Saturday :: Dec 18, 2004

Old MacDonald HAD A Farm - Part III


by pessimist

The news continues to worsen for America's Family Farmer, a common fixture of the Red States which voted for 'moral values' over economic self-interests.

It turns out that these farmers had fair warning that Bu$hCo was out to screw them [Note the date of the article]:


With farmers looking on, Bush signs farm aid bill
Tuesday, August 14, 2001

"It's a meaningful piece of legislation for this part of the country because a lot of people make their living on the farm and on the ranch," Bush said. "Farm families represent the best of America."

During the ceremony, Bush not only hailed the importance of keeping American farmers afloat, but portrayed the decline of the family farmer as a threat to America's moral fabric.

"We want our families to be on the farms and ranch," said Bush, who will spend much of the month talking about the values embodied in the American heartland. "After all, farm families represent the best of America. They represent the values that have made this country unique and different - values of family, values of respect for nature."

"I'm worried about the fact that the ag economy suffers because agriculture is part of our national security mix," Bush said during the bill-signing ceremony. "If we can't grow enough food to feed our people, we've got a problem."

First In Line for A Handout, Not A Hand

Grain and cotton farmers, who receive the bulk of the special assistance, will get smaller government checks than they saw under last year's bailout. A farmer who got $40,000 in 2000 should receive less than $34,000 this year.

And what did you, the American Taxpayer, get for your investment in the family farm?

Iowa farmers rank second in USDA payments

Iowa farmers received $11.3 billion in farm program payments from the federal government between 1995 and 2003, according to government data supplied to the Environmental Working Group, a nonprofit organization in Washington, D.C. Iowa ranks second to Texas in the amount of farm payments from the U.S. Department of Agriculture, the data show.

More than 70 percent of Iowa's farmers received some form of USDA payment in 2003. Only North Dakota had a larger percentage of farmers receiving government farm payments that year.

Ken Cook, president of the Environmental Working Group, said the USDA data show that 10 percent of U.S. farms - or 305,000 individuals, corporations or partnerships - have received 72 percent of the government's farm program payments over the past nine years.

The top 4 percent of recipients of government farm payments received an average of $59,000 a year over the past nine years, Cook said. That is more than the average U.S. household earns in a year, he noted.

About two-thirds of U.S. farmers receive no government farm payments, Cook said. Cook's group believes that large payments to big farm operators should be stopped and the money moved to conservation and environmental programs.

[Cursory research indicates that farmers might be approachable on ecological issues. This linked article above, and this link below have much on farmer ecological initiatives and goals]

Land conservation, a bald-faced method of keeping farm commodity prices up by reducing production and paying the farmers for 'lost' profits, may be under the GOP oil war axe:


Spending Bill to Require Across-the-Board Cuts (12/09/04 09:55)

President Bush on Wednesday signed the $388.4 billion omnibus spending bill into law. The measure includes funding for USDA and requires an across-the-board cut of 0.83 percent for many federal government programs in the new fiscal year that began Oct. 1.

It will be interesting to see what farm program spending is exempt from the cuts. One likely exemption is the Conservation Reserve Program (CRP) because payments under this program are made under long-term contracts with landowners.

It is unclear whether direct payments will be exempt because farmers have to sign up each year for the farm program, whereas in the 1996 farm bill such payments were part of a multi-year contract.

The answer to this question is important because future budget cuts could include additional across-the-board cuts for some spending programs.

Red State Family Farmers are about to discover what their votes for George Wasteland Bu$h really mean:


Farming and your Freedom - What does GOP victory mean to farming?

In terms of the Bush Administration, one would assume to know what it means: more of the same - some pretty good support for ethanol and other value-added farm products, a desire to see farming stand on its own in a business sense, and a corporate view of world trade. It also may mean that initiatives such as CRP will be lauded but barely funded. With an even more conservative senate, who knows what may happen?

And just what is CRP?


Groups step up calls for changes in CRP

Substantial changes are needed in the future direction of the Conservation Reserve Program (CRP) if U.S. agriculture is to capture growth opportunities and sustain the growing demand for grains and oilseeds from the ethanol, livestock and poultry sectors, four major grain-related organizations told USDA. The groups include the National Grain and Feed Association (NGFA), National Oilseed Processors Association (NOPA), North American Export Grain Association (NAEGA) and North American Millers Association (NAMA).

The groups said that means that the CRP should be refocused on soil and water-quality improvements, and away from whole-farm enrollments, the four organizations said in a joint statement submitted in response to USDA’s request for comments on long-term CRP policy.

