Spinning Crop Insurance

I've probably written this before, but crop insurance advocates spin their story just as well as any politician.  Take this statement included in the press release noting crop insurance indemnities crossed the $10 billion mark and touting the fact that Congress didn't have to pass an ad hoc disaster program this year:

"Since 2008, a total of more than $28 billion has been sent to farmers for policies they
purchased. Federal investment in crop insurance, during that same period, was reduced
by more than $12 billion."

The same tactic is used by all supporters of federal expenditures on a totally nonpartisan basis.  Conservatives who support a "strong defense" do it, liberals who support food stamps do it, President Obama does it, President Bush did it, Rep. Ryan does it, even fiscal hawks do it when it comes to their pet program, they all "do it", but Billie Holliday isn't singing about it.

What's "it"?  Extrapolate from the past policy to establish the baseline for determining what the "cut" or "reduction" is, and fail to acknowledge automatic sources of growth.  In other words, the second sentence in the quote should, if the author was intellectually honest, read something like this:

"Although changes in policy have reduced Federal investment in crop insurance, during that same period, by x billion dollars, because of increased crop prices and acreages the total Federal investment has grown by y billion dollars." 

See this link for another example of spinning.

NASCOE Versus Crop Insurance III

For background, see prior posts here and  here

What I would really like to see, though it will never happen, is a controlled test of FSA servicing crop insurance versus the companies servicing crop insurance.  Choose 10 counties and have half the current insureds serviced by FSA and half by the companies. Run the test for 3 years and compare results.

Why won't it happen?  Disregarding the political realities, the practical consideration is: to service crop insurance you need to develop software. To do the job right, you need the software to be integrated with FSA's existing or to-be systems.  That takes time and money, which you can't justify for a limited test.  (Though it's what we did with CAT insurance over a couple years.  Unfortunately FSA management in DC spun its wheels for some months so the first year was pretty grim.  The second year was significantly better.  And then the big shots proclaimed that CAT was available through insurance agents through the whole country.)

Of course, if the result of the test were to show a big advantage for FSA (which most people who worked for FSA would like to believe) and you extrapolate that over the country and over 40 years, then it's worthwhile to do the test.  But that's not how we do things in this country. 

Closing FSA Offices

Vilsack's going ahead with plans to close 131 FSA offices. 

I see the Broome County, NY NRCS office is going to be closed as well.

Crop Insurance Going On-Line?

I posted yesterday about the head of NRCS boasting about plans to put conservation work online for his customers.

I wonder, are the private crop insurance companies putting their work online? At the moment I'm too lazy to try to find out, but surely one or more of the companies is doing that?

Government Geography and Palin

The Post had a piece reporting on a Gallup survey showing the location of government employees (all levels).  As you'd expect, DC, MD, VA are at the top.  What's surprising is, they aren't at the very top; Alaska and Hawaii are.  Yes, that's right. Sarah Palin was once the governor of the state with the most government employees (percentage of total).

And states like SC, WY, NM, WV, and MS rounded out the top ten.  What it is, is a reminder of how big DOD is and the difference it makes in some states.

The Dog Which Didn't Bark: GAO at FSA

GAO may have issued a report identifying 51 areas in which cost savings could be made, but a fast review shows they didn't ding FSA or NRCS.  The main USDA area affected was food safety.

NRCS Pushing Online Service

Via Farm Policy, here's NRCS Chief White talking about how his customers will be able to do their conservation paperwork from home by fall.  (Yes, he qualifies his hopes a bit, but it's an ambitious vision.)  This is in the Senate Ag hearing on conservation, and the audio clip doesn't include the chair's reaction to his plan.

EWG and Conservation Compliance

EWG has a paper on conservation compliance out Monday, in advance of a hearing tomorrow.

I'm no expert on the subject, particularly since my knowledge of the matching process between NRCS data and FSA data is so out of date. But the study seems professional and hits all the bases, although it obviously is pushing for changes in conservation compliance. 

Some notes:

•  the report says linking crop insurance with conservation compliance was dropped in the 96 farm bill to encourage participation in crop insurance. It argues that goal has been achieved so the requirement should be reinstated.
•  the report's interesting on the process of easing up on the initial 1986equirements.  I was sort of peripherally aware of some of the changes, but mostly of the fact NRCS did not at all like having to change from a service/educational agency to a regulatory one.

 A couple quotes I found interesting: 

there has been less focus on the FSA officials who have had the lead administrative responsibility for the law from the outset. FSA officials are responsible for making final determinations on whether producers qualify for the most important exemptions and variances, including the good faith exemption, graduated penalties and eligibility for relief because of economic or personal hardship. NRCS’s more limited role is to provide the technical information and guidance for the decisions made by FSA. According to some observers, FSA officials, who have extensive experience with enforcement of commodity program rules, have been largely unwilling to deny farm program benefits to farmers who do not actively implement their conservation plans. It is FSA that bears the greatest burden of responsibility for the law’s ineffectiveness and the apparent acrimony between FSA and NRCS officials. [page 18]

ongoing rancor between USDA’s Farm Service Agency, which has the lead responsibility for enforcement, and the Natural Resources Conservation Service, which provides technical assistance to farmers and conducts spot checks of compliance, has contributed to enforcement failures.  [page 22]

I wonder whether part of the resistance to the idea of combining SCS and ASCS in the early 1990's was the fear that, if you put everyone in one agency, the enforcement of conservation compliance would have been more effective.

