Tag: agriculture

Just Put Ernie in Charge of the Next Farm Bill

Yesterday, the U.S. Senate passed a farm bill with a projected price tag of $955 billion over ten years. As my colleague Sallie James explains, neither the Senate farm bill nor the House version offer up much in the way of real “reform.” And as Chris Edwards notes, both the Senate and House versions would spend more than the previous farm bill.     

One reason why taxpayers are about to get handed another _____ sandwich is because the politicians responsible for crafting the legislation are, well, politicians. And out of the mouths of politicians often come statements that indicate a softness of thought. Take, for instance, the following comments from Senate Agriculture Committee chairwoman Debbie Stabenow (D-MI) who just successfully shepherded a farm bill through the Senate: 

“I don’t think you can have an economy unless you make things and grow things. This bill is about growing things. That’s what we need to do in this country,” said Sen. Debbie Stabenow (D-Mich.), who chairs the Senate Agriculture Committee.

The Senate just voted to take more money from average taxpayers and give it to higher-income farm households because we need to “grow things”? Things won’t grow unless the grower gets a check from the government? What in the world is Sen. Stabenow talking about? Grow things? 

Apparently, one need only to have watched Sesame Street to be qualified to centrally plan the nation’s agricultural economy:

Migration Opportunities for Lower-Skilled Workers

Today President Obama is meeting with immigration reform activists, labor unions, and business leaders to discuss immigration reform. The House Judiciary Committee is also having a hearing about opportunities for legal immigration and enforcement of existing laws. Opening the House hearing, Representative Bob Goodlatte (R-VA) said that any immigration reform “must prevent unauthorized immigration into the future.”

So far President Obama and the Senate blueprint for immigration reform have either not mentioned lower-skilled workers outside of agriculture and dairy or propose increasing the rules and regulations that currently make American guest worker visas unworkable. The 2007 immigration reform effort was stopped cold in the Senate when its guest worker provision was gutted because of union pressure—with help from then senator Barack Obama (D-IL) and then senator Jim DeMint (R-SC).

Unions and immigration restrictionists came together in 2007 to stop reform. If they cannot stop it again, they can certainly eviscerate much of the long term gains of a freer international labor market.

In a video released today, I discuss how immigration reform could severely reduce immigration problems going forward, including unauthorized immigration.  My three points in the video are:

  1. Increasing lawful migration opportunities for lower-skilled workers will funnel potential unauthorized immigrants into the legal market.
  2. Welcoming highly-skilled immigrants regardless of where they were educated jumpstarts innovation, entrepreneurship, and allows for firms to expand production in the United States while also increasing employment opportunities for native-born Americans.
  3. Pursuing border and immigration enforcement without a lower-skilled guest worker visa program is a waste of resources. The economic allure to immigrants of coming here is so great that many of them will knowingly and intentionally defy America’s international labor market regulations immigration laws if they are too restrictive. A legal avenue for lower-skilled workers to come to the United States in sufficient numbers to satisfy economic demand and eliminate the supply of unauthorized immigrants is essential.

Legalizing unauthorized immigration will be good for the United States and good for legalized workers. However, without a guest worker visa program going forward this reform will just be an improvement on President Reagan’s 1986 law, but with highly-skilled worker visas.

I Heard It Through the Grapevine That the Government Was Violating Property Rights

This blogpost was co-authored by Cato legal associate Kathleen Hunker.

Property owners shouldn’t be made to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights. Yet that is exactly what the U.S. Department of Agriculture seeks to impose on independent raisin farmers Marvin and Laura Horne when they protested the enforcement of a USDA “marketing order” that demanded that the Hornes turn over 47 percent of their crop without compensation.

The marketing order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market. The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.

Believing that they, as raisin “producers,” were exempt, the Hornes failed to set aside the requisite tribute during the 2002-2003 and 2003-2004 growing seasons. The USDA disagreed with the Hornes’ interpretation of the Agricultural Marketing Agreement Act of 1937 and brought an enforcement action, seeking $438,843.53 (the approximate market value of the raisins that the Hornes allegedly owe), $202,600 in civil penalties, and $8,783.39 in unpaid assessments.

After losing in that administrative review, the Hornes brought their case to federal court, arguing that the marketing order and associated fines violated the Fifth Amendment’s Takings Clause. Having litigated the matter in both district and appellate court, the government—for the first time—alleged that the Hornes’ takings claim would not be ripe for judicial review until after the Hornes terminated the present dispute, paid the money owed, and then filed a separate suit in the Court of Federal Claims.

The San Francisco-based U.S. Court of Appeals for the Ninth Circuit proved receptive to the government’s about-face. Relying on Williamson County v. Hamilton Bank (1985)—the Supreme Court case that first imposed ripeness conditions on takings claims—the court ruled in a revised opinion that the Tucker Act (which relates to federal waivers of sovereign immunity) divested federal courts of jurisdiction over all takings claims until the property owner unsuccessfully sought compensation in the Court of Federal Claims. In conflict with five other circuit courts and a Supreme Court plurality, the Ninth Circuit also concluded that the Tucker Act offered no exception for those claims challenging a taking of money, nor for those claims raised as a defense to a government-initiated action.

