Thursday, February 21, 2008

Wheat Allotments

I posted earlier on the possibility of reverting to permanent legislation, dismissing the idea. But a commenter says there may have been meetings on it. It's still hard for me to take the idea seriously, at least as we were approaching in the run-up to the 1985 and 1990 farm bill. Before we got away from wheat allotments and feed grain bases in the late 1970's, you needed three things to determine a farm's effective wheat allotment:

  1. the Secretary's estimate of the wheat acreage we needed in the nation
  2. the total of basic allotments
  3. the farm's basic wheat allotment.
Say no. 2 was 62 million acres, and no. 1 was 31 million acres (i.e., we needed only 50 percent of the wheat we historically grew). Then the farm's effective allotment would be 50 percent of its basic allotment.

So, to revert back to the permanent legislation in 1985 and 1990 meant that we needed to carry the farm's basic allotment, as recorded in 1977, forward (i.e., "reconstitute it" for FSA types). But that's assuming something, that the way USDA had done allotments in the past was the only way to go. And assumptions, as I often say, get you in trouble. Looking at the permanent legislation in the 1938 act you might not have to reconstitute the basic allotments at all. Of course, it would take some lawyering, but the USDA lawyers are known for invention (witness the 1983 Payment-in-Kind program).

Anyhow, I'm no longer an expert, just an old kibitzer. I still think it's all a game of poker and USDA is trying to run a bluff. Of course, the best bluff is when you aren't. (Thomas Schelling famously observed of the game of "chicken" (the way teenagers in the 1950's got their thrills, two cars driving straight at each other, seeing who would swerve first)--you could win it if you could toss the steering wheel of your car out the window.

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