Comments by "Xyz Same" (@xyzsame4081) on "Styxhexenhammer666"
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* part 2 of 2 These costs can be: pollution (manure, use of chemicals), using up of resources (that will not be replenished in millions ! of years until some tectonic/volcanic events form new extraction or mining sites). - It is very expensive, if you want to have CHEAP fodder like soybeans or cheap palm oil for the food industry - it will require the U.S. government / military to support many dictatorships /authoritarian regimes worldwide.
Those dictatorships will promote huge farms possessed by the local ruling class (the indiginous people are driven out or killed) where they grow export crops in monocultures. Small farmers and farm workers will be disregarded, they do not have the ear of the corrupt government, if they protest they will be crushed. The U.S. is very willing to help out in case of an uprising - or even mild reforms like the proposal of land reform in Chile, see the First 9/11 in Chile in 1973. All of Latin America since 1900, Indonesia, Philippines, the banana wars, Cuba, Haiti.....
Agriculture on plantations versus familiy farms are completely different economic scenarios - the crops will differ as well (monoculture with poor farmworkders vs. more diversity, production also for local needs by independent farmers, and self sufficent local communities).
The plantation / latifundia model does not work in a FUNCTIONING democracy. The citizens will demand a solution that works for small farmers and the farm workers.
That means the cheap fodder (necessary for domestic meat and dairy production), soy, oranges, coffee, palm oil,...... - and FOSSIL FUEL - cost the U.S. a lot in military spending. They also deprive the developing nations of the chance to improve their economy AND the majority of U.S. citizens and smaller enterprises miss out on their future potential customers (if most of the population stays poor and is exploited, they will never be able to afford First World products. Nor will it be safe to spend vacations in these countries).
The status quo "requires" 680 bn $ REGULAR U.S. military budget and 1,2 trillion ** for all the agencies (incl. FBI, VA, CIA, ...) to maintain the political conditions to have that cheap fodder, those cheap agricultural products - and ALSO the necessary cheap fossil fuel. Fertilizer production (nitrogen) needs a lot of energy, if oil prices rise, so do the prices for agricultural products, especially if they are produced in a non-organic manner).
Growing food in glass houses requires an awful lot of energy - even more than long transport distances.
* Insane military budget: not all is related to the agenda of cheap resources, but a lot - and w/o the U.S. wanting to dominate the oil region, there would not have been the wars in the Middle East, which fuelled International terrorism (and 9/11). Terrorism is the pretext for the surveillance state. The mass surveillance does not only cost civil liberties - it is also insanely expensive (and a lucrative business model for some).
Then there are health costs, GMO's and the related herbicides (Glyphosate). Now it cannot be suppressed anymore that they very likely cause cancer - the health costs do not show up in the product either.
Loss of valueable top soil due to industrial farming.
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part 1 of 2 the HYPOTHETICAL FREE MARKET only works when all COSTS (* see part 2) are born by the producer (who adds them on the sales price). Our production model does not have transparent costs, especially not in the food production.
The HIDDEN COSTS that are slapped on all of society (and many future generations to come) are huge and do not show up in the production costs or sales prices. If you count them in, old-fashioned, traditional, more or less "organic" food production would beat Big Ag.
Food - a valuable resource - would need to to cost more - on the other hand housing which takes up a big chunk of the budgets of regular citizens, could be so much more affordable (see QE for the people - also called Sovereign Money it is explained on positivemoney(dot)org. Or low interest, long term loans for social housing projects or regular homeowners. - Cheap money has been around for a long time - just not for the regular folks. The financial sector and large investors are getting cheap money thrown at them (QE for banks, low interest rates by the Fed).
To keep the food AFFORDABLE (not cheap !) there are several possibilities: subsidies for farmers, or a sort of Basic Income to be used only on domestic agricultural products (alternative currency). Or higher wages.
Another reason why the market is not free: the very few left retailers have so much more power now than the producers. Walmart for instance (and not only with dairy products, the de-listing of Rubbermaid is notorious and lead to their demise).
Also not enough customers will be willing and insightful enough to voluntarily pay the higher price because it is good for the local economy (and makes sense if you look at the large picture). The consumers have been trained in the U.S. to go after the "cheap price", even more than in the wealthy European countries.
And it would of course exclude those who would like to buy local and / or organic but cannot currently afford to pay the higher prices.
Companies like Apple or Nike invest a lot of money in marketing to get their customers to pay more for the brands. Investing a lot of money to make even more money is not possible for smaller producers (and frankly a waste of money on marketing, how many middlemen do we need, to get good milk or cheese ?). Farmers market are a small niche (they help many farmers for sure), but the mass volume is elsewhere and you cannot fix the system with the fringe solution.
Small farms also provide income to people in rural areas, people can continue to live there, they will have disposable income. If many have to give up, next thing to go will be the schools, shops, doctors, the libraries, the young people leave (for the cities, where they already sit on each other and pay high rent). There are indirect cost of employment, and growth of cities attached if the "market" prefers the seemingly cheap products of Industrial farming.
Consumers cannot know the many details of all the production processes of all the goods they consume - even if they wanted to. The price is a very simple, straightforward trait of a product. All the indirect complicated benefits or costs are much harder to communicate, certainly not in the split second it takes to look at the price tag. And often it is impossible to put an exact price on the hidden effects and costs.
But the effects are there - and who if not the government would be able to STEER in a direction that is beneficial (but complexer) for all and over longer time.
I am not for or against "free market" - whatever TOOL works best. And to me it is a tool not an article of faith. Whatever works: To get the stuff produced, distributed, made available. - and to let people EARN and SPEND an income.
In a system where you have subsidies there is an incentive to "play the system". In a market economy (to avoid the term "free market") there will be rigging as well - by big players like Walmart for example who will squeeze the food producers (often large companies) who will in turn squeeze the farmers even worse (who undercut labor if they have workers - and they have no choice if they want to do that or not - not when they want to survive).
In large, complex, diversified; modern economies THERE WILL BE INEFFICIENCIES no matter what. So if one must accept some "losses", than it is better to have the inefficiencies at the bottom of the "food chain". Meaning the farmers, the small shops, the local communities or the consumers (like with the idea of an earmarked Basic Income for food).
Many smaller farmers (entrepeneurs) are on the surface less efficient than one huge farm (with dependent and thus underpaid farm workers). And maybe subsidized small farmers get a little more money for their milk than absolutely necessary ? - So what ! They are not going to rake in the millions (not when we deal with family farms). They are going to have a middle class income (good DISPOSABLE INCOME) and will keep the region vibrant.
If subsidies are given to LARGE entities, expect a few people getting rich (using the workforce of underpaid workers - less disposable income), expect also more rigging, because the subsidies result in concentrated wealth which is used for lobbying to get an ever higher R.O.I. Example: sugar industry in Florida. Or Cotton, there are huge subsidies and they go to VERY FEW farms).
I read that smaller farms in the U.S. are bought up by investment funds - the vultures of Wallstreet in charge of the land used for food production - what could possibly go wrong ?
Big Ag SEEMS to be more efficient - but it is only when you squander the resources of mankind in a 100 - 200 years. Phosphor for example is a rare element, a few mining sites exist, mainly in Northern Africa, we should guard them like a treasure. Nitrogen is plentyful (in the air) but needs a lot of energy for production. In organic farming they use plants like beans. Bacteria in the roots help to catch the Nitrogen, with those plants it is possible to maintain, or even improve soil fertility.
Instead we use these elements in easily soluble (= instant effect) fertilizer. Big Ag relies on that. In organic agriculture (= the traditional and sustainable ! way ) the nutrients are slowly and steadily released.
If we were reasonable and "conservative" we would carefully avoid the washing out of valuable top soil and nutrients. And very sparingly add the valuable elements like Phosphor (over many years even with careful management some will be lost so the mines in North Africa are a godsend).
Our crazy economic system used Phosphate even in washing powder (in Europe until the 80s / 90s), meaning way too much phosphor in the rivers, which triggered the growth of algae, finally resulting in severe lack of oxygen - "dead" rivers.
Since Phosphate has been substituted for other chemicals (which do the job for the laundry equally well) the rivers have become much cleaner.
I heard there are HUGE dead zones now in oceans - washed out nutrients and/or sewage pollute the rivers, then they reach the ocean, then there is exploding growth of algae, which uses up all oxygen in the water. It seems the currents keep the dead part of the water body in place. (A huge storm might mix that up and bring some fresh air into the system as well - but it impacts fishery negatively as well. And we do not even know about the impact on life in Deep Sea).
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