An Honest Blogger

Which Greek of ancient times searched for an honest man? 

I forget, but I nominate Chris Bittman as an honest blogger.  After welcoming an new economics/development blog, he talks about how hard it is to last blogging substance:

My secret to longevity? Six days out of seven I cut and paste peculiar drivel I that catches my interest on the web

Gaining and Losing Resistance

John Phipps quotes a rant about farmers misusing genetic technology here. 

It caused me to wonder about this:  suppose farmers start using compound A on weeds.  Over the years the weeds develop resistance to compound A.  So our marvelous chemical industry develops compound B, which farmers start using in place of compound A. Now if I understand how it works, because weeds are now growing and reproducing  in an environment where the gene(s) providing resistance to compound A no longer provide a competitive advantage, those genes should eventually be lost from the weeds' genetic makeup. (While the weeds are busily gaining resistance to compound B.)

What I wonder, assuming I've got the biology roughly correct, is how long it takes to lose the resistance: 2 generations, 12 generations, 22 generations, 122 generations?

Simplicity and Organics

Michael Pollan's favorite organic farmer, Joel Salatin, has a new book, with an excerpt here.  Basically he's noting the misalignment between an organic operation and modern methods of marketing, particularly fast food chains and Whole Foods.  He discusses his dealings with Chipotle, where he's succeeded in selling parts of pigs (shoulders and hams) to them, but that leaves him with the problem of selling the rest of the pig.  All in all, it's a complex job of negotiation and management, a far cry from the simplicity some associate with organics.

As I've noted before, what's true for the livestock and poultry farmer like Salatin is also true for the organic field crop farmer.  To make organics work, to make the land produce as much as conventional agriculture, you need to rotate your crops.  That permits Rodale to claim their organic corn production is equal in yield to conventional, but it's also a sleight of hand because the organic corn producer has lots of alfalfa she needs to market.

As an aside, Dr. Pollan appears to be recycling his books as a good organic person should: he's got illustrated versions out now, but it's been a few years since he had a new one.

Farewell Tortilla Factory

We've been eating at Tortilla Factory in Herndon since about 1978, on a regular weekend schedule from the early 80's.  No more.  Today was our last lunch and their last day.

Everything changes and very few human organizations last and last.

It was good while it lasted.

Farmers and Computers and Public Libraries

 Both before and after I retired I've pushed the idea of farmers getting service through Internet applications.  But there are some practicalities I often miss, like the learning curve barrier.  In a different context, it shows up in the following--via Kevin Drum, from a Metafilter thread on the role of public libraries: a long comment--two excerpts:

If you can take yourself out of your first world techie social media smart-shoes for a second then imagine this: you're 53 years old, you've been in prison from 20 to 26, you didn't finish high school, and you have a grandson who you're now supporting because your daughter is in jail. You're lucky, you have a job at the local Wendy's. You have to fill out a renewal form for government assistance which has just been moved online as a cost saving measure (this isn't hypothetical, more and more municipalities are doing this now). You have a very limited idea of how to use a computer, you don't have Internet access, and your survival (and the survival of your grandson) is contingent upon this form being filled out correctly. 

....[So you go to the library to use their computers, but you don't have the experience with them and can't find the site.}

Before leaving you decide to try one last thing. You go up to the desk, and explain your situation. The tired, overworked person at the desk nods along, and says, “well, we're not supposed to do this, but...” and tells you to walk around the desk. With a few clicks on the mouse they have the site up that you spent 30 minutes trying to find. They bring up the electronic form, politely turn their head aside as you fill in your social security number, and then ask you a series of questions to satisfy the demands of the form. It comes to your email address, and you have to admit that you don't have one, so the librarian walks you through setting up a free one and gives it to you on a slip of paper. “We have free computer classes,” he says (and you're lucky, because a great deal of public libraries don't), but you look at the times and realize that between your job and taking care of your grandson you'd never be able to attend, and it'd probably be too hard anyway. You thank him, and he smiles, and you leave. Congratulations, you've staved off disaster until the next time you need to use a computer for a life-essential task.

The whole comment and thread is interesting. Unfortunately most farmers don't have access to the sort of public libraries assumed in the thread (which sounds like my local Reston library).

 

Stakeholders

Kim at Wolf Trap Opera in a blog post mentioned that "stakeholders" made her think "of someone holding a sharp stick and threatening me with it :))" "Stakeholders" were big back when we were supposedly reengineering business processes--we were supposed to identify the stakeholders and get their buy-in.  That's difficult and often didn't happen.

