Tag: agriculture

Post-Election Outlook: Agriculture Edition

My colleagues have done a thorough job of analyzing the policy implications of Tuesday’s federal election outcome as it affects trade policy, health care, immigration, education, and the scope and size of government generally (more here on federal spending). Most of them are cautiously optimistic that a Republican-controlled House is good news for liberty-minded folk. Let’s hope so.

Unfortunately, there are fewer obvious reasons for optimism that Tuesday’s result will mean big changes in agricultural policy, a depressingly bipartisan area of federal intervention. Even Rand Paul, the poster child for the Tea Party, expressed “moderate” views on farm subsidies during his campaign.

On the positive side of the ledger, our friends at the Environmental Working Group make the excellent point that being a friend of Big Farming was not enough to shield many Democrats from defeat. Earl Pomeroy (D, ND) represents the congressional district that ranks Number One in farm subsidy receipts (now there’s a source of pride!) and even he got the boot. As did Senator Blanche Lincoln, chairperson of the Senate Agriculture Committee and shameless architect of a bailout package for farmers that was funded we-don’t-exactly-know-how. At least 15 (possibly 16 if Rep. Jim Costa (D., CA) loses his too-close-to-call race) Dem members of the House Agriculture Committee — friends of the farmer all — are now looking for work. In other words, support for Big Ag is not a sufficient shield.

On the other hand, it’s not clear that their replacements are an improvement as far as agriculture policy is concerned. With a new farm bill due to be written in 2012 (although soon-to-be-former House Agriculture Committee chairman Collin Peterson (D., MN) was trying to get that ball rolling earlier), it is not certain that the fiscal conservatism exhibited during most Republicans’ campaigns extends to farm policy. Indeed, probable new House Agriculture Committee chairman Frank Lucas (R., OK) has said he disagrees with getting rid of the fiscally offensive (but less trade-distorting) direct payments that flow to farmers regardless of what, or even whether, they farm.  That was an area of reform that Collin Peterson was at least willing to look at. (More on the implications for direct payments here).

Chuck Abbott, agriculture reporter for Reuters, has more analysis on the outlook for farm policy. His is a more optimistic take, and I hope he’s correct. For my part, my skepticism is based on statements such as those by the CEO of the Renewable Fuels Association, speaking on a conference call yesterday:

[F]or the most part those that may have been defeated were replaced with equally strong advocates for value added agriculture and ethanol. Does anyone believe that Kristy Noem (R-SD) will not be a strong voice for ethanol?

Exactly. The fight’s not over yet, folks.

Good Time to End Farm Subsidies

The Wall Street Journal reports that the agricultural sector is recovering nicely from the recent recession while the rest of the private sector continues to struggle. The counter-cyclical nature of some farm subsidy programs means that the taxpayer bill for the year could be cut in half to only about $12 billion.

From the article:

For many crops, prices are climbing even as big harvests pile up, a rare combination. Farmland values are up while those for some other kinds of real estate languish. Debt on the farm is manageable. Incomes are rising.

And trade, of which many Americans are growing wary, is for agriculture a boon. Asia’s economic vigor and appetites make the farm sector’s reliance on exports—once thought a vulnerability in some quarters—a plus today.

“The farm economy is coming out of the recession far faster than the general economy,” said Don Carson, a senior analyst.

The WSJ article also notes that farmers will still receive direct payments of about $5 billion for basically just being farmers. This subsidy is particularly insulting to taxpayers as the program was created in 1996 to help wean farmers off of subsidies. Instead, these “temporary” payments were turned into a permanent hand-out in 2002.

Better news for taxpayers would be the abolition of farm subsidies. While they obviously remain popular with the beneficiaries and their patrons in Washington, the general public seems to be increasingly aware that the subsidies amount to little more than legalized theft.

Of course, farm subsidy apologists will respond that the programs must be kept in place in order to cushion farm incomes when times aren’t so good. As a Cato essay on farm subsidies points out, this is nonsense:

Another point to consider is that farm households are much more diversified today and better able to deal with market fluctuations. Many farm households these days earn the bulk of their income from nonfarm sources, which creates financial stability. USDA figures show that only 38 percent of farm households consider farming their primary occupation.

