Monday, October 22, 2007

I smell another boondoggle...

Those crafty guys in the Ag Committees of Congress are about to do it again. They are going to raid the Treasury in broad daylight (albeit in the fog of farm legislation - to torture the metaphor). Jim Weisemeyer outlines the increasingly questionable cost assumptions behind the Senate Farm Bill.

One tiny little slice of his analysis:
How will the apparent inclusion of an ever-ready ag disaster program impact a producer's attitude toward buying up crop insurance?

What if.. If as I suspect that the CBO assumes in their analysis that x-percent of producers would buy up insurance to a higher level, the savings resulting from that assumption may not be realized near to the degree that CBO might have predicted. [More by subscription - seriously, ya need to find room for this in your budget]
I'll bet the idea of eliminating the LDP game won't survive conference either.
While not exactly the same, drafts of farm bill language in the Senate do contain a shift in when producers could claim the LDP to the day they lose beneficial interest in the crop. [More]
However I am inclined to believe these are tempests in a legislative teapot. Looking at the trends in trade, biofuels, and biotech, a huge fuss about a few billion per year is going to mean less and less to more and more producers.

Those commodities and communities who insist on government support as their primary business plan may discover they have not built a safety net, they've woven their own shroud.

How very Halloweeny.

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