New farm bill much like the old.

[trappincoyotes39]

herald-review.com/business/local/senate-approves-farm-bill-house-to-consider-it-this-month/article_9adb29a8-d256-11e2-942c-0019bb2963f4.html

[bblwi]

I would not state that a huge increase in food stamps and no direct payments is the same old same old at all.
The corrections for the crop insurance based on 750K AGI is going to be interesting for the firms selling insurance or the FSA and Risk Management Association that over sea the programs. Are they going to need to request current tax forms and for one year or more? That opens up some real issues with privacy etc and also adds a lot of oversight and time to the whole process of determining what rate to charge for the premiums.

Bryce

[trappincoyotes39]

Well early talk was many crop subsidies would fall off my a big margin due to grain prices, doesn't seem much will change with corn or beans. Seems like a political move to gain in food stamps.

[bblwi]

Actual subsidies for corn and beans have been zip practically for the last farm bill except for direct payments which are now gone. The big increase the last farm bill was crop insurance which was the lower cost replacement for subsidies. This farm bill is trying to reduce that cost but as stated above the issues of making those income dependent could be burdensome and also now a dairy farmer with 600 cows and 1,000 acres that buys over half their feed will pay more for crop insurance then the grain farmer with 2,000 acres of corn and beans which he sells to a dairy, poultry or hog farmer. This was an addition by the corn belt guys for sure.
The house will plan to attack the higher food stamp monies so the jousting will begin in earnest soon. The 100 billion per year includes 20 billion for CRP , crop insurance NRCS, CREP, EQUIP etc. so actual monies to farmers is 20 cents on the dollar for the farm bill. That 20 billion also does not include the staff for the FSA, NRCS, RC &D etc. etc.

Bryce

[cflann]

I guess I'd argue that not looking at the Food Stamp, WIC etc line items in the Farm Bill, 100 cents of every dollar goes to farmers. Don't know how you could argue that with a straight face. And, I'm not Farm Bill bashing. There are logical reasons to have these safeguards, just like there are totally insane aspects to the legislation. I guess that's government. But we need to call a spade a spade...

[thorsmightyhammer]

For the life of me I cant figure out how come they keep protecting the sugar farmers as they do.

[FWS]

That's easy to figure out Stephen, the answer is $$$'s, millions of them invested in lobbyists and in legislators by the sugar growers.

Same reason there is such a thing as the ethanol production mandate, it was created, bought, and paid for by the corn growers and related interests.

[trappincoyotes39]

Yep you don't need the ethonol subsidy as long as you have the mandate, looks better that way and you still end up with inflated corn prices and land prices. I just talked to a guy in Iowa 93 acres of hi yield corn ground just sold last week for 17,100 per acre.

[bblwi]

There was a new senator from the south on the senate ag committee and that gives more leverage to sugar, peanuts and cotton. Much of the farm bill base was created in the late 1940s and early 1950s when the Democratic Party was the only party in the South ( be they conservative or not) and thus with high seniority the southern senators ruled the farm bill and the carryover is still there with more emphasis now on corn and beans and GOP senators from the corn, beans and wheat belt.
The main reason Food Stamps were put in the farm bill is that they were ways to put more spending into the bill that were not likely targets to be cut if they were in other programs or stand alone items. Now the major commodity companies the grocery store lobbies etc. have embraced the Food Stamps as well.

Bryce

[bblwi]

below is an editorial from the Chicago Tribune regarding the re cent Senate Farm Bill pasage.

Bryce



The Senate approved a nearly $1 trillion farm bill Monday night that proves Washington is still bent on catering to special interests and wasting taxpayers' money.

Let's count the ways.

The Senate bill perpetuates a sugar subsidy that raises the price of sweets and shuts out foreign competition. Great for the sugar industry, terrible for consumers.


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The bill creates a new sweetheart deal for the dairy industry: an insurance program that will drive up prices by triggering production cuts when there's an oversupply of product. Good for the dairy industry, terrible for consumers.

The bill perpetuates the vast government subsidies for crop insurance. The government will continue to pay more than half the cost of the insurance. Farmers get subsidized and get a perverse financial incentive to take excessive risks without having to worry if their crops fail. Taxpayers get gouged.

The bill largely spurns Obama administration efforts to reform the international food aid program. Most food will still be bought in the U.S. and shipped abroad, rather than be purchased where it will be consumed. That's good for U.S. growers and shippers, but drives up the cost to taxpayers and reduces the number of people who are fed.

The bill cuts $4 billion over 10 years in the food-stamp program, but does little to deal with fraud in the program.

While the Senate bill promises $24 billion in savings, including the elimination of $5 billion a year in direct government payments to farmers, there's so much more potential here for reform.

Lawmakers like to say agriculture policy protects family farmers, but the beneficiaries are generally large agribusiness operators. They've been reaping tidy profits for some time, even as the rest of the country struggled through recession and slow recovery.

The farm bill in many ways distorts the marketplace for food, ultimately hurting an industry that is one of America's great competitive strengths.

The biggest culprit is crop insurance. Years ago, it helped farmers to weather drought and flood. These days, it has morphed into a giveaway that enables the big, sophisticated farm operators (who receive by far the most money from the program) to lock in their annual revenues.

No business could afford that kind of insurance in an open market. Farm operators get it because the federal government covers more than half of the insurance premiums. The government also offers reinsurance protection for the private companies that write the policies. If Congress gets its way, the program would grow to at least $9 billion a year over the coming decade, and probably a lot more.

The subsidies encourage farmers to obtain so much coverage that they take risks no prudent operator would take. They plant on unsuitable land, knowing that if a crop fails, they can make a claim. They usually plant corn, the nation's No. 1 cash crop, which is in demand partly from companies that brew it into ethanol fuel — an industry that owes its existence to more government subsidies.

With less and less risk of bearing a loss, farmers have started planting what's known in the heartland as "corn-on-corn." Instead of rotating the crop in each field year by year, some farmers have been planting only corn. Corn last year. Corn this year. Corn next year.

That's poor stewardship, contrary to the critical goal of sustainability. It contributes to soil erosion and depletes nutrients. It breeds pests and crop diseases. Yet government-funded crop insurance, along with other pro-corn policies, has made corn-on-corn a lucrative financial proposition. Midwest agriculture will pay the price eventually for this perversion of accepted practices.

Crop insurance leads to fraud: Federal agents this year busted a criminal ring involving dozens of farmers, insurance agents and adjusters in North Carolina. They were scheming to steal more than $100 million from the poorly policed, overfunded crop-insurance program. More than 40 people have or plan to plead guilty in the case so far.

U.S. Rep. Collin Peterson of Minnesota, ranking Democrat on the House Agriculture Committee and a defender of crop insurance, recently struck a nerve when he admitted, "There is five times as much fraud in crop insurance than in food stamps."

The government should have no role in crop insurance for wealthy agribusinesses. The subsidy should be greatly scaled back to assist only those farmers who require help to obtain a reasonable level of emergency coverage.

The Senate has failed again to come up with a far-reaching farm bill. The House will take up its own version in the coming weeks. Congress, come on. Wean the agriculture industry off of welfare.


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