Land on the Moon

This post at Govloop, doubting the sanity of someone selling land on the moon, brought back memories.  Sometime around 1950 in a promotion of some kind, perhaps for a breakfast cereal, an outfit sold land on the moon.  As I recall it was for a nominal sum, and a nominal area (a square foot maybe, or even a square inch).  Ah, those were the days.

ACRE Dangers and the WTO

Via Michael Rogers at Green, Green, and Grains, here's an AEI study of the ACRE program, outlining two dangers:

1. the likelihood a complaint against the program at the WTO would succeed, resulting in penalties like the Brazilian cotton case
2. the possibility that market prices will decline in future years, leading to a large increase in payments.

I'm no expert on anything but for theWTO the writers speculate on a new WTO agreement which lowers the amber box limit below its current 19.1 billion and might be impacted by ACRE payments.  More likely is a "price suppression" suit in a period of declining market prices, along the lines of the Brazilian

31 Percent Is a Bubble

See this from the Des Moines Register, reporting on the increase in farmland prices.

While I'm calling a bubble, I should note differences from the bubble of the late 70's: interest rates are much lower--when I bought a house in 1976 I thought I was doing great by getting 8 percent financing; apparently there's less leveraging among farm operators.

Thoughts About the Future of Farm Programs

I've voiced concerns over the conjunction of a new farm bill and extensive changes in FSA operations.  However, my concerns may be misplaced.  It's true, I believe, the 2012 farm programs are safe, given the impending passage of the ag appropriations for the 2012 FY.  If the sequestration provisions of the debt ceiling legislation which set up the super committee are invoked, there still won't be any effect on the major programs.

So if the 2012 farm bill is passed as part of the super committee's compromise legislation, then FSA and its contractors might have a whole year to plan for its implementation, to write the regulations, and develop the software required. That assumes the new farm bill keeps a major place for FSA-type programs, rather than shifting almost entirely to crop insurance style risk management.  That assumption seems to be safe, at least as of now, given the apparent inability of the different commodity groups to come together.  Of course, if there's separate programs for wheat and feed grains, cotton, and rice and peanuts that will increase the workload and the administrative headaches. [Update: see Larry Combest's take on the situation from yesterday, via Farm Policy]

However, there's many a slip twixt cup and lip.  It seems to me if the super committee can come up with agreed legislation which is passed, there will be a long period, say from January to next elections, during which the farm bill provisions will be reviewed and questioned.  Not the cuts, particularly, it would be hard to come back in the spring or summer of 2012 and provide more money.  But commodity groups could very well ask for changes in the provisions, which could be passed so long as the overall impact on the budget is neutral.

Another unknown, at least to me, is the