But how did "stake holder" evolve into its current meaning from the original meaning of a neutral party who has temporary custody of the bets/stakes of contestants?

USDA and Immigration

Usually think liberals favor easier immigration, though sometimes it's libertarians.  And usually think liberals look favorably on the food movement, which is usually anti-USDA.  But DTN reports Vilsack got favorable reaction  for his call for Congress to pass comprehensive immigration reform.  He was keynoting the USDA ag forum, so speaking to a bunch of ag people who like easier immigration so they have someone to pick their fruits and vegetables, process their meats, and milk their cows.

Another French Revolution (for Bureaucrats)

Bureaucrats care deeply about titles, which is why this change in France is a revolution.  Where the U.S. has "Miss", "Mrs." and "Ms", the French have had only "mademoiselle" and "madame".  But no more.  As described by Dirk Beauregarde, instead of coming up with a third term as we did, French feminists have forced the bureaucracy to do away with "mademoiselle" and use only "madame".  And Sarkozy is a right winger.

What I'd Like to Know: Age Distribution of Small Farms

From Farm Policy, this quote got me wondering:

The FT article concluded by stating that, “Tom Sell, a farm industry lobbyist in Washington, says US farmers receive relatively less support than their peers in other countries. He adds that removing financial aid will hurt smaller, family farms and accelerate the move to industrialised [sic], large-scale farming.

This follows a discussion of how the biggest farms produce most of the crops.

But what I'd like to know, is how the age distribution of farmers relates to the size distribution of farms.  It's probably available in some ERS study, but I'm lazy today, having just returned from working in the garden for the first time.  Why would I like to know this?

My suspicion is there's two types of old farmers, those with children who are going to go into farming (like John Phipps) and those who aren't (like my dad).  The first category and the young farmers (not many of those) are forward-looking, wanting to expand, buying up land when they have the chance, looking at the future, etc. etc.  The second category is probably conservative, without the drive or incentive to take a lot of chances in order to expand.  My bet is there's a big difference in the size/intensity of the farming operations of the first category and the second. If my stereotypes have some truth to them, we might well be overestimating the importance of a safety net for the smaller farms. I'd also hazard the guess that the first category is more indebted than the second, so the second can coast to retirement by mortgaging or selling land.

I may well be wrong; it's always dangerous to traffic in stereotypes and examples which readily come to mind, but then life is dangerous.

Misleading With Statistics

Alex at Marginal Revolution posts a chart showing that the exhaustion of unemployment benefits tracked very closely with disability applications under Social Security.

Unfortunately, it's a tad misleading, so  commentor Rahul produced a graph less misleading because it uses the same scale and intervals for both measures..

Alex's point is still valid, but it's a damned sight less dramatic.

One of the 10 best books I ever read: "How to Lie with Statistics". which dates to the 1950's.

A 500K Mercedes?

Who knew, but this piece via University Diaries on the rich kids at GWU shows a fancy student car which retails for over $500,000.  


To the barricades.

The "Three Option" Program

From Farm Policy, Rep. Peterson predicts a 3 option program in the next farm bill:

“Rep. Peterson: Well, there will be. I think it’s going to be three options. I mean, I don’t see any other way to do this. There’s going to be the target price, kind of a cyclical component, there’s going to be some kind of shallow loss/catastrophic loss component, and there’s going to be a cotton program, the STAX program. And I don’t see any… I mean, rice and peanuts are the ones that are primarily interested in the target price. That brings them on board. And there might be some people out here that might use the target prices. The other commodity groups are more interested in the shallow loss/catastrophic loss.
“But we just don’t have the money to do a one-size-fits-all program anymore. And frankly, the crops are different. I mean, the rice market, they don’t have ethanol, so they’re struggling. They don’t have access to Japan and a lot of these big rice consuming countries. They don’t have access. Now peanuts, they’ve got their own problems. Cotton, you know, the WTO case. So to try to fix all of them and have a program that’s going to work for cotton or for corn and soybeans and wheat, I just don’t see it, so I think there will be three options.”

He also says:

 "You know, I don’t know why we couldn’t even handle disaster through crop insurance, and I’ve talked to the crop insurance people about that. It would be a fairly efficient, I think, way to do it. So I think that’s where we’re heading, barring some big collapse in prices. But if we get back to a deal where corn prices go back down again significantly, corn and soybeans, then that could change the whole picture of things, and it could happen.”

 When I joined ASCS in 1968 there were separate titles of the farm bill for wheat, for feed grains, for upland cotton, and for producer rice and farm rice.  Over the years the programs gradually became more similar to the point they could be covered in one title.  Now it looks as if the commodity differences are  rearing their heads again.  Makes for more complex administration.

Grapefruit and Locavores

My college roommate was from Hawaii, so he stayed with my family for the Christmas holiday.  His mother shipped a crate of citrus from Hawaii, meaning I learned for the first time how grapefruit should taste.  Locavores are right: fresh fruit direct to the table are the best.

