Monday, September 03, 2007

Why the "safety net" may be a tougher sale...

Farmers - or perhaps our public relations consultants - have wisely realized we need to repackage our previous versions of "victimhood".

It is relatively hard to ignore charts like this and plead for government entitlements. (But not impossible - I should note.)
"We believe farm policy should support agricultural production and not some subjective and social goals," Stallman, a Texas rice farmer and president of the American Farm Bureau Federation, said after the appearance. [More]
This is an interesting remark, seeing as it abandons any pretext of ag payments being deployed for reasons of fairness or humanitarian aims. In the case of corn production, it is also howlingly wrong. My $24 DCP has virtually zero effect on my 2008 crop plans - especially since I get it whether I produce any corn or not. At current prices, corn subsidies do not affect corn production, period.

With per acre gross incomes in $700+ stratosphere, the DCP for corn farmers is vacation money or as we have seen, "new paint money".

It appears in the face of hard-to-disguise prosperity, aid advocates are falling back on our old reliable nemesis: the EU. "We have to pay our farmers because those Germans are getting mucho dinero!" Of course, one problem with this argument is EU farmers aren't the competition. In fact, for a change, foreign competition is less of a factor, since wheat is short everywhere as the rush to fuel crops bids acres away here and abroad. Wheat has always faced strong EU competition since Northern Europe's natural advantage is cereal crops. But even wheat looks like a gold mine now.

And of course, while we are fixated on the EU CAP, our strongest competitors are places like Brazil. We seem determined to fight the foe we prepared for, not the one that really exists. How very French.

In fact, the only crops really, really desperate for support are cotton, rice, and sugar - a fact Mr. Stallman and the largely southern-facing AFBF understand well.

However, it will take firm control of facial muscles to look an America with 47 million citizens without health insurance and argue over-indulged guys like me need a "safety net" - but not potato farmers and certainly not other citizens such as umm, non-farmers. And I think the old "all the other kids are getting a subsidy" argument may be where we are going.

This will work right up until Pres. Bush gives the farm (subsidies) away at the WTO.

2 comments:

From Virginia said...

John,

You nail it on farm policy every time! But I always wonder why more replies are not posted to your insightful comments. I wonder if it is because they have no response. It is frustrating that everyone in Washington DC maintains the attitude of "please don't confuse me with the facts". I have become convinced that the inertia of the status quo is next to impossible to overcome. I have given up hope on Doha as well.

John Phipps said...

VA:

I think one of the comment problems can be corrected with some badly needed blogging updates currently in progress. Recent comments will be displayed in a sidebar, just like the real bloggers do. Then even comments to way-past posts will be noticed.

I have also observed it takes time for readers to become comfortable with this open dialogs - especially a profession with little literary tradition.

Weirdly, I am becoming more optimistic our farm policy will be corrected from without by trade/budget issues and declining ag clout compared to business (deep concerns over intellectual property and industrial tariffs, for example) which will throw ag subsidies under the trade bus in a minute.

I also think the administration is a real wild card on every issue you can think of. Note the change of policy toward NK (one-on-one meeting) and the result. Who knows what could happen next?

Thanks for reading and contributing.