Agriculture. There is a lot of criticism directed at this move by the Obama administration and the banking sector. There are critics who feel that these institutions did not serve the public good when they sold The current discussion on agriculture is related to the impact on farmers from the privatization of off or under-utilized this land. Nevertheless, the debate over the impact of the privatization of agriculture has reached a boiling point and is expected to rage on for quite some time.
Agriculture is the single largest owner of fossil fuels in the U.S. When the public bought out the private farmers, the industry was left virtually intact. However, it was heavily regulated because of the mandates in the act passed by the legislature. The new laws will allow for more privatization of agricultural lands. This is mainly due to the fact that the number of collective farms has significantly decreased over the years.
According to the USDA, there are approximately 4.5 million dairy cows, two million sheep and one million hogs owned by private farmers in the United States. These numbers do not include the numbers of cattle and turkeys that are owned privately. Private farmers rely heavily on the revenue from these animals in order to live and make a living. A huge majority of the revenue comes from the sale of meat, milk and eggs as well as from poultry and grain. Thus, the impact of the banking policy regarding the privatization of agriculture is not entirely bad.
However, this argument will not hold water unless the distribution of wealth increases. A simple example will illustrate this point. If the banking sector gets a five percent cut in its revenue then it will be forced to raise interest rates, which will impact the cost of business. It will either force businesses to close down or reduce their output to accommodate the increased costs. In both cases, the government expenditures go up as the economy suffers because the percent gap which is made up of government expenditures drops.
By comparing the percent GDP of the farming sector with the national debt and the current level of inflation, one conclusion can be drawn. The farm industry is not performing very well. It is not performing so badly that its existence is threatened by bankruptcy. On the other hand, the central government is increasing its debt as it attempts to pay off its ballooning debts. This means that in the long run the impact of the public policies of privatization of agriculture on the national economy will be negative.
The current crop to be grown is highly reliant on agricultural subsidies. They account for over fifty percent of the cost of production. It is estimated that in the next decade the cost of agricultural products will increase by approximately forty percent. At the same time, the government is encouraging private entities to invest in agricultural lands. The logic is that if these entities have access to subsidized capital, they will be more likely to invest in rural development.
Private entities, on the other hand, see this as an opportunity to receive profits from a resource that has been artificially inflated. Many farmers are not in favor of receiving subsidies from the government. They see the move by the government as an attack on free market capitalism. Indeed, this appears to be a core issue of the clash between free enterprise and socialism.
Many in the private sector see the government’s subsidies as a theft of their money, not unlike when the government takes your car and then gives you an inferior car to drive. You are the one who loses out in the deal. Yet, there is also an element within the farming community that does not see this as theft but as protection of their livelihood. These people believe that the government should protect them from market forces. This is basically the dilemma between free-market capitalism and public ownership of the means of production.