Regardless, I've regularly had grapefruit halves for breakfast over the last 50 years. Why?  Grapefruit from the Safeway taste good enough; they satisfice even if they aren't the platonic ideal of grapefruit. And that's the crack in the locavore armor.  Many people develop a taste for tropical and subtropical fruit: your citrus, bananas, etc.  which most Americans cannot grow locally but which we learned to value.  That simple fact breaks the connection between place and product, so we're willing to accept the idea of fruits and vegetables being transported to the store from further and further away.  (See the history of United Fruit for how far back this goes.)

The economists would tell us it's a balance of the utility of the produce, mostly the taste, and the cost and they'd predict, rightly, that the ability to put good-enough tasting produce on the shelves of the supermarket only increases with time.

My proof: some of the best blueberries I've tasted in a good while just came from the Safeway, grown in Chile.

Gloomy Geezer

Not me, John Phipps:

Otherwise, it looks like producers as a group are bound and determined to see how fast and often we can shoot ourselves in the foot. We are re-enacting the Tragedy of the Commons even with full knowledge of how the story will turn out.

(On farmers misuse of new technology, like failing to plant the required refuges when using GM corn.)

How Government Really Works

Two articles in today's Post show how government really works:

• one covers the implementation of the rules of 28 states on health insurance covering contraception.  Turns out the states have loopholes and vague provisions, and provisions which aren't really enforced, which means the Catholic organizations who were/are yelling about the Obama administration's requirements were able to live with what really happened at the local level.
• the other covers the implementation of the law requiring reservists to get their job back when they return from active duty.  Turns out some reservists don't get their job back, and sometimes it's the federal government which fails to follow the law.

Some points:

•  the way our government is designed, the multiple layers (local, state, federal) mean "liberty" is protected. (I put "liberty" in quotes because I could as easily write "disorder".)
• some laws are more signal than reality.  That was a lesson from my sociology prof who cited the case of laws against prostitution. There's still prostitutes.  Or speeding, there's still speeding.  
• no one doubts President Obama wants veterans looked after, but it's a big government so gaps between executive intent and actual execution can be great.

Improving FSA Customer Service

One of the issues for any big bureaucracy is how do the bureaucrats at the center/top of the organization monitor the success their operatives have in dealing with their customers/clients.  In the case of FSA there used to be a number of ways the DC people, even those in the ivory tower as Chet Adell used to call the Administration Building, which used to house the Administrator and deputies, kept up with the field:

• first of all there was the feedback up the chain of command, from county through district director, state office and state director to area director
• second there was the feedback through the politicians--the county committee members, state committee members, etc.
• third the correspondence and phone calls directly from the farmers to DC, whether the Administrator, Congresspeople, or President

I think implementing web applications which provides direct service to customers creates a problem--how do you get feedback from the customers?  The established channels don't work (I don't see farmer Jones telling Ms. Smith in the local county office of a problem he had with the FSA website a week ago), and I don't have much faith in the ability of canned surveys to gather useful information. 

Would it work for the county offices to use the same applications as their customers could access online?

Vilsack on FSA/Crop Insurance

Secretary Vilsack tells House Appropriations he's not discussed any move to use FSA to service crop insurance policies

A Puzzle: Crop Insurance and Big Farms

An excerpt from the executive summary of analysis of the changing farm structure recently completed by ERS:

A long-term shift in production to larger farms has contributed to a shift in the distribution of commodity-related Government program payments and Federal crop insurance indemnity payments toward larger farms, most of which are family farms. Since operators of larger farms tend to earn higher household incomes, this shift has in turn led to a shift in the distribution of commodity-related Government payments toward higher income farm households. Most commodity-related program payments now go to farms operated by households with annual incomes over $89,000—significantly higher incomes than the typical U.S. household. Federal crop insurance indemnity payments have also shifted toward farms operated by higher income households, although not as much as commodity related program payments.

 The last sentence puzzles me, because I would have expected the exact opposite.  Maybe I'm living in a dream world but I do expect the payment limitation provisions FSA administers to have some effect.  And since crop insurance doesn't have such limitations, I'd expect the indemnities be more correlated to farm size.

Not sure I have an explanation, which is why it's a puzzle.  Perhaps, just perhaps, the larger operations are able to self-insure? Or maybe the definition of "operation" varies across the agencies?  Who knows?

Congratulations FCIC

Yesterday was the birthday of FCIC.

When a Caddy Was the Cat's Pajamas

That's how old I am (actually not: "cats pajamas" dates to the 20's).  But seriously, when I was young the Cadillac was the epitome of class and excellence.  Maybe the Rolls Royce was competitive, but no one else.

Apparently Caddy is on the rebound, paving the way for the smart car, introducing "elements of autonomy to the car".  See this Technology Review piece.

NASCOE Versus Crop Insurance II

A followup to my Feb. 10 post: NASCOE has had their legislative position on crop insurance posted for several days.  They refer to a couple of GAO reports on crop insurance.  Essentially NASCOE is pressing the servicing end, not the sales end, of crop insurance.

