Something to think about in 2008: Farmer economics

Happy new year. For the first time since 1999, I decided to take the new year off. Ever since the Y2K new year, I've been coming to the belief (on the morning of January 1) that New Years Eve is like amateur hour anyway, particularly since the bars are packed with a lot of people out who rarely, if ever normally go out. I did go on a New Years Cruise once, and that was a lot of fun, but maybe I'm becoming more reserved now that I'm a lawyer. Or that all of my friends were all doing their own thing and I'm far away from them. Anyway, it was actually nice to just spend new years with my family, which I don't get a chance to do too often.

Since I stayed home, I was filling my folks in on life and what not, and my pop and I began speaking about the economy and our predictions on where it was heading, esp. since I'm probably going to be diving into this housing market sometime in the next eight months. Two observations as a result of this conversation and whatever we were watching on the tv: First, Law & Order (based on my parents' understanding of law and as evidenced by my own appeals dealing with aspects of the CSI-effect) has made prosecutor's jobs much tougher, but I think it also makes close-call cases with guilty verdicts that much tougher to appeal.

Second, I think that the farmers may be the most protected class in America. By virtue, the migrant workers are the least protected class. What I mean by this, is that Congress spends an incredible amount of resources protecting land and farmers through the various tariffs placed on imports of related goods. So, while most of our sugar tariffs come from arcane policies implemented during the Great Depression, the effect is that the poor countries, where sugar would cost us next to nothing, pay enormous taxes in order to sell domestically. Obviously this protects domestic interests, but at what cost? I don't know how much truth lies beyond the growing reporting on the problems of corn syrup, but maybe there is something that the media should start investigating a little more.

The rest of this entry is pretty much a rant against this particular segment of our economy.

Through blind eyes, Congressional oversight (or undersight) and unprotected interest groups, these huge farms are able to employ migrant farm workers to keep our agricultural food costs low. And while I'm all for that on one hand, it seems sort of hypocritical on another. There's not much I can do other than accept it as a part of life. It seems sort of wrong though if you start to digest it, but again, I'm just going to give it a taste.

I'm not sure how much these workers are paid, but I'm sure it winds up being less than minimum wage (and I'll leave that rant for another day). And for what? If our economic theory presently is to export all labor to third world countries in the hope that our domestic labor force will increase (e.g., more white collar jobs, like computers) over a twenty year period, why wouldn't farmers follow the same trend? If we can stimulate another Caribbean country's economy and it mutually benefits both countries, why wouldn't we do it? Half of these farmers can't keep their farms afloat anymore without government subsidies anyway, and if anything, it's in their economic interest to develop their farms and effectively "sell out."

It seems to me that our economy can't have it both ways. Interestingly, economic theorists appear to agree, to a certain degree on this point. See Sara F. Ellison & Wallace P. Mullin, Economics and Politics: The Case of Sugar Tariff Reform, 38 J. Law & Econ. 335 (1995); USITC: Certain Sugar Goods: Probable Economic Effect of Tariff Elimination Under NAFTA for Goods of Mexico; Testimony of Professor David Orden: US Senate Committee on Agriculture, Nutrition and Forestry. If you Google "the economic effect of sugar tariffs" or a similar search, you'll find more.

So, is there anything we can do? I'm not sure. On one hand, these farms that work employ a lot of people, and theoretically, they are compensated the same as any other person. On the other, would lowering these tariffs or opening up the agricultural borders to more imports have a more negative effect than I'm currently speculating? After all, the domestic car manufacturing industry seems to have taken a hit by this same sort of thing. And with rising fuel costs, people want fuel efficient cars, which aren't being delivered by domestic manufacturers. Here's an idea. If you want to get people to buy your stuff (be it cars, farm products, or whatever), target your market and make a better product that people will want to buy. Then make it cheaper so that the average person will choose it over the junkier, gas guzzling and otherwise, probably less healthy alternative.

Of course, I'm in the law end of this, so I'll support my client's position and do whatever my boss tells me until I have reason to do otherwise. Since I'm not an economic theorist, however, maybe someone will explain what I am overlooking.

Tags: sugar tariffs, farms cars and economic theory