Under the CRP, enrolled acreage is idled under 10- to 15-year contracts, with USDA making annual rental payments and financing up to 50 percent of the cost of establishing ground cover or other approved conservation practices.

The groups said that fewer whole-farm enrollments in the CRP would reduce economic pressure on tenant farmers, which currently account for 70% of U.S. ag production and whose economic structure will "do much to determine if U.S. agriculture can remain competitive."

There is strong evidence that the CRP and other US farm programs have artificially inflated land values, the organizations said. But the CRP is particularly “pernicious” because its payments flow solely to landowners and the program puts the US government in direct competition with tenant farmers bidding for land, making rental land scarcer and more expensive.

So what crop are the farmers reaping from the seed Bu$h sowed?

We Bought the Farm
Who knew that America's demented agricultural policies could get even worse?

The real annoyance in recent farm prosperity is that it only seems to have increased the burden of American taxpayers. Even as farm net income rose by half between 2002 and 2004, the volume of direct government payments (read: subsidies) paid to farmers rose by nearly the same amount, from $11 billion to $15.7 billion. If farmers are reaping such a green harvest, why are the rest of us subsidizing them so heavily? The reason is that our demented farm policy has managed to get even worse recently.

It's no surprise that this strangely market-distorting action has taken place in the last few years under a Republican Congress and a Republican president. Despite their self-identification as the party of entrepreneurial, competitive small business, the Bush crowd has shown itself to be a relentless advocate for non-entrepreneurial, competition-averse large businesses.

Political geography also plays a role here. Many of the largest farm-goods producing states are red, and many of the largest farm-goods consuming states are blue. To a large degree, the 2002 farm bill, which is responsible for the current regime of subsidies, acts as a mechanism for transferring wealth from the people who earn lots of money in states like Connecticut and New Jersey to (mostly corporate) farmers in Kansas and Nebraska.

These provisions aren't about guaranteeing a food supply for Americans or saving the increasingly mythic family farm. They're about making life easier for big agriculture. This breakdown of federal-aid recipients shows that while 38.8 percent of all farms received payments in 2003, "about 67 percent of commercial farms received government payments."

Commercial farms took more than half of all payments. Worse, the programs don't really target the farmers who need it most.

So, the politically connected reap all the benefits of a market economy when it goes their way but are insured against its downsides. Meanwhile, the public at large has no protection against price increases and can never receive the full benefits of global competition. Wealth without risk, upside with no downside. Privatize success and socialize failure.

So just how much are some of these farmers getting for not farming? First, the little guy:

Conservation Reserve Program payments to Woodbury County [IA] came from about 300 acres of land in the Oakridge Conservation Area in the Loess Hills. The county inherited the CRP payments when it purchased farms for the area, said Rick Schneider, Woodbury County's conservation director.

Because it is a government entity, Woodbury County has to enter a drawing to see if it will be paid for retiring the land in the Conservation Reserve Program. So far, Schneider said, the county has been lucky enough to receive the $70- to $90-an-acre annual payments.

"If we're eligible for the program, why shouldn't we do it?" he asked. "We spend that money for improvements in the area, and that's fewer dollars that Woodbury County taxpayers have to pay."

Now how much do the fat cats get?

Some of the 10 largest Iowa recipients of farm program payments were hesitant to talk about the money they receive.

"It's my business, and I wouldn't care to discuss it," said Harold Buseman, who received $215,147 in 2003 through H & J Buseman Farms, an operation he owns near Belmond with his wife, Donna, and sons Joel, Jerry and Jeffrey. The Busemans rank fourth in the state in the amount of farm payments they have received since 1995: $2.2 million.

J.D. Schlieman , who owns Advanced Pork with partner Bruce Rastetter, also declined to talk about the $294,797 that Advanced Pork received from the USDA in 2003 for commodity programs. "It's a private business, and we're not interested in sharing that information," Schlieman said.

Both Rastetter and Schlieman now work for Hawkeye Renewables, an ethanol plant in Iowa Falls. They were involved in Heartland Pork Enterprises Inc., the second-largest Iowa-based hog producer and the 13th biggest in the United States until the company was sold in April to Christensen Farms of Sleepy Eye, Minn. Before it was sold, Heartland Pork ran into serious financial problems after being one of the fastest-growing hog producers in the United States.

The eighth-largest farm program recipients in Iowa were the Kerrigan brothers, who farm 4,000 acres in Clarke, Decatur, Madison, Ringgold and Union counties. Patrick Kerrigan, 52, owns the farm operation with his brother, Robert, and Robert's wife, Kristine. Hot and dry weather in 2003 cut the brothers' crop yields, Patrick said, and made them eligible for $47,688 in disaster payments.