Love Those Free Marketers

The incentives certainly work to inspire idiocy:

Jim Massery, the government sales manager for Pittsfield, Mass.-based Lenco, dismissed critics who wonder why a town with almost no crime would need a $300,000 armored truck. "I don't think there's any place in the country where you can say, 'That isn't a likely terrorist target,'" Massery said. "How would you know? We don' t know what the terrorists are thinking. No one predicted that terrorists would take over airplanes on Sept. 11. If a group of terrorists decide to shoot up a shopping mall in a town like Keene, wouldn't you rather be prepared?" From Ta-Nehisi Coates

 “‘However, with the enormous amount of risk farmers are about to undertake by planting a new soybean crop, now is exactly the wrong time to reduce support for the federal crop insurance program,  The American Soybean Association from Farm Policy

Based on the logic of these hucksters, we need a $300,000  armored truck in every town the size of Keene, N (23,000 +) H, or larger, or about 1300 places. And because soybean farmers plant a crop every year, and risk their investment in seed and fertilizer, we can never reduce crop insurance.

Women and Haying

I stumbled across a site, Hay in Art, which I recommend to all feminists who grew up on dairy farms.  I was searching for images of haying for another blog, and found this site which apparently has collected all the paintings showing haying. You'd be surprised how many there are (6700+).  A subset of the collection is women doing haying. The site owner, Alan Ritch, finds a pattern: women raked and men used forks.  And apparently it was common to ted the hay (i.e., turn the cut hay over so it would dry faster). Where I grew up in Broome County, NY that wasn't normal: the hay wasn't dense enough and the conditions moist enough to require it. 

The sheer number of pictures of women in the fields provides a different picture of what life was like in previous centuries.

My sister, who likes to brag about driving the team pulling the hay wagon and hay loader when she was maybe 13 or so, will be disappointed--I didn't see any such images in the database. 

I strongly recommend the site: it doesn't seem to have been updated recently, but it has all sorts of special essays, as Ritch calls them.  Unfortunately, the images are limited in size, and the type's a bit small for old eyes, but it's still fascinating.

Confusion: Minority Farmers and USDA

I'm confused by what's happening.

We have notice AO-1534  establishing a Minority farmer register using form AD-2035
We have notice CM-695, implementing departmental regulations using form AD-2106.

Reading between the lines, although quickly so I'm possibly missing something, the register is intended to collect data from and through  "outreach organizations", the data stays on paper, and goes to the Department.  The AD-2106 is just passed out to program applicants, presumably SCIMS is updated.  A question: can SCIMS reflect whether the race, ethnicity, sex category is based on customer input or is the old eyeball test?

Seems to me it would have been much better to have issued one notice covering the subject.

Looking at the USDA strategic plan it appears USDA believes its current data on customers is good enough for analysis (despite GAO's problems with it).

My own feelings on the subject I stated in these comments on the Federal Register notice the Department put out.

Surprising Factoid: Christmas Carol Didn't Sell

The Economist has a graph showing sales of Dickens books in his lifetime. Christmas Carol is third from the bottom.

Hattip: Marginal Revolution

How Can You Fight Miss America? NASCOE Loses

Technically she's an ex-Miss America, but I don't see NASCOE as being able to counter her.  See this Des Moines Register piece.

The Death of Newsprint: Waiting for Car Service

I take my car to the dealer for service, and always wait for it.  Over the years the waiting room has changed, gotten fancier and fancier.  The last cycle boasts fancy leather chairs with arms for your computer; the previous cycle had just four  seats against the wall for PC users.  Of course, I'm not sure the chairs work so well for people using smartphones and iPads, but that's another story.

Anyhow, back in the day half the people waiting would be reading the newspaper, the other half zoned out watching CNN on the TV.  Today there was one person reading the paper, me, and the rest were on their laptops or phones.  The TV was going, but no one was watching.

The other change in 30 years has been from a mostly white clientele, through a mixed white and Latino clientele, to a Heinz 57 varieties from every continent.

Surprising Sentence

" Government employment is declining nationally by the sharpest annual rate since the 1940s."

That's from this Atlantic post on government employment--the discussion is of government at all levels.  It doesn't allow for contractors (I think I saw something that more American contractors died in Afghanistan last year than military troops.)

It was surprising to see Mississippi, Louisiana, and South Caroline, three states with Republican governors which vote red consistently, among the 10 states with the most government employees.

Government Service from IRS

Recently I had occasion to deal with the IRS (I made a stupid mistake on my 2009 schedule D).  All in all I was pleased with my interactions: one in-person call to the local office, two phone calls.  In all three cases I had to wait, but that's expectable because Congress doesn't fund tax collection as it should.  In all three cases the IRS people were pleasant and competent and the IT systems they had available to them worked well. And, most importantly of course, I finished the series of interactions without owing more taxes.

So, a hat tip to the IRS.

One thing of interest I did note, given the concerns over PPI (Social security number, etc.)  When I went to the office, instead of asking for my SSN I was asked to enter it on a separate keypad--apparently such entry hides the SSN from the employee while authorizing access to one's tax files.  It's an interesting approach.

