Farming a welfare scheme or viable business?

Cran

just came accross this arguement, and think alot of the thoughts are valid on bith sides but the core is not. Agriculture has been forced indirectly and directly over the past 30 years or more in a food producing direct causing more specialisation accross farms. There has been a slow drive towards removing farms from grant aid, and correctly to but cannot expect this to just end overnight. The farmers have been directed a certain way by the authorities and they need time to be allowed to adjust their business for the change in requirements. No other sector has had so much interferance from authority than farmers in the last 4 to 5 decades. The other arguement that always comes up is that my business doesn't get grants. In the majority of sectors this is rubbish. I work in an IFSC company and they benefit from the 12% corporation tax as does most companies people work in.

nesf

Tipp Man wrote: »

I know all of what your saying but historically has Ireland ever had a 3-5% unemployment rate i.e full employment outside of the recent fictional boom?? Very few if any countries in the world can boast this as their normal unemployment rate. how long do you think it will take for the current unemployment rate to get back down to those levels?/ IMO never unless we get mass emigration again

My point is that your idea is a theoretical and not a practical one IMO

Equally we had an artificially high period of unemployment through the 70s and 80s due to the Oil Crises and fiscal mismanagement. You don't want a 3-5% unemployment rate because it drives inflation upwards, I really don't want unemployment to go back down to those levels because it brings its own set of problems.

You don't need full employment for an economy to absorb workers from one sector into another, since 1900 that's been exactly what's happened here, the percentage of people working in agriculture has more than halved since then but it didn't have a serious long term effect on unemployment numbers. It's not really a theoretical idea, economies have been doing these kinds of sectoral shifts for well over a century at this point. In the short term it is painful because people need to reskill but in the medium term it tends to balance out.


Edit: In the short term it's awful for people, this I fully agree with and often they have to move to find work as well as reskill but the evidence is that most people do do this. This isn't free market fundamentalism, it's simply human nature. If all the work in the sector you used to work in dries up most people will look for an sector that has jobs and try to get one there. This doesn't happen instantly and it's tough on the people involved and the State definitely has a place in making it cheaper and easier for these people to reskill. It's not a theoretical idea but what's empirically observed. Even anecdotally look at what's happened over the past century. My great-grandfather was a farm labourer with no land of his own moving from farm to farm helping out with harvests and whatnot. My grandfather did that for a while but ended up driving bulldozers because there was more steady work doing that by that time period. My father is a salesman/manager. People and families adapt to what work is available and aren't "fixed" by the career they started with or that their parents had.

roosterman71

I haven't read the full thread (its been a long and largely frustrating day), but I would like to comment on one thing a previous poster mentioned.

He/she said that if farmers aren't happy with the price they get for their produce then they shouldn't sell (not an exact quote but a good summary). What do people think they are to do? They can't hold onto milk (it gets sour) and must be disposed of. live animals ready for killing cost money everyday in extra feed and maintenance. Farmers have to sell their produce, holding onto it largely isn't an option.

Now this isn't entirely the fault of co-ops or factories (they do contribute), but mainly the supermarkets who are pushing suppliers to cut costs (another arguement I'm sure)

Farming in Ireland has been the backbone of the country for most of its history. This changed in the last couple of decades. In the future, with the way businesses are failing, agriculture may return. But not if its controlled by a small group with massive holdings. I think its better for farming to receive grants and subsidies and get people producing exports, than to pay them to sit on their arses (just like at the amount of lazy scum on the dole for their lives)

Just my 2 cents. Dismiss it at will

turgon

Tipp Man wrote: »

Well i'm allergic to civil and public servants but i still have to pay their bloody wages.

What a silly, silly, silly comparison, in fairness. No matter how much you may dislike the civil service they still do things for you.

Unlike Dairy and Cattle Farming subsidies. My mother eats neither dairy products (allergic) nor beef products (diet) and yet she still has to pay for these things. How stupid is that?

Tipp Man wrote: »

You would think that subsidies from Europe would be welcome in this country given the current economic plight of the country, they should be seen as a major export for this country.

The "take them for what theyve got" attitude that got us into the recession has survived it somewhat I see. Sure its all right once were not paying for it.

