Thursday, July 11, 2013

Fair is fair...  

While I am no fan of the cynicism, gerrymandering, and class-warring of Tea Party congressmen, if they can pull this off, they deserve credit for moving farm policy toward something saner and more equitable.

Not only does the House intend to split the bill, but they also took aim at rooting out the "permanent farm law" from 1939 and 1948. This is no small ambition.
The bill would also repeal laws from the 1930s and 1940s, essentially eliminating all old farm policy which some conservatives like. 
Farm-state lawmakers have kept those laws on the books so there would be incentive to pass new farm bills and avoid expiration, but the threat of outdated policies kicking in has been a headache for farmers who worry they can’t depend on Congress to create new laws or extend more recent versions of the law.
Repealing those decades-old laws could mean that Congress would have little incentive to create new farm bills, however, and could make many farm programs permanent. [More]

[Note: I dispute the last sentence, and could find no justification for that prediction]

But what I continue to consider the greater point is too much of agriculture has placed their future in the hands of hard-to-predict politicians. This is a major farm business plan blunder, because it introduces unpredictable, illogical catastrophic failures and broad economic dislocations.

My list of most vulnerable in ag:
  1. Sugar - without our protectionist program I doubt we would have much production here (as they are finding out in Europe as well)
  2. Dairy - the idea milk can't be produced in free markets is learned nonsense. In fact, we'd better start finding ways to do so.
  3. Cotton - I suppose alternative crops could get cheap enough to make cotton viable without subsidies, but that's a long shot, IMHO.
  4. Rice - we're not even close to global competitiveness most years.
  5. Corn - Although slipping down the list, the ethanol mandate loss would be a knee-buckling development. While the industry may have outgrown it, and energy economics may support its use, until we stop holding a gun to the public's heads, we won't know how to plan.
To top it all off, while all eyes are on Washington, agriculture continues to be slow to respond to climate change. I think there is a naive belief magic seed will appear from Monstanto, et al. in time to cope with extremes of heat, drought, and rain. I'm actually coming to the other conclusion - that new genetics offer rising risks for different environmental conditions. The green snap problem seems to be a new side effect of modern genetics and guess which way storm intensitygoing.

At any rate, whatever the outcome, this narrow escape with from loss of government goodies should shake the faith in this cornerstone of our ag business. Trusting Washington seems an odd thing to do for people who despise and distrust government. 

1 comment:

Anonymous said...

Yes politicians are hard to predict but no more than the usual markets and weather. By having a third variable there's more chance of something working out favorably