How American Agriculture Went Wrong

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From the article…

As with manufacturing, little of this trade imbalance is attributable to intrinsic comparative advantage. “Nearly 60 percent of the apple juice sold in the United States comes from China, even though most of the United States has a climate conducive to apple production,” notes Frerick. He personally remembers growing up in Iowa and passing acres of farm orchards. About 90 percent of the apple orchards in Iowa in 1992 were gone by 2017, replaced by corn and soybeans.

“The overproduction of corn and soy did not arise naturally,” he writes. “It’s the result of massive government subsidies that underpin the American agricultural economy.”

Putting together a coalition for these reforms is tricky because, as Frerick admits, both parties have played a part in creating this mess.

Putin bad! He’s a very, very bad man!!

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Why do we overproduce corn and soy?

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Very good question…I don’t know, but if I were to guess, I’d say that it probably involves government corruption and corporate greed (i.e. crony capitalism).

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Why those specifically? Or why the agricultural protections in general?

Corn (maize) is an interesting case because it has a bunch of different kinds of supports, some of which initially had nothing to do with corn. As you would guess the process is an ouroboros worm: increased demand lead to subsidies, which increases supply and lowers the end user price, leading to finding new uses which increase demand again. The corn producers have a prominent lobbying role, of course.

  • Sugar tariffs
    • Date back to early America
    • led to sweetener substitutions, specifically corn syrup, increasing demand.
  • fuel ethanol requirements (x 2)
    • Increasing demand.
  • Americans like beef. A lot.
    • There is a historical perspective that states that US development can be thought of in terms of Englishmen (Roast Beef of Olde England!) expanding westward in order to find space to raise cattle.
    • We are now feeding beef cows a lot of corn and only finishing on grass (sometimes).
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Interesting timing. John Oliver is covering the farm subsidy situation.

He’s an idiot, so it’s possible he was guided.

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