Currently browsing posts about: Farm-bill

Thanks to the Hagstrom Report for sending along analyses of the dairy programs in the farm bill.

I’m not a dairy farmer and I’ve never had to work with these programs, which is a good thing because I find them impenetrable.  

For one thing, support for dairy farmers—and protection against disastrous cost and price fluctuations—is accomplished through several extraordinarily complicated programs that survive or are newly enacted in this farm bill.  

• The permanent Dairy Price Support Program from the 1949 farm bill.
• The Dairy Forward Pricing Program
• The Dairy Indemnity Program
• Export market development in the National Dairy Promotion and Research Program
• The Margin Protection Program for Dairy Producers (MPP)
• The Dairy Product Donation Program (DPDP)
• Federal Milk Marketing Order for California

Why impenetrable?  Try this explanation (from the first document listed below) of the new Margin Protection Program:

A voluntary program that pays participating farmers an indemnity when a national benchmark for milk income over feed costs (the actual dairy production margin or ADPM) falls below an insured level that can vary over a $4 per cwt range.

That document explains the two new programs, MPP and DPDP, in great detail, with charts and formulas.  For them, I have to take the authors’ conclusions on faith:

The two new programs (MPP and DPDP) offer a total revamping of the safety nets that have been in place for the dairy sector going back to the middle of the 20th Century…Whether the programs proposed here will prove to be the answer farmers seek is something that will be debated and estimated, but we won’t really know unless and until they are tried.

Dairy farmer readers:  Will these new programs make your lives easier?  More secure?  Bring you more income?

Here are the analyses:

• Program on Dairy Markets and Policy — Information Letter: The Dairy Subtitle of the Agricultural Act of 2014 by Marin Bozic (U. Minnesota), John Newton (U. Illinois), Andrew M. Novaković (Cornell), Mark W. Stephenson (U. Wisconsin), and Cameron S. Traen (Ohio State).
• (Audio) Just Waiting for a Signature: Discussion of the New Farm Bill (conversation with Stephenson, Andrew Novaković, and John Newton).
• Working Paper: Price Discovery, Volatility Spillovers and Adequacy of Speculation in the U.S. Dairy Markets (by Marin Bozic and T. Randall Fortenbery of Washington State University).

I’ve been hearing from readers challenging my disgusted comments about the politics of the farm bill.

The bill is so awful that the Washington Post says it deserves a veto:

Tipping the financial scales at $956 billion over 10 years, or just over $1 billion per page, the hideously complex bill is supposedly a compromise that reforms crop subsidy programs…what the bill takes from the ag lobby with one hand, it largely gives back with the other…the bill cuts $8.5 billion over 10 years from the Supplemental Nutrition Assistance Program (SNAP) for the poor…attached to so much corporate welfare, it’s hard to swallow, especially when that corporate welfare isn’t rigorously means-tested.

The New York Times doesn’t go that far.  It supports the bill, but grudgingly: “The farm bill could have been worse:”

On balance, the bill is clearly worthy of support, particularly because it will prevent austerity fanatics in future Congresses from gutting food stamps for the next five years….But endorsing the bill also means acknowledging the low expectations for real progress in Washington…As the Center on Budget and Policy Priorities argues, rejecting the farm bill means rolling the dice that the next Congress will do a better job. In today’s environment, that’s a tough bet.

Why is the farm bill politically corrupt?

• It is indeed “hideously complex,” so much so that nobody can possibly make intelligent decisions about very much of it.
• It is so difficult to read (because it refers to previously legislation) that all kinds of things can get into it without being noticed or discussed.
• It is mired in “pork,” things put into it by members of agriculture committees to please particular groups of constituents or lobbyists.
• It is not about what’s best for the American people, farmers, or the poor; it is about what’s best for getting legislators elected.
• It represents a substantial transfer of taxpayer dollars to the wealthiest “farmers” (i.e., agribusiness) at the expense of the poor and, therefore, legislates further income inequity.

I’m with the Washington Post on this one.  If the Senate passes it and the president signs it, it’s only because they’ve given up on trying to govern the country from some rational perspective.

Brad Plumer, the WonkBlogger at the Washington Post did some homework on the farm bill based on cost estimates from the Congressional Budget Office.

The grand total: $956.4 billion over 10 years.

Whether the total cuts (“savings”) from the previous bill amount to $16 billion (the CBO estimate) or $23 billion (the congressional estimate) depends on how they do the calculations, but all estimates agree that the big cuts over ten years come from three areas:

• Farm programs: -$18.4 billion
• Conservation: -$6.1 billion
• SNAP: -$8 billion

ProPolitico Morning Agriculture points out that President Obama’s speech last night did not mention the farm bill.  Really, it’s too awful to talk about in public.

