(February 12, 2010) - The farm media is all atwitter over the announcement by the Obama administration that they have set a goal of doubling US exports in five years. This will include help for farmers in boosting their exports.
You will have to pardon us if we don't get overly excited about the implications of this export initiative for US farmers.
The lure of a permanent export-driven prosperity has been the holy grail of agricultural producers since shortly after the first Europeans settled in what is now the US. Tobacco proved to be a profitable enterprise for early settlers until a burgeoning supply from the colonies exceeded the demand and prices plummeted.
Over the next three-and-a-half centuries, there were years of export-driven agricultural prosperity, no question about that. But for major commodities, it is equally true is that export volumes typically accelerate for a few years then level off, grow agonizing slow, or decline.
The years of sharp increases were often caused by external political events or decisions.
(March 31, 2009) - No matter what one thinks about the proposal of the Obama administration to eliminate direct payments to farms with gross sales in excess of $500,000, it is becoming clear that they want to put their own imprint on farm policy. That can be seen in the argument that farmers could make up their loss of direct payments with payments for environmental benefits and carbon sequestration.
The issue of improving the environment through carbon sequestration fits in with the emphasis Obama has given to green energy investments, the reduction of atmospheric emissions of fossil-fuel-based carbon dioxide, and reducing the dependence of the US on imported oil.
Farmers have made significant investments in biofuels as a means of both increasing farm income and reducing the number of barrels of oil that are imported by the US every day. Public support is conditioned on the ongoing acceptance of these goals as important elements of public policy.
(March 9, 2009) - In his February 24, 2009 speech before Congress, President Obama said, "In this budget, we will...end direct payments to large agribusinesses that don't need them." We were listening to the speech and when he said that we did a double take.
What did he mean?
Large agribusinesses like Monsanto, Cargill, ADM, AGCO, and Pioneer Seed don't receive direct payments. Direct payments are the current iteration of the AMTA (Agricultural Market Transition Act) payments that were made a part of the 1996 Farm Bill in order to entice farmers to support a radical reordering of farm programs. These payments are made to growers of the major crops (corn, soybeans, cotton, wheat, rice, etc.) so Obama wasn't talking about many large livestock producers, orchardists, and fruit and vegetable producers.
To our ears the wording was strange because, in most cases, we do not think of crop farmers, even the large ones, as "large agribusinesses." They may be incorporated to simplify tax and inheritance issues, but for the most part, they are family operations-hardly what comes to mind when the President talks about "large agribusinesses."