The ruling defies both law and common sense. It stretches the Supreme Court’s ripeness rule beyond its moorings and forces property owners to engage in utterly pointless, inefficient, and burdensome activities just to recover what should never have been taken in the first place.

Cato has thus filed an amicus brief, joined by the National Federation of Independent Business, Center for Constitutional Jurisprudence, and Reason Foundation, supporting the Hornes’ request that the Supreme Court take the case and correct the Ninth Circuit’s overbroad reading of Williamson County. We argue that an unjustified monetary order is inherently a taking without just compensation and that a ruling to the contrary imposes a pointless burden on property owners, particularly when the government initiated the original proceeding.

We also encourage the Court to reconsider Williamson County, noting that the text and history of the Takings Clause don’t permit the government to defer compensation—that indeed the most natural reading of the Takings Clause demands that compensation be offered as a prerequisite to government action. Just as the Court wouldn’t permit the government to seize property without some prior “due process of law,” it shouldn’t permit the government to seize property without prior “just compensation.”

The Court has no reason to treat takings claims with less deference than rights anchored in other constitutional provisions. It will decide this fall whether to address that issue in the case of Horne v. U.S. Dept. of Agriculture.

The Christmas Tree Tax Is a Microcosm of What’s Wrong with Constitutional Law

Jim Harper beat me to the punch on the new Christmas tree tax – probably because I initially thought it was a joke – but there’s actually much more to say here beyond the USDA’s claim that it’s not a tax and the general absurdity of the situation.  Three quick things:

First, there are obvious Free Exercise and Equal Protection issues here.  That is, unless we consider Christmas trees to be wholly secular, this is an obvious burden on the free exercise of Christianity, and one that no other religion faces.  Even if it might be reasonable to see Christmas trees as not particularly religious – pine trees played no role in The Greatest Story Ever Told and, e.g., my secular Jewish family always had a traditional Russian New Year’s Tree (which has no ties to Russian Orthodox Christianity) – but do we want courts drawing lines between, say, creches/crucifixes and trees/Santa?

Second, and probably even more important given the times in which we live, where in the Constitution does the federal government get the power to tax the sale of a local agricultural product?  Setting aside trees trucked in from out-of-state, there’s no interstate commerce here to regulate.  And if it’s a tax (which, again, Ag officials deny) – presumably an excise, which is specified in the Constitution and which courts have construed to be a tax on transactions or privileges – how does assessing it to promote the general welfare or common defense?  The administration cites the Commodity Promotion, Research and Information Act of 1996, under which the tax mandatory fee funds a new program to ”enhance the image of Christmas trees and the Christmas tree industry in the United States.”  That’s what passes for the general welfare? 

Third, even if the tax is a lawful use of federal power, shouldn’t Congress be the body levying it, rather than an agency of the USDA?

I could go on, but this little 15-cent tree tax is a microcosm of what’s wrong with constitutional law, evermore divorced from the Constitution as it is.  Yes, under modern doctrine, the Christmas tree tax can be probably justified under either the Commerce Clause or the General Welfare Clause – and Congress can delegate to bureaucrats the power to levy certain “assessments” – but is that the kind of government we signed up for?

h/t Cato legal associate Chaim Gordon

The Ratchet Effect, Agriculture Edition

Between the lines of a front-page Wall Street Journal article about farm subsidies [$] is an instructive example of the ratchet effect:

Land prices are way up and so are bank deposits, as high corn and soybean prices mean local farmers are making the most money in their lives…An exception to the boom is the local office of the U.S. Agriculture Department, the dispensary of federal payments to farmers from an array of arcane programs with names like ‘loan deficiency’ and ‘milk income loss.’ On a recent afternoon, the parking lot in front of the squat brick building behind a Chinese restaurant was nearly empty.

The reason: Payments from America’s primary farm-subsidy program, dating from the 1930s, have stopped here. Grain prices are far too high to trigger payouts under the program’s ‘price support’ formula. The market, in other words, has done what decades of political wrangling couldn’t: slash farm subsidies.

Though the subsidy payments always ebbed and flowed with crop prices, many economists are convinced that what is happening now is different. A fundamental upward shift in crop prices is creating the real possibility that Midwestern farmers won’t ever again qualify for the primary form of farm subsidy.

There remain other types of subsidies, which continue to pay out because they aren’t linked to market prices. But high prices are undermining political support for those programs…

Well, there’s some good news. Maybe we can start downsizing the USDA, including by closing some of those local offices? Not so fast. The last two paragraphs of the article (on page A10) leave us with this cheery thought [emphasis added]:

Meanwhile, workers in the USDA’s county offices, seeing the handwriting on the wall, are campaigning for new things to do, now that there aren’t any price-support payments to dispense. One idea is to give them responsibility for federally subsidized crop insurance, currently handled by private companies.