Bureaucrats = Condoms?

Or isn't that what John Holbo meant in this:

(The principle that layers of bureaucracy are semi-prophylactic against moral pollution is subject to doubt. But we seem to have no other principle, so this will have to do in the case of prophylactics.)…

From a post on the requirement contraception be included in health insurance policies.

Crop Insurance Versus NASCOE

Via Farm Policy, the crop insurance industry counters NASCOE arguments:

Those who call for greater Farm Service Agency involvement in claims adjustment as a way of saving Federal jobs in the countryside do not have the interests of farmers at heart. The “modern” crop insurance program started out in the 1980s with a dual system of delivery in which farmers were given the choice of buying policies sold by private agents who contracted with the government and had the government service claims, or they could buy policies from private companies who would both sell policies and service claims. Because the private sector outperformed the government, especially in terms of quality of
farmer services, timeliness and accuracy of claims processing and cost (1989 Arthur Andersen study reported government cost was more than twice that of the private sector), all program delivery was assigned to the private sector by the end of the 1980s.

I wonder about the context of the 1989 study.  That would FCIC representing government delivery and probably a mostly manual process.  I doubt the Reagan administration would have supported a fair test.  Myself, I don't believe FSA could sell insurance effectively; they just don't have the incentives to do so, but servicing the policies ought to be within their capability.

The AACI statement goes on to bemoan the fact that crop insurance isn't available everywhere, which makes me laugh since FSA's involvement with CAT was ended because it was available everywhere.

John Phipps on Crop Insurance and Market Distortion

Have I said recently I hadn't noticed much concern about WTO rules vis a vis the next farm bill?  Seems to me in past cycles it was a top concern.  Indeed the delinking of payments and current plantings in the Freedom to Farm of 1996 was, I think, a big issue, at least for those who weren't bewitched by the dream of getting government out of agriculture.

John Phipps reports here the Brazilians are taking the position that crop insurance is market distorting. You'll remember they've already won a WTO case against our upland cotton program.

NASCOE Versus Crop Insurance

NASCOE has asked Congress to de-privatize crop insurance according to DTN's Jerry Hagstrom.  DTN editorial opposes.

Some random comments:

I didn't see this position on the NASCOE site until I doublechecked and found this consultants report.  Don't understand why the report was dated in September but, unless I have been missing it consistently, which is possible, not posted until recently. The report seems impressive enough (that's what consultants do--impress) that it should be up front in NASCOE's pitch. The DTN editorial rightly says this is FSA trying to preserve jobs, but without mention of the data in the report.  If NASCOE is serious they should be highlighting the dollar savings in short talking points.

Having gone through the process of parallel sales and servicing of CAT policies in 1994-6, I've some wisdom thoughts to offer. I think we ended up doing a pretty good job with CAT and I think GAO was reasonably positive about our work, though that may be an old man's rosy memories.  But the point is it was a real battle of sweat and tears to get to where we ended up.  There was a very big learning curve.  It's easy to assume crop insurance is simple, just another program to administer.  But it's not, particularly because the differences are subtle.  I've posted before about the different acreage reporting dates of ASCS/FSA and RMA--there's good reasons for many of them, reasons which someone raised in the crop insurance world understands automatically (as regards crop insurance) and someone raised in the FSA world understands automatically (as regards farm programs). 

I've posted before about the 80/20 rules: it's those subtle differences and the odd-ball (to an FSA person) crops which would cause 80 percent of the work.  

So I'd fault the consultants for not recognizing transition costs and learning curves, which would be major.   If Congress really wanted to explore saving a billion or so (which I doubt they will--just look at the map of crop insurance agents in the report and remember those people have influence) I'd suggest they haul some branch chiefs and division directors from FSA and RMA up before their committees to thrash out the proposal.

I was struck by the statement in the report that most crop insurance acreage reports are rekeyings from FSA acreage reports.  By now I would have hoped that offices could have been working directly from GIS-based reports, but I guess not.

Opting Out and Rational Decisionmaking

Here's an interesting post, on a book which argues that some blacks in higher education end up going away from STEM and towards the softer side.

, according to the 2000 Census, the top 20 white-collar careers among both black and white employees include elementary and secondary education as well as registered nursing. But break it down further and you’ll find that white people hold proportionately more high-status positions: lawyers, physicians, surgeons, chief executives and financial, general and operations managers. Black employees, in contrast, trend toward “service-oriented, racialized jobs” including counselors, education administrators, preschool and kindergarten teachers and community and social service specialists. Taken together, the differences in employment result in: chief executives being the fifth most common white-collar occupation among whites, but 35th among blacks; lawyers being 10th among whites but 27th among blacks; and physicians being 19th among whites but 31st among blacks.

