Milking the Taxpayers: $7 a Gallon When We Go Over the Fiscal Cliff

American agriculture is the single largest welfare recipient on the face of the earth. — jtl, 419

Written by Gary North on December 28, 2012 of The Tea Party Economist

Gallon milk jug


The price of milk will double if Congress does not pass a replacement farm bill. We will be $7 a gallon. That’s because the federal government’s milk producers’ subsidy will go to $7 a gallon. The dairy industry will rejoice. “Happy days are here again!” “We’re in the money!”

The lapse of today’s farm bill will resurrect the 1949 percentages for the guaranteed price paid by the government to dairies.


This will remind the voters of the subsidies, which they always forget. Milk would be cheaper than $3.50 a gallon if it were not for the Department of Agriculture’s price support program, one of the oldest and most respected boondoggles in government.

There is no free market in agriculture. There has not been ever since 1933.

Why do dairies get paid guaranteed prices by the government? Because this tiny industry has conservative U.S. farm state Senators like Charles Grassley on their side. They know where their bread is buttered.

Is there a recession in farm products? On the contrary, agriculture is a booming sector of the economy. So, why do farmers need federal subsidies? That is like asking why a Hollywood starlet needs plastic surgery. Because the subsidies are there. It’s free money.

Does this program hurt the poor? No. Food stamps cover the losses to the poor.

Then who pays for food stamps for 47 million people? Who pays for the crop guarantees? After all, there is no such thing as a free lunch. Or breakfast. Or dinner.

Look in the mirror.

Go out and buy a gallon of milk before January 1. Buy two gallons. Splurge.

Will Congress hear from the voters? Yes. Will there be a new farm bill? Yes. Will $7 a gallon milk prevail? Not for long.

So, let’s enjoy the show. Let’s see how Congress handles the clear message from the folks back home.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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3 Responses to Milking the Taxpayers: $7 a Gallon When We Go Over the Fiscal Cliff

  1. Oamorley says:

    Can’t argue with. So called staple items are a big kick back. Us non staple people don’t get shit.

    Adrian Morley 575-631-3596


  2. Oamorley says:

    PS. I don’t give a shit about the ficial cliff. Just more politics. Let them go off it. Fuck em

    Adrian Morley 575-631-3596


  3. Yes, that is certainly true, especially if you are referring to direct subsidies. That is what Henry Hazlet referred to as “the seen.” There are a few areas of “staples” agriculture that receive no direct subsidies–the cattle business, for example.

    But Hazlet also refers to the “unseen.” Again, using the cattle business as an example, food stamps is an indirect (usually unseen) subsidy for the cattle business in that it artificially increases the demand for red meat.

    Then, of course, there is a plethora of indirect (unseen) subsidies for all of agriculture. The short list–your state supported land grant universities (and other publically funded research and education facilities), your local extension agent, your local high school ag teacher.

    It has been that way since FDR’s New Deal. He knew that in order to get his socialistic ideas to fly, he had to buy off three groups–big business, big labor, and agriculture. And he did. And America has been worse off since.

    jtl, 419


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