WTO makes progress in cutting farm subsidies

[KrazyHorse]

The competitive European AgriCorps will cut on their costs (as they'll now have the motivation to do so) by changing/pressuring suppliers, by being even more intensive -since they'll now be allowed, as the end of the subsidies would also be the end of the production quotas- and by cutting in their outrageous profits generously given by the EU.

Makes no sense.

[Ramo]

And anyways, there's the possibility of socialist farming enterprises in the third world to take advantage of these economies of scale.

[Spiffor]

Makes no sense.

The alternative probably makes sense then. They'll just say: "oh, we'll continue like before, trying to have the same margins and the same production processes... Surely this will continue like before"

---

I often hear that we pay our farmers to be inefficient. I understand that our family farmers generally can't face the costs of an adaptation to the world markets. I fail to see how our Agribusinesses couldn't do it. If the Canadian agribusinesses manage to be efficient, I wonder how come the European or American ones couldn't adapt.

[KrazyHorse]

No, what it means is that there won't be as much produce coming from French farms. Only the more profitable fields will be farmed.

Simply claiming that the businesses will find some magic way to be more eeficient doesn't cut it.

[Kidlicious]

KH is right. Agribusiness is still competitive even with subsidies. There is already incentive for efficiency.

[Spiffor]

Originally posted by Ramo
The point, again, is that their produce will be more valuable without supply being massively inflated by our agrisubsidies.

I wouldn't say for sure the supply will stop being massively inflated, for two reasons:

1. Now that it will be profitable to create an agribusiness in the third world, you can expect many new agribusinesses to emerge and compete for the now-open market. This will increase production, until the market balances itself out.

2. I don't know for the US, but in Europe, agrisubsidies come along with production quotas. That's because the EU tries for a long time not to contribute to the fall of world food prices. The more we produce, the lower the overall prices, and the more the EU must pay for subsidies, so it's a sound plan.
Should we remove the agrisubsidies, these production quotas will have no reason to exist anymore. Agribusinesses and family farmers alike won't show restraint in their production. They'll produce with even more heart that their profit per unit will freefall, and they'll try to make up for the loss by selling more units.

In short, I would imagine the suppression of Agrisubsidies will mean an explosion of the supply at short term. The consumer will benefit greatly from this, as the costs for food will dramatically fall (our food in Europe can be seen as ridiculously overpriced - I think the same applies in Japan). The third world agribusinesses that are successful will benefit from this as well. But I don't think the situation will be any better for the farmers in the end.

And anyways, there's the possibility of socialist farming enterprises in the third world to take advantage of these economies of scale.

I wish. But a modern farm needs heavy investments. I don't see the banks lending money to a socialist enterprise, especially in the climate of risk that will characterize the opening of the food market. And this kind of enterprises aren't fashionable with States anymore.

[Spiffor]

Originally posted by KrazyHorse
No, what it means is that there won't be as much produce coming from French farms. Only the more profitable fields will be farmed.

Yep, by agricorps, like today. The difference is that family farmers (those who have the non-profitable fields) will be ****ed. Agricorps, OTOH, can lower their production costs by exploiting their fertile land more intensively, by pressuring or switching suppliers, and by reducing their massive profits.

Simply claiming that the businesses will find some magic way to be more eeficient doesn't cut it.

There is room already. The European Commission has made a set of rules to avoid the production to rise, and the prices to fall. Our agricorps could produce much more, with little extra cost, once these regulations are removed.

[Kidlicious]

Originally posted by Spiffor
In short, I would imagine the suppression of Agrisubsidies will mean an explosion of the supply at short term. The consumer will benefit greatly from this, as the costs for food will dramatically fall (our food in Europe can be seen as ridiculously overpriced - I think the same applies in Japan).

Yikes. Sounds more like the Great Depression to me, but I don't think it would play out like that. You can't really sell more food like that. People can only eat so much.

[Chemical Ollie]

I'm curious how French farmers will respond to this. Whenever they are unhappy with something, they block the highways with farming tools, dump truckloads of tomatoes on Champs-Elyses and throw artichokes at the police.

[Spiffor]

Originally posted by Kidicious
Yikes. Sounds more like the Great Depression to me, but I don't think it would play out like that. You can't really sell more food like that. People can only eat so much.

Exactly what I have in mind.

Recently, most markets have been opened after a technological breakthrough. Personal computers and cell phones come to mind. In these situations, the demand grew pretty much as quickly as the supply. These products are on the brink of reaching maturity, ie the demand begins to be mostly about replacing the old apparels, which explains why these markets have calmed down so much (most "new" demand comes from the rapidly developing countries).

This can't be said with food. Pretty much every human being alive more or less satisfies his demand for food already. Sure, there is room for improvement, with more than a billion of malnourished people, but all in all, the demand is far less extendable than with computers or cell phones.

Yet, the market will be open soon. With a bunch of new competitors who will try to be successful on the market. And with the impending fall of the old order. The technology to produce more food at lower costs is perfectly mastered, and easily accessible anywhere in the world; besides, the formation of the workforce to use this technology is really minimal. The only thing needed to start an agribusiness is some big money.

Unless we make an international regulatory instance that allows production quotas for each country (I don't see that happening), I fail to see why it would be different than with the great depression. It will be a general free-for-all, where the strong will ruthlessly crush the weak.

[Spiffor]

Originally posted by Chemical Ollie
I'm curious how French farmers will respond to this. Whenever they are unhappy with something, they block the highways with farming tools, dump truckloads of tomatoes on Champs-Elyses and throw artichokes at the police.

Well, this is what will probably happen.

[Kidlicious]

One thing's for sure. Prices are going to fluctuate big time. They will fall in the EU and US, and they will rise in the developing world. The rising prices will cause inflation, and the falling prices could cause big problems in the developed world. In the long run things might work out, but things could get a lot worse before then.

[Kidlicious]

Originally posted by Spiffor
Yet, the market will be open soon. With a bunch of new competitors who will try to be successful on the market. And with the impending fall of the old order. The technology to produce more food at lower costs is perfectly mastered, and easily accessible anywhere in the world; besides, the formation of the workforce to use this technology is really minimal. The only thing needed to start an agribusiness is some big money.

The problem is that there is little more farmable land, and the farmable land that is left is pretty unproductive. Productive land could go fallow while people starve or poverty increases due to rising prices.

[Spiffor]

Originally posted by Kidicious
The problem is that there is little more farmable land, and the farmable land that is left is pretty unproductive. Productive land could go fallow while people starve or poverty increases due to rising prices.

In Europe, the regulations forced some fertile land not to be farmed. In Brazil, Argentina, India and China, there is much land that could become production powerhouses if enough capital is invested to modernize the exploitations. And there still is room for improvement in the Eastern European and Russian lands as well.
Besides, many agricultural products don't depend on land anymore. Cattle and poultry are produced in what can be basically called factories. Vegetables are often grown in greenhouses (they grow bananas in Iceland!).

And I'm not even counting the GM revolution that currently doesn't affect the majority of the world. Really, we can produce much, much more food from this planet than we are doing. The question is whether we will do

[Chemical Ollie]

Originally posted by Kidicious


The problem is that there is little more farmable land, and the farmable land that is left is pretty unproductive. Productive land could go fallow while people starve or poverty increases due to rising prices.

A lot of the most productive farmland in Europe is already in fallow, due to over supply. The farmers get compensated to reduce production. If the governments really wanted to, they could use that money they pay to reduse food production to buy the same food from the farmers and ship it as aid to starving regions, but they don't.