Read more: http://www.insidehighered.com/news/2011/12/02/new-book-says-elite-black-students-dont-try-high-paying-jobs#ixzz1lowMKYaL
Inside Higher Ed

I'd argue a part, perhaps a small part, but a part of this is a rational choice based maximizing one's assets.  Since this is a touchy subject, let me use myself as an example.  As a farm boy I could bring some intangibles to some jobs, and not to others. I tried to play this card when interviewing for college: when asked what I could contribute to Harvard I argued they didn't have many farm boys in the student body.  Unfortunately, my argument from diversity fell flat and they rejected me.  But my background was an asset in my work for USDA.  It wouldn't have been an asset had I gone into math or science, or even computer programming.

I think much the same applies to the occupations above: the jobs may be "racialized" (not sure what that means but it sounds bad) but when you think about it, on the average most blacks will have had more experience dealing with more different people than most whites. More experience usually translates into more capable.

As I said, this may be a small part, but it makes sense to me.

Don't Grow Old: Nature Conservancy and Climate Change Denial

I was amused to find two age-related posts in my Grist feed: one reports that the Nature Conservancy's members are old and gray, which causes concern; the other reports that climate change deniers are old and gray, which causes pleasure.

The mantra of my household is: don't grow old.

Those Destructive Government Employees

Did you hear that Obama shot off a cannon in the State Dining Room?  Not content with destroying our free enterprise system, he's now intent on destroying the White House so Mitt can't take it over.

People Leave the Country: 1920's {corrected]

I knew the 1920's were not good for US farmers, but I was totally floored by the economic history piece on 1920's which included this graph: 20 million people left the farm in the 1920's.

[Correction: Note the different scales on the left (population) and right (employment), so the decline in population is about 1.5 million, not 20 million. I thank the author, Gene Smiley, for pointing out my mistake.}

Job Openings: French Hermits

Dirk Beauregarde reports the French church has openings for hermits.

Civil Servants: Pay and Expectations

The Post reported this morning on an investigation in DC of people who drew unemployment insurance while employed by the District.  Apparently particularly for intermittent employees, the pattern was when they got paid by the District they failed to report the fact back to the unemployment people.

My immediate response was drastic, jail 'em.  Maybe that's because I think highly of public service, so feel let down when civil servants screw up. Then I thought: if civil servants should be models, isn't that a basis for paying them more? (Think of the public school teacher in a small town in the old days.) But then the prestige of the job is additional compensation.

Bottom line: I'm confused and don't know what I think.

Blast from the Past

Hat tip Grist: Bloomberg reports on the big planting plans for 2012, including this quote

“There is unlikely to be any ground that won’t be planted this year,” said Todd Wachtel, a 40 year-old who farms about 5,700 acres in Altamont, Illinois, and plans to expand his corn fields by 21 percent when seeding begins in early April. “Farmers know that they have to plant more when prices are high because they may not last.”

Of course, if every farmer plants more when the prices are high she guarantees the prices will fall.  It's called the law of supply and demand. Farm programs used to have a supply management feature, which enabled farmers to act as a cartel.  Without government intervention, there's no way for an individual farmer to have the market power to adjust supply.  The only alternative to such intervention is for the industry to restructure itself with vertical integration, meaning a handful of companies acquire power over the supply chain and thereby can informally coordinate supply and prices.   That's what's happened in the US to poultry, eggs, and hogs, and most recently with tobacco.

If corn prices are going to drop in 2012, what happens to the cash rent leases and the mortgaged land sales?  The only thing keeping us from repeating the crash of the early 80's is the fact farmers aren't nearly as indebted now as then.

How Far to an FSA Office?

Via Farm Policy, Senator Grassley has written USDA about the possible closures of FSA offices in Iowa.  He goes so far as to challenge the 20 mile distance, pointing out that a couple of the offices are actually at least 23 miles away from another FSA office by road.  

In a way this sort of letter is the obverse of earmarks; it's the elected representative using his local knowledge, or rather channeling the local knowledge of his constituents, to affect the decision-making of a bureaucracy.  I think we'd all agree this is useful, even though some of us may oppose earmarks.

On a lighter note, I was remembering Roy "T" Cozart, an official in ASCS in the 1970's/80's.  He was, I believe, CED of Deaf Smith County, Texas (pronounced "deef" and named after the scout first into the Alamo after the killing stopped).  Maybe it was that county, maybe another, but he delighted in mockery and one thing he'd mock was Easterners and the way he'd mock was to describe how long it would take to drive his county, hours and hours at least as I remember it.

Maybe he was pulling my leg, because with the magic of Wikipedia I can find that Deaf Smith county is just about 1500 square miles, meaning it's a rectangle roughly 30 by 50 miles.  In the Texas panhandle it wouldn't have taken long to drive, so maybe Roy was reminiscing about his days as district director in middle Texas. For comparison, Linn County in Iowa is about 750 square miles.

Sen. Grassley's constituents face a round trip drive of 25 miles to the FSA office, maybe 35-40 minutes assuming Iowa roads are straight.  In Texas one assumes the distance would be double or triple that.  And if you want to talk about Montana: the counties mostly range from 2000 to 5000 square miles.

What's my point? The distance parameter is arbitrary.  No corporation, no Walmart or Subway, would allocate their stores the way the US government allocates its offices.

