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Old 06-19-2010, 03:33 PM   #21
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Originally Posted by Trek View Post
Not arguing your overall point at all and am clearly totally on board with the anti-communism thing, but I have been under the impression that many (most?) farmers in the US can only manage to stay in business with government subsidies (ie. large scale farming isn't profitable).

"The United States currently pays around $20 billion per year to farmers in direct subsidies as "farm income stabilization"[10][11][12] via U.S. farm bills."
Agricultural subsidy - Wikipedia, the free encyclopedia

So even in a free market economy, the government influences agriculture as I would think they wouldn't dole out the money without setting rules on how the money can be spent. Isn't that some sort of central planning? (even if not to the same extent as N. Korea).
Yes, there is government meddling (that's why I had to say "virtually no central planning"). The market value of US agricultural products was approx $300 billion dollars in 2007 (link), so at least on the face of it the $20B in government payments shouldn't cause a large degree of "steering."

I don't know much about price supports and subsidies. My impression is that much of this is intended to benefit smaller farmers (to allow them to stay in business) and is really more of a social program (govt assistance to help maintain a traditional way of rural life in America) than a program designed to shape agricultural production. But, that's just a guess.

It's interesting how agricultural subsidies have unanticipated consequences. I don't know the situation now, but in the 1970s and 1980s, "green" Western Europe used far more pesticides on their crops than the US. It was a by-product of the very large European agricultural subsidies. A US farmer would use a small amount of pesticide because the stuff was expensive and he had to watch every dime. In Europe, the government paid so much more to farmers for their crops that it was worth it to use even 2-3 times more insecticides, fungicides, herbicides, etc to get that last 5% of production.

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Old 06-20-2010, 04:16 PM   #22
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Originally Posted by Dudester View Post
This reminds me a lot of the MPC (Military Payment Certificate) system that was used by the US Military for oversea personal. When I was stationed in Korea in the late 60's, we were paid in MPC instead of dollars. Because a lot of MPC made it way to the black market, the bills were periodically changed. One morning you would wake up and learn that today was a conversion day and you had to trade your old bills for new bills. People entering the base were limited in how much MPC they could bring onto base (to thwart the black market). The big difference with the North Korea example is that MPC converted at par.

There's a entry on Wikipedia describing Military Payment Certificate s.
I recall that they did this in Vietnam in 1968-69. But since only Americans could legally have MPCs, only GIs could convert and only so much according to your rank. (A private had no business converting the same amount as a General). I recall the sight of many local store owners and bar-girls that had accepted MPCs in he past stuck with bunches of worthless paper. As I recall they continued to accept the new MPCs the next day, but prices probably were increased.

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