Monday, June 04, 2007

One emerging theme...

As I read the op-ed columns and lobbying group papers on the farm bill debate one theme is fairly consistent and we all saw it coming.
One problem with the farm bill has been its historical lack of balance. For example, only 39 percent of all U.S. farmers and ranchers received crop subsidies in 2005. These farm-bill subsidies support the growing of commodities such as corn and soybeans, but have little support for fruits and vegetables.

These imbalances have consequences for eaters. Between 1985 and 2000, the real price of fruits and vegetables increased by 40 percent, while the price of soft drinks and other sugary and high-fat foods declined by as much as 20 percent. If our farm bills had been healthy-food bills, we could have distributed government support more equitably to make nutritious food more affordable. In part because of this imbalance, we are paying more than $100 billion a year in obesity-related medical costs. [More] [My emphasis]

Say what you will about the Environmental Working Group, but the power of one guy (yup - that's all) armed with a decent computer, good database skills, and well-run website is formidable. Subsidy proponents simply have been unable to counter these exposed numbers, especially when they contrast significantly with the traditional rhetoric of farm payments.

The maldistribution of government money also plays well for those who argue about local producers being short-changed.
There's growing demand to change how the subsidies are allocated. Some say it's unfair that commodity growers receive nearly all the money. And there's a push to spend more money helping farmers solve environmental problems and less on direct payments to individuals. [More]
Moreover, the breadth of the coverage and interest in the new farm bill seems greater. Opinions are popping up in places that never cared much before.
Each year the federal government makes payments worth millions to farmers across the country -- many of whom are massive corporations, not the average family farmer, like Maine farmers. These subsidies promote inefficiency and encourage growers to "game" the system in order to qualify for larger subsidies. [More]
This means there could be fewer easily-traded-for votes from urban legislators than in the past. When you don't have many farmers in your district/state, why not swap a farm bill "aye" for a vote that will impact your constituents? That type of thinking may not be as easy to come by anymore. Pressure groups have arguably lowered the "disinterest" in farm payments, I think.

The bottom line - if the forces at work in the farm bill debate cannot alter the path of this juggernaut legislation, it could be as close to as close to permanent as the Constitution. But as I mentioned in this week's USFR commentary, a number of small changes (slightly lower payment cap, wider distribution, less market-distorting, etc.) could essentially make our farm program an afterthought for industrial producers in the booming grain business.

This Death of a Thousand Cuts is starting to look like the optimal outcome to me.


Anonymous said...

As a grain farmer who also has a vegetable patch, I would like to comment on the story from the DesMoines paper.

The reason for fruits and vegetables being more expensive is mostly labor cost. Grains are efficiently grown with less labor each year, while most fruits and vegetables continue to need hand labor to harvest. The adverse effect wage (the minimum wage for Mexicans on the farm) has been quickly rising to protect U.S. citizens who want jobs picking fruits and vegetables (even though picking fruits and vegetables is a job that U.S. citizens do not want to do anymore). A good immigration program will help the fruit and vegetable business more than any new farm bill.

I also take issue with the idea that highly productive grain farms cause obesity. If people had the self-control to say enough at the buffet line and get a little exercise, no amount of grain production would cause weight problems. On the other hand, if there were no farm subsidies, our society is affluent enough to pay slightly more at the grocery store and continue to put on just as much weight.

John Phipps said...

j.r.: Thanks for reading. I have written often about my take on these arguments. My point is which way the tide seems to be flowing, and concerning the status quo, I would say "out".

Still I have a remarkable history of being wrong on predicting farm policy, so don't bet the farm.

Anonymous said...

It appears your hope for some tweaking that would make programs less trade distorting is wishful thinking at best. I hear that what the House Ag Subcommittee did for peanuts this week in cutting direct payments and increasing loan rates is likely the template to be used in both the House and Senate for other covered commodities as well. Just the oppposite of what the Secretary proposed. He was trying to promote programs that were predictable and able to withstand challenge from other countries at WTO. Instead, Congress looks intent on shifting more farm spending from the "green box" to the trade distorting "amber box" increasing our vulnerbilities. Real geniuses up there on the hill!

Anonymous said...

J. L. says I have been a farmers daughter and a farmers wife all my life. Now that my husband has had a stroke I make many decisions that I had not counted on. My son who now farms does not have much of a future since the big get bigger . Farmers have been at the mercy of the government since the beginning. The guys on the hill are smart enough to pad their own pockets and not look to the future of our country. Obesity is a huge problem beyond belief and will not change until food is so expensive we can't afford to eat....that will be soon. The farm program will never change because the guys on the hill use us as a barter and we let them, because we have no backbone (money). It all boils down to money.!! Only through you John Phipps with your comments do we stand a chance of being heard. Thanks for letting me air my frustrations.

John Phipps said...

Anon (JL?): I am sorry for your struggles - and I wish you well. I have not given up on the possibility of some form of payment limits and even floor amendments, which would direct payments away from farmers like me to folks like you.

The big question for me is will Pres. Bush stand behind Sec. Johanns who has been a very loyal spear carrier?