Minnesota Farmers Union

(October 16, 2011) - When Chairman Frank Lucas gaveled the full House Ag Committee to order Oct. 12, ranchers, farmers and other aggies who depend on commodity futures markets to price their crops, livestock and dreams might have thought the hearing would center on what its title suggested: “To Review Legislative Proposals Amending Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

The hearing would do no such thing.

Two days before, on Oct. 10, the Committee’s Majority Staff circulated a seven-page memo to all members that outlined seven legislative proposals to amend the law designed to rein in American equity and futures markets’ excess that nearly derailed the global economy in 2008. (Read the memo at http://www.farmandfoodfile.com.)

Each of the seven proposals, though, sported two faces. The first was really a mask for the second: a legitimate question or concern about an some aspect of Dodd-Frank’s trading rules.

The second was the real deal: a primer on how to kill Dodd-Frank by sticking it with a thousand little pins—amendments, hearings, studies, cost-benefit analysis, lawsuits—and letting it slowly bleed to an irrelevant death.

No muss, no fuss, no fingerprints.

(October 14, 2011) - In early October, Senator Richard Lugar of Indiana, author of the Conservation Reserve Program (CRP) in 1985 and Chair of the “Senate Agriculture, Nutrition, and Forestry Committee in 1996” when Freedom to Farm was adopted, announced the introduction of a farm bill proposal that would save “$40 billion in USDA Cuts to Help Meet Federal Deficit Reduction Goals.” The bill was co-sponsored by Rep. Marlin Stutzman, also of Indiana. 

According to a Lugar Press release: “The Rural Economic Farm and Ranch Sustainability and Hunger Act (REFRESH) would reform farm programs, cutting $16 billion, a 24.5 percent reduction. Conservation programs would be updated and streamlined for a savings of $11.3 billion, a 17.6 percent reduction. Nutrition program eligibility loopholes would be closed saving $13.9 billion, only a 2 percent reduction. Roughly two-thirds of the savings would come from farm and conservation programs, and a third from nutrition programs, which represent three-fourths of the USDA budget.” 

(October 7, 2011) - The establishment of the Joint Select Committee on Deficit Reduction as a part of the recent legislation that increased the US debt limit has changed the process for the 2012 Farm Bill. With the establishment of this committee of 12 (6 Republicans and 6 Democrats), the focus of farm bill discussions is shifting from the agriculture committees in the House and Senate to this joint committee, rolling a number of programs into this effort to reduce the federal deficit over the next ten years.

Instead of a leisurely debate (some might call it protracted) on various elements of the farm bill by each of the committees as they work to build a workable coalition that can get a positive vote on the floor of the House and Senate, the current process has to be done by Thanksgiving so that the two houses can vote the package up or down before Christmas. If the committee’s bill is voted down, vetoed, or if the committee of 12 fails to reach agreement, then automatic cuts will be allocated to most federal programs. It is the fear of the nature of these cuts that is supposed to drive the committee to come to an agreement.

(October 2, 2011) - The usual six-mile drive home from Sunday church took a pleasant turn some weeks ago. As I headed back to the farmette for more coffee and more newspapers, my mind went a different way and, without one turn of any wheel, I was on my way to the southern Illinois dairy farm of my youth.

Back then most Sunday drives home from church featured three elements: a well-scrubbed Ford station wagon with at least five kids and no seatbelts in its back seat; the car radio relaying the tape-recorded highlights of the St. Louis Cardinals’ past week and the penetrating smell of my father’s slow-burning Camel cigarette.

If it was summer, all the windows of the big-fendered boat would be down so we could enjoy what was sure to be the closest thing to air conditioning we’d feel all week.

Winter delivered the opposite: windows tightly closed so the rolling oven would (we vainly hoped) roast us well-done so we’d remain warm for seven days.

And spring, summer, fall or winter we boys—Rich, David, me and Perry—sat like straight-backed little sinners all in a row, felt hats atop no-smile faces made stiff by starched collars, narrow ties and real fear of an angry God.

(September 30, 2011) - Over the last 13 years, 1998-2010, government payments for crops totaled $152.2 billion for an average of $11.7 billion per year. Keep in mind that these numbers do not include government subsidies to crop and revenue insurance products and other products that have been promoted as a substitute for ad hoc disaster payments.

In the present political climate with the focus on debt reduction, most observers are expecting that the House and Senate ag committees will have less money to work with even though there are a significant number of current farm programs whose funding will end with the end of the current farm legislation.

In this policy climate, are there a set of policies that would cost less, but maintain farm income under a wide range of price and production conditions?

To answer that question, we examined the 13 years from 1998 through 2010. During that period, local elevator corn prices were as low as $1.50 a bushel for an extended period of time (well below the cost of production) and as high as $7.00 a bushel—other crops saw similar numbers. For us this seemed like the perfect period over which to identify a set of policies that would reduce government payments, allow farmers to earn most of their income from the market, and maintain the value of production adjusted by government payments and variable costs.