If I did not have an idealogical stance against rolleyes I would include one here.

Tipp Man wrote: »

Also can you please provide back up as to how Irish farmers are wasting the subsidies they receive seen as though they are using them for survival?? is survival of farmers a waste in your eyes??

Where did I say that?

Cran wrote: »

I work in an IFSC company and they benefit from the 12% corporation tax as does most companies people work in.

Perhaps you should consult the dictionary definition of 'grant'

ninty9er

taconnol wrote: »

Stop trying to dismiss things you don't understand as not relevant.

Pot, let me introduce you to Kettle:rolleyes:

itsallaboutheL wrote: »

As expansion occurs the cost per unit price increases if anything.

So for example if it takes me 3 hours to get 50 cows through a milking parlour (1 each way and 1 there) by expanding to 100 cows it will still take 1 hour each way to get there and an extra hour to milk. So by increasing the herd (and output) 100%, I only need to increase working hours by 33%. So that's twice the income and only 1/3 more cost (apart from the initial capital outlay on cows and facilities). So by investing in your business, you can increase productivity.

Farmers are perfectly positioned to demand milk prices. Ever heard of OPEC?

Tipp Man wrote: »

not exactly a lottery windfall is it particularly when its being eaten into by costs

Well fix the cost model rather than complaining there isn't enough income. If you can't (or are unwilling) to negotiate a better income, cut your costs. If you can't do that....sell up and get out of Dodge.

Tipp Man wrote: »

You would think that subsidies from Europe would be welcome in this country given the current economic plight of the country, they should be seen as a major export for this country. Apparently not

Subsidies are very welcome. I don't think anyone is against them, just their distribution. For 80% of all EU sibsidies to go to one sector is moronic.

taconnol wrote: »

Um...donegalfella, you do know that CAP was brought about in post-war Europe to ensure sufficient food supplies for the European population?

And I suppose it's still very important given that France is going to go to war with Germany any day now:rolleyes:

Tipp Man wrote: »

Firstly fella you are completly wrong, the milk supply is fixed by the milk quota introduced retrospectivly in 1984

It is CAPPED, not fixed.

Many of the arguments in favour of CAP here would be more at home in a septic tank.

itsallaboutheL

ninty9er wrote: »

Pot, let me introduce you to Kettle:rolleyes:


So for example if it takes me 3 hours to get 50 cows through a milking parlour (1 each way and 1 there) by expanding to 100 cows it will still take 1 hour each way to get there and an extra hour to milk. So by increasing the herd (and output) 100%, I only need to increase working hours by 33%. So that's twice the income and only 1/3 more cost (apart from the initial capital outlay on cows and facilities). So by investing in your business, you can increase productivity.

You make that sound so easy

nesf

Guys, please attack the post not the poster. There is no need for it.

Tipp Man

turgon wrote: »

What a silly, silly, silly comparison, in fairness. No matter how much you may dislike the civil service they still do things for you.

Unlike Dairy and Cattle Farming subsidies. My mother eats neither dairy products (allergic) nor beef products (diet) and yet she still has to pay for these things. How stupid is that?

Look i haven't been to a hospital in 20 years(touch wood) so does that mean that i can say, oh i don't get sick i'm not paying tax to pay for hospitals, of course not. your taxes are determined by the government and so is their expenditure. Does your mother eat any grain products?? your tax money is going there 2.

Macha

ninty9er wrote: »

Pot, let me introduce you to Kettle:rolleyes:

Example?

ninty9er wrote: »

And I suppose it's still very important given that France is going to go to war with Germany any day now :rolleyes:

I was making the point to donegalfella that the introduction in CAP in 1957 was not the work of today's farmers.

I think a lot of people here are assuming that farmers are pro-subsidies, whereas a lot of them see them as the only chance they have, given the strangle-hold that supermarkets have on the price of produce. I would like a Food Ombudsman to be set up here, as is happening in the UK. I don't like the fact that Tesco has so much power: I have heard the figure that for every €4 spent in Ireland, €1 is spent in Tescopoly.