It’s too soon for me to say much about the farm bill other than to express disgust for the entire process.

The House and Senate still have to vote on it, which leaves plenty more opportunity for last-minute amendments, the addition of even more pork, and even more welfare for the rich at the expense of the poor.

In the meantime, we have the

• Agricultural Act of 2014 — Conference Report—all 949 pages of it
• Managers’ Statements on Title I through Title XII
• Press release

What can I say?  The farm bill is a mess—the worst example of the worst of food politics.

Every clause in those 949 pages exists as the result of special-interest lobbying.  Guess what: some special-interest groups have more money and power than others.

The result: an unattractive compromise.

If the bill is ever to pass, everyone has to compromise, but some groups have to compromise more than others.

How else to explain the Center for Budget and Policy Priorities’ statement that the SNAP cuts represent a reasonable compromise?

To be sure, the conference agreement does include $8.6 billion in SNAP cuts over the next decade. Yet it stands in sharp contrast to the nearly $40 billion in SNAP cuts in the House-passed bill of September, which contained an array of draconian provisions and would have thrown 3.8 million people off SNAP in 2014, according to the Congressional Budget Office (CBO). The conference agreement includes none of the draconian House provisions — and it removes virtually no low-income households from SNAP.

I am indebted to ProPoliticoAg for listing the winners: groups that want to retain Country-of-Origin Labeling (COOL), the dairy manufacturers, organic producers (!), the U.S. catfish industry (USDA will inspect catfish, not FDA), and animal welfare groups (states can insist on standards),   The soybean and rice industries are also happy with the bill, as are groups that want more flexibility in food aid.

ProPoliticoAg’s losers:  meat packers and processors who wanted to get rid of COOL, dairy farmers who preferred a different program, the poultry industry (which will have to abide by state cage-size requirements), anti-hunger advocates (the SNAP cuts).

ProPoliticoAg also read the fine print (as I promise to do once the bill passes):

• $20 million per year for emergency relief to producers of livestock, honey bees and farm raised fish (p. 131-132)
• A USDA report on the federal standard for the identity of honey (p. 802)
• A citrus disease subcommittee to advise on citrus research (p. 568-569)
• A requirement for USDA to recognize feral swine risks (p. 890)
• $2.25 million per year through 2019 for wool research and promotion (p. 928)
• A go-ahead to create a Christmas tree promotion board and 15-cent tax on fresh-cut trees (p. 805).

In the strange way the U.S. government works, Congress has produced the “Consolidated Appropriations Act of 2014,” which authorizes payments for government services, including those related to agriculture.

This is not the farm bill.  It’s what Congress decides taxpayers will pay for in the farm bill as well as bills that cover other programs run by USDA.

The House summary of agriculture appropriations is a lot easier to read than the bill itself, although it contains its share of double speak.  Try this:

WIC – This program provides supplemental nutritional foods needed by pregnant and nursing mothers, babies and young children. The bill provides full funding for WIC at $6.7 billion – $153 million below the fiscal year 2013 enacted level…This level will ensure all eligible participants will be served.

Can someone please explain to me how a cut of $153 million will ensure service to everyone who is eligible?  WIC is not an entitlement; eligible people cannot be served once the money runs out.

The bill does provide full spending—$82.2 billion—for SNAP, but only because it has to.  SNAP is an entitlement and spending for it is mandatory.  Unless, of course, Congress ever passes the farm bill, which currently contains a $9 billion proposed cut.

And here’s more double speak.  “The legislation includes several provisions to reduce spending and increase oversight of taxpayer dollars.”  How?  By authorizing spending for:

• Oversight and monitoring requirements for the WIC program, including a directive for the Secretary of Agriculture to increase oversight of vendors to help rein in food costs;
• A provision requiring USDA to submit a plan for reducing high error rates and improper payments in the National School Lunch and School Breakfast Programs;
• Requirements for the Secretary of Agriculture to help weed out and eliminate waste, fraud, and abuse in the SNAP program – including a directive to ban fraudulent vendors, and a prohibition on advertisements or outreach with foreign governments.

And why does the FDA’s budget still get decided by committees dealing with agricultural appropriations?

The FDA is a public health agency in the Department of Health and Human Services, which is funded by entirely different committees which you might think understand its mission a lot better than committees fussing about legislation that

restricts the Grain Inspection, Packers and Stockyards Administration (GIPSA) from implementing certain regulations that would allow harmful government interference in the private market for the livestock and poultry industry.

I can hardly wait to see what the farm bill will look like.

As I am endlessly complaining, the farm bill is so detailed, complicated, and opaque that no rational person can possibly understand it, let alone a member of Congress.

