Wednesday, May 09, 2007

Fruits, Vegetables, Blue Corn and True History

The May 8 Post has independent pieces with much the same point. Jeffrey Birnbaum outlines how the fruit and vegetable growers are hoping to get a bigger piece of money in the new farm bill. He says that they were long disdained as "specialty crops" but now are better organized and hope to have influence because they're strong in states often dubious of the farm programs (like CA and WA).

Meanwhile, over in Business a columnist for Bloomberg, Cindy Skrzycki takes up the cause of "blue corn" (usually used for tortillas), which hasn't met the definition of "corn" for the purpose of the farm programs. The lobbyist for the growers is testifying before Congress to get that changed:
He recounted the story of a Nebraska blue-corn farmer who went to his local USDA Commodity Credit Corp. office to apply for a low-interest, nine-month loan against his harvest. Clarkson said he was told he didn't qualify because he wasn't growing corn.
To oversimplify, the original farm programs were intended for field crops and dairy, commodities that could be stored (in the form of cheese and butter for dairy). They were intended to aid marketing by offering nonrecourse loans on stored commodities to keep them off the market until prices improved. They also had various measures to reduce production, to try to bring supply into line with balance.

Fruits, vegetables, and blue corn didn't fit into this picture. But by the 1990's things started to change. The supply management/production adjustment side of the programs was phased out (ending with the buyout of tobacco quotas this century). The phase out both complied with World Trade Organization rules on delinking subsidies and production and responded to the views of economists that allowing the market to give signals on what to produce, signals unclouded by subsidies, was the efficient way to go.

Meanwhile the provisions for loans on stored commodities were also changed. Loan deficiency payments and marketing assistance loans became ways of circumventing payment limitation and WTO rules [perhaps a biased view of mine]. Loans on actual stored commodities diminished in overall importance.

So by 2000 the picture is: crop farmers are getting money that's not closely tied to commodities. So blue corn, fruit and vegetable farmers say--if Uncle Sam is handing out money, why isn't he handing any my way?

In my view, while these farmers may have better lobbyists now, and connect with the zeitgeist better (natural foods, eating well, anti-obesity), their probable gains in the next farm bill also reflect the change in farm programs.

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