The Kerrigans have collected $97,171 in disaster payments since 1995, according to the USDA database made public by the Environmental Working Group.

Patrick Kerrigan also said that $71,545 in conservation payments [CRP] in 2003 came from 800 acres they have enrolled in the land retirement program.


William Talsma, who farms near Newton with his brother, David, and some other family members through a family farm corporation known as I-80 Farms, said he paid back about $35,000 or $40,000 of the $193,444 in commodity payments the farm received in 2003 when the price of corn went up.

The brothers had received a countercyclical payment from the USDA that is paid to eligible farmers when prices drop below a certain point. When the price of corn went back up, William Talsma said, he and his brother had to repay some of the money.

Craig Lang, president of the Iowa Farm Bureau Federation, said U.S. taxpayers should support farm program spending because it keeps food affordable for American consumers.

"At the root of it, it's an issue of national security," Lang said. "We need to protect our food-producing capacity."

The Environmental Working Group Web site shows that Lang, his brother, Eric, and their father, Maynard, received $47,000 in commodity payments in 2003 and $473,200 since 1995 on their dairy farm near Brooklyn.

Other Iowans who were in the top 10 recipients of farm payments did not return telephone calls.

Big Money for Ag Schools

Iowa State University ranked 14th in Iowa farm program payments in 2003. The Ames university was ranked No. 9 in 2002, according to the USDA data.

Mark Honeyman, coordinator of ISU's research farms, said the university received most of its government money for 2,500 acres of corn and 2,200 acres of soybeans it grows on its research farms. The university also collected small payments for milk, sheep and apples produced on its farms, he said.

Money from the USDA is used to pay for research projects, pay employees and students who work at the farms and for teaching and E xtension work, he said.

"Government payments are a piece of our revenue stream that we use to offset the cost of operating these research farms," Honeyman said.

Green Acre$

Bruce Babcock, director of the Center for Agricultural and Rural Development and an ISU professor of economics, said farm program payments vary dramatically from year to year, depending on the program rules and the size of the state's crops.

From 1999 through 2001, government farm payments made up 90 percent to 120 percent of net farm income in Iowa, Babcock said. In 2002 and 2003, he said, government payments made up 40 percent and 55 percent, respectively, of Iowa's net farm income.

Although Iowa's net farm income will be close to record highs this year, Babcock said, so will government program payments.

"This year will be the perfect situation for Iowa farmers," Babcock said. "They have bin-busting crops and bin-busting government farm payments."

The 2002 farm bill - that now governs who gets paid what and how much through 2006 - contains a lot of government programs that pay farmers a lot of money when crop production is high and prices are as low as they are this year, Babcock said.

While this may be so right now, there are signs that the gravy train may be about to derail - and the warming comes from two former Ag Secretaries


Ex-ag secretaries predict changes

Bob Bergland and John Block - both former U.S. secretaries of agriculture - talked about what to expect from the 2007 farm bill during a joint appearance in Kansas City recently at the annual meeting of the National Association of Farm Broadcasters.

Because projected record government budget deficits are forecast well into the future, Block said, agriculture spending faces possible cuts. "Hanging over the debate is the budget deficit," he said.

Bergland said there will be an election in 2006 that could be a referendum on President Bush and could undercut his political influence. Another factor to be considered, Bergland added, is the shrinking clout of farm states in Congress.

Bergland, a Minnesota congressman for eight years before being appointed agriculture secretary, said: "Of the 435 members of Congress, there are just 35 congressmen from rural districts. They will have to be careful they don't get run over."

Budgets are going to be harder to promote for these 35 Congressmen when more of their campaign funds come from corporations which will benefit in every case regardless of the provisions of the 2007 Farm Bill than from family farmers who are barely making the payments:


Convergence of events could prove challenging to farm groups

Delta farm leaders who thought they had a hard row to hoe when they helped pass the 2002 farm bill may not have seen anything yet, says Mark Keenum. Passing a 2007 farm bill – with safety net provisions – could be an even bigger challenge, he says.

That’s because several irresistible objects are set to converge during the months ahead when Sen. Thad Cochran, R-Miss., Keenum’s boss, and other farm state lawmakers will be sitting down to try to devise a new farm law.

“The President has already said he’s going to put forth a plan to reduce our deficit by one-half over the next five years,” says Keenum. “When you look at how to deal with reducing the deficit, there are only two ways to do that: either you raise taxes or you cut spending.

