Wednesday, September 3, 2014

The Russian and Subsidy Story

It's not widely discussed or talked about....but if you farm on a substantial scale in get a subsidy from the government.  It's not a big chunk of money, but it more or less puts you into the profit line.....without changing the whole pricing scheme of agricultural products (it's hard to say that with a straight face, I admit).

This week, the German Agricultural Commissioner admitted that with the Russian issue going on, and no sales out into Russia.....there's going to be a problem with the subsidy.

Adding to this episode.....fruit and vegetables which might not be sold.

To counter this....the Polish Agricultural Chief suggested that the public eat more fruit and vegetables than keep the pricing up and prevent massive farm issues later.  I noticed the German Agricultural Minister saying the same thing in the local German news....suggesting folks ought to eat more and consume fruit/vegetables five times a day.  For some die-hard nutritional freaks.....they finally get their five-star moment in life.

Since the Russian episode also involves beef and pork....I might go out on the limb and suggest that we residents of Germany....ought to be be grilling way into October.....doing two times the normal amount of brats and pork steaks.  And we ought to consume double the normal amount of chocolate and ice cream, to make up for the losses to the Russian episode.  We probably need to consume more beer and wine as well.

Yeah, I'm probably overdoing it.

What no one says much where Russia goes now to get their replacement vegetables and fruit, along with beer, beef, and pork.  I'm betting on Turkey really coming out ahead over the next year.  And once they get solid contracts.....I don't see Russians returning to the European product lines.

That may say something about economics that professors never covered in university....the strength of a good merchant to find replacements when times are bad.

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