|The 'Protection' of a
comprehensive agriculture policy ...
January 6, 2003
By John Stewart
To look closer at the premise, " ... If only American producers were protected by a comprehensive agriculture policy ... "
Set aside the issue of farm subsidies and consider the actual cost of production. Given this scenario, whether the product is agriculture products -- or any other manufactured product -- there is a supply line cost accrued that decides what the final cost will be to the consumer.
With respect to Imperial Valley producers, they will face higher production costs. They will be limited in passing those costs along.
However, when they can no longer pass those costs along, the result is closure of the business.
That closure will have a cost in terms of workers' unemployment compensation, retraining and lost tax revenue to the county. These costs -- lost tax revenue ricochets: to counties (property tax), state and federal (income tax) -- will ultimately be borne by the already overburdened taxpayer.
This 'collateral damage' becomes an integral part of the "cost of production" -- whether the product is grown/manufactured locally or is imported.
The statement that "Ultimately, the expense is transferred to the consumers through increased cost for food products" is a valid one.
Whether a product is grown locally -- or at a great distance from the marketplace -- the consumer will bear the cost of production. If local competition is stifled, the cost of production will include indirect costs of supporting local social programs to compensate for out-of-work persons.
In short, a comprehensive agriculture system with guaranteed prices or cheaper imported agriculture products are nothing more than a shell game where the true cost is hidden.
My underlying contention is that the wealth of a nation lies in its land and resources.
Being able to use those to make a profit ensures the continued success and growth of that nation.
Destroying an infrastructure (agriculture resource) for the prospect of cheaper imported agriculture products ignores the overall cost of consumption.
Keeping people on welfare and property off the tax base increases the cost of living as fewer people shoulder the cost for more.
Overall, under such an agriculture policy, Imperial Valley agriculture would be forced to increase costs to the point that they must go out of business.
The cost to consumers does not stop at that point.
Someone must still pay the taxes to sustain welfare -- out-of-work -- costs. The income tax from the failed business is lost. Both factors are ultimately passed to the consumer through higher taxes and higher market price for goods and services.
The "balloon" will expand to the bursting point, and will likely give way in the direction of least resistance. The weaker segment will feel the effects first; but soon everyone will feel the effects. It was once called the 'Domino Effect.' That visualization -- when applied to the economic health of a great nation -- should be a Red Flag for enhanced resource production in our own land, not a temporary temptation to buy 'cheaper' elsewhere.