Speed of Delivery of Disaster Payments

This article points out the irony of the money FSA paid out under the Livestock Disaster Assistance Program, some $2.78 billion.

The payments come at a time when cattle are bringing record prices and corn used for feed is the cheapest it's been in years.

Don't blame FSA, blame Congress.

The One in Four Rule

One of my first jobs after I switched from Directives to Production Adjustment was a followup to an audit of the disaster program ASCS was running.  The auditor, probably GAO but possibly OIG, faulted us for the number of farmers who got disaster payments in more than one year out of five.  Some got payments in two years, some in three.  So we had to run a computer program to identify these farmers and have the counties re-review the justifications for the payments and question the yield.

I thought of that when I saw this article about the one in four rule for crop insurance.  The difference is that this rule requires farmers to plant the land in at least one out of four rules, presumably being eligible for prevented planting indemnities the other three.  To someone from NY this rule seems ridiculous--why bother if you can only get a crop one out of four years?  That's the quick, knee-jerk reaction.  Slower consideration, remembering the prairie pot-hole area and the dryness of the area in question (i.e. Dakotas, MN, etc.) is perhaps a tad more favorable to RMA.  But the bottomline is once again a lesson in how Congress works.  No matter that GAO has done studies claiming crop insurance encourages the planting of marginal acreage--the ND congressional delegation is raising a fuss.  ("delegation" sounds more impressive than the "three members of Congress from ND".)  This is the way Congress works, and one example of why government programs fall short of a goo-goo's (good government types) dream.

Drones and FEMA

Seems to me FEMA should immediately create its own air force of drones, first to survey the aftermath of hurricanes, flooding, etc to assess the extent and nature of damage and to track the arrival or non-arrival of aid vehicles; second to provide emergency cell phone service in cases where cell phone towers have been damaged and/or where additional service is needed.

Disasters, Climbing Mountains, and the Poor

I'm not a mountain climber, but it seems it me mountain climbing is a good metaphor for being poor, and disasters.

Imagine a big high mountain and the game of life is to try to climb it.  The mountain has various nooks and crannies, easier routes and harder routes, and most of all it has a lot of loose stones, so it's very easy for a climber to dislodge a stone which falls, sometimes triggering more rock falls.  Now where you start on the mountain is a matter of luck, your ancestors and your inheritance.  Some people just find a cranny near their starting point and rest there.  Others are able to make mad sprints up an easy route. But most people toil away at whatever level they're at on the mountain.

Unfortunately, as they toil they knock the stones off, the stones go bouncing down the side and they can hit the people below, knocking them backwards down the mountain.

The poor are at the lowest levels of the mountain and therefore have the longest climb and face the most stones falling down.  That's life, that's unfair, that's disaster.

Thinking of filing insurance claims for damage caused by Sandy, that assumes people have insurance.  But the poor are less likely to have insurance, that's a luxury you can't afford  Lose all the food in your refrigerator; that's particularly hard if your food budget is tight.  Lose the car to the flooding, unlikely to have comprehensive insurance.  Have the apartment flooded, no renters insurance. The local restaurant is flooded, lose weeks of work as dishwasher or waiter until it gets going again.

Competing With Crop Insurance

According to Farm Policy, the crop insurance industry is already bragging on the $2 billion in indemnity payments they have out the door.   It goes on to link to a video NCIS has put out.

This sort of response, and advertising, is a reason why FSA doesn't have a disaster payment program for field crops, as they used to. 

Bureaucrat of the Month: Mr. Masao Yoshida

Who is this Yoshida and why does he matter? 

According to this NYTimes article, he was a manager at the Japanese nuclear reactor site hit by the tsunami.  The article reports on a set of videos just released which document the chaos at the site over some days.  But, if I read it correctly, Yoshida was onsite, doing his best to direct workers, getting bad advice and orders from big shots who were ignorant, and generally being a good bureaucrat by this definition: when the environment the bureaucracy was designed to handle goes berserk, a good bureaucrat does her best.  Two paragraphs:

At one point in the videos, as conditions at Reactor No. 3 are deteriorating, raising fears of an explosion, Mr. Yoshida sends a team of workers out from the bunker with this message: “I’m truly sorry. Please proceed with the utmost care.” 

