Monday, August 27, 2012

Why is the price of milk going up? Ask the overlords

When you're a freelance writer, you generally don't turn down opportunities to work.  Thus it is that I recently agreed to the request of an editor I've been working for for several years to become a regular contributor to a farming magazine with a multi-county readership.  There's been a learning curve for this city boy, to be sure, but thanks to a network of contacts I'm forming among what may be the last sector in our society to be comprised of solid, salt-of-the-earth types, I'm getting my sea legs.

My current assignment, though, has me in the weeds.  It's on the current versions of the farm bill making their way through the House and Senate respectively.  I'm supposed to get feedback from some area farmers, as well as some policy-wonk types.

Since the FDR era, when the first such bill became legislation, Congress has tweaked it to address the nature of the times about every five years.  It's now time to re-examine it.


To get started on my research, I have been checking out some documents provided at the website of the Agriculture and Food Policy Center, a think tank within Texas A&M run by some agricultural economists.  There are indeed some reports about the current versions of the farm bill update.

Talk about arcane.  The working papers are a jungle of acronyms and terms such as RLC, STAX net payments, SCO premiums, AGI 3-year moving average, NCFI . . . okay, you get the drift.  I am starting to see the braod outlines of what's being presented.  The Center is asking farmers selected of a study it conducted whether they prefer subsidized insurance coverage for price drops or revernue drops, or be compensated by county or on an individual-farm basis.  The two versions of the bill offer various mixes of these variables.  Still, the whole thing makes my head swim.

The text of the remarks of Dr. Joe Outlaw, the Center's director, to the House Agriculture Committee were much easier to understand.  But they paint an odd picture of the farming sector's view of government involvement.  It seems farmers count on price support - "safety net" is the term Outlaw uses a lot - as a given and panic if it looks like it's going to be altered in any way.  On the other hand, they bristle at government mandates such as biofuel-use allocation for corn and other environmentally based intrusions into their operations.


Thus this  morning, I was pleased to run across Katie Kieffer's Townhall column on this very subject.  A number of things became clear.  Certainly a medium-sized family farm operation that is generally based on the classic American work ethic, but that has come to count on subsidized prices and risk amelioration is going to get a little antsy when Congress considers tapering off.  But it's all of a piece.  The government that boosts your soybean or dairy prices is the same government that can tell you what to plant and how much.  And the market for food for all of us is thereby distorted.

 I don't know if I'll be able to draw such a conclusion in the final paragraphs of my article when it's done.  This is supposed to be objective journalism.  Still, if I present the basic dynamics behind the minutae, it will have to be obvious to the reader that, once again, as in any area of life and economics, we're talking about the relationship of government, freedom and dependence.

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