Sunday, July 22, 2007

Saved by the edge of the political knife...

What looks like the likely farm bill output for the House has received Speaker Pelosi's blessing. This is not endearing her to her district, but like all Speakers, she knows nobody is going to vote out a Speaker from their own district.

My guess is Rep. Pelosi would throw her own Maltese under a bus to maintain the Democratic majority, and the handful of Democrat freshman in rural districts were not expendable. If you stop and think about it, the only real effort at reform came when Republicans had a large edge in Congress. Stalemate has been very, very good for subsidy fans.

Still, Speaker Pelosi's approach is a clear indication of the one-dimensional image of agriculture. Do farmers vote solely on the basis of how much money we get in the farm bill? (I have never seen evidence of a "farm bloc" vote) Does Iraq not matter to us ? Or health care? Or gay marriage? Or immigration? Would we vote for Lord Voldemort if he came through with doubled loan rates?

Maybe farmers are content to be seen as self-centered simpletons with little interest in affairs beyond the farmgate. That picture does not correlate well with producers I know, but when I think of it, neither do they seem troubled to be viewed that way. Perhaps Ms. Pelosi's cynical arithmetic is right.

As usual, the gold standard coverage of this development is in Jim Wiesemeyer's column at ProFarmer (for which you have to pay - and should) but I'll risk stealing this one nugget that gave me pause.
Payment limitation changes are by far the biggest farm bill achievement in the House farm bill. While farm bill reformists say the alterations did not go far enough and deep enough, changes in payment eligibility (not only for farm program payments, but also for conservation payments), along with the end of triple-entity and a move to direct attribution clearly give this farm bill a reformist label.
Jim and I have a quantum difference on the meaning of the word "reform" but the more I ponder it, eliminating the three-entity rule at least opens the door for future ratcheting down of payment limits. While a very small step, if it is retained by the Senate - which I think very possible - it will force some innovative work-arounds at least by some large operations. [Hint: expect to see more 5 year-olds "materially participating"]

The Senate will have to pass different legislation of course, in order to be seen as contributors, so it may be this proposed legislation is the upper boundary for traditional subsidy recipients.


Anonymous said...

I just read the full version of the house proposal. I am actually rejoicing in the fact that my three entities will no longer be needed to maximize payments since my wife will now be considered an entity of her own. I hated keeping three sets of books. My CPA will find his income down 67%. My payments will stay the same. My five year old will be saved the EWG experience.

John Phipps said...


You make my point precisely. Did Rep. Peterson think we couldn't game this flaccid "limit"?

Agriculture's campaign to appear like clueless rubes sucks them in again.