Tuesday, June 26, 2012

Pat Roberts of Kansas and the 2012 Farm Bill

For reasons that I don't quite understand, the infamous Farm Bill comes up for renewal every five years. 

It's one of the few scandalous giveaways that has to be reworked and reapproved. 

Here's Townhall.com:

Every vote in Congress can be viewed as an opportunity to either increase liberty or increase government. Right now, the Senate appears poised to choose the latter as they prepare to vote on the 2012 Farm Bill.

The 1,000-page bill that Senators Debbie Stabenow and Pat Roberts are pushing through the Senate is chock full of massive spending, new entitlements, and new regulations. With corporate welfare and generous subsidies thrown in for good measure, the bill reflects everything wrong with out-of-control government. No wonder Congress is sporting a 17 percent approval rating these days.

The farm bill is another in a long line of government boondoggles that simply builds on the big expenditures of a previous bill. The CBO estimates that the 2012 farm bill will up spending to $969 billion over the next ten years. Locking in at those levels in the midst of a debt crisis and credit downgrade is beyond fiscally irresponsible. Overall, the Senate farm bill punts on the opportunity to contribute to deficit reduction and shows a startling lack of political courage.

Ok, let's pause for a moment.  Farming is risky.  Erratic.  Unpredictable.  But, on the other hand, so is long-haul trucking.  So is running a lawn service or a coffee bar or an upholstery shop. 
Upholsterers aren't organized into a lobby, though.  Sucks to be them, doesn't it???

The 2012 farm bill’s most noticeable “reform” is the elimination of direct payments to farmers. In its place is a new entitlement program most commonly referred to as “shallow loss,” a new federal crop insurance program. It’s meant to serve as an income safety net that will automatically trigger payments to farmers when their crop yields fall below 90% of their average levels over the past five years. However, the past five years have seen a spike in crop yields, meaning that shallow loss is locking in rates that are due to fall. It’s unnecessary corporate welfare, despite what the farm lobby claims. According to the American Enterprise Institute:

“The current average debt-to-asset ratio in the farm sector is less than 9 percent and has been declining steadily over the past decade. Moreover, farms fail at a rate of less than one in two hundred a year, and, from a financial perspective, farms are better placed than almost any sector of the economy to handle year-to-year variations in revenues and costs by themselves. Yet, effectively, farmers want a tax payer-funded guarantee that their revenues will never fall below about 90 percent of their recent levels.
I'll throw in some more about "shallow loss" programs in a moment.  If you can't stand the suspense, go to the end of this post, and prepare to be depressed about the gullibility of the American public. 

The addition of a farm entitlement program is one of countless examples of the federal government encouraging dependence at the expense of liberty. Additionally, telling farmers that they can keep their revenues and have the taxpayers absorb their losses invites risky behavior on their end. Apparently too-big-to-fail has yet to go out of style.

Here's a quote on the Farm Bill from the New York Holy Times.  Any time you hear a politician or a "journalist" claim that people on both sides should reach across the aisle to get things done and break the gridlock?  You should hide your wallet, lock up your daughters and bury the family silver in the backyard.  You're about to get screwed.  Here are Democrat Debbie Stabenow and Republican Pat Roberts of Kansas:
“This bill represents significant reform,” said Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee. “It cuts subsidies, it cuts the deficit and it creates jobs.”

Senator Pat Roberts, Republican of Kansas and the ranking member on the committee, called the legislation the best bill possible. “It shows what can happen if we break the logjam of partisanship and work together to get something done,” Mr. Roberts said.
 Debbie, you ignorant slut.
You claim that this theft "creates jobs".  But what is the cost of taking the money from taxpayer A and giving it to farmer B?  Has it occurred to you that taxpayer A might have wanted to create some jobs of his own, you Statist looter?  
And Pat, a lot of us were depending on that logjam that you just managed to "break".  We want it back.  We want you to be tarred and feathered and ridden out of town on a rail.
In addition to wanting to give money to farmers, Pat Roberts also wants to lower the tax burden on Kansas taxpayers.  Gag me with a dirty diaper.  Anyone voting for this old fraud should have his taxes doubled. 

God almighty, I'm in a bad mood this morning. 

Here's the skinny on the "shallow loss" farming program.  The older programs guaranteed an income.  This new one guarantees a profit.  Well done, Pat and Debbie.  Well done. 

  • Shallow-loss programs are costly: Depending on structure and crop prices, these programs could cost the taxpayer as much as or more than the direct payments program they would replace, averaging as much as $8 to $14 billion a year over the next five years.


      • Shallow-loss programs amount to a new entitlement: Payments would be automatically triggered by revenue shortfalls and would be linked to average revenues over the past five years. So, when prices and yields increase, payment triggers will also increase, creating a new, partially disguised entitlement program that locks farmers into near-record incomes at the taxpayer’s expense.

      • Shallow-loss programs based on farm-level yields create incentives for the wasteful use of economic resources by buying down deductibles associated with federal crop insurance: Farmers would reap the benefits of record crop yields and prices. However, because a high percentage of revenues are guaranteed, farmers may adopt more risky farming techniques.

      • The Congressional Budget Office’s cost estimates for shallow-loss programs assume that recent historically high prices will be sustained: If corn, wheat, soybean, rice, and cotton prices return to the average levels observed between 1996 and 2011, however, program costs will balloon. A county-based program would cost taxpayers between $8.4 and $13.98 billion, depending on the rate of reimbursement. The Stabenow-Roberts shallow-loss proposal would likely cost taxpayers between $5 billion and $7 billion, depending on the mix of farm-based and county-based programs.

      • Shallow-loss programs will perpetuate the federal farm program tradition of giving the majority of subsidies to farms that do not need them in the first place: Shallow-loss subsidies, like direct payments and crop insurance subsidies, would be tied to the amount of land that households farm. Consequently, the largest and wealthiest farmers enjoy built-in buffers in the form of substantial equity in their farm operations (debt-to-asset ratios average less than 9 percent in the entire American agricultural sector). These individuals would receive the lion’s share of shallow-loss subsidy payments.
      Here's how it ought to work.
      If corn prices aren't high enough for farmers to make a profit, that means there are too many people growing corn.
      The farmers affected need to grow something else. Or become upholsterers.

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