5]

Unemployment remains low but is higher than the national average; some manufacturing-dependent

states—most notably Michigan—have still higher unemployment rates. Outsourcing of higher paying

manufacturing jobs and a rise in low-wage service jobs is a major issue.



http://www.newworldencyclopedia.org/entry/Midwestern_United_States

Where did it all really start?

Within days of his inauguration in 1933, President Roosevelt called Congress into special session

and introduced a record 15 major pieces of legislation. One of the first to be introduced and

enacted was the AAA, the Agricultural Adjustment Act.

For the first time, Congress declared that is was "the policy of Congress" to balance supply and

demand for farm commodities so that prices would support a decent purchasing power for farmers.

This concept, outlined in the AAA, was known as "parity."

AAA controlled the supply of seven "basic crops" – corn, wheat, cotton, rice, peanuts, tobacco and

milk – by offering payments to farmers in return for taking some of their land out of farming, not

planting a crop.

LeRoy Hankel says there only a few farmers who refused to take the government payments. "There's a

few that said, 'The government isn't going to tell me what to do.' There was a few of them. Now, I

don't think there was too many." Most farmers couldn't afford not to take the government payments.

In 1937, the Supreme Court ruled that the AAA was unconstitutional, but the basic program was

rewritten and again passed into law. Even critics admitted that the AAA and related laws helped

revive hope in farm communities. Farmers were put on local committees and spoke their minds.

Government checks began to flow. The AAA did not end the Depression and drought, but the

legislation remained the basis for all farm programs in the following 70 years of the 20th

Century.

This idea of supporting farmers by limiting supply has also produced controversy. Some critics

point out that only seven of the hundreds or thousands of different crops grown by farmers are

eligible for payments. No livestock producers are included. Farmers also continue to produce more

and more despite the limitations the government imposes. New technologies make it possible to grow

much more on the same amount of land.

http://www.livinghistoryfarm.org/farminginthe30s/water_11.html

And what about unions?  Gee I keep reading FDR didn't want Public Unions, wouldn't that mean he

was Anti-Union??

Wagner Act


The National Labor Relations Act or Wagner Act (after its sponsor, Senator Robert F. Wagner)

(Pub.L. 74-198, 49 Stat. 449, codified as amended at 29 U.S.C. § 151–169), is a 1935 United States

federal law that limits the means with which employers may react to workers in the private sector

who create labor unions, engage in collective bargaining, and take part in strikes and other forms

of concerted activity in support of their demands. The Act does not apply to workers who are

covered by the Railway Labor Act, agricultural employees, domestic employees, supervisors,

federal, state or local government workers, independent contractors and some close relatives of

individual employers.
{snip}


http://en.wikipedia.org/wiki/National_Labor_Relations_Act

And for the purists a non-wiki source:

FDR and Compulsory Unionism Destroyed Jobs
FDR and Compulsory Unionism Destroyed Jobs
by Jim Powell, April 16, 2009

For decades, labor unions struggled for power, but until the 1930s they had made little headway.

Unions were based on force and violence, which repelled a substantial number of employees as well

as employers.  The aim had been to raise the wages of members above market levels, but this was

only possible if they went on strike, forcibly prevented employers from hiring other employees,

shut down businesses, and ultimately forced employers to accept union demands.  Union bosses

talked about securing the “right to strike,” but they didn’t mean the right to quit which

everybody already had.  In practice, the “right to strike” meant the right to forcibly prevent

others from filling jobs that strikers had left.

{snip}



http://www.fff.org/comment/com0904g.asp

 

[Doc]

Well.....I certainly won't argue that FDR did a lot of damage with his policies, not only with social programs, but with farmers as well.  That said, the vast majority of his farm policies no longer exist.

As I stated in the other thread, I'm far less concerned about past policies than I am seeing the farmers branded as gross recipients of Federal subsidies......they are generally not interested in subsidies, because as with all things "government" they come with strings attached that compromise making good business decisions regarding land use, and crop placement and yield.

Going back to the top of your post, I think that the first thing that we need to define is exactly what is a "farm", what size must it be to be profitable, and how is it structured today as opposed to a half century ago.

When I was a kid growing up in the 50's and 60's, a farmer could make a living on a 150 to 200 acre farm, with a mixture of grain farming, and some livestock.  During that same period, that same farmer could buy a tractor, plow, planter, cultivator, and a small combine for less than $10,000.  Purchased on credit, the farmer (assuming no total crop failures.....a big IF), could  keep up the payments and feed his family.  Bear in mind that during this period.....continuing up through the late 80's,, over 80% of the farmland in the US was owned "free and clear"......no mortgages).........this was a hard lesson learned by farmers during the depression.  Pay for the land FIRST.