“I don’t see President Bush recommending any tax increases and I don’t see this new, even more conservative Congress proposing more taxes, either. As a result, we will be dealing with some rather severe spending cuts.”

Keenum, former agricultural aide and now chief of staff for Sen. Cochran, said the current Congress got a taste of those cuts when it passed the omnibus spending bill for fiscal year 2005 in a lame-duck session in late November.

Congress will be required to pass a budget reconciliation act similar to those in 1990 and 1996 when farm state lawmakers had to find savings in farm programs to meet spending targets spelled out in the law.

Following passage of the 1990 budget reconciliation act, agriculture made its contribution to reduced spending through the triple base concept. That is, by reducing the number of base acres farmers received program payments on to 85 percent.

In 1996, agriculture responded to another budget reconciliation act with the freedom to farm bill, which was designed to phase out farm program payments by 2002.

Keenum said farm organization leaders are becoming concerned about the possibility of another budget reconciliation act in 2005 for two reasons.

“One is that reopening the farm bill in mid-stream is not good for anybody,” he noted. “It’s not good for farmers, it’s not good for people who provide financing to farmers, or for people who provide inputs.

“Second of all is that we are in the process of going through major trade negotiations with other countries in the Doha Round. These are negotiations in the WTO that are aimed at promoting fairer trade.”

Ag leaders who work with Congress on farm legislation are becoming justifiably concerned about this convergence of events, says Keenum. “But if between now and when we strike an agreement our negotiators have some of their bargaining chips removed, because we’re taking away supports to our farmers, they won’t have as strong a ground to negotiate on,” said Keenum.

Such warnings of budgetary restraint that will definitely affect family farmers even come from the Heritage Foundation:


Is Bush Becoming a Budget Hawk?

President Bush and Congress will have to go further in order to rein in spending. Families looking to cut costs would not freeze all expenditures equally; they would fully fund priorities like food, the mortgage payment, and insurance, while completely eliminating unaffordable luxuries such as vacations and expensive entertainment. Similarly, Washington should continue fully funding top priorities, such as defense, homeland security and a few domestic programs, and terminate unaffordable luxuries such as the $50-billion corporate welfare budget; $25 billion pork project budget; $100 billion (at least) in waste, fraud and abuse; and $3 billion in "emergency" farm assistance, despite the strong year for crops.

Instead of taking that approach, lawmakers again spent more on corporate welfare than on homeland security. (The House voted to eliminate only one corporate welfare program, the Advanced Technology Program, and then the Senate restored it.) The budget resolution included no requirements for committees to reduce waste, fraud and abuse. And lawmakers refused to take up legislation to create a government-waste commission that would operate like the successful military base-closing commissions of the late 1980s.

Worst of all, Congress once again made a mockery of fiscal responsibility with 11,000 pork projects that will cost taxpayers $25 billion this year. This includes money for the Baseball Hall of Fame ($450,000), the Grammy Foundation ($150,000), a mariachi music-school curriculum in Nevada ($25,000), relocating a single kitchen in Alaska ($2 million), and building a public swimming pool in Ottawa, Kan., ($100,000). These projects are often bought and sold by lobbyists, who make sure helpful lawmakers receive hefty campaign contributions. Under current projections, the money spent on pork projects over the next decade could otherwise finance one-quarter of the costs of Social Security reform.

Not to mention that $3 billion in farm supports could be restored if necessary for appropriate farm-related ecological and environmental projects - such as this one:


Solutions exist for use of limited water

Since agricultural use accounts for some 90 percent of Colorado's water, most solutions propose to take agricultural lands out of production, temporarily or permanently, and divert water resources to municipal use. Yet such plans, which accept the death of vibrant agricultural communities as an inevitable cost of Colorado's growth, fail to recognize that there is an alternative, a way to increase municipal water supplies without sacrificing the rural economy that is an essential element of the Colorado we love.

By tying increased municipal use to improving the efficiency of agricultural use - with cities, water districts and developers sharing the cost of implementing water-saving technologies and methods - policymakers can meet the growing demands of cities, suburbs and industry while allowing agriculture to continue to flourish.

Neither agricultural interests nor government agencies have devoted much effort to increasing efficiency in the water-usage practices of Colorado's farmers and ranchers, even as it has become clear that conservation is in the interest of all sides in Colorado's water wars. As one analyst recently told The Denver Post, "If agriculture used just 10 percent less water, there would be enough water to serve twice the population of the Front Range." While there has been wide acknowledgment of this fact, ideas about how to achieve such a reduction without destroying agricultural economies have been scarce.

