New Farm legislation is

Truepolicy — Tue, 30 Jan 2007 08:14:38 -0600

New Farm legislation is Coming, So let’s look back!

2007 will bring a new farm bill or farm act to rural America. For it is often referred to as both, because someone will pay the bills, while others will enjoy the acts. For in 2006, both Congress and the Secretary of Agriculture held many hearing, asking for farmer input for the 2007 legislation. From which many in Congress want to extend our present policy, as do the major farm organizations. While Ag Secretary Johanns hearings lead to the following disclosure. "Producers were loud and clear, about the disparity in farm supports. There is a spirited debate going on in the country about the current farm support structure, sensitive topic". To which this piece will reveal some of the disparities 1996-2005. To show the bottom line in modern farm policy, which is the cost or financial reward per harvested acre. To which the traditional crops of the South have won hands down. Convincing Congress, that southern crops had special needs. Hence, southern crops have enjoyed larger subsidy outlays, per harvested acre and more favorable payment formulas and special perks. That are revealed by first deciphering USDA data, under their Enron accounting rules of disclosure. For the average subsidy cost, for each harvested acre of rice 1996-2005 was $302 per acre. While cotton was $162 per acre, corn $72, wheat $38 and soybeans just $19 per acre.

To which the National Association of Wheat Growers told Congress in September the following. From 2002-2005 the average subsidy per acre of wheat was 10% of it’s cost of production or $20/acre. Soybeans were 8% of it’s cost of production or $21/acre, corn 11% or $41/acre, cotton 41% or $213/acre and rice 52% or $307/acre.

Yet don’t let the southern lobby pull the wool over your eyes as they did to northern Congressmen. With their line, we have more expensive crops to produce so we need more money to cover costs. When the truth is, the only annual guaranteed payment for soybeans were set at $11 per acre, wheat at $15 and rice at $96 per acre. So when you analysis rice market income plus subsidies, minus cost of production and do the same for wheat and soybeans over ten years. You find rice shows a $150 per acre per year profit, while wheat shows about a $15 per acre loss, as do soybeans.

Then in 2002, Congress bought out peanut quota holders and in 2005 tobacco quota holders. Yet the economics, clearly show a pay out of friends, rather than a buyout. For in years 1996-2000, peanuts only cost taxpayers about $22 per harvested acre of peanuts. But when the 2002 farm act added the peanut buyout, the cost per acre 2001-2005 jumped to about $400 per acre. Including two special perks, their own additional payment limit, plus storage and handling, which other crops don’t receive. Which equaled about $65 per acre for the 2005 peanut crop. Or enough money to store and handle a typical 45 bushel per acre wheat or soybeans crop, in commercial storage for four years, at no cost to the farmer!

Then not to be out done by peanuts. Tobacco with the help of Congress in 2005 enacted the tobacco quota buyout program. Like peanuts, it’s another political pay out. For before the buyout, the tobacco program cost was low, only costing taxpayers about $200 per harvested acre per year 1996-2004. Yet after the buyout was implemented, using the 2006 tobacco crops harvested acres as the best barometer to calculate cost and reward. The likely reward or pay out to quota holders is about $3000 per harvested acre per year, over the next ten years.

Yes, that means Congress wanted them to have the cash equal to about $30,000 per acre! This is how Congress dealt with the fact that the average American tobacco farmer maybe needed one more to maybe two cents more per pack of the cigarettes selling price to stay in business over the next ten years. Now understand, that the tobacco farmer gets only a nickel or less of each pack sold.

Now is Alan Roebke (rebkey) saying that Congress didn’t stand up to counter this program, the answer is no. What he is saying is that Congress caved into the south, when they changed it to a no cost buyout. Yes, a no cost buyout plan, managed by government and guaranteed by taxpayers. Which is a scheme based on using USDA as their agent to collect money from tobacco users and importers and have USDA re-distribute the funds to their friends the tobacco quota holder. Who most, had just been quota holders that rented their government granted entitlement, to real tobacco farmers. At about $1400 per acre per year, for the right to raise tobacco. Now after this titled buyout, anyone can raise and sell tobacco, with no government supports, checks or loans. Yet they like any American now, can still raise tobacco if they choose. Which is also true of the peanut quota buyout recipients, but the actual peanut grower in 1998-2001 now has USDA peanut base acres, to get new on going peanut subsidies. So should these events of the past, be added to the 2007 farm act debate. Or should we just allow the people who managed farm policy over the last ten years to continue the job? Will you react to this letter or are you just happy to understand why they call it a farm act or a farm bill? The choice is yours? Alan Roebke (rebkey) Policy Analyst, at Truepolicy.com Chaska Minnesota

Jordan Independent - budget - Comments

New Farm legislation is