They currently do need subsidies to be profitable. Farmers destroying their own crops to raise prices is a well documented historical fact and it still happens today particularly when it comes to livestock. This is not my abstract conjecture.
You’re either citing some failed new deal policy or various libertarian myths that the government still pays farmers to destroy their crops.
When there is such a supply is too high and the demand is too low, farmers will destroy their own crops instead of taking them to market. This is because the price of the crop is lower than the price of actually taking it to market. This is bad for two reasons:
1 There could still be a real “demand” for the product just not an “economic” demand. IE people don’t have the money to pay for the crop such as in the Great Depression or the COVID pandemic.
2 Food is the primary good you want as abundant as possible in any economy at the lowest prices. Other such goods are steel, energy, railway transport, ie goods that other markets depend on. That runs contrary to the interests of the producers of those goods. They want to hit the sweet spot where profit is highest. The two main solutions for this are subsidies or nationalization. For example, China has nationalized steel production and rail transport which they intentionally operate at a loss for the benefit of the rest of the economy.
They currently do need subsidies to be profitable. Farmers destroying their own crops to raise prices is a well documented historical fact and it still happens today particularly when it comes to livestock. This is not my abstract conjecture.
But in the examples I’m familiar with, they do it because of regulation or collusion, not because of a lack of subsidies.
You’re either citing some failed new deal policy or various libertarian myths that the government still pays farmers to destroy their crops.
When there is such a supply is too high and the demand is too low, farmers will destroy their own crops instead of taking them to market. This is because the price of the crop is lower than the price of actually taking it to market. This is bad for two reasons:
1 There could still be a real “demand” for the product just not an “economic” demand. IE people don’t have the money to pay for the crop such as in the Great Depression or the COVID pandemic.
2 Food is the primary good you want as abundant as possible in any economy at the lowest prices. Other such goods are steel, energy, railway transport, ie goods that other markets depend on. That runs contrary to the interests of the producers of those goods. They want to hit the sweet spot where profit is highest. The two main solutions for this are subsidies or nationalization. For example, China has nationalized steel production and rail transport which they intentionally operate at a loss for the benefit of the rest of the economy.