Obama to cut farm subsidies?

I grew up on a farm during the final days of the British farming industry.

In many ways, my parent's farm was a 'pet' farm. We farmed a small herd of Dexter cows (a rare breed unafflicted by BSE) and Wensleydale sheep (enormous sheep with Rastafarian wool.)

My parents received subsidies from the British government for farming these animals, but in general, we produced only enough meat for ourselves and to trade for the cost of slaughtering our animals. In short, we contributed very little to the British farming industry.

But it was a nice life. We raised happy animals and helped continue two rare breeds. If it wasn't for the farming subsidy, this wouldn't have been possible.

The same situation exists in America, where farmers are given subsidies to offset the fact that farming is pretty much a non-profit pursuit. These subsidies help keep the American farming industry going, but do warp the market dynamic. Milk and cheese, for example, are a protected market and the prices you pay in America are vastly inflated compared to abroad.

Now Obama is threatening to end the subsidies for farmers. Is this a good or a bad thing?

Well, part of me thinks it'll be a good thing. Despite being raised on a farm and sympathizing deeply with farmers, the fact is that America can't afford to continue operating a non-profit industry. American agriculture is geared more towards earning government subsidies than running profitably. That's why thousands of farmers have diverted their corn crop from corn flakes and turned it towards the production of subsidy-heavy ethanol.

This is great for farmers, but bad for the rest of us. Ethanol, for example, would be a cost-effective alternative to gasoline, were it not for the fact that government tariffs on imported ethanol and sugar have driven the price up far in excess of petrol.

The fact is, subsidies totally warp and manipulate the free market system - the one that's meant to keep prices down. If we didn't have them, American farmers would face a brutal period of readjustment, having to totally alter their business dynamic to remain competitive. It's sort of economic Darwinism. The Republicans are all for it (ironic, really, since they don't believe in real Darwinism.)

But that would mean, ultimately, that American consumers would reap the benefits. Cheaper food, from foreign sources.

However, on the other hand, it would temporarily (or permanently) devastate the economy of the American midwest. America is a glorious country in which agriculture remains one of the most important industries. Entire states are comprised of nothing but farmland and fields. If they didn't survive, it would be a tragedy.

Not to mention, I think there's something to be said for countries being able to feed themselves from domestic sources. Less than seventy years ago, Britain was isolated during World War II and the British farming industry was all that kept the country from starvation. If Hitler was resurrected today, the skeletal remains of British agriculture would drive the country to starvation in a matter of weeks.

So America's vast farming industry is, to a certain extent, a testament to the continued independent spirit of the United States. As long as the farming industry survives in America, so does a little bit of the American spirit.

And 'industry' is a very important word. For generations, America has had the largest economy in the world, supported mainly by America's industrial roots. Now, like the economies of Europe, America is turning towards a service-based economy. Maintaining a 'real' industry like farming goes some way to addressing that shortfall.

Obama's suggestion about eliminating subsidies does mean one thing, though. The Democrats are traditionally the party of subsidies and protectionism. The fact that Obama's bucking the trend might indicate that things really have changed in Washington - and whatever that means for American farmers, ultimately change is exactly what we voted for.