Over the decades the size of a "family farm" has increased steadily, from around 200 acres, to now well over a thousand.  The reason for this is simple........the cost of farm equipment has increased in a logarithmic curve.  In order to support the investment in equipment, farms have been forced to become larger and much more efficient.  The tractor that one could purchase for $2000 in 1965 will cost you well over $300,000 now.  You might compare that to the price of a new automobile in 1965.....about the same $2000, and to replace tom today will run you $30,000.......a significant difference in cost escalation.

The other farming myth is the "corporate farm".........many think that the big Ag companies own and operate much of the US farmland.  It isn't true........certainly ConAgra, Ralston-Parina, Green Giant, etc, do operate some farms.....mostly for specialized products and experimentation.  The myth of the "corporate farm" comes from the fact that many farmers form corporations for tax and liability reasons, just like other small businesses do.  Therefore when some idiot politician wants to complain about corporate farming, they are looking at land that is owned by "John Dow, LLC", and lumping all of those in with the large companies that operate farms as well.  Large Ag corporations generally LEASE/RENT land, they don't buy it, they have far more profitable uses for their capital resources.

As to your point about our 880 acres being a "large farm".......it is actually quite small by today's standards from the point of view of supporting the investment required to operate it.  Our next-door neighbor (a family farmer) plants over 10,000 acres per year.......with just two brothers, three sons, and two hired hands.  THIS is what a family farm is today........and they are also a "corporation".

As far as going through and researching each of your citations point by point, which I simply don't have time to do, I'll just refer back to my direct experience as a farm operator and state that the "farm subsidies" that are generally discussed are largely not descriptive of direct payments to farmers.........they describe the vast budgets of the Department of Agriculture, the FDA, and to an extent the EPA, all of which attempt to inject themselves in to the Ag business.  It is true that "price floors" have been established for commodity grain production, but some research will show you that grain prices haven't dropped below the "floor" for over two decades.  The DoA also provides farmers with "crop insurance", which is designed to mitigate the impact of disastrous crop failures.......participation in this is "optional", and we actually have to PAY for the coverage with a percentage of the crop if it DOESN"T fail.......it ain't free, and the taxpayers are not paying for it, the farmers are.

Addressing the politics of farmers (I'm going to eliminate Minnesota and Wisconsin from the discussion, as Minnesota is an anomaly......a generally weird place politically, you'll recall that they actually elected Jesse Ventura Governor).  The "politics" of farmers has changed over the past fifty years in the same manner as the rest of the general population.  Farmers being a generally conservative group, back in the 50's, 60's, and into the 70's saw the Democrats as the party of the "little guy" which they identified with.  As the Democratic party evolved leftward during and after the Vietnam war, and became representative of simply a number of left to far-left special interest groups, the farmers left........in the words of a former politician from Georgia, "I didn't leave the Democratic Party, it left ME......"  I didn't read all of it, but you spent a lot of print discussing Illinois.....although Illinois is a large agricultural state, its politics are controlled by ONE GROUP......Cook County.  The vast majority of the state's population lives in Cook County, and it therefore controls the makeup of the representation in the state government.  Even with that considered, Illinois elected a Republican Senator, and came within a hair of having a Republican Governor.

One also has to  look at the TYPE of Democrats that come from the midwest farming states.........they are virtually all "blue dogs", that run as conservatives in general elections.......it wasn't until the Pelosi era in congress that the voters woke up and discovered that the "blue dogs" would vote with the liberals when the chips were down.......here in Missouri after the last election that left only TWO Democrat representatives in Congress.....and veto-proof Republican majorities in the state legislature.  Same in Kansas and Nebraska.

I also won't argue that ethanol for fuel is a farce.......there is an entire thread somewhere else on that subject.  However, even your wiki source states that the subsidies for ethanol production go to the producers of ethanol, and not the grain farmers.  They (the farmers) DO benefit from higher prices for their crops, but not through direct subsidues for the production of corn.

doc

[zeitgeist]

Nice post.  You might find this link interesting.  It is a local farm which has been for sale for over a year:

http://en.wikipedia.org/wiki/Tuttle's_Red_Barn

Last I knew it was still on the market for about 3.5 mil. 

Sad.