Wednesday, September 12, 2007

Pressure from without...

Although farm interests are adamant in reserving the right to dictate their own policy to the government, an array of converging interests seem to be increasing in intensity. These factors may not have time to be fully felt for this farm bill debate, but could certainly color the nature of farm programs considerably over the next decade.
  • The ever-mischievous French. We kinda expect it from farmers like the Danes, but...
France plans to present a "radical reform" of European agricultural subsidies when it takes over the presidency of the European Union next year, President Nicolas Sarkozy said Tuesday.

Sarkozy said a major overhaul of the EU's Common Agricultural Policy (CAP) was "indispensable to ensure that this policy once again enjoys legitimacy."

"The French presidency of the European Union will prepare a new political framework for our agriculture in Europe, based on fundamental principles," he said in a speech on agriculture delivered in the western city of Rennes.

France, Europe's agricultural powerhouse and the EU's top recipient of farm subsidies, will take over the rotating presidency of the 27-nation EU in July next year for a period of six months.

Sarkozy's call for reform of EU farm subsidies marked a major shift from his predecessor Jacques Chirac, who steadfastly opposed changes that would inevitably penalize French farmers. [ More]

  • Eroding popular support for farmers in general - even surprisingly, the much beloved agrarian sector.
Michael Pollan's bestseller, The Omnivore's Dilemma, has gotten people all riled up about farmers again. The last time this happened was when the first Farm Aid concerts reminded America that we have strong feelings about the family farm and its economic viability. The new round of farmer feelings is more directly related to issues of trade and the impact of globalization. As Pollan writes:

"I’m thinking of the sense of security that comes from knowing your community, or country, can feed itself; the beauty of an agricultural landscape; the outlook and kinds of local knowledge the presence of farmers brings to a community; the satisfactions of buying food from a farmer you know rather than the supermarket; the locally inflected flavor of a raw-milk cheese or honey. All those things—all those pastoral values—free trade proposes to sacrifice in the name of efficiency and economic growth."

My general feeling about farmers is that they can go f*** themselves. Perhaps this is strong. But farmers also come on strong in their own sort of farmer way. They take a homespun approach but they often wrap themselves up in a hell of a lot of self-righteousness. It all has to do with the land, I suppose, the importance and simplicity of the land. Americans love the simple even if we've been destroying it for generations. A few pithy sayings and we’re eating out of their hands. The farmers. [More]

  • Brazilian lawyers - these guys have tasted victory in the cotton case and see a chance for lots more billable hours.
Brazil will ask the World Trade Organization for a formal investigation of U.S. farm subsidy programs, which it says includes payments for ethanol production, a senior Brazilian official said Wednesday.

The South American country, which has already won a series of WTO rulings over U.S. cotton subsidies, will make its request for an investigative panel soon, said Roberto Azevedo, the Brazilian Foreign Ministry's trade chief.

The dispute could become a major case for the global commerce body, which has largely steered clear of energy issues in its 12-year history. Brazil is a major ethanol producer.

It also could become a hot topic for U.S. presidential candidates as they gear up for primary contests, including voting in Iowa, the state that produces the most ethanol.

"Brazil will have to ask for a panel," Azevedo told The Associated Press.

The two countries held consultations last month after Brazil accused the United States of exceeding the $19.1 billion that it is permitted under WTO rules to spend on the most controversial forms of farm subsidies in six of the past eight years. Brazil also accuses the U.S. of giving illegal export credit guarantees, largely echoing an earlier complaint by Canada.

While most of the measures it questioned Washington about concerned farm produce, Brazil included in its complaint what it called "energy subsidies," which included tax exemptions on diesel fuel and gasoline.

"Ethanol results from agricultural subsidies," Azevedo said. "You don't produce ethanol from rocks or underground. It's derived from agricultural commodities." [More]

All these separate influences could be dissected on their own merits, but it appears to me to be the actions the Adam Smith's fabled invisible hand. Our farm policy impacts the whole world, and the whole world is reacting. Even our reliable domestic political "lovability" may soon be more constrained to smaller, quainter operations. Oddly enough, I think one reason global pushback is picking up steam is because their economies are more and more like ours - market responsive.

Besides, it's becoming obvious farm policy isn't where we need to be. We're now clients of energy policy.

The U.S.' ethanol production capacity will probably total 20.43 billion gallons as of August 2009, up sharply from 6.707 billion gallons as of August this year, due to high profit forecasts and government support, a U.S. commodity risk management consultancy firm said Wednesday.

That means corn consumption for ethanol will total 7.46 billion bushels in the 2009-10 crop year, more than double the 3.62 billion bushels in 2007-08, Bill Tierney, executive vice president of research and marketing for John Stewart & Associates, said during the International Corn Industry Conference in Dalian. [More]

In other words we could win a skirmish on the farm program and be waylaid by the energy bill.

2 comments:

Glenda Neff said...

John,
you've erroneously attributed a quote to Michael Pollan (Sept 16 Pressure from without...) It was Morgan Meis who wrote "My general feeling about farmers is that they can go f*** themselves."

I'm confident that Michael's analysis and journalistic professionalism does not degenerate to such a simplistic level.

Thanks for posting Farm Bill perspectives, yours and others.

Just as the policies that lead us to war must be debated by every US citizen, so too the Farm Bill (which is really the Farm/Food/Bio-Energy/Environment Bill) needs the full participation of our citizenry. It determines what foods we have access to and can afford, the stewardship of our land and forests, water and soil, the options of future energy production and the economic viability of rural communities.

John Phipps said...

Glenda:

I need to do be more clear for people who have not been reading my blog for long, it seems. I apologize for the confusion.

Indented, italicized portions are quotes from the source linked by the [More] at the end of the quote. I use that format - as do other bloggers - to attribute, and to provide direct access to the source material. I checked and the quote link seems to be working.

This is not intuitively obvious, but it saves some time for me and I hope this clears up your question.