Tipp Man

ninty9er wrote: »

So for example if it takes me 3 hours to get 50 cows through a milking parlour (1 each way and 1 there) by expanding to 100 cows it will still take 1 hour each way to get there and an extra hour to milk. So by increasing the herd (and output) 100%, I only need to increase working hours by 33%. So that's twice the income and only 1/3 more cost (apart from the initial capital outlay on cows and facilities). So by investing in your business, you can increase productivity.

Farmers are perfectly positioned to demand milk prices. Ever heard of OPEC?


Well fix the cost model rather than complaining there isn't enough income. If you can't (or are unwilling) to negotiate a better income, cut your costs. If you can't do that....sell up and get out of Dodge.


Subsidies are very welcome. I don't think anyone is against them, just their distribution. For 80% of all EU sibsidies to go to one sector is moronic.


And I suppose it's still very important given that France is going to go to war with Germany any day now:rolleyes:


It is CAPPED, not fixed.

Many of the arguments in favour of CAP here would be more at home in a septic tank.

Sorry but there are plenty of holes in your arguement

1) it doesn't matter if your herd is 50 100 or 1000 if milk is the price is under the cost of production you are making a loss, you can't simple just double your herd size, you need to make invesment, land buildings infastructrure etc which takes time and serious cash, your rather poor example says that income will increase but so will labour costs and fixed costs thus making the produciton costs even more and bigger losses.

2) I find it funny that you want farmers to act as a cartel, maybe they should and let people who have no value on food realise how good they have it

3) only 42% of the EU budget is spent on CAP, where is the rest going??

4) you completely miss the point of food security and as has been hhighlighted in prevoius posts there are more issues to it than just political eg environmental sustainability

5) you can call it capped if you want but as long as the quota is in place then the supply of milk in Ireland is FIXED

6) Well some of the arguements against CAP are just the greatest load of rubbish i've ever heard and show a complete lack of knowledge and understanding of both agriculture and small business and are just make it up as you go along stuff

Tipp Man

itsallaboutheL wrote: »

You make that sound so easy

Its easy when you haven't a clue how things work in the real world. the amount of crap written by people who have no clue is ridiculous and the worst thing is when you try to have a reasoned discussion they either won't answer your quesiton or just make up some rubbish

Tipp Man

nesf wrote: »

Equally we had an artificially high period of unemployment through the 70s and 80s due to the Oil Crises and fiscal mismanagement. You don't want a 3-5% unemployment rate because it drives inflation upwards, I really don't want unemployment to go back down to those levels because it brings its own set of problems.

You don't need full employment for an economy to absorb workers from one sector into another, since 1900 that's been exactly what's happened here, the percentage of people working in agriculture has more than halved since then but it didn't have a serious long term effect on unemployment numbers. It's not really a theoretical idea, economies have been doing these kinds of sectoral shifts for well over a century at this point. In the short term it is painful because people need to reskill but in the medium term it tends to balance out.


Edit: In the short term it's awful for people, this I fully agree with and often they have to move to find work as well as reskill but the evidence is that most people do do this. This isn't free market fundamentalism, it's simply human nature. If all the work in the sector you used to work in dries up most people will look for an sector that has jobs and try to get one there. This doesn't happen instantly and it's tough on the people involved and the State definitely has a place in making it cheaper and easier for these people to reskill. It's not a theoretical idea but what's empirically observed. Even anecdotally look at what's happened over the past century. My great-grandfather was a farm labourer with no land of his own moving from farm to farm helping out with harvests and whatnot. My grandfather did that for a while but ended up driving bulldozers because there was more steady work doing that by that time period. My father is a salesman/manager. People and families adapt to what work is available and aren't "fixed" by the career they started with or that their parents had.

I agree full employment is far from an ideal situation. Your point is of course correct regarding the reskiling of the workforce, however in my original post i was refering more to the short term (I didn't state this).

I would make 1 point however farming and other small businesses for that matter have significant personal, emotional and personal financial commitments to their businessess, which means that they will do almost anything to keep them afloat, this means that they are extremely reluctant to let them fail, leave them/sell them and in turn to reskill, much more so than your average PAYE worker who has little personal and financial attachment (large investment) to their jobs. They are much more likely to do a part time job and keep the farm going, as has hapenned in a massive way in the last 5-10 years

turgon

Tipp Man wrote: »

Its easy when you haven't a clue how things work in the real world.

