Problems with Farm Policy

Tom Philpott at Grist writes:

From an ecological standpoint, the fundamental problem with U.S. farm policy dating back to the '70s is that it rewards farmers for maximizing yield at all cost.

I assume that his reference is to the 1970's, but the same statement would be true for the 1870's and the 1770's. As long as farmers are producing for the market, which they've been since Captain John Smith decided that pursuing gold in the New World was not a paying proposition, at least not in coastal Virginia, their incentives lead to short term over-production at the cost of long-term productivity. That's an issue in the cash lease/share lease controversy in Illinois, I just posted on.

Straws in the Wind--Uof Illinois

John Phipps comments on a policy change by the University of Illinois, which owns 11,000 acres of farmland (from donations) and has been share leasing the land. They've decided to switch to cash leasing, which means putting the lease out for bids, and may price the past operators out of the market. See this article, via John.

The Illinois Farm Bureau is opposed to the policy change.

John comes down on the side of the right of the owner to rent to whom he chooses.

Random observations:

• the article comments that 3/4 of the IL farmland is rented, which is higher than I would have guessed.
• There's no comment in the article about the possible role of payment limitation rules. UofIL would no longer be eligible for farm payments when they cash lease. I don't know what the current rules are, but educational institutions used to be exempt from payment limitation. According to EWG, the university got $450K in 2005. I don't know how they might be affected by the pending proposals.
• John mentions the outdated notion that a leasor's labor and improvements gave him some sort of moral ownership of the land. That ties back to Ireland, whence came many of my ancestors, where you couldn't buy land and the best you could hope for was a long term lease. If I'm not mistaken, the English passed a law giving the tenant some right to his improvements. It also goes back to western New York in the early 1800's, where people hoping to buy land from the Holland Land Company also felt they had a right to their improvements. Unrest reached such a point that a Company's office in Mayville, NY was burned, destroying all the records.

A Metaphor for Illegal Immigration

I'm driving along, in rush hour, in the right lane. Traffic slows, then stops. I look in the rear view mirror, and some idiot has pulled over to the shoulder of the road and is driving down it at 15 mph. And now he's ahead of me and trying to merge. Do I yield and reward the bastard or do I cut him off and risk causing an accident?

AGI Limits and Payment Limitation

Some discussion about reducing the adjusted gross income (3-year moving average) limit on individual earnings in order to be eligible for farm program payments, with references to other discussion here and here.

I'm not going to spend much of my remaining time on earth worrying about the details of this argument. I'd just make general statements:

• (apparently) tight laws can be loosened by the right regulations and back-door pressure from members of Congress whose constituents are personally and greatly concerned. So where the advocates of lower payment limits will be tempted to fold up shop once the farm bill is enacted, either declaring victory or licking their wounds in defeat, the opponents will be on the job every work day until the next farm bill
• my first statement applies both to AGI and payment limitation--in theory I don't know there's much difference between them. (In practice, at this stage of the bill, it's different.)
• the law of unintended consequences applies, always

I'm still convinced that a graduated payment limit would be more effective. It could restrict the payments of more people, but give less incentive to work to undermine or overturn the provision. Even so, my three points above would still apply to that provision.

California Dreamin of Water and Alfalfa

Megan at From the Archives, always with an interesting voice, discourses on ag subsidies, water and growing alfalfa in California. Two points I like: it's lots easier to move water to good soil than good soil to water; changing the subsidy structure means social disruption. When the market does it, economists call it "creative destruction", emphasis on "creative". When it's done to you, it feels an awful lot like just "destruction".

FBI and IT, Redux

Government Executive reports on the FBI's latest step forward in automation.

But is anyone bothered by this line?

Under Phase I, Lockheed Martin, which won the $305 million Sentinel contract in March 2006, built the front page of the Web portal, which features functions such as Google search and an FBI phonebook.

Presumably there's also a big security piece (which seems to be referred to later in the story), but gee, Google search and a phonebook? That's such a steal for a mere $305 million.

Unintended Consequences of Green

From Farmgate, a discussion of corn and soybean outlook:

1) Projections of corn use for ethanol continue to climb upward, putting pressure on corn prices, encouraging acreage shifts, and resulting in reduced supplies of other crops.
2) Higher US prices are encouraging crop production expansion in South America and elsewhere, with an impact on livestock production and the price of meat.

Of course, the expansion in South America is changing tropical forest into monocultural land. As Robert Heinlein wrote, there's no such thing as a free lunch.

Whole Foods and True Organics

Tom Philpott worries about Whole Food, its proposed merger, and the inroads of big "organic" farming. (I own shares in Whole Food). I think it's the inevitable result of the free market--we're going to see the food market differentiate into lots of different categories: cheap, "industrial" food from the old-line Krafts and Safeways; ethnic foods (possibly organic) through ethnic food markets, Latino chains, and aisles in the Safeways; big "organic" (meaning herbicide/pesticide free, but not grown in an idyllic small farm environment) food in the Safeway aisle and Whole Foods; small "organic" sold through niche shops, farmers markets, and community supported ag; and organic food in restaurants. It's the result of enough people having enough money and locating closely together enough to support these specialty tastes.

Rural School Population II

I've now corresponded with one of the authors of the report on which I posted yesterday. I'm still not totally convinced, but I'll accept the concept that rural areas have had a big increase in school population, mostly minority and immigrant.

The Things You Find in Garbage, Er "Miscellaneous"

The Miscellaneous Title of legislation often contains some "good" stuff--earmarks, the pet ideas of various legislators and staffers, etc. Here's an interesting bit from the Senate farm bill (appears to be the report language, rather than the actual bill):

Sec. 11068. Prevention and investigation of payment and fraud and error.
This section would amend the Right to Financial Privacy Act of 1978 to require financial institutions to disclose the financial records of any customer to any government authority that certifies, disburses, or collects payments, when the disclosure of such information is necessary to verify the identity of any person in connection with the issuance of a federal payment or collection of funds, or the investigation or recovery of an improper federal payment of collection of funds.

No idea of the background for this.