Yes. It happens very little in America. Would it happen some? Maybe, but it wouldn't be wide spread enough to make the market any worse off than it is now.
I don't know if there would be collusion or not, but I do know that small farmers are afforded protection that small businesses in other industries aren't getting. Times have changed. We are in an era where big companies rule and they are eliminating the mom and pop businesses. I don't know if that will turn out to be good or bad, but we shouldn't expect the government to protect all these small businesses from the big bad corporations. Our government is subsidizing an industry that not only produces enough food to feed all americans, but are able to export tons of food all around the world. Agriculture is one of our largest exports. It would be one thing to get subsidies if farmers were truly struggling to feed america, but that's not happening. I don't see where our agriculture industry is hurting so much to deserve billions of taxpayer dollars. Sounds like another government giveaway program. However, I am one of those who believe that we are better off producing our own food and not relying on other countries, even if it's cheaper. That would be as bad as buying all of our military equipment and parts from other countries because we can get it cheaper.
Subsidies pay farmers not to farm - subsidising them if they weren't producing enough wouldn't make sense. The government started the program so that farmers wouldn't put themselves out of business by producing so much that they drove prices down so low that many of them couldn't make a profit. However, that's exactly what a free market is supposed to do and it's completely ridiculous that the government took away that right when it is what made America so successful to begin with. Yes, but I don't think the American food industry is in any danger of going away. Some of the markets may, but for the most part it will stay intact.
I've pretty much said all I have to say on this, but just for informational purposes I found this for you. Its from 1999-2000, but I'm sure you can find some more recent figures if you look. http://www.ers.usda.gov/Amberwaves/February05/Features/FarmPrograms.htm#programs
That may have been true 75 years ago when we started farm subsidies. And subsidies may have been a good idea back then since we really couldn't easily export the excess food back then. I dunno. But the programs have changed and it's not all about how much food we produce. We are paying farmers to grow certain foods, and not so much worried about how much of it. We are able to export the excess these days. I have yet to see enough justification for keeping it around. But farm subsidies have been around so long that it'll be hard to take away. I know it may hurt some farmers, but that's just way it goes. Nobody seems to be too concerned about mom and pop grocery store owners.
So it's not exactly how it works anymore, but it was the original point of the program. It does, however, still allow farmers to produce less and make the same revenue.
Your original statement was so absurd, I had to ask. You may have well said that crime does not occur because there is a law against it. Regardless, while you may be right on it's impact relative to the current state of affairs, I disagree with the frequency that it happens. Things like insider trading and collusion go on all the time. Just because something is extremely difficult to prove legally, doesn't mean it isn't happening; in fact it generally means the opposite. I guess recruiting violations don't occur because there are rules against it too. It is in producers' interests to minimize competition, and they will be very creative in serving those interests.
"Who protects the consumer? It's competition among business," "Who protects the worker? ... It's competition among employers for employees." - nobel prize winning economist milton friedman. thats what you fellas need to recognize.
Of course it being against the law doesn't completely stop it from happening, but it helps. And the free market deters it from happening anyway, so I think combined it results in a very small effect of collussion.
Collusion can still happen. You're talking about fictitious widgets......something with obvious small value. But try something that goes on right now.....cable rates which are deregulated. Any cable company, when they pay a franchise fee, can come into this market, BR, run cable lines and offer cable service. But the cost is so expensive, that through simple economics, they see that not enough money can be made even if they take 50% of the homes. So Cox cable owns the BR cable market and the consumer suffers because our cable rates are two of the highest in the country along with Tulsa, OK. Go out to Cox's website and compare the price of our service with Orange Country, Ca. Adding digital telephone service here is $43.95 per month. In Orange Country, because there are 3 other providers, it costs $11. It's a free market, why aren't other companies coming in and beating Cox? Because simple free market economics makes it not viable. Just because we have a free market does not mean collusion won't happen. I can't make compact discs.........the cost to start up and make CD's is expensive. It keeps competitors out of the market.....then Sony and 2 other makers get together and rig the price. They had an anti-trust suit on this already. That's why the cost of CD's has never really dropped but the cost of manufacturing them has. Simple economics sometimes dictates the very lack of competition. With a $1 loaf of bread or fictiuous widgets your theory holds true. I agree free markets is the way to go but there is no free lunch or guarantees of roses either.