No I understand pretty well. You want people to pay for things they have never and will never use under any foreseeable and imaginable circumstance. And, seems as you mentioned it, my mother is also coeliac so shes allergic to wheat and she generally eats imported bread. So shes paying for something again that she will never use.

But I suppose she benefits because society benefits, right?

I think we can all be rest assured Tipp Man wont listen to anything we say in any case. Myself, nesf, ninty99er and donegalfella have all tried to use economic arguments but alas, farming is "different." Thus is the economics book once again swept under the carpet. Not of course that we will be informed why economics wont work here. We must simply accept that it wont work. Its a pity that debates about economics so routinely dismiss said science.

brianthebard

Since when has coeliacs been an economic argument?
And I don't think Tippman is arguing that people should pay for food they don't eat, only that farmers should be reimbursed for their work and produce. At the minute this is not the case and so many have to depend on subsidies. Myself and I think most others on this thread who sympathise with the farmers are not in favour of subsidies, and would happily see them removed if the factors damaging the agricultural sector were properly regulated and dealt with. But you've probably got an issue with regulation too so I doubt you'll agree.
*wikis coeliac economists*

ninty9er

Tipp Man wrote: »

Sorry but there are plenty of holes in your arguement

1) it doesn't matter if your herd is 50 100 or 1000 if milk is the price is under the cost of production you are making a loss, you can't simple just double your herd size, you need to make invesment, land buildings infastructrure etc which takes time and serious cash, your rather poor example says that income will increase but so will labour costs and fixed costs thus making the produciton costs even more and bigger losses.

Capital is a one off cost, therefore has a very long payoff period. If you are in fact a farmer, I would suggest you talk to a business consultant, because your understanding of business is quite poor based on that statement.

Fixed costs decrease per unit added, as do labour costs until enough units are added to require an extra pair of hands. Variable costs like grain and fertiliser will increase, but stay static per unit.

The overall result is more money left once the bills are paid.

Tipp Man wrote: »

2) I find it funny that you want farmers to act as a cartel, maybe they should and let people who have no value on food realise how good they have it

Maybe those who have no value on money should get an idea of how the rest of the country lives.

Tipp Man wrote: »

3) only 42% of the EU budget is spent on CAP, where is the rest going??

ONLY...You can't be serious opening that sentence with the word only.

Tipp Man wrote: »

4) you completely miss the point of food security and as has been hhighlighted in prevoius posts there are more issues to it than just political eg environmental sustainability

Environmental sustainability can be managed quite well. There's whole PhD courses on it. Contact a research PhD student in the area, who I'm sure will give you many, many different options. There are solutions to every problem if only people would be open to them.

Tipp Man wrote: »

5) you can call it capped if you want but as long as the quota is in place then the supply of milk in Ireland is FIXED

Irish farmers could cut milk production, they just can't exceed their quota...that's what quotas are!

Tipp Man wrote: »

6) Well some of the arguements against CAP are just the greatest load of rubbish i've ever heard and show a complete lack of knowledge and understanding of both agriculture and small business and are just make it up as you go along stuff

And people wonder why small businesses the country over are going out of business. It's not because people like me have new ideas for them, it's because the people that own them refuse to change to facilitate the modern marketplace.

turgon

brianthebard wrote: »

*wikis coeliac economists*

Perhaps your time would be better spent following the threads you comment on rather than trawling through Wikipedia.

Remove subsidies and farmers will be reimbursed, btw, through higher prices for the consumer. Theres an economic argument there that Ive mentioned a few times.

itsallaboutheL

ninty9er wrote: »

Capital is a one off cost, therefore has a very long payoff period. If you are in fact a farmer, I would suggest you talk to a business consultant, because your understanding of business is quite poor based on that statement.

Fixed costs decrease per unit added, as do labour costs until enough units are added to require an extra pair of hands. Variable costs like grain and fertiliser will increase, but stay static per unit.

