Tuesday, May 14, 2002

Questions on the Farm Bill-There's been a bit of blogfire directed at the latest Farm Bill. I haven't digested the bill as of yet, but it appears to have reinstituted price supports for most basic crops. If done right, that might not be a bad thing. This runs counter to my general dynamist instincts, but agricultural price supports might be in the long-term best interests of the country. If left to free-market constraints, the ag market might underproduce and create famine conditions in bad production years. If price supports are sufficiently high, the market will lean towards over-production, as the government will by the crop for at least $X/bushel, thus minimizing the famine risk. In addition, some grain left over in government-sponsored silos from past years will help provide extra food for the bad years. This isn't the most economically efficient way to do things, but it will lessen the risk of famine. An inefficient surplus is better than an efficient famine and thus can be seen as national food insurance. There are very few other (if any) industries that would require such support. If the auto industry went down for the count, we could survive for a while with the existing stock of cars and trucks. If Intel and AMD went belly-up at once, we would find a way to make do with the existing stock of computers. We can cannibalize auto parts and computer parts, but I don't think we're ready for Ag Secretary Lecter.

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