(This is an excerpt from an article I originally published on Seeking Alpha on August 28, 2012. Click here to read the entire piece.)
In “Why Taxpayers Pay For Farmers’ Insurance“, Planet Money recently took on the sensitive subject of subsidies to farmers. My sense has always been that these subsidies are more controversial amongst us city slickers. So I took great interest in hearing farmers explain why taxpayers should support their businesses, in this case through farm insurance.
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Planet Money interviewed farmers in Fairbury, Illinois who happen to be millionaires based on their wealth in farmland.
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Source: United States Department of Agriculture (USDA), Economic Research Service: Farm Income and Wealth Statistics
Data in constant dollars are available for farm assets, which includes machinery. {snip}
Source: United States Department of Agriculture (USDA), Economic Research Service: Farm Income and Wealth Statistics
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When asked whether taxpayers should be subsidizing insurance, here is what one farmer hesitantly had to say …{snip}
I am guessing the rich farmers’s ambivalence toward the crop insurance program does not just come from their status of wealth, but also that these are guys who likely feel like self-made men. They have built their businesses with their own bare hands and sweaty brows. That is not an image which reconciles well with the agent’s characterization of a farm economy so dependent on government support.
Overall, state and federal government assistance is substantial but at least it tends to be counter-cyclical…{snip}
Source: United States Department of Agriculture (USDA), Economic Research Service: Farm Income and Wealth Statistics
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Source for charts: FreeStockCharts.com
Absent a notable change in weather conditions, Deere’s assessments point to strong prices for the foreseeable future…{snip}
Finally, farmers in need of disaster-relief, millionaire or not, appear to be better prepared than ever to handle such calamities:
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Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on August 28, 2012. Click here to read the entire piece.)
Full disclosure: long CORN puts