Farming a welfare scheme or viable business?

Min

Farming gives work and jobs to over 250,000 people, I'm sure the taxes, PRSI and the new income levy all generates enough to more than cover what the farmer receives from the Irish tax payer.

There is or was a myth that only the PAYE worker pays taxes.....

RedPlanet

smccarrick wrote: »

Udaras grants for the (erstwhile) clothing industry in Gaeltacht areas?

Good point, and it's another one of those things i despise. But it's not quite the same because some of those industries could become sustainable.
And they probably have to submit a business plan to qualify.
Not so with the Disadvantaged Areas Scheme, little hope for those guys becoming profitable while farming scrubland and mountain tops. And apparently, they needn't bother with a business plan.

Government subvention of regional airline routes?

Probably should get axed. I wonder how much subsidising is involved here.

Multinational companies being incentivised to locate here purely because of the 12% corporation tax rate? You could go on and on........

That is not the same thing as being handed tax payer money.

Riskymove

smccarrick wrote: »

Gold mining in the Slieve Blooms, speculative licences for gas/oil drilling in the Corrib basin, provision of gas at less than 1/10 of the open market price to ICI for conversion into fertiliser to support an indigenous fertiliser industry- they didn't quite bribe an oil rig onto Lough Derg- or a diamond mine in the Burren- but by god, they weren't far off.........

but they are viable commercial activities

we are talking about subsidising un-viable activities

Min

RedPlanet wrote: »

Good point, and it's another one of those things i despise. But it's not quite the same because some of those industries could become sustainable.
And they probably have to submit a business plan to qualify.
Not so with the Disadvantaged Areas Scheme, little hope for those guys becoming profitable while farming scrubland and mountain tops. And apparently, they needn't bother with a business plan.
Probably should get axed. I wonder how much subsidising is involved here.

That is not the same thing as being handed tax payer money.

You do know the IDA does hand these companies tax payer's money? The last figure I saw was over €13,200 per worker, as well as the low corporation tax....usually on a plot of land given over by the IDA.

brianthebard

Riskymove wrote: »

but they are viable commercial activities

we are talking about subsidising un-viable activities

But farming is a viable enterprise.

The_Conductor

Min wrote: »

Farming gives work and jobs to over 250,000 people, I'm sure the taxes, PRSI and the new income levy all generates enough to more than cover what the farmer receives from the Irish tax payer.

Its not actually- but thats not exactly what we're debating here......

The big problem is farmers are expected to produce at ridiculously low prices- in order to enrich the shareholders of Musgraves, Tesco, M&S etc. Production costs do not enter the equation- and indeed, a shocking number of farmers are using SFP money to subsidise below cost production for the multiples- because its what they've always done.

The idea of the Single Farm Payment was that it would decouple farming aids from production based incentives- and allow farmers produce that which they had a viable market for. Unfortunately this theory has fallen over at the first hurdle.

The power of the retail chains is the massive stumbling block for farmers- short of somehow creating a parallel distribution chain- we are stuck with it- but government policy has been to the detriment of producers and processors- and in favour of retailors.

Macha

brianthebard wrote: »

But farming is a viable enterprise.

Gah! I was just about to say that.

Also, reducing agriculture down to the purely economic argument ignores other factors (yes, already pointed out but repeatedly ignored)
-environment
-food security
-energy costs

Riskymove

brianthebard wrote: »

But farming is a viable enterprise.

the point being made (he can confirm himself i suppose) is that not all farms would be viable without the subsidies

brianthebard

taconnol wrote: »

Gah! I was just about to say that.

Also, reducing agriculture down to the purely economic argument ignores other factors (yes, already pointed out but repeatedly ignored)
-environment
-food security
-energy costs

At this stage the fact that the above points have been ignored suggests that many people are ignorant of the environmental costs, or simply don't care. Either position is pretty sickening.

Riskymove

RedPlanet wrote: »

What about this whole idea of subsidising people whom are attempting to farm at a location that is unsuitable for farming?
And instead of doing the right thing, subsidising it?

I can't think of a similiar situation regarding manufacturing.

just to clarify...this is what we are talking about...not "farming" per se

Riskymove

brianthebard wrote: »

At this stage the fact that the above points have been ignored suggests that many people are ignorant of the environmental costs, or simply don't care. Either position is pretty sickening.

what do you mean, that there are environmental costs if farming ended?

Macha

Riskymove wrote: »

what do you mean, that there are environmental costs if farming ended?

OK *deep breath*

There seem to be two alternatives to the current situation being proposed her by one side:
1-remove subsidies and if farms get bigger, so be it.
2-remove subsidies and if farming ceases altogether in Ireland, so be it.

1-Bigger Irish Farms
The trend has been, for farms to get bigger in Ireland, especially since the Green Revolution of the 1950s/60s. The Green Revolution saw the introduction of heavy machinery, external inputs such as chemical pesticides and imported fertility in the form of fertiliser. Basically, it was the application of technology to agriculture and output increased accordingly.

