Different Voices On the Agricultural Economy

According to Britannica agricultural economics is a study of the allocation, distribution, and utilization of the resources used, along with the commodities produced, by farming. Agricultural economics play important role in the economics of development, for a continuous level of farm surplus is one of the wellsprings of technological and commercial growth. All economists agree that instability in farming threatens food security, and they all share the same goal of having a secure food system. But they strongly disagree about how to achieve that end. There are three main different voices, which try to explain the complex food system. 

{tocify} $title={Table of Contents}

Conservative Voice

The Conservative Voice of America fights for free market solutions and leadership to improve our nation’s safety, security, and economic prosperity. It is imperative we have principled, conservative leadership in Washington and our state capitals who are unwavering in their commitment to conservatism and good stewardship of our government.

The conservative's main idea is: "when we leave markets alone to self-adjust, firms adapt and innovate, and we get the food we want at the right price". Liberal policies distort price signals, throw markets off balance, and ruin international relations. On the other hand radical policies of government handouts in an economic system with no profit motive jeopardize our ability to feed ourselves. 

The solution for every problem is that we have to reject agricultural subsidies and replace them with unfettered price signals to ensure a secure food system. According to conservatives, the free-market approach is simple and elegant: the consumer and the farmer meet in a market without any government interference, and since farmers want to make money, they’ll produce what people want to buy. 

Figure 1: The Wheat Market - Conservative View

Let’s consider the wheat market When there’s a drought, farmers’ costs go up because they need to pay for more irrigation. As a result, some wheat farmers go out of business, some switch to growing more drought-tolerant crops, and some choose to switch to producing a crop that brings a higher price. In all these cases, the supply curve for wheat shifts to the left and the price of wheat goes up. 

The wheat market shrinks, but everyone who wants the wheat at this higher price gets it, and because those farmers who still produce wheat can get a higher price for it, they can afford to pay the higher costs for water during the drought. The invisible hand guides the market to maximize our social welfare.

Conservatives believe that agricultural subsidies are a huge waste of taxpayer dollars because farmers overproduce crops that nobody wants. And it gets worse because when countries send their overproduced products to developing countries pushes their own farmers out of business and causes international trade crises.  

Ιn addition, conservatives believe that the emergency and innovation fund can’t solve the problem of instability in agriculture, because the idea of the profit motive is rejected. That means there’s no incentive for anyone to work hard or innovate because the profit motive that leads agribusiness to invest in research and development. 

Liberal Voice

The liberal's main idea is that public-private partnership secures our food supply by preserving our farming industry, which protects our national security and brings us the food we want and need. Conservative policies give us a four-way loss: bad for farmers, bad for consumers, bad for national security, and bad for international relations.

Also, Radical's emergency and innovation fund are just subsidies by a different name but are burdened with suffocating bureaucracy, limited choices, and food shortages. With the helpful hand of the government, firms are no longer at the mercy of the weather, pests, or other unexpected threats.

Figure 2: The Wheat Market - Liberal View

Let’s consider the wheat market in figure 2 When there’s a drought, higher water costs drive some farmers out of business. The supply curve shifts to the left, bringing about a higher wheat price and a shrinking wheat market. In normal circumstances, it’s perfectly fine when this happens because markets self-adjust in the long run, but food is not the same as any other product. Food is necessary for our everyday survival. According to the Liberals subsidy programs can shift the supply curve back to where it was before the drought.

In figure 8.2 we can see that subsidies shift the supply curve back to the right because subsidy programs offset farmers’ costs for water so they can continue to produce our wheat and continue to stay in business and grow the food we need. Subsidies create an equity gain that brings us more social welfare because we get the wheat we want in the quantities we want and at a low price—all while preserving our nation’s farming enterprises.

Agriculture is a risky business because no one can predict the weather or any other unexpected event that interrupts food production. But we don’t have to worry about empty shelves at the grocery store because our farming industry is protected by responsible government intervention. 

According to the Liberals, in democratic socialism, cooperatively owned farms are held back by lazy freeloaders who have no motivation to put in a hard day’s work since they’re going to take a share of the profit in any case. On the other hand, farmers can’t afford private insurance on their own, and futures markets are a gamble that could easily lose them the farm. Agricultural subsidies keep farmers producing in a high-risk industry.

Radical Democratic Socialism Voice

The main idea is that participatory governance brings the nation a stable, healthy, and balanced food system by funding innovation and best practices to plan and prepare for catastrophes.  Conservative policies enable big ag to give us unhealthy, addictive food and the illusion of choice and Liberal policies only serve to feed big ag, which exploits workers, ruins the land, and destroys farming communities.

The main accepted solution is to replace agricultural subsidies in capitalism with food security councils in democratic socialism to ensure a secure food system. Imagine a world where people come together before the weather event that threatens food production and help the farming industry prepare for, adapt, and respond to inevitable catastrophes.

Figure 3: Six-Core Cube of Democratic Socialism

Let’s use the Six-Core Cube of democratic socialism and drill down through the core point of participatory governance. In democratic socialism, elected officials convene and facilitate food security councils. Made up of multiple stakeholders, these participatory community councils have the authority to make decisions. Bringing together their different areas of expertise, their different needs, and their different concerns, council members collaboratively decide how to address problems and what resources to allocate to programs. 

At that point, the elected officials are tasked with representing those decisions in the larger legislative arena to try to get them passed into law. For example, food security councils would ensure that cooperatively-owned farms have the funding to switch to drought-resistant crops, that farmers get training in the best methods to harvest rainwater for irrigation, and that they can afford to restore degraded soil after a tornado. 

Because planning is important for the success of any endeavor, these measures would be put in place before disaster strikes. With participatory governance, the people with the most knowledge and expertise, as well as those who have the most at stake, all have a voice, so we get the best ideas for preventing crop failure, recovering from disasters, and for developing innovations to improve production. Worker-owned farms and farming communities don’t have to worry that their firms will go out of business or that their communities will become ghost towns. 

Selected References

• Amy S. Cramer, Laura Markowitz (2022), Voices on the Economy: How Open-Minded Exploration of Rival Perspectives Can Spark Solutions to Our Urgent Economic Problems, pp 226-244

• Olivia B. Waxman (2018), Socialism Was Once America's Political Taboo. Now, Democratic Socialism Is a Viable Platform. Here's What to Know, Time.com

• https://conservativevoiceofamerica.org/