The overall result is more money left once the bills are paid.

There are so many variables that you are never going to understand, i actually have a pain trying to work out the best way to go about disproving your arguement.

Do you have any concept of what is required to significantly increase a Dairy Herd??

Permabear

This post has been deleted.

Min

Tipp Man wrote: »

if farming is so bloody good why don't some of you from suburbia up sticks and buy a farm for yourselves, see how much money they are making then

I agree they should, or if they are employed by the state they should look to earn the average income of a farmer.....

Maybe they are being paid by the tax payer for their job or in an IDA job that was created by a subsidy to the company employing them.

This is from the Oireachtas 11 years ago - Over £18 million is spent every day by IDA Ireland supporting companies in the economy, which is the equivalent of over £6 billion per annum.

How it changed over the years I do not know but do people in towns or cities who work in companies supported by the IDA not think they are in fact receiving a subsidy from the taxpayer through their employment at an IDA backed company?
For the 6 year period 1999 -2005 the cost per IDA job was 13,229 or the cost to the state of over 1.7 billion
http://www.idaireland.com/news-media/publications/annual-reports/accesible-versions/IDA_AnnualReport2005_Delivered_1stAug06/statistics.html

Agriculture doesn't cost the state that much for a similar number of people employed directly as farmers. Should we remove the IDA subsidy and send those jobs elsewhere afterall it something like beef production needs subsidies wouldn't it be better to get that Brazilian beef, they don't have our high standards and they can cut down some forests but its better than a subsidy for the Irish farmer, right?
Same for your average IDA backed company, lets get rid of them and along with former farmers who we think should get no subsidy.
Lets puts another 300k to 500k people more on social welfare, its what the country needs, more social welfare, less subsidies....

itsallaboutheL

Min wrote: »

Lets puts another 300k to 500k people more on social welfare, its what the country needs, more social welfare, less subsidies....

Of course the farmers won't be entitled to claim Job Seekers Allowance;)

ninty9er

Min wrote: »

I agree they should, or if they are employed by the state they should look to earn the average income of a farmer.....

Maybe they are being paid by the tax payer for their job or in an IDA job that was created by a subsidy to the company employing them.

This is from the Oireachtas 11 years ago - Over £18 million is spent every day by IDA Ireland supporting companies in the economy, which is the equivalent of over £6 billion per annum.

How it changed over the years I do not know but do people in towns or cities who work in companies supported by the IDA not think they are in fact receiving a subsidy from the taxpayer through their employment at an IDA backed company?
For the 6 year period 1999 -2005 the cost per IDA job was 13,229 or the cost to the state of over 1.7 billion
http://www.idaireland.com/news-media/publications/annual-reports/accesible-versions/IDA_AnnualReport2005_Delivered_1stAug06/statistics.html

Agriculture doesn't cost the state that much for a similar number of people employed directly as farmers. Should we remove the IDA subsidy and send those jobs elsewhere afterall it something like beef production needs subsidies wouldn't it be better to get that Brazilian beef, they don't have our high standards and they can cut down some forests but its better than a subsidy for the Irish farmer, right?
Same for your average IDA backed company, lets get rid of them and along with former farmers who we think should get no subsidy.
Lets puts another 300k to 500k people more on social welfare, its what the country needs, more social welfare, less subsidies....

500k people producing things there's a DEMAND for that makes them economically VIABLE to produce is a lot different to 25,000 people getting subsidies to produce stuff that can be bought in cheaper from elsewhere.

ninty9er

itsallaboutheL wrote: »

Do you have any concept of what is required to significantly increase a Dairy Herd??

Land, money, time and effort. Land is the only variable that doesn't apply to any other form of business as much as it does farming. The others are ordinary everyday business requirements.

Of course the regulation doesn't make matters any easier, but it doesn't help taxi drivers or tobacconists either.

itsallaboutheL

ninty9er wrote: »

500k people producing things there's a DEMAND for that makes them economically VIABLE to produce is a lot different to 25,000 people getting subsidies to produce stuff that can be bought in cheaper from elsewhere.

