Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, February 18, 2005

Agricultural Subsidies Induce
Substitution in Production

The U.S. gubmnt is talking about reducing its subsidies for some agricultural products. The likely result will be that much of the land used for the most heavily subsidized crops will be shifted over to other crops. Cotton and rice are prime candidates.

The two crops that would suffer the most from subsidy reductions,
cotton and rice, are generally farmed by large combines whose managers say they are ready to change over to other crops, if the subsidy cuts are approved as part of Bush's budget.

Cotton and rice operations collected most of the $672 million paid out in California in 2003 in federal subsidies. Nationwide, federal farm subsidies accounted for $16.4 billion in payouts for all crops in 2003, the latest year for which full figures are available.Cutting subsidies on California cotton crops would hit hard this year, when the price per pound has dropped to 43 cents from 74 cents a year ago. But growers say they're prepared. One Tulare County cotton farmer said he'd simply switch over to pistachios or row crops such as green beans or black-eyed peas, if the cotton subsidy is

See here. I would add sugar to the list, but I wonder if Jeb would let his brother do that to the Florida sugar industry.
[h/t to BF]
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