Jolley: Five Minutes with the "Not Cool" Farm Bill
Maybe I should subtitle this column "Forever With the Farm Bill." Five minutes just won't cut it for something so complicated and cumbersome that it seems to always be a bone of contention. It's supposed to be a five year plan but just as soon as we get past the six or seven years it takes to put it together, we're off and running on the next 'plan.'
Do you remember the old Soviet Union and the monotonous, repetitive five year plans which were supposed to generate great leaps forward? That kind of massive central planning could never work, of course. There were just too many variables. The results were always the same – great fanfare followed by an embarrassing stumble backwards. And another five year plan was soon re-issued.
After way too many false starts, Corporate USSR soon declared the international equivalent of a Chapter 11 and sold most of its assets in an attempt to pay off its creditors. Those five year plans were so complicated and relied on to many 'fingers to the wind' best guesses that failure was about the only guaranteed outcome.
And now we come to the Farm Bill, which is a terrible misnomer since 'farm' is only a small part of it. It's a conglomerate of everything remotely associated with food, an illegitimate mind meld of a thing that guarantees only two things: (1) Interminable political wrangling which usually results in the two major parties arming themselves and confusing each other with talk about their rights according to the first and second amendments. And (2) that insincere posturing is followed by the key players standing back-to-back, taking twenty paces, turning and firing on one another.
Fortunately, both sides are terrible shots – they're much more adept at verbal salvos – so no physical damage is done. Unfortunately, none of them are any better at central planning than the haphazard members of the old politburo so no real political advantages are gained, either.
Now we have our next best guess of a two years-past-due bill which is likely to produce even more controversy after the fact than it did during the ridiculously long, poorly wrangled affair that it took to create it.
Here is what USDA had to say about it:
"The Agricultural Act of 2014 is important legislation that provides authorization for services and programs that impact every American and millions of people around the world. The new Farm Bill builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for the taxpayer.
The new Farm Bill will allow USDA to continue record accomplishments on behalf of the American people, while providing new opportunity and creating jobs across rural America. It will enable USDA to further expand markets for agricultural products at home and abroad, strengthen conservation efforts, create new opportunities for local and regional food systems and grow the biobased economy. It will provide a dependable safety net for America's farmers, ranchers and growers. It will maintain important agricultural research, and ensure access to safe and nutritious food for all Americans."
Probably more out of exhaustion than any real passion for the bill, the Senate adopted the Farm Bill conference report by a vote of 68-32 and the House adopted the report by a vote of 251-166. The House cut about $40 billion over the next 10 years, a strange political maneuver since the bill only covers the next five years.
Farm programs suffered from a few unexpected hatchet strikes in the new bill, including the elimination of the direct payments subsidy. Those subsidies amount to a hefty $5 billion a year and are paid to farmers whether or not they grow crops. The new bill moves some of the money to government-subsidized crop insurance. Turning away from what many saw as program that subsidized farmers for not working into protection from natural disasters made sense to most lawmakers who were feeling pressure on the home front to do something about the government's often ill-advised use of tax dollars.
MCOOL might be the real cow pie in the punch bowl, though. It is one of the most hotly contested, but rarely intelligently debated issues in the bill – one that could cause a disastrous trade war between all three of the North American trading partners. To be fair, it would be Mexico and Canada in one corner and the U.S. in the other. MCOOL is an animal ag related issue that could sprout long and ugly roots that would disrupt the flow of a lot of unrelated goods and services if it's allowed to stay in its current form.
It has the potential of being a multi-billion dollar game changer in the usually warm trading relationship between the three countries. Here is what some of the key players are saying while they rattle their sabers:
Scott George, President of the National Cattlemen's Beef Association:
"This mandatory label by the U.S. government has failed in every regard. It has caused costs to be put on the back of the producer, rancher or farmer like myself with no benefits."
Dave Warner, speaking for the National Pork Council:
"We had to ask for a fix. Because it wasn't in the farm bill, we're going to ask for a full repeal."
Michael Martin, Cargill spokesman:
"(Faced with) the prospect of two billion dollars in retaliatory tariffs from America's NAFTA partners to the North and South, we believe Congress should revisit this issue."
John Masswhol, Director of Government & International Relations, Canadian Cattlemen's Association:
"I genuinely believed they were going to fix it. I think that makes the disappointment that much worse."
Gerry Ritz, Canadian Agricultural Minister:
"Our government continues to stand with our industry and we remain steadfast in taking whatever steps may be necessary, including retaliation, to achieve a fair resolution."
Barry Carpenter, Chief Executive Officer, North American Meat Association:
(We are) extremely concerned that Congress has refused to resolve these critical issues. Without these provisions, we are forced to aggressively oppose the Farm Bill. This failure to address COOL also makes it imperative that the U.S. government push the WTO to expedite the process in order to provide the certainty necessary for the industry to move forward."
Bill Bullard, Chief Executive Officer, R-CALF USA:
“Marketplace competition can no longer occur without COOL. In this global market, more imports from more countries are entering the U.S. each year and foreign meatpackers are trying to capture market share away from U.S. family farmers and ranchers. COOL allows U.S. cattle farmers and ranchers to highlight their product to U.S. consumers whom we believe will choose our exclusively U.S. produced product if they can identify it in the market. That’s what this fight is all about: farmer and ranchers want competition while the meatpackers and their allies want to control the market.”
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