… And What Have You Got? Fat Cows
Missouri’s Department of Health and Human Services has estimated that more than one in five Missourians is obese, and that the more than $1.6 billion is spent in Missouri annually on obesity-related expenditures. According to the department, “Obesity is one of the most serious health issues facing society today.”
For people, I guess. For cows, Missouri’s policy is to encourage the bigger-is-better mentality.
The state has a tax credit for Missouri beef producers who raise Missouri-born cows that weigh at least 200 pounds more than the average weight of cows sold during the past three years. Beef producers are awarded $0.10 per pound of the extra weight, up to $3,000.
Regardless of the reason that the Missouri legislature created this tax credit, it is encouraging larger and larger cows by design. If growing larger cows were a more efficient means of beef production, then no tax credit would be needed. But if it’s more difficult to grow cows that weigh at least 200 pounds more than average, why on earth are are we subsidizing this wasteful activity?
I’m sure the cows would appreciate losing the extra baggage.
Growing large cows should be its own reward.
Comment by Christine Harbin — August 19, 2010 @ 11:24 a.m.
Looks like a short-term program designed to encourage Missouri cattle farms to update processes and infrastructure to raise more lean and muscular cows (backgrounding) and cows which taste better (finishing) which are higher in demand at this point in time around the world.
Comment by DaveG — August 19, 2010 @ 8:05 p.m.
If there were higher demand for larger cows, then why would the cattle farmers require additional incentive from the state government? Additionally, how can the state government know more about producing beef than the farmers who work in the industry?
On the contrary, this program provides a disincentive to farmers to update their processes and infrastructure. In the unregulated market, the profit and loss system allocates resources efficiently. However, when the government intervenes, as it does with this Qualified Beef tax credit, it mutes this “loss” signal. Since producers are consequently more insulated from risk, they have less of an incentive to respond to consumer demand, which removes the incentive for producers to target their operations efficiently.
Comment by Christine Harbin — August 19, 2010 @ 10:53 p.m.