I was pleased to hear recently Senator Kátia Abreu (DEM - GO) in a presentation Famasul. The senator is a sane person who takes initiative in important discussions and try to seek the reason in matters that many politicians prefer to go off on tangents for fear of offending the organized sectors of society or even simple ignorance and cowardice.
Demystifying fallacies surrounding rural areas is therefore one of the struggles of the senator. The importance of red meat in the diet, especially for children, the partnership between food production and environmental preservation, enhancement of the farmer, who is often vilified by distorting the view, mostly urban, and who do not know reality of the countryside, are appearing in the words of Senator.
I will make some observations that I believe coming to the lecture of Senator, considering she is one of the best leaders in the country.
Kátia Abreu said that Brazil has a cheap food - yes, we have some of the basic food of the world more accessible - but there must be a struggle to pay the producer, that is, if he produces a cheap food, but somehow gets injury, one must compensate him, that's what some European countries and in some cases, the U.S., promote. Except that this is wrong. Then explain why.
Prices are signals. The profit is obtained by the talent of the producer is produce well, that is, their productivity, even in the face of climate changes, their cost of production, and selling price. If the price of the product is too cheap and causing injury, or the offer is excessive, so there's no need for so many producers channel their energy to that product, or simply he is not sued, so the market - which are the millions who feed - do not want to consume that food produced.
If even producing well, the producer still has injury is a sign that he must either cut costs or change their investment, and if prices do not fluctuate freely, there is no way of knowing if the product is being prosecuted or not.
Kátia Abreu exemplified the agribusiness crisis of 2006. What happened at the time, actually from 2004 to 2006, was a downsizing of a bubble that happened in 2002 and 2003, due to the strong entry of China into the world market by buying soybeans, and especially the dollar triggered by the imminent election PT for the presidency, namely a political interference in the economy.
At that time, soybeans and beef have risen about 50% in little over a year, and in sequential years the prices lowered, until in 2006 reached bottom. Producers who have invested in the business had to brake or change investments. Subsequent to 2006 there was a rise in prices at satisfactory levels.
Senator still talked about a great producer that had the cost of producing the orange box at $ 3, while his neighbor, smaller, had a cost of $ 5, due to the smaller scale and less bargaining power. There is nothing more than normal. Mass production has always favored the reduction in price.
Nobody goes to the supermarket to ask how much was the cost of production of rice, oranges, beef, milk, etc.. People make their choices based on price and quality. In general, poor people prefer the item "price", and who will produce large-scale power cheaper more food. Therefore the Austrian economist Ludwig von Mises said that capitalism is the dictatorship of consumers "and favored the lower classes of society.
senator killed herself the question by saying that, to his surprise, the owner of a large agricultural machinery maker said that it had been an exceptional year in sales. What happened is that the producers more efficient and larger scale were leasing the land from smaller or less efficient producers. This is great, there is an economy of scale and rural production is being directed to the most competent.
Consumers gain from this, because they will have cheaper products, producers may also increase profits by greater scale, and those farmers who rented their land to be able to capitalize on another activity (and many other activities already have it). It is a kind of "creative destruction" - a term coined by Austrian Joseph Schumpeter, referring to changing systems of capitalist production - for these landowners.
The land lease was something forbidden in Nazi Germany of Hitler. Mises had said: "Liberalism is honored to be the doctrine more hated by Hitler." Yeah, I think he was right.
So there is no need for government intervention in rural production. Agricultural insurance, pricing the stock market and other devices to reduce the risks of rural production, need not be screened by the government. The government, with rare exceptions, over the years has hampered the lives of consumers of food, or ultimately, become heavier the burden on taxpayers who do not yet realize the causes of it.
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