Does Quality not bother you at all??

ninty9er

itsallaboutheL wrote: »

Does Quality not bother you at all??

Have you any proof that the food quality coming from every other country is inferior to such a degree that we shouldn't at least have the choice of buying it?

I know farming quality is high in Ireland in general, but it's how it tastes and cuts that bothers me more than where it came from, as long as I do know what country it came from.

Min

turgon wrote: »

Perhaps your time would be better spent following the threads you comment on rather than trawling through Wikipedia.

Remove subsidies and farmers will be reimbursed, btw, through higher prices for the consumer. Theres an economic argument there that Ive mentioned a few times.

Back in the 80's farmer gets 21 cent a litre - milk in shops a lot cheaper
Today farmer gets under 21 cents a litre - milk much more expensive in shops.

It is not the farmer who will get a higher price, in fact milk prices would not increase, you have to look at the global price for milk, it is on the floor right now.

Where is the likes of Tesco or other big supermarket chains handing back more to producers?
They just pocket it all, you have too much trust in the system. Farmers are at the bottom of the food chain.

fly_agaric

donegalfella wrote: »

This post has been deleted.

donegalfella, why is it that govt's (...that can afford to do so) subsidise in some way areas of their agriculture that are not be competitive vis a vis other nations?

What prompts this crazy behaviour?

Are they all wrong? Are they all stupid? Looneys perhaps? Is there, maybe, something somewhat different about food - compared to saaay,...cars or toasters??:P

Min

ninty9er wrote: »

500k people producing things there's a DEMAND for that makes them economically VIABLE to produce is a lot different to 25,000 people getting subsidies to produce stuff that can be bought in cheaper from elsewhere.

Yeah cheaper because the standards are lower.

Don't know about you but I have issues when it comes to food which is more important than an IDA job.
Do you think subsidies should go and instead a charge be put on EU food as they set standards that makes that other food cheaper.

We can import milk from outside the EU with hormone boosters to make the cows milk more.
More beef or cereals from Brazil, who cares their standards are poor and they cut down rainforests, its cheaper so its ok.

ninty9er

Min wrote: »

Yeah cheaper because the standards are lower.

Food has to meet minimum standards. It's up to me to decide if I want to buy a car with a 3* Euro NCAP or a 5* Euro NCAP, one with a combined CO2 of 100g/km or a similar model with a combined CO2 of 155g/km. If I want the best I'll pay for it, but I don't see why everybody should be forced to subsidise these methods, when they'll gladly eat GM crops or a battered cow (which is maybe, but not necessarily a less nutricious or tasty cow).

Min wrote: »

We can import milk from outside the EU with hormone boosters to make the cows milk more.
More beef or cereals from Brazil, who cares their standards are poor and they cut down rainforests, its cheaper so its ok.

And I suppose the Brazilians are going to stop chopping down forests because a negligible percentage of the Irish don't like it. I know I certainly don't think it's a good idea to cut down rainforests, but that is Brazil's policy and I'll be damned if I'd want my government doing stuff to please anyone other than me and my fellow harped passport holders, so why should the Brazilians.

Permabear

This post has been deleted.

Min

ninty9er wrote: »

Food has to meet minimum standards. It's up to me to decide if I want to buy a car with a 3* Euro NCAP or a 5* Euro NCAP, one with a combined CO2 of 100g/km or a similar model with a combined CO2 of 155g/km. If I want the best I'll pay for it, but I don't see why everybody should be forced to subsidise these methods, when they'll gladly eat GM crops or a battered cow (which is maybe, but not necessarily a less nutricious or tasty cow).


And I suppose the Brazilians are going to stop chopping down forests because a negligible percentage of the Irish don't like it. I know I certainly don't think it's a good idea to cut down rainforests, but that is Brazil's policy and I'll be damned if I'd want my government doing stuff to please anyone other than me and my fellow harped passport holders, so why should the Brazilians.

Its not just a negligible percentage of the Irish, it is the EU, about 500 million people who need food. We had Peter Mandelson who believed it was a good idea to sell out the European beef industry for services and industry, imagine no beef industry in Europe and then think of the consequences, all this is EU wide.

The question is do Europeans want food security?