Bigger farms need a lot more inputs that smaller farms (relative to yield), in the form of the items mentioned above and other, such as bigger buildings, bigger storage etc. Also, a significant quality of bigger farms is that they are less efficient than smaller farms, for reasons I and others have given above: they may require less labour input but labour has simply been shifted elsewhere to produce the many other inputs now needed in farming. Looking at efficiency purely through labour does not show the whole picture.

Collectively, all these added inputs (plus their manufacture and transportation) have a large impact on the environment in terms of energy used and natural resources extracted. Examples:
-fertiliser needs to be extracted, processed, packaged, transported to farm and distributed on farm, then dispose of packaging.
-large machinery needs to be manufactured, parts assembled, transported to farm, maintained, fuel for use. And so on..

Then there is the impacts of larger farms directly on the environment, such as lower biodiversity due to monocropping. Monocropping has the added disadvantage that it leads to many linear processes (ie something that is waste to them, could have been converted into an input on a mixed farm). Now, this is just waste - another burden on the environment.

2-Outsource Farming to Other Countries
Clearly, this involves added energy expenditure through massively increased distances along which food has to be transported. Add in all the distribution centres needed in Ireland (construction of buildings, embodied energy in construction materials, extraction of construction materials)

Also, to make it worth the foreign business's while to export, our food would probably be coming from a bigger farm (see above).

So it's about extraction of natural resources, additional processes and increased waste all along the chain. That is bad news for the environment.

itsallaboutheL

taconnol wrote: »

OK *deep breath*



2-Outsource Farming to Other Countries
Clearly, this involves added energy expenditure through massively increased distances along which food has to be transported. Add in all the distribution centres needed in Ireland (construction of buildings, embodied energy in construction materials, extraction of construction materials)

Also, to make it worth the foreign business's while to export, our food would probably be coming from a bigger farm (see above).

So it's about extraction of natural resources, additional processes and increased waste all along the chain. That is bad news for the environment.

Not to mention that if number two were to happen we wouldn't even have an ecomomy in which to have a recession........

turgon

taconnol, your not really understanding the economics here. Or to be specific: optimization and efficiency. Your talking about (a) Bigger farms being less efficient thus less value for money and (b) Foreign production being more expensive. Fine. We are not suggesting that (a) & (b) be forcibly enforced at all. We are saying that if these things are cost effective then they should be let happen, and its up to the farmer to choose to expand so if he feels it will serve him financially. Your whole argument about efficiency and that is totally irrelevant.


When it comes to (a) you argue that bigger farms aren't more efficient because they require bigger buildings. What you fail to do here is divide the size of the building by the size of the herd. You're saying that a bigger herd requires a bigger building thus the farm must be making less. Wrong. The extra cattle obviously contribute more revenue.

Its the same will all inputs. You seem to completely ignore the fact that more inputs = more outputs. Yet until the farmer reaches a stage where producing an extra unit of output is unprofitable, then expansion is valuable. In economics speak, he expands until he only just covers the cost of the marginal unit of his output. I think

itsallaboutheL

turgon wrote: »

taconnol, your not really understanding the economics here. Or to be specific: optimization and efficiency. Your talking about (a) Bigger farms being less efficient thus less value for money and (b) Foreign production being more expensive. Fine. We are not suggesting that (a) & (b) be forcibly enforced at all. We are saying that if these things are cost effective then they should be let happen, and its up to the farmer to choose to expand so if he feels it will serve him financially. Your whole argument about efficiency and that is totally irrelevant.


When it comes to (a) you argue that bigger farms aren't more efficient because they require bigger buildings. What you fail to do here is divide the size of the building by the size of the herd. You're saying that a bigger herd requires a bigger building thus the farm must be making less. Wrong. The extra cattle obviously contribute more revenue.

Its the same will all inputs. You seem to completely ignore the fact that more inputs = more outputs. Yet until the farmer reaches a stage where producing an extra unit of output is unprofitable, then expansion is valuable. In economics speak, he expands until he only just covers the cost of the marginal unit of his output. I think

Right before i all agrarian again, i have a question.

I can't explain why large farms are inefficient in Ireland unless people know how Liquid Milk Producers are paid??....

Do any of you economists have a grasp on the practicalities of Dairy Farming??

turgon

The efficiency/inefficiency of large farms is irrelevant. If they are efficient they will evolve so. If they aren't, they wont. There is no point forcing it either way. The most efficient method will reap the best profits for the owners, and the best price for the consumer. Money will speak a lot louder than government policy. Except if said policy is money, of course.