He later suggests that if the situation does not improve soon, he and some older workers will consider “a suicide mission” to pump water into the reactor, a decision officials at headquarters said they would leave to him.

Conservatives Don't Like Crop Insurance: Texas and Cruz

Ted Cruz just won the Republican primary in Texas, meaning he's the next US Senator from there.  His reputation is: very smart, very conservative.  But I wonder--Texas agriculture is often beset by disaster, as witness the drought last year.  Not sure what its status is this year, but I'd be willing to bet during his 6 year term in office Texas will have some agricultural disasters.  And of course Texas ranching/farming is part of the self-image of Texas (all hat, no cattle, etc. etc.)

The Washington Times is a conservative newspaper, so I was struck this morning by a piece from a Heritage thinker, who picks up EWG's  populist viewpoint on crop insurance.  Big corporations profit at taxpayer expense.

So my prediction: at some point down the line Sen. Cruz will have to decide between his principles, as represented in the Heritage piece, and his constituents, who will need either crop insurance or a livestock disaster program.

The Problem With Government Is...

We humans deal with assumptions and universals, but reality is a lot more messy.  Example 1 is the Pennsylvania voter ID law, which assumes that everyone either has a photo ID or can easily get one, because everyone has their birth certificate stashed away in their safe deposit box along with all other vital papers.

Example 2 is the reliance on crop insurance, because every farmer is rational and is going to buy it.  Chris Clayton at DTN reports getting calls from farmers like this:

"Is the government going to do anything? I don't have crop insurance.

How could you not have crop insurance? We've been saying since before the 2008 farm bill that you have to have crop insurance.

One farmer only has 160 acres. Crop insurance every year just didn't pencil out.

You didn't look into catastrophic coverage, or CAT?

I don't know what that is.

I wasn't sure what to think of this conversation, but I have to believe there are more people like this farmer out there. He's a small farmer in the scheme of things. He's never needed to rely on government payments and didn't want to. But now he doesn't have a corn crop and concerned the beans won't make anything either.

Is there some type of help available for him at the Farm Service Agency office. He said they couldn't think of anything that would specifically help him out."

 The advantage of disaster programs, perhaps their only advantage, is they apply across-the-board.  If that farmer and others like him make enough of a stink, Congress will do something ad hoc, which partially undermines the whole idea of crop insurance.  The situation is rather like that of a 30-year old who passes on health insurance because it didn't pencil out, then gets into a car crash which leaves her paralyzed.

[Updated to add the link.]

Budgetary Games and Livestock Programs

An innocent little question, based on the fact the House Republicans considering something like this (from Farm Policy):

"The bill extends a number of programs through 2012: the Supplemental Revenue Assistance Payments Program (SURE); Livestock Indemnity Program (LIP); Livestock Disaster Forage Program (LFP); Tree Assistance Program (TAP); and Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP)."

The question?   Why weren't those programs authorized through 2012 in the original 2008 farm bill?

My suspicion is that it was a budgetary game--by cutting them off with 2011 the total cost of the bill was lowered.  And the Congress people would know that they'd have the chance to do an "emergency" bill in 2012 if needed.  What may also be true is that they don't need to pay for it.

The Promise of Satellites for Agriculture

Back in the day ASCS had an Aerial Photography Branch in the Farmer Programs Division (and two labs, one in Asheville and one in Salt Lake).  With Comsat Congress started the process of privatizing the exploitation of space (in 1962).  We were young then, and full of hope that science fiction dreams would come true.  So ASCS dipped its toe into the world of satellite sensing and satellite photography, thinking someday we'd be able to assess crop conditions and acreages from space. We had for a while someone stationed in Houston just to work with NASA on this area.