Some USDA programs provide useful commercial services such as insurance. The USDA says that its insurance services are “market-based,” but if that were true, there would be no need for subsidies and the services ought to be privatized. After all, most U.S. industries pay for their own commercial services. Also, financial markets offer a wide range of tools, such as hedging and forward contracting, which can help farmers survive cycles in markets without government subsidies.

A $1.1 Billion Re-Election Campaign. For the Senate.

When Rep. Collin Peterson (D- Minn. and Chairman of the House Agriculture Committee) pronounces that a farm program is too generous, you know you’ve crossed a line.

But that’s what happened recently after Sen. Blanche Lincoln (D-Ark), Senate Agriculture Committee Chairwoman and – oh, hey, how about that? – facing a tough re-election battle in November proposed an extra $1.1 billion in emergency farm aid be added to a jobs/tax/unemployment/kitchen sink bill going through the Senate this week. These extra handouts would flow despite the fact that the 2008 farm bill contained ”reforms” (the so-called ”permanent disaster” program) ostensibly to put an end to politically-motivated ad hoc emergency aid of just the type that Senator Lincoln is pushing now.

For those who can stomach it, this excellent article by Dan Morgan, one of the nation’s best agriculture journalists, contains plenty of background information.

Agricultural Exceptionalism

House Agriculture Committee Chairman Colin Peterson (D, Sugarbeet Farmers) announced yesterday [$] that he would begin hearings on the 2012 Farm Bill this spring. I’m still recovering from the traumatizing 2008 Farm Bill fight, so I heard this news with some trepidation.

But wait! Put those red pens away, folks, because Chairman Peterson plans to keep on spending on agricultural programs. Heaven forbid that agriculture should take any of those “cuts” we’ve been hearing so much about :

House Agriculture Committee Chairman Collin Peterson, D-Minn., said… he is determined to write a bipartisan bill that is within the funding baseline that exists in 2012.

The funding baseline is the amount of money that the Congressional Budget Office determines would be spent on all programs in the farm bill if the same programs were to continue after 2012. CBO projects the funding levels based on spending in programs in past years.

Peterson said at least initially he expects each major farm bill section — the farm program, conservation and nutrition — to stay within its 2012 baseline.

He also specifically pledged to fight off any attempts to lower direct payments, which flow to current or past farmers of certain crops year-in-year-out, regardless of whether they still farm or not.

Some further details on his plans for the next farm bill can be found in this National Journal article [$ again, sorry] but the gist of it is that Chairman Peterson doesn’t want reformers interfering the way they did last time, even if farmers were left practically unscathed from the battle.

In a speech to the National Association of Wheat Growers and U.S. Wheat Associates, Peterson said that reformers “who don’t understand how this works … defined what reform is” in 2008. Peterson said there should be changes to the farm bill, but he ridiculed one of the reformers’ biggest goals: limitations on payments to big farmers.

The campaign to lower payment limits “is not reform. It’s an ideology,” he said. Reformers want Congress to decide what size farms should get subsidies, a notion that Peterson rejects. “We are not smart enough in government to decide what farm size is,” he said.

(Sidebar: Isn’t it cute how Chairman Peterson couches his opposition to farm payment limits in libertarianish terms about how government “isn’t smart enough.” His support for a 80+-year-old suite of government interventions suggests he is not as skeptical about government’s smarts as he indicates in this little political aside. But I digress.)

And in a charming dismissal of the importance of free trade (he’s an old-hand at dismissing international obligations in this area), Chairman Peterson offered this:

Peterson said he did not think pressures to comply with trade agreements would be too much of a problem in the farm bill because “the trade situation is dead in the water,” and negotiators realize they cannot get approval from Congress if agriculture is not satisfied. “We’ve got some power over that system,” he said.

