Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Friday 12/21/12

A 2013 Farm Bill is a Nice Christmas Gift

Dear House Speaker John Boehner and House Majority Leader Eric Cantor,

I just want to share the gratitude of those of us in the agricultural policy community for the wonderful re-gifting you have bestowed on all of us this holiday season. To think that we will get the opportunity to continue discussing the 2013 farm bill is certainly a joy that many of us will cherish, even if it looks like we got this same gift last year.

Your contributions in these endeavors, though outwardly appearing as effortless, will not go unnoticed.

Just consider the spotlight you will cast on federal milk policies early in the new year when it dawns on the average American consumer that the price has doubled for a gallon of milk or a pint of yogurt. Unrestrained by logical policy and yet chained by archaic decisions from the post-World War II era, dairy processors may even discover that consumers are still willing to pay exorbitant prices. The industry can begin to establish a much higher overall price floor for all of its products, even if some consumers on the lower rungs of society may be priced out of milk on occasion. If proven successful, such a new dynamic in the dairy industry could translate into doubling the costs paid by federal government buyers for dairy products such as the military, school lunches, the Veterans Administration, WIC, etc. You may have accidentally raised the federal expenses for years to come, but such is the price for ideological decisions meant to demonstrate short-term fiscal restraint.

More blessings will come from the CBO scores. Oh, the stories we shall write after this 2012 crop season. How much did the costs go up for crop insurance? Sweet sassy molassy that seems high. Did that add another zero somewhere?

It also goes without saying that you have continued to offer false hope to groups seeking to make radical overhauls to farm policy by demanding greater reforms than those crafted in the Senate farm bill. A $50,000 cap on commodity payments? Surely you jest! Demanding greater protections against soil erosion for being eligible for crop insurance? What a novel concept! Perhaps a wayward House member, uneducated about the function of farm politics, will attempt to discuss such matters on the House floor. Oh, I know the agricultural community will be pleased.

Moreover, you have raised the outlook for the event-hosting industry in Washington as groups seek to book their 2013 press-conference opportunities to denounce potential nutrition cuts or point fingers at the crop-insurance industry.

While there is a whimsical thought that we can just reset the calendar on the old versions of the new farm bill for 2013, such views are misguided. We now have a new set of subcommittee chairmen on the House Agriculture Committee who will want put their own stamp on this new piece of legislation. I can just see the new subcommittee chairman for oversight and nutrition holding countless hearings on school lunches. Congress will get to hold a debate over whether school-lunch standards are starving our children or whether we can continue to ensure that 25% of our kids remain too fat to join the military. I'm sure we will eventually side with the value of obesity because everyone gains with that policy choice. Scoring on Medicaid due to diabetes doesn't demand offsets in the agricultural budget.

Before I sign off, I want to offer a special thank you to Majority Leader Cantor for the "pause button." It was a joy, sir, to see how you masterfully used this ingenious legislative creation throughout 2012. Contrary to the perspective of Agriculture Secretary Tom Vilsack, you aptly demonstrated the political relevancy of rural America by pressing the pause button on a bi-partisan farm bill that cleared one of your own committees and offered $35 billion or so in savings. Thus, you offered protection in the fall campaign to help the Republican presidential nominee secure the vote of rural America. It was largely effective except in swing states such as Iowa and Wisconsin. Then, in the lame duck, you were able to keep the finger on the pause button to ensure that the farm bill would not muck up the GOP voting block for the aptly-named Plan B. Well played, sir! Well played!

I do hope the pause button continues to remain by your side in 2013 as well. Use it wisely.

Merry Christmas to both of you for your work on the farm bill, the unresolved gift that keeps on giving.

Everybody have a Merry Christmas!

Follow me on Twitter @ChrisClaytonDTN

Posted at 8:46AM CST 12/21/12 by Chris Clayton
Comments (9)
Now Chris, make sure you re-center your tongue before you bite down on anything. I've done it, myself, and brother does it hurt. (Of course, you probably already suspected this, as you've read my comments over the last year or so.) Merry Christmas & a Happy New Year to you and your whole personal and professional family.
Posted by Ric Ohge at 9:22AM CST 12/21/12
The potential doubling of milk prices is viewed as a total disaster by many. RFS is a major factor in the doubling or tripling of corn and soybean prices. Where is the outrage over the government mandated use of ethanol?
Posted by Lon Truly at 12:26PM CST 12/21/12
Throwing money at problems is not the solution. Throwing money is the problem. See http://www.aberdeennews.com/news/aan-column-congressional-proposal-just-insane-20121215,0,3938965.story
Posted by Lon Truly at 12:55PM CST 12/21/12
The clueless and or corrupt congress ever fixated on re-election has chosen to be oblivious to the economic carnage it is creating with the unfair and inequitable crop insurance schemes. It should be obvious to everyone that targeting the largest and most profitable farm businesses with the largest investment and income guarantees grants these operations with an overwhelmingly competitive edge in a highly competitive business. It should be noted that many of these operations have little or minimal land costs and that government has no business guaranteeing ever increasing land values with insurance schemes that cover land costs. It should also be obvious that smaller farm operations targeted with no or minimal government benefits have little or no chance of competing in such an economic environment. Considering the stratospheric levels to which land values have escalated it should be obvious to all that extreme government income and investment guarantees are capitalized into land values and that government has no business targeting the wealthiest with multi million dollar business benefits.
Posted by Lon Truly at 1:13PM CST 12/21/12
A major reason that margins in ag are tight is because of government not only assuming nearly all the production and marketing risks for many of the major ag crops, but also government guaranteeing a profit to many farmers with current prices and current government insurance schemes. Current farm bill proposals double down on these government risk assumption schemes with new and crazier shallow loss income guaranteeing schemes. When farmers have to budget for more of the production and marketing risks they are not as crazy about driving profitability margins below zero.
Posted by Lon Truly at 1:27PM CST 12/25/12
And now that Christmas is over, the President is tired of vacationing, the S'mores and MeToo's can line up on Give Away Avenue in D.C. hoping the gifts will continue flowing.
Posted by Bonnie Dukowitz at 6:07AM CST 12/26/12
Bonny...I'll never look at "S'mores" the same way, ever again. You also do "tongue-in-cheek" very well.. Late Merry Christmas & Happy New Year. R
Posted by Ric Ohge at 9:34AM CST 12/26/12
Ditto's to All,
Posted by Bonnie Dukowitz at 10:12AM CST 12/26/12
Chris, The only problem with your letter "commentary" to Speaker Boehner and House Majority Leader Cantor is that I didn't write the letter.
Posted by W Lee Deutsche at 11:35AM CST 12/26/12
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