I'm not sure of the history between then and now, but this earthobservatory image from NASA shows what's possible now, in the way of assessing drought.

Question for Paul Ryan and Mitt Romney

What's your position on taking legislative action to help drought-stricken farmers in 2012?

Secretary Vilsack raised the question yesterday, suggesting Congress needed to act.

[Updated: via Obama Foodorama here's the briefing today at the White House--Vilsack is focusing on livestock producers. Back in the day we used to have the Livestock Feed Program for these sorts of situations but I guess it got cut.]

[Update II: Got around to doing what I should have done--check the FSA webpage.  Apparently the old LFP got reauthorized under different titles and in different forms, but the authorities in the 2008 farm legislation expired Oct 2011. ] 

After This, the Deluge (of 2012 Disaster Ideas)

Chris Clayton quotes Sen. Stabenow pushing for House action on the farm bill, goes on to say:

"This [is] another reason to pass a farm bill now so that we can not only pass what we have in the farm bill now in terms of disaster assistance, but I think we need to be strengthening that for 2012," she said.

See my post on the 20 percent of uninsured farmers. When you live a long time, you can be prescient.

20 Percent of Farmers Have Their Rear Hanging Out

That's the message I take from this Illinois extension piece on crop insurance coverage in IL.  It will be a big test: can politicians resist the pleas of the 20 percent uninsured for some federal help.

From Favor to Process: USDA Disaster Designation

Here's yesterday's USDA press release about changes in the process for designating disaster process. One change is automatic designation for counties which are drought-affected for 8 weeks according to U.S. Drought Monitor, and the governors do not have to initiate the request.

That's one small step on the way to taking the life out of politics.  In the good old days governors could make a big show of standing up for the home folks by bragging about his request for designation and blasting the Washington bureaucrats for delays in approving it.  It's also a small step towards de-bureaucratization.  In the bad old days the paper request from the state went to bureaucrats in the northwest corner of the South Building, the offices with the great view of the Mall, the Washington Monument, and the White House. There could be back and forth between the bureaucrats and the states, particularly when the governor's aides weren't familiar with the process.  Then the paperwork would go up the line, some stopping at the Secretary's office, some going to the White House.  Of course those offices could also grandstand about how they were acting to help needy, hardworking folks.

So, if I'm feeling cynical, the Obama administration cashed in a long term asset for politicians for maximal gain in this presidential election year.  If I'm feeling idealistic, the administration rationalized the process and made the government more efficient and less bureaucratic.  Take your pick.

Drought Speculations

A couple weeks ago I started but did not finish apost on the possibility of a drought in the Midwest--then it was a topic restricted to the ag media.  Today the drought has reached the top of the news pages and news broadcasts.  Two things will be happening in parallel: the drought will progress and Congress will be working, or not working, on the new farm bill.  Presumably there will a temptation to patch holes in the 2012 safety net with provisions of the bill, perhaps the adverse impact on pork, beef, and chicken producers. The extent to which crop insurance can handle the impacts on crop producers will also be interesting.  My impression is they did well with the drought last year which occurred in Texas.  We shall see. (I guess that's a last sentence I can use on most of my posts.)

A 2012 Disaster Program?

Chris Clayton notes the SURE program expired with the 2011 crop year, so those corn and soybean farmers in the Midwest who are watching their crops shrivel in the drought and heat must only rely on crop insurance, right?  (Clayton notes the current Senate farm bill wouldn't cover such disasters, even if it did apply to 2012 crops, which it doesn't.)

I'd say: possibly not. Clayton mentions the ad hoc disaster program in 2010 the Obama administration delivered for Sen. Lincoln when they were trying to win her vote and help her in the fall election.  That's a precedent.  There's also the precedent of retroactive disaster programs, which I remember but can't recall the years of, which can possibly be tied to emergency appropriations acts, which evade the current emphasis on paying for legislation under "pay-go".