“I am not going to turn myself into a pretzel to accommodate this latest trade agreement,” he said.

A disappointing start to the 2012 Farm Bill fight, to be sure, but my hope is not dashed. With any luck, the recent signs of voters’ disgust with Washington will translate into some extra political support for those of us working for real reform. (see examples here and here.)

Your Choices Are Unacceptable

Through my work on agriculture, I get occasional media calls on obesity and the agri-industrial complex supposedly behind it.  On Sunday, for example, I gave an interview on NPR about the USDA’s push for – and subsidisation of – farmers markets and “eating locally” as the solution to poor nutrition. (This a recurrent theme of the Obama administration: Michelle Obama has made people’s food habits her business, growing a White House Garden and driving in a convoy of 36 vehicles to the H Street farmers’ market in a photo-op to promote it. The USDA even has a “People’s Garden”.)

So an article in today’s New York Times caught my eye. According to a recent study, the push for calorie postings in restaurants has had no affect on people’s eating habits in certain low-income areas of New York City.  People’s choices are, apparently, pretty impermeable to the information that nutrition and public health advocates assured us was the key to better choices.

You would be forgiven for thinking that was the end of the matter and we could go on eating what we like unharassed. Think again:

“I think it does show us that labels are not enough,” Brian Elbel, an assistant professor at the New York University School of Medicine and the lead author of the study, said in an interview.

I hope I’m not coming across as hyperbolic, but I find it difficult to believe that healthy eating advocates will be content to accept that people are making choices, unpalatable though they may be to the ”slow food” movement, based on the benefits and costs of the alternatives available to them. If people won’t voluntarily submit to the food police – even when information is available – then I suspect calls for regulation will soon follow.

(HT: Radley Balko)

Borlaug the Great

the greatNorman Borlaug, the father of the Green Revolution, has died at 95. Ron Bailey calls him “the man who saved more human lives than anyone else in history.” In an as-yet-unpublished letter to the New York Times, Don Boudreaux reflects:

By saving millions of people from starvation, green-revolution father Norman Borlaug arguably has done more for humanity than has any other human being of the past century (“Norman Borlaug, 95, Dies; Led Green Revolution,” Sept. 13). Yet unlike Sen. Kennedy’s, his death will go relatively unnoticed. He’ll certainly not be canonized in the popular mind.

Alas, in our world, melodramatic loud-mouths thunder to and fro in the foreground, doing little of any value while stealing most of the credit for civilization. Meanwhile, in the background, millions upon millions of decent, creative people work diligently at their specialties - welding, waiting tables, performing orthopedic surgery, designing shopping malls, researching plant genetics - each contributing to the prosperity of the rest. Some contributions are larger than others (as Dr. Borlaug’s certainly was), but even a contribution as colossal as his is quickly taken for granted, any notice of it submerged beneath the self-congratulation, swagger, and bellicosity of the politicians who pretend to be prosperity’s source. How wrong.

In 1992 the late Senator Kennedy said, “The ballot box is the place where all change begins in America.” I wrote a few years later that he was “conveniently forgetting the market process that has brought us such changes as the train, the skyscraper, the automobile, the personal computer, and charitable or self-help endeavors from settlement houses to Alcoholics Anonymous to Comic Relief.”

Some day a history book will describe Bill Clinton as “a scandal-ridden president in the age of Bill Gates.” Or maybe “in the age of the Green Revolution.” Either way, the biggest changes in our lives – certainly the biggest improvements – will have come from scientists, inventors, and businesses, not from politicians.

But that’s not the way journalists and historians see it. Just think of the people who have gone down in history as “the Great”: Alexander the Great, Catherine the Great, Charles the Great (Charlemagne), Frederick the Great, Peter the Great – despots and warmongers. Just once it would be nice to see the actual benefactors of humanity designated as “the Great”: Galileo the Great, Gutenberg the Great, Samuel Morse the Great, Alan Turing the Great.

So just for tonight, drink a toast to one of the great benefactors of the poorest people in the world, Borlaug the Great.