Re: 286 billion Farm Aid Bill for 2008
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The markets work perfectly without govt. intervention imo. If one year not enough potatos are produced, or even if farmers suspect there won't be enough planted you can bet your ass that those farmers will increase their acreage to try and take advantage of the high potato prices (because they are greedy capitalists as well) till the market gets saturated and the price falls to a level right about where farmers are break even. It's Econ 101 and even backwoods redneck farmers like me can understand it.
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well
a) there's a food shortage right there in your example
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No, there isn't. The price system ensures that there is no shortage. If in one year there is some sort of drought or disease that affects potato crops and the supply drops, that is not a shortage. A shortage occurs when there are more buyers willing to pay the going price than there is supply at that price. This can only happen when the price is capped, because otherwise buyers will bid up the price until the competing buyers have dropped out. So if there is a drop in the supply of potatos and demand stayed the same, the price of potatos and all products that use potatos will go up. This will automatically cause consumers to curb their consumption of potatos, or if they value potatos and potato products more than other products, they will curb their consumption in other areas. Likely they will do a combination of both.
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b) I mean I'm sure the program is more than is necessary, but in theory farmers overproduce for the public good, and then the gov compensates them from the public good. I don't see anything wrong with that. undoubtably it should be restricted to staple foods / staple animal feed maybe.
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But they don't overproduce for the public good. The public must pay higher prices, meaning they have less money left over for other purchase, or that they must purchase less agricultural products than they would like to in the absence of the higher prices. This makes the public worse off, not better off.
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