Locavores and Vulnerability

I mentioned the storm which hit the Mid-Atlantic states had gone through Reston.  The local Safeway got its power back yesterday, but its stock of perishable food, particularly frozen food, is still being rebuilt.  I think it reflects the extent to which the food chain has adopted the "just-in-time" logic of Japanese car makers from the 1980's, which was a hot meme in the 1990's. 

The discussion in the Post of the impact of the storm included observations from local vendors of high-end meat, including one perhaps apocryphal statement that his butcher had 80 head of cattle which he had to dispose of.  At first it sounded unlikely to me, but thinking about the practicalities makes it more likely.  Consider an operation where a butcher/meat packer buys cattle.  He's set up to move the cattle from the feed lot/ranch to his slaughterhouse where they'll be killed and cut into products he can ship out to his stores.  He knows how much meat his stores can take; he knows how long his refrigerated trucks will take to get the products to the store; he knows how long it will take to slaughter and butcher the animals. 

Simple economics means he should speed the animals through as fast as possible; that's good for the bottomline, reduces the amount of capital needed, and incidentally probably serves the animals well. So what happens when the storm comes through and the stores call up and say, no deliveries until we notify you we've got power back?  He's probably got no storage, no way to hold inventory.  He maybe could load up his trucks and keep their refrigeration units running, but that won't hold much surplus. If he's got 80 head of cattle in the lot, he's not set up to feed and care for the animals, certainly not humanely.

There's a Chaplin or Lucille Ball short where one end of an assembly line stops and the rest keeps going--that's what can happen here.

The point of my reflections is this: though I often question the advocates of the food movement, they've got one thing right:  our modern integrated food production and distribution system is efficient, but it's vulnerable.  Simply because of its integration, a disruption wreaks more damage than with the locavore system. 

The Case for Crop Insurance vs. Ad Hoc Disaster

Via Farm Policy, here's 3 paragraphs from a case for crop insurance, a John Mages op-ed:

Crop insurance is a public-private partnership, designed to ensure that when disaster strikes, the private sector – crop insurance companies – are there to help shoulder the risk and the financial burden of rebuilding.  Crop insurance policies are purchased by the farmer and suited to the farmer’s needs, comfort with risk and financial situation.

In the past, before purchasing crop insurance was the widespread and widely available option, disasters like last year’s would have triggered large, stand-alone disaster bills in Congress, aimed at trying to save as many farms as possible.  Those bills would have cost taxpayers dearly, and unfortunately, would have taken months, or even several years to finally get into the hands of the farmers who need the help.  Not a good situation for either party involved.

In 2011, with 80 percent of eligible lands protected by crop insurance, private sector companies paid out in excess of$10.7 billion in payments to farmers who had purchased plans and suffered losses.  Those checks were often in the hands of the farmers in 30 days or less after they completed the necessary paper work.  It’s because of the effectiveness and efficiency of crop insurance that many of us are in our fields planting today instead of being forced to auction off our farms.

 Since I've been implicitly and explicitly critical of crop insurance, it's only fair to recognize the counter-arguments.  I'm proud of the work my shop did on disaster programs and payments over the years, but it's true enough that an ad hoc program doesn't work as well as having something in place from year to year.

Past Disasters

The roughly 3,000 people killed on 9/11 stand as a record.  But when you rank disasters in terms of the percent of total population killed it recedes.  For one, there's the 1,600 killed in a steamboat explosion (the Sultana carrying former prisoners of the Confederacy north).  Given US population then it would be more than 4 times worse than 9/11.

12 Percent of Emergency Response Officials Are Idiots

That's my take from this sentence, from a Government Executive post addressing the use of emergency response grants in the wake of 9/11:

And a newly released survey found that a whopping 88 percent of emergency-response officials believe that grants are allocated according to what's best for politicians, not what's best for emergency preparedness.

Perhaps I should be charitable and say 12 percent have a surplus of charity and a deficiency of cynicism.