Heck, why not? Heaven knows the federal government is flush with cash.

The (Beginning of the) End of the Shameful U.S. Cotton Deal?

Heartening news from the Appropriations Committee yesterday: they voted to cut aid to farmers generally, and to make significant changes to an egregious cotton program. But first, some background.  You’ll recall the embarrassing deal made by the Obama administration last year to head off Brazil’s right to impede American exports in retaliation for WTO-illegal cotton support. The United States is, in other words, now sending almost $150m worth of “technical assistance” and “capacity building” funds to Brazil, just so we can continue to subsidize American cotton growers without penalty (so much for U.S. promotion of the rule of law in international commercial relations). Rep. Ron Kind (D-WI) tried to end that deal earlier this year, but to no avail. Big Ag’s friends in Congress argued, unfortunately successfully, that any changes to the cotton bribes should be dealt with in the context of the 2012 Farm Bill, and by the agriculture committees (good luck with that).

But yesterday, the Appropriations Committee approved by voice vote an amendment from Rep. Jeff Flake (R-AZ) to take the fiscal 2013 payment to Brazil from funds that would normally go to supporting U.S. cotton growers. According to an article [$] in the Congressional Quarterly, Rep. Flake argued that “American cotton growers should pay the bill since the United States was making the payment on their behalf.” Well played, sir.  Rep. Rosa DeLauro (D-CT) filed an amendment that would send the FY2012 cotton payment to the Women’s, Infants and Children nutrition program instead.

The Committee also voted to lower the income eligibility cap to $250,000 AGI.

The CQ article did contain this worrying footnote, however:

Support for the amendments may be tenuous — especially if lawmakers cannot hide behind the anonymity of a voice vote. After winning the voice vote in committee, Flake sought a roll call, prompting appropriators of both parties to suggest that he did not need the recorded vote. Flake took their advice and demurred.

 Leglislators are usually shy about publicizing their positions only when they think it could get them in political hot water, so let’s not uncork the champagne yet.

Agriculture Cuts to Usher in the Apocalypse

Harold Camping is “flabbergasted” that the world did not end on May 21st as he had predicted. I think it’s because he didn’t account for the devastation that will be wrought by Republican budget cuts for fiscal 2012, which doesn’t begin until October 1st. Therefore, Camping’s new predication that the world will end on October 21st is much more plausible.

Yesterday the House Appropriations Committee’s subcommittee that deals with agriculture and nutrition programs passed its bill, which will now be considered by the full committee. According to the committee’s numbers, discretionary funding for these programs in 2012 would be $17.2 billion – a $2.7 billion reduction versus 2011.

According to a statement released by the subcommittee’s ranking member, Sam Farr (D-CA), the four horsemen are readying their saddles:

Farmers will be broken. Jobs will be lost. Ag economies will crumple.

Wow, even though “the farm economy [is] booming”? I half expect to see Rep. Farr waving a “The End is Near!” sign from a street corner in early October.

The Associated Press reports that “hunger advocates” are particularly upset by an 11 percent funding reduction for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). (“Hunger advocates” is the AP’s bizarre term for advocates of federal welfare programs.) The AP cites an estimate from a group of “hunger advocates” that the cuts could deny benefits to 475,000 people otherwise eligible for WIC.

If you’re looking for Republicans to defend the cuts on the basis that there’s nothing “progressive” about depending on a federal bureaucracy for sustenance then you’re going to be disappointed:

Republicans who wrote the bill said the cuts in domestic food programs are taken from excess dollars in those accounts, and participants won’t see a decrease in services.

Subcommittee chairman Jack Kingston (R-GA) basically says that the cuts are about making the federal government more efficient:

This subcommittee has begun making some of the tough choices necessary to right the ship. We have taken spending to below pre-stimulus, pre-bailout levels while ensuring USDA, FDA, CFTC, and other agencies are provided the necessary resources to fulfill their duties.  Our members have worked to root out waste and duplication and, where they have strayed from their core mission, we rein in agencies so they may better focus on the responsibilities for which they are intended.  In doing so, we balance the urgent need for fiscal restraint with the necessity to provide an abundant food supply, robust trade, prudent conservation measures, and strong rural communities.

Sorry, congressman, but if the media is going to uncritically report the “women and children will suffer” argument, the “root out waste and duplication” counter-argument isn’t going to win the heart of the average American who probably thinks WIC is something that comes out of a candle.

For all the angst over cuts to discretionary spending, I don’t see much discussion over the fact that, according to Republicans, mandatory spending for agriculture and nutrition programs will increase by $3 billion – from $105 to $108 billion. Spending on food stamps, which unlike WIC, is basically on auto-pilot, would increase by almost $6 billion. I’m guessing that the “hunger advocates” didn’t plug that number into their equation.

I’ll end on a positive note by pointing out that Cato’s Downsizing the Federal Government website has essays on why it would be truly “progressive” to eliminate farm subsidies, rural subsidies, food subsidies, and other federal welfare programs.

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