Macha

turgon wrote: »

taconnol, your not really understanding the economics here. Or to be specific: optimization and efficiency. Your talking about (a) Bigger farms being less efficient thus less value for money and (b) Foreign production being more expensive. Fine. We are not suggesting that (a) & (b) be forcibly enforced at all. We are saying that if these things are cost effective then they should be let happen, and its up to the farmer to choose to expand so if he feels it will serve him financially. Your whole argument about efficiency and that is totally irrelevant.

I'm not talking about economic efficiency, I'm talking about efficiency in use of natural resources and natural processes: I'm talking about the environment.

You're really showing your inability to grasp this by bringing everything back to economics when I was specifically answering a question about the environmental impacts.

*Bangs head against brick wall*

Macha

turgon wrote: »

The efficiency/inefficiency of large farms is irrelevant. If they are efficient they will evolve so. If they aren't, they wont. There is no point forcing it either way. The most efficient method will reap the best profits for the owners, and the best price for the consumer. Money will speak a lot louder than government policy. Except if said policy is money, of course.

Sorry but the market is not perfect and it loves to externalise all possible costs, LIKE the environment. You don't seem to be able to factor in the degradation of natural resources and natural processes upon which farming ultimately depends.

I really despair for the general attitude exhibited by many on here that we can just keep taking the environment for granted and everything will keep chugging along - it's nothing short of stealing from future generations.

astrofool

many small farms will generally see much much more duplication of equipment than one large farm. One 2000sqm building can be built using much less resources than two 1000sqm buildings. Same goes for tractors, and other plant machinery.

The largest pollutant in the world is also humans, having more working on smaller farms increases pollution exponentially (more houses needed, more cars, road maintained, sewerage, the list goes on and on).

fly_agaric

donegalfella wrote: »

This post has been deleted.

realism. a realisation that even if you are at a total competitive disadvantage it may be prudent to support production [in some way] lest a day comes where even the fattest purse won't avail you to buy food for your population.
What would Ireland's agriculture look like without any subsidies at all I wonder? I would imagine alot of it would go the way of sugarbeet.

Very few farmers. (larger) pressure on us to compete with the likes of Brazil's land barons for labour costs for tasks that must still be done by a human. A very few large efficient farms, limited to certain things we can do well, producing for export with most of the food that actually eaten here imported. Does that sound reasonable/likely to any "experts" here?

fly_agaric

taconnol wrote: »

You're really showing your inability to grasp this by bringing everything back to economics when I was specifically answering a question about the environmental impacts.

economics explains everything, or it would if you expanded it to include all other subjects!:pac:
Of course, it wouldn't mainly be about money any more then so the people who totemise it would need a new tin god.

brianthebard

astrofool wrote: »

many small farms will generally see much much more duplication of equipment than one large farm. One 2000sqm building can be built using much less resources than two 1000sqm buildings. Same goes for tractors, and other plant machinery.

Wrong. One man who owns a baler will help the community, or at least for a small fee. Equipment is lent between people if something specialised is needed. Tractors are a necessity on a farm over about 15 acres. Again you post total assumptions that you pick out of the air and want to be treated seriously?

turgon

brianthebard wrote: »

Tractors are a necessity on a farm over about 15 acres.

So for 5 farms of 15 acres you need 5 tractors but for 1 farm of 75 acres you only need 1. Right?

Min

astrofool wrote: »

many small farms will generally see much much more duplication of equipment than one large farm. One 2000sqm building can be built using much less resources than two 1000sqm buildings. Same goes for tractors, and other plant machinery.

The largest pollutant in the world is also humans, having more working on smaller farms increases pollution exponentially (more houses needed, more cars, road maintained, sewerage, the list goes on and on).

But most farmers get in contractors to do the bigger jobs, a farmer needs a tractor but not necessarily a lot of machinery.
If anything bigger and bigger farms have more equipment including more than one tractor due to more workers

Farms don't pollute like your local authority does with its sewage, if that was a farmer doing it then it would be on the news every night and you would need more housing in towns and cities and more sewage going into rivers and streams....

itsallaboutheL

turgon wrote: »

So for 5 farms of 15 acres you need 5 tractors but for 1 farm of 75 acres you only need 1. Right?

you think a 75 acre farm is big???

turgon

itsallaboutheL wrote: »

you think a 75 acre farm is big???

Where did I suggest that?

itsallaboutheL

turgon wrote: »

Where did I say that?

My apologies it was atrofool.

Still on the same point. 15 acres isn't a farm, it's a lawn.

turgon

Indeed. But brianthebard still proved the point that asfaik he was trying to refute earlier: that large farms are more efficient economically than small farms in their use of inputs.

taconnol: Im still considering the environment btw.

itsallaboutheL

turgon wrote: »

Indeed. But brianthebard still proved the point that asfaik he was trying to refute earlier: that large farms are more efficient economically than small farms in their use of inputs.

taconnol: Im still considering the environment btw.

Brian was using an extreme example...

Macha

turgon wrote: »

taconnol: Im still considering the environment btw.

Glad to hear it

How?