Charles Murray, the Two Tribes, and Social Class

David Brooks in the Times blogged on Mr. Murray's new book, suggesting that the white upper and lower classes have diverged greatly in mode of life and social mores since the 50's. Specifically, the top 20 percent or so don't divorce, while the bottom don't marry or they divorce.  And so on.

Here's a 1957 short film, not a documentary, on social class in America, part I and part 2.  (Hat tip to someone, maybe Tyler Cowen.)  What is interesting is the assumptions the creators make, which are apparent in retrospect.  The discussion of class is a bit more open than I'd expect today, though that might be because it's apparently a sociologist behind the film. ("Ascribed status" and achieved status, mobility.)

There are 3 kids, upper, middle, and lower class. All 3 kids are boys, their class is defined in terms of the occupations and backgrounds of their fathers, and they all come from unbroken homes.  All 3 graduate from a public school, though one goes on to the Ivy League, and graduation is an achievement for the lower class boy.  All 3 fathers wear suits for the high school graduation.

The upper class boy graduates and works for his father's factory, the lower class is a gas station attendant training to be a mechanic  The middle class boy follows his dream of art to NYC and an ad agency--horizontal mobility leads to upward mobility. The city is seen as the route for upward mobility because standards are different.

Seems to me that the social structure was more stovepiped in the 50's; each town had its own lower, middle, and upper class.  Since then the big banks have absorbed the local banks, the big real estate companies have absorbed the locals, the restaurant chains have ousted the local diners, the local auto mechanic is a dying breed, etc.

So parts of the film seem to support the Murray thesis while others don't.

Congratulations to NRCS

NRCS has made their soil survey info available on mobile devices.  What's not clear to me is whether they're using the GPS info available in some such devices to automatically pull up the soil profile you're standing on.  I suspect they aren't, but it's the obvious next step.

How People Get Smarter Over Time

From Ajah Shah's blog, a post on changes in the computer world:

In the 1980s, software came with fat manuals. Users actually sat down in training classes. A remarkable feature of the new world is how the manuals and training are gone. Software is incredibly capable but there are no manuals. Google maps or Amazon or Apple Mail are very powerful programs, but the fundamental assumption is that a reasonable person can just start tinkering with them and learn more as he goes.

The modern office worker gets no formal training in software all his life. The modern knowledge worker learns major tools (e.g. a programming language) and often puts in enormous effort for these. But for the rest, the ordinary flow of day to day life, where new software systems come up all the time, is done without formal training.

 One of the puzzles of life is the Flynn effect, which says every generation is smarter than the previous one.  Personally I think we drastically underestimate the effect of the learning which floats in the environment, which Mr. Shah's observation implies.

SSA a Model for Online Operations at FSA

Social Security Administration wanted to have 44 percent of retirees sign up for SS payments online.  That was their announced goal:

The actual percentage who filed online was 41 percent, states the SSA Performance & Accountability Report for Fiscal Year 2011.

I applaud SSA for setting the goal and announcing it, even more for the followup report.  If and when USDA aims to have farmers to do more stuff online with FSA, I'd like to see USDA specify what the goals are and what the results are.

7000 Pounds of Milk

Post has an article on a Virginia farmer selling Holstein bulls to Russia. Two paragraphs:

Russian farmers are trying to improve dairy herds that produce an average 7,000 pounds of milk per cow each year, said Valery Osipenko, who co-owns Vistar Farms of Mechanicsville, which sold the bulls to Russian farmers for an undisclosed amount. Top-quality American Holsteins produce an average of more than 20,000 pounds of milk per year.

Instead of raising dairy cattle for milk and beef cattle for meat, Soviet collective farms had “dual-use” cattle, which would be milked for a while, then killed for meat, Osipenko said. Those one-size-fits-all cattle may have embodied an egalitarian ideal, but both milk and meat were mediocre, said Osipenko, a native of Ukraine who recalled his mother boiling beef for hours in a fruitless attempt to tenderize it.

Random thoughts: back in the 50's, we were averaging something over 10,000 lbs, maybe more, so Russia is really backwards.

Of course, back in the 1700's dual purpose cattle were the rule in America.  I wonder about the evolution of the industry.  In the 50's we had "registered" Holsteins, tracking the ancestry of our cows.  Used artificial insemination and choose the bull based on the production records of his progeny.  Now Darwin writes about how humans have changed domestic breeds by their selection, but I don't recall he used cows as an example.  I'm vaguely aware Washington and Jefferson imported animals based on their qualities: is it possible sheep can be "dual-purpose" (wool versus mutton)?

If we assume that US dairymen were, in the 19th century, trying to improve the productivity of their herds, then maybe it's also reasonable to assume the same was true in Russia.  So what might have happened? Perhaps the Russian Revolution and the arrival of collective farms meant the freezing of the drive to improve productivity?  Meaning for 70 years the Russian dairy industry was frozen?

Still surprising to me that they haven't progressed faster in the 20+ years since the collapse of the Soviet Union.