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Lovely Government Idiocy – More Money For Farmers

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One the the aims, a point of, Brexit was the ability to stop spraying money at farmers. So, now we’ve got Brexit what is government doing? Spraying more money at farmers:

Ministers are considering boosting payments to farmers under the new post-Brexit subsidy programme after concerns were raised in trials that support on offer is too low.

Officials are testing a new financial support scheme that will be vital for keeping farms afloat – but some of those taking part in the trials warned of a shortfall in suggested payment rates.

Payment levels are being reviewed by the Government and could be changed to make them more attractive to farmers who are currently heavily reliant on state support, sources said.

Here’s what the basic farming problem is – too much subsidy.

Yes, too much.

As David Ricardo pointed out in 1817 – time enough for people to grasp the point – if we give money to people who use land then that money we give to people who use land becomes capitalised into the value of land and rents rise. So, farmland costs a lot these days – £10,000 a hectare sort of level. So, in order to be a farmer you’ve got to have lots of capital. This makes farming an ex[pensive thing to be doing. The reason land costs so much? The fact that we subsidise the use of land to farm upon.

If we didn’t subsidise then farm land would be cheaper. The costs of being a farmer would be lower. Therefore we wouldn’t need to subsidise farming because we’d no longer be subsidising farming.

True, this would make every current farmer go bust but so what?

The direct payments, which make up the bulk of the CAP support, accounted for 71pc of farms’ net income – earnings from output and subsidies minus taxes, interest, production and staff costs.

Lower the cost of land and thereby reduce the costs of farming. The reason we’re not doing this is that, of course, government never does do the sensible thing, does it?

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2 COMMENTS

  1. So, “some of those taking part in the trials warned of a shortfall in suggested payment rates” – who would these people be? Two possibilities it would seem are the farmers themselves and the bureaucrats running it. They want more money? Shocker, that.

  2. I am not sure the farmland owners would go bust. From the one I know they might have to sell one of the his-n-hers matching aston martins, but I don’t see bankruptcy. Not least because if you are rich then farmland is an amazing asset to own (inflation protected income, various tax advantages) but will only be part of your portfolio.

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