Farming is an efficient market due to the sheer number of competing agents, that drives the price to be close to the cost.
Markets are cyclic. When demand is higher than supply, prices go up, companies profit more and there's incentive for investment. Within time supply exceeds demand and prices go down, so companies barely make enough to pay off and those which are inefficient go broken and are sold, hopefully, to better managers.
This is generally a good thing but, of course, food/farming is of public interest. If prices go up those with lower income might struggle to feed themselves. And if prices go down poor farmers might struggle to survive and be forced into selling their land. Thus government intervenes.
What separates poor farmers from say poor food truck owners?
The issue with farm subsidies is they don’t actually change profitability long term, they simply result in over production. It’s vastly more efficient to build up a long term storage of surplus say 2 years of corn per American stored at -40C which should last ~100 years. Then let huge swaths of American farmers go bankrupt as you scale back production. This was the basic model hundreds of years ago, they still had famines.
Alternatively you can push productivity while paying pay farmers not to produce anything on their land. This keeps them from going bankrupt and requires fewer resources than excess production. We used to do this, it reduces the risk of famine because productivity can be scaled up quickly.
Finally you can just massively subsidize production and dump the excess on foreign markets, this is really bad for other countries and costs insane amounts of money and still results in excess production even as everyone gets fat. This is where bio fuels come in.
PS: There are also secondary effects as subsidizing farm insurance etc, keeps incompetent farmers in business.
"There are also secondary effects as subsidizing farm insurance etc, keeps incompetent farmers in business."
Any data to back that up? If you're incompetent and your crops repeatedly, then you're not going to be reimbursed enough to make it.
"It’s vastly more efficient to build up a long term storage of surplus say 2 years of corn per American stored at -40C which should last ~100 years."
Any data to back this up? This is a huge volume. Freezers capable of those temperatures are expensive and consume a lot of energy.
"The issue with farm subsidies is they don’t actually change profitability long term, they simply result in over production."
I think farm subsidies need to be changed or reduced, but for a slightly different reason. We are basically subsidizing other countries. A lot of our grains get exported, basically sending the fruits of those tax dollars overseas.
It’s not that people are completely incompetent it’s that some people are better at getting subsidies vs growing food. Essentially subsidies add a parallel skill set which becomes valuable but reduces the impact of being an inefficient farmer. I don’t have hard data, but have been told about people who are better at one side or the other.
> Any data to back this up.
The freezing thing was actually from a study I read. Ultra large freezers are very energy efficient via classic square vs cube scaling. The freezer loses energy on the surface and needs insulation along the surface while it and stores inside the volume. Energy costs of shipping vs colder climate etc.
The idea was a FIFO system along a circular storage system, but I don’t recall all the details.
Re: Freezers, yeah, I agree with this. Volume to surface area doesn't scale linearly[0], so you can build something like a giant sphere or cylinder and lose a relatively small amount of energy.
Commercial freezers are also frequently built with vacuum-insulated panels[1] which have very low thermal conductivity.
It's not crazy to build something very large, like a grain silo, to hold dried grain at a low temperature. That seems fairly plausible as a way to reliably "turn off" subsidies over time.
It sort of reminds me of the strategic oil reserve[2] in the US. Similar idea (boring holes in the earth cheaply via using water to etch into giant salt deposits)
That's because it makes no sense. The US consumes around 12 billion bushels of corn per year. Yes, some of that may be wasteful (corn syrup etc). But trying to store 24 billion bushels of corn without loss is simply impossible. Each bushel is roughly 1.25 cubic feet, so 2 years would be 30B cf. Imagine a storage unit 2 miles long, 2 miles wide, and 300 feet tall.
The point is to feed people not cows or cars, so your estimate is significantly off base.
A bushel of corn is 56 pounds. Assuming a very high 1lb of corn per person per day only gives 2 * 365 * 330 million / 56 * 1.25 = 5.4 billion cubic feet.
Which still sounds insane except AT&T Stadium in Dallas is 0.1 billion cubic feet and cost only 1.3 billion to construct while including all sorts of stuff we don’t need. So roughly one building that size per state. Even if it was almost that expensive vs a more realistic 1/10th, the cost of corn + ethical subsides would hit that in roughly a decade and we would could then spend a 1 billion a year cooling the things while saving money.
PS: Having just one building would look cool but would be a massive single point of failure. Also, you can store dry corn for quite a while even in non cryogenic conditions.
> What separates poor farmers from say poor food truck owners?
If all food trucks and restaurants disappeared off the face of the earth, people would mostly be able to feed themselves. The same is not true for farms.
Markets are cyclic. When demand is higher than supply, prices go up, companies profit more and there's incentive for investment. Within time supply exceeds demand and prices go down, so companies barely make enough to pay off and those which are inefficient go broken and are sold, hopefully, to better managers.
This is generally a good thing but, of course, food/farming is of public interest. If prices go up those with lower income might struggle to feed themselves. And if prices go down poor farmers might struggle to survive and be forced into selling their land. Thus government intervenes.