Wednesday, June 20, 2012

Boondoggle harvest

Last month I took a trip to Wisconsin to visit some of the conservation work being done by Dane County officials to deal with nutrients from farmland. While I was there, I was introduced to a farmer called Jeff Endres, who has a farm near Waunakee and who is working with the county on an innovative new project to remove excess phosphorus using farming strategies. He is also very conservation minded, and takes care of the environment around his farm. Behind him, in the picture, you can see a mown strip of grass right next to the waterway--this prevents nutrients from the fertilized fields from running into the streams and creating foul-smelling and sometimes toxic algae from forming in waterways and lakes. More on this in a future blog though.

Farm Bill
In the end, just the way these things happen, Mr Endres ended up first appearing in print in a piece about the US farm bill. Writing about the US Farm bill at the moment is like trying to hit a deflating balloon in a concert hall with a water pistol--its a rapidly moving target and my firepower is limited. The farm bill is an omnibus (i.e. big) bill that comes along every five years. Everyone has a vested interest, either through its spending on the poor (through food stamps) or through its spending on farmers (via subsidies). When this piece was written the farm bill had not been approved by the floor of the Senate, it now has. But this is only half of the story as a bill in the house must also pass and there is not a great deal of progress on this front.

My feelings on the proposed additional insurance subsidies for farmers are that they are an outrageous expense at a time when the American budget needs to be cut and when crop prices are at an all time high.
Vincent Smith, a professor of agricultural economics at Montana State University and a scholar for the right-leaning American Enterprise Institute has looked at the possible costs of such a scheme and points out that the scheme will become extortionate in cost should crop prices dip from their all time high. In any case, the taxpayer should not be in the business of insuring 90% of a farmer's revenue.


Boondoggle harvest 

The new farm bill, although it cuts some unnecessary payments, is likely to increase others 

Jun 16th 2012 | CHICAGO AND WAUNAKEE, WISCONSIN | from the print edition

ON THE land farmed by Jeff Endres in Wisconsin, gently rolling fields are interlaced with streams. To prevent soil and nutrients washing away, Mr Endres has fashioned neat borders of grass between his farm and the waterways. Most farmers are increasingly uninterested in such measures to protect the environment. That is not because times are tough but because they are good, and is it worth planting every inch available.

Indeed, thanks to high crop prices and the rude health of rural America, the unthinkable has happened: farmers are under pressure to accept cuts in the generous handouts they receive from the federal government. Much of the debate over the 2012 farm bill (a debate which comes up every five years or so, when the bill must be reauthorised) is being dominated by the budget deficit and demand for fiscal restraint. Payments to farmers, which include sums for taking part in conservation programmes, have been running at around $12 billion a year since 2007 (see chart). Yet since then farmers have enjoyed record prices and incomes, and increasing yields. Farm income is at its highest in almost 40 years, and farm failures are down to a rate of less than one in 200 a year. [More...]