(September 23, 2011) - In anticipation of potential Congressional action and the issuance of the GISPA rule by USDA, we have been rereading Informa Economics’ “An Estimate of the Economic Impact of GIPSA’s Proposed Rules,” prepared for the National Meat Association. It can be accessed at: http://www.beefusa.org/uDocs/Gipsa-Report_2010-11-09.pdf. According to Informa’s analysis, as a result of the implementation of the proposed GIPSA rule, the annual economic costs for the meat industry will total $1.6 billion and result in the loss of 22,843 jobs. These numbers are in contrast to the initial estimate by the USDA that the cost of the proposed rule would be negligible.

(September 16, 2011) - The reaction to part of the proposed GIPSA rule that was issued on June 22, 2010 may in itself suggest the need for Section 201.211. This is the section that addresses the issue of packers offering premiums to some producers and not others. The proposed rule is designed to ensure that packers offer the same premiums to all producers who can provide the required volume, kind, and quality of livestock, either individually or collectively.

Participants in some premium programs have argued against the rule fearing that the packers would eliminate the premium programs rather than keeping paperwork that would justify price differentials offered to different producers or sets of producers. As Ken Grecian, President of the Kansas Livestock Association and member of the Board of Directors of the National Cattlemen’s Beef Association, has said, “The proposed regulations ultimately may remove from the marketplace products consumers prefer. Producers have responded to consumer demand by finding innovative ways to develop and market premium quality and branded products. Programs like Certified Angus Beef, U.S. Premium Beef, ‘naturally raised’ and others would be jeopardized.”

(Spetmeber 9, 2011) - The USDA (United States Department of Agriculture) published a proposed rule in the June 22, 2010 Federal Register that would “add several new sections to the regulations under the Packers and Stockyards Act, 1921, as amended and supplemented (P&S Act). The new regulations that GIPSA is proposing would describe and clarify conduct that violates the P&S Act and allow for more effective and efficient enforcement by GIPSA [Grain Inspection, Packers and Stockyards Administration]. The proposed regulations would clarify conditions for industry compliance with the P&S Act and provide for a fairer market place (emphasis added).” The USDA originally allowed for a 60 day comment period but under pressure from industry groups extended the comment period to November 22, 2010.

As of early September 2011, GIPSA has not issued a final rule. And still the proposed rule continues to generate strong reaction by its opponents as witnessed by the testimony of Kansas Livestock Association President Ken Grecian at a 2012 Farm Bill field hearing on August 25, 2011 in Wichita, KS. The hearing was held by Kansas Senator Pat Roberts and Michigan Senator Debbie Stabenow, Senate Agriculture Committee Chair. 

(September 4, 2011) - A day does not pass without some Big Ag chieftain or Capitol Hill yakker parting their perpetually pursed lips to unleash total nonsense on you, me and the body politic.

To wit the following quote, an answer given by a member of the U.S. Senate to an Aug. 25 question on who will be dominate 2012 Farm Bill discussions, Congress’s aggies or its appropriators:

"I think they will welcome our suggestions and if we put together a farm bill that meets the number that's all that's required of us, except that we are going to point out, we're going to do a great job, I don't want to say reform, I just say that we're going to do a great job to do everything to streamline, to combine purpose and combine programs when you have 10 or 12 programs that do the same thing.”

That this is what passes for informed commentary today is more important than the identity of the mumble-mouth commenter. It also explains why you can stop wondering how we got into today’s swamp and start wondering why you still think this group of full-time lip flappers and part-time thinkers is gonna’ find a way out.

They won’t.

And they won’t because, like zombies, they are committed to the dead-end process that got us here: politics first, solutions second.

(September 2, 2011) - The downhill ride that the stock market has taken in recent weeks is said to be evidence of a general weakness in the US economy and worries about the stability of interlinked financial institutions worldwide. Over the last two-and-one-half years, we have seen the unemployment rate in the US shoot upward and remain high as job creation has not been sufficient to make a dent in the overall unemployment rate, especially when those who have given up looking for work are included.

The effects of the downturn will have an impact on the farm bill debate in two ways. First, there will likely be less money available to support the current set of farm policies that protect farmers from disasters, whether they result from production problems or low prices. Second, the use of Supplemental Nutrition Assistance Program (SNAP) benefits—formerly called food stamps and still called that by most people—has soared since the beginning of the economic downturn. 

With increased usage, the costs of the food stamp program have doubled and will certainly be a target of budget cutters in Washington, DC. And if the past is any indication of what the debate will look like, there will be those who will try to gut significant elements in the farm portion of the legislation, pitting what they will call “wealthy farmers” against hungry children.