To wit: catfish inspection.

As Gail Collins noted in her New York Times column a week or so ago, some members of the House want the USDA to inspect catfish, not the FDA (which ordinarily is responsible for fish inspection).  The current FDA inspection office costs $700,000 per year.  The USDA office, established by the 2008 farm bill, costs about $14 million a year, even though the USDA has not gotten around to issuing rules or actually inspecting catfish.

What is this about?  Not fish safety, really.  It’s about protecting catfish farmers in the South and setting up “more rigorous” safety criteria that will exclude competitive foreign catfish imports, especially from Vietnam.

The House version of the farm bill calls for repeal of USDA catfish inspection as a cost-cutting measure (the Senate farm bill does not mention catfish inspection, which means it leaves the USDA office in place).

Thad Cochran, Republican Senator from Mississippi, wants the House to delete the repeal provision, keep USDA in charge, and, thereby, protect the Mississippi catfish industry from foreign catfish imports.

Politico Pro quotes a member of Cochran’s staff:

Sen. Cochran has made it clear that his priority is to complete the new farm bill and get it signed into law. It sounds like there are some who have a deep under-appreciation of the diversity of Mississippi’s agriculture industry and the importance of this bill to the state’s farmers, foresters, hunters, and those in need of nutrition assistance.

The New York Times also points out that although some watchdog consumer groups support tougher safety standards for catfish (because of lower foreign standards for antibiotics and other chemicals), a Government Accountability Office report in May 2012 called imported catfish a low-risk food and said an inspection program at the Agriculture Department would “not enhance the safety of catfish.”

Now, says the Times in another article, a coalition of budget watchdog groups and a seafood trade group are lobbying to repeal the USDA’s inspection program.

All of this is in the House version of the farm bill, but unless you are a lobbyist for the catfish industry, you would never know it from the bill itself.  Here’s the relevant section from the  House bill.

As Gail Collins puts it,

See, this is what I like about the farm bill. The agriculture parts harken back to the golden era when Republicans and Democrats could work together to promote stupid ideas that benefited the special interests in their districts. And then go out and get inebriated in bipartisan drinking sessions. Now everybody is in the gym and then shutting down the government.

I am an avid reader of Jerry Hagstrom’s Hagstrom Report, which I subscribe to and consider well worth the price.  He not only tracks farm and agriculture policy, but explains it in ways that I can actually understand.

Sometimes, his articles go to the National Journal and other places with open access.  This one gives a lucid history of the farm bill along with the politics of the current congressional impasse.

The history matters because the farm bill is otherwise inexplicable.

Here’s how we got to this point:

• 1933       Congress passes the Agricultural Adjustment Act to deal with commodity surpluses that nobody has any money to buy during the Great Depression.  The bill included production.
• 1936       Supreme Court rules production controls unconstitutional. Congress passes the Soil Conservation and Domestic Allotment Act to deal with this decision and the consequences of the Dust Bowl.
• 1938       Congress passes new Agricultural Adjustment Act (this includes sections of the 1933 law that were unaffected by the Court ruling, the 1936 conservation law, and new commodity legislation that meets the Court’s standards).
• 1949       Congress passes law giving high, fixed-support prices that trigger subsidy payments when market prices fall below certain levels.

Since then whenever Congress passes new farm bills, it suspends the 1938 and 1949 commodity titles  for specific periods of time (the alternative would be to amend those laws, or pass new laws that will be permanent and difficult to change).

Where does SNAP fit in?

• 1964       Congress passes Food Stamp Act
• 1977       SNAP incorporated into farm bill.

Hagstrom points out that SNAP does not have permanent authorization; it expires with the farm bill.  But it is an entitlement, meaning that anyone who qualifies gets funded.    This, however, requires congressional appropriations.

So everything is up to Congress, and none of the reasonable options look possible.

Sad.  Infuriating, actually.

Our dysfunctional Congress continues to dither over the farm bill.  Will the House send its SNAP-less, corporate-welfare bill to the Senate?  Will it do terrible things to SNAP first?  Or will it do nothing?

While waiting to find out, I want to mention a speech given by USDA Secretary Tom Vilsack to the National Rural Assembly.   From the beginning, Secretary Vilsack said that his agenda for USDA was to revitalize rural America—a laudable goal.

Here he is last month calling for outrage over congressional failure to pass legislation in support of this goal.

What do we see from rural advocates? Utter disappointment. Are you kidding me? There ought to be outrage… “It is going to be important for groups like this to express more than extreme disappointment,.. Demand that they pass legislation that is supportive and not destructive. Demand appreciation for those in rural America.

How about that.  A call to action from the USDA!