Hugo Chavez economics writ small - Granite Grok

Hugo Chavez economics writ small

Venezuela’s economy is headed for a train wreck.  No matter what your politics are (and I certainly do NOT agree with Chavez AT ALL), every time government decides to stick its ham-fist into the marketplace, bad things happen.

Especially when emotions get wrapped up into it all – in this case, Vermont family dairies.

Farmers rally behind effort to fix milk pricing system

SOUTH BURLINGTON — Without reform of the federal milk-pricing system, Vermont’s dairy industry faces potential extinction, farmers at a makeshift dairy summit in South Burlington told the state’s congressional delegation Tuesday.

"We’ve cut every corner we can cut," Marie Audet of Bridport told the delegation. "We’ve got to take a look at how the federal pricing of milk works, because it doesn’t work."

No kidding, Sherlock.  Point One – this is a capitalistic marketplace (no matter how hard Vermont tries the Socialist "way").  Point Two – Government often hinders the marketplace.  Point Three – the intersection of the two generally does not work well – study history.

Audet said farmers are being paid the same price for milk that they received 20 years ago while the cost of farming has increased. As a result, she said, it is almost impossible to make a profit, and farms at times have had to turn to the state for help to stay afloat.

Hmmm, does the phrase "supply and demand" come to mind?  If the price is the same, that means that supplies are too plentiful, that there are too many suppliers trying to provide too much to the marketplace.  And the State is just distorting the marketplace by propping up farmers that should not be in business.

"We appreciate so much that the state of Vermont has helped us, yet I don’t think you’ll meet one dairy farmer who is proud of that," she said. "We shouldn’t have to rely on subsidies just to pay our bills."

And that is where the emotional part comes in.  Like America, motherhood, and apple pie, the family farmer is part of the nostalgic past.  Harsh?  Yes.  Truthful?  For me, yes, but more important they have to look at economics and see where they might be able to exploit the marketplace instead of suffering misery due to it and the distortion of government policies or politics.

Subsidies are the signal that your role in the marketplace is failing. 


Effectively, you have swayed the government in believing it is right to take money from others in the form of taxes just to keep you afloat. 

The stated goal of the group is to have farmers in the region adopt a plan to address the milk-pricing problem and work with the state’s congressional delegation to ensure that plan is included in the 2007 Farm Bill being written in Washington.

"We need to have the unified support of family farmers, in Vermont and all over America," Sen. Bernie Sanders, I-Vt., told the gathering. "We’ve got a fight on our hands."

Spoken like a true Socialist – everyone has to give up their hard earned cash to support those that cannot support themselves.  The fight is against the marketplace itself, and they will lose every time. With an attitude like that, Senator, will you support me, a simple computer guy, if I move to Vermont?  Why them, and not me?

They should be realizing one thing – some will have to perish for the best to succeed.

Among the ideas that drew support during Tuesday’s meeting was a call for creating a nationalized version of the Northeast Interstate Dairy Compact. The compact, originated in Vermont, won congressional approval in the mid-1990s.

Until it was scuttled in 2001, the compact guaranteed farmers a stable base price for their milk by forcing dairy processors to pay farmers the difference when prices dipped below a certain level. The program was entirely self-funded.

"Whatever you want to call it, we’ve got to get it back," farmer Clark Hinsdale III of Shelburne told the gathering.

No.  How about competing on the merits of your product and production capability – like the rest of us?

Other farmers also said they would be willing to accept limits on their milk production so long as the price for their milk was fair.

"We don’t want to get big," said Mitch Montagne of St. Albans. "We just want to make a halfway decent living and save something for our children."

Sure, make me an offer that helps me but not the consumer…..guarantee my living!


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