The best hope lies in an array of water-saving agricultural technologies, some of which have already been tried on a smaller scale. The biggest barrier to the use of such water-saving technologies is not technical feasibility but cost. With farmers struggling to survive, few are able to make the kind of capital expenditures that would improve efficiency in the long term. This is where our governments must step in. It is not fair to impose on the cash-strapped agricultural community the cost of buying and installing drip irrigation and other, more efficient water-delivery systems, when the benefits of such technology flow to residents and industries across Colorado. Just as public funds are used to build dams, viaducts and pipelines, public capital should be made available to the agricultural community for the sake of conservation.

Conservation - a word that sends shivers up the Tex-ass oil-rig spines!

What I'd like to remind these family farmers is that George Wasteland Bu$h is owned by multinational corporations - many of them the ones who seek to drive you off your land, out of business, and away from the lifestyle you cling to so tenaciously. If you aren't picked up by Con-Agra or Archer Daniels Midland to work you own former holdings, just where are you going to end up? Do you think you could make a living out there in Jesusland not working for one of these companies? Somehow, I doubt it. But you might just want to consider what you are going to do, for it looks like your annual income is going to diminish further, amking you even more dependent upon the very government which is rapidly 'giving away the farm' - yours:


White House can't explain lurking trade imbalance
Tuesday, December 7, 2004

For nearly two years, U.S. farmers and ranchers watched as the second shoe grew bigger and bigger. On Nov. 22, it officially dropped. According to U.S. Department of Agriculture Economic Research Service estimates released that day, 2005 will be the first year in nearly 50 that America will not turn an agricultural trade surplus.

The dubious milestone was met with odd silence at USDA. Odd because throughout the fall presidential campaign, Secretary of Agriculture Ann Veneman talked herself hoarse each time some farm community in a swing state dedicated a new, USDA-sponsored street light.

Now, as America is about to become a net food importer for the first time in generations, Veneman has no explanation of how Bush administration economic and trade policies have taken American agriculture from a $13.6 billion trade surplus in 2001 to a flat line in four short years.

Who can blame her? Would you want to be the first secretary of the last 11 to report such death-in-the-family news?

The news is made worse by the speed in which ag imports overtook ag exports. In August, ERS predicted a $2.5 billion ag trade surplus for 2005, the skinniest since 1972 but still a surplus. Three months later, though, ERS lowered 2005 exports by $1.5 billion, raised imports by $1 billion (in a curious coincidence, both now are pegged at $56 billion) and the thin margin was gone.

Ironically, the very thing farmers have been told for years would be their savior - a cheaper dollar - is worsening the ag trade balance.

Despite the dollar now falling to new lows against most of the world's major currencies, 2005 ag exports will be $6.3 billion less than in 2004. Simultaneously, the fast-cracking dollar has not slowed more expensive imports. Indeed, says ERS, the 2005 "import volume (will be) unchanged," but "their higher prices will continue to push the total U.S. import bill up."

Wow, and all this occurred while the U.S.-Canadian border remained closed to live cattle imports (the White House promises to open the border soon) and quotas limited Aussie beef exports to the U.S. Imagine the flood to hit when the World Trade Organization kicks the American door open even more. On second thought, little imagination is necessary.

Three news items - all tied to Brazil and combined with the trade report - paint a clear picture of where U.S. farmers and ranchers will find themselves in a more open global food market: further behind. Brazil recently noted it exported more soy and soy products in the first 10 months of 2004 than the U.S. will export in the entire year - $9.3 billion for them, $8.83 billion for us.

Also, in mid-November Brazil and China formalized an ambitious trading relationship. The deal opens China to Brazilian beef, soy and minerals and commits China to invest $5 to $7 billion in Brazilian roads, ports and railways.

Additionally, the Chicago Board of Trade recently confirmed it will launch a Brazilian soybean futures contract in mid-2005. The contract "is a historical change," notes a CBOT spokesman.

These latter news items suggest the ERS trade report wasn't the proverbial second shoe to drop.

It was the first; and more are coming.

Your business is going away faster than you can attempt to keep up, and you can thank that 'Good Christian' you voted for. He isn't doing a damn thing for you, and he isn't going to change HIS horse in the midle of this torrent that used to be a stream.

You will thus end up in the Blue cities, competing for the diminishing good jobs, maybe having to work several part-time jobs just to make ends meet. You'll then find out just what constitutes 'moral values'.

Hope you still then think you voted for the right man.


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pessimist :: 3:12 PM :: Comments (4) :: Digg It!