While I have faith in the folks we send to Washington to do our bidding, it seems they often think rules don’t apply to them.
Take federal spending. Right now, as has been the case for more than a decade, the government spends more than it has in its checkbook. There are times when I’d like to do that, but my bank always seems to frown on the practice. The family doesn’t like it too much either.
And take deadlines. If there’s something farmers know a lot about, it’s deadlines. Planting deadlines are usually hard and fast, as are harvesting deadlines. And while there’s always a little wiggle room when it comes to things like fertilizer, weed and insect control measures, most farmers know what the absolute cutoff dates for those practices are as well.
Speaking of spending and deadlines, take the Farm Bill. The House Agriculture Committee set a deadline of last week to finalize plans for the budgetary aspects of the 2012 Farm Bill. It was all part of Congress’s plan to show voters it could reduce farm spending while getting out in front of a bill that’s been historically late to the party.
But unfortunately the self-imposed deadline came and went with no real budget data produced. And just like Congress, it quickly enacted another deadline to replace the one it just missed.
“The real driver now is Nov. 23,” said Kyle McCann, associate commodity director for the Louisiana Farm Bureau Federation. “The Joint Select Committee on Deficit Reduction has to vote on a plan and it has to have scoring for all the mandatory programs. That’s the date that ultimately has to be reached and hopefully we’ll see some action from each committee soon.”
That scoring McCann mentioned is essentially how the budget numbers will work into the overall federal budget and whether or not the Government Accounting Office, or GAO, will accept them. With massive budget cuts pending across all federal programs, the “score” better not come in too high; that is, “Don’t ask for too much because we’ve all got to take a hit.”
Despite what you’ve heard about the cost of farm program spending, the truth is that many farmers don’t receive any government payments and those who do have seen smaller payments over the last two crop seasons. Higher commodity prices and increased production have kept billions in the federal treasury that were earmarked for farm program spending.
The one thing that has gone up as far as USDA checks are concerned is the cost of food and nutrition spending since 2008. According to the Carleson Center for Public Policy, food stamps, now called the Supplemental Nutrition Assistance Program (SNAP), managed by the U.S. Department of Agriculture (yep, the same agency that runs farm programs) will cost American $75 billion by the end of 2011. That’s more than double the $36 billion the government spent on food stamps in 2008.
Ask any farmer and they’ll tell you they’re expecting fewer dollars for farm program support payments over the life of the next farm bill. Many producers have known for years the day of reckoning for farm payments was coming. Now it’s finally here.
That’s why many commodity organizations are looking to alternative methods to protect farm income from price fluctuations, weather disasters and global crop failures. For many farmers, new and redesigned crop insurance programs may hold the key. Either way, most farmers know the 2012 Farm Bill will be a lot leaner and meaner, particularly where their payments are concerned.
“No doubt we are going to reduce the amount of support for farm programs,” McCann said. “One of my fears, however, is that we’re writing a farm bill at a time of serious economic crisis. The purposed of any farm bill is to provide protection from the downside, the very low systemic prices no farmer can manage his way out of. I hope we keep some semblance of the prior farm bill so if we need to we can pump money back into the system to shore up farm income should global prices tank.”
McCann said adequate farm spending levels also has benefits vital not only to farmers, but to consumers as well.
“If you’ve been to the grocery store lately you know food prices are astronomical,” he said. “Like traders of commodities, food sellers are always watching the market. And while fuel and energy costs are the primary reason food prices fluctuate, the one thing that always works to stabilize food prices is a reliable source of food.”
And that means farmers having the ability to grow that reliable source of food on a regular basis. Sounds simple enough, every time a farmer goes out of business, it sends a small ripple down the line of the food production chain. Too many ripples and the next thing you know you’ve got a wave.