Washington Insider-- Thursday

Aging Farmers

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Threat of Reaching the Next U.S. Debt Limit on the Far Horizon

The U.S. Treasury is likely to run up against its borrowing limit again this year, but not until late September or early October, according to the most recent estimate by the nonpartisan Congressional Budget Office. "To avoid a breach in the debt ceiling, the Treasury would begin employing its well-established toolbox of so-called extraordinary measures to allow continued borrowing for a limited time," CBO says in its report. "CBO anticipates that the Treasury would probably exhaust those measures in September or October of this year."

In the recent past, congressional Republicans have used their support for increasing the government's borrowing authority as a bargaining chip to extract concessions from Democrats. Failure to increase the debt limit would place the government in default, seriously jeopardizing the country's credit rating and causing economic reverberations around the world. However, Senate Majority Leader Mitch McConnell, R-Ky., says said there will be no default on the debt, an early indications that he may want to avoid another battle over the issue

The situation may change between now and September. But if McConnell is correct, the country may avoid another economic cliff-hanger this time around.

***

Ryan Continues to Press for Trade Promotion Authority

The House Ways and Means Committee will work to approve trade promotion authority (aka "fast track") for President Obama as a prelude to completion of negotiations on the Trans-Pacific Partnership (TPP) free trade agreement, according to committee Chairman Paul Ryan, R-Wis. "To get the best deal possible, we have to be in the best position possible. We can't be negotiating with ourselves. We have to maintain a united front," Ryan said at a recent committee hearing.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Ryan's plan is receiving some pushback from within his own committee. Ranking member Sander Levin, D-Mich., said Congress must not give up its leverage now by passing TPA until members are assured that the administration on a clear path to achieving the outcomes that members want. To assure that the Office of the U.S. Trade Representative is negotiating with strong bipartisan support, Levin said all members of Congress and advisers that have received the necessary clearance must have full access to the negotiating documents, including other nations' negotiating positions, on a secured basis where necessary.

There is a question whether negotiators from the other 11 Pacific Rim nations involved in TTP discussions will be totally forthcoming with their offers, knowing that a leak from the U.S. Congress could expose them to political problems at home. Strategic leaking of negotiation details certainly would be one way to derail the talks, something that a significant number in Congress would find to be an agreeable outcome.

***

Washington Insider: Aging Farmers

One of the most persistent legends in agriculture is the often expressed concern about the "Aging American Farmer," a theme that fits the mindset of a lot of politicians, but also one that is sometimes repeated by analysts who should know better.

Many argue that this trend is relentlessly confirmed by Census data as has happened again with the new 2012 Census of Agriculture. Now, a report from Purdue University has taken up the theme and hastens to find relevance in the statistic that in the five years between 2007 and 2012, "the average [farmer] age ticked up by 1.2 years." Then follows a blizzard of comparisons by age cohort alone — a major mistake for a population as varied as U.S. farmers.

It is also a major mistake to look only at age since USDA has long-ago nailed down the case about the enormous differences in farmer groups — and reported on "typologies" that provide very substantial insight into their resources and farm organizations.

The first problem with the aged farmer concept is the lack of a meaningful definition. Any operation that sells or could have sold $1000 in products gets counted as a farm. Using that broad definition, there are just over 2 million farms, but only a few thousand commercial operations. So, most "statistical" farmers consider themselves something else in spite of the fact that they have rural residences. They get most of their income from many, many other basic occupations.

An important number of persons counted by the Census as farmers are actually retired and given current demographic trends can be expected to be increasingly elderly. Many others are local service providers like veterinarians or elevator managers or others who prefer to live in rural residences and produce some livestock or crops. So, you need much more than just age data to make meaningful conclusions about industry trends.

In fact, it is likely that the idea of finding early warning about economic trends by concentrating on demographics may be increasingly out of date — reflecting the fact that the system depends increasingly on capital and technology rather than muscle.

U.S. agriculture today is both well managed and highly sophisticated. It frequently involves multigenerational management teams and multi-industry boards to organize the resources required in modern operations. Certainly, no land is going unfarmed because of lack of farmers — or is partly or wholly out of production because of infirm operators, observers say.

Ag organization experts also say that a new "investor class" is becoming more important now, and that asset ownership and farming operations increasingly are being separated. As a result, contract farming and specialized service providers are increasingly common. These trends are well understood by farmers as well as agribusiness firms, but they are quite unpopular with the romantics who widely apply the F word (farmer) to all high tech, sophisticated operations. So, university types may be somewhat late in fully plumbing such trends.

But, the industry press is not, and so it looks like much of the demographic concerns over farmers and their ages reflect trends and concerns of a much earlier age. Modern farmers have sharp pencils and up-to-date computers and tap into tech advisors right and left — often with Grandpa leading the pack.

Perhaps it is time for today's economists to get up to date, too, and understand that feeding the world in the coming decades will require insight into technology that works rather than simply focusing on birthdays, Washington Insider believes.


Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the U.S. Ag Policy, U.S. Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@telventdtn.com

(GH/CZ)

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x600] M[320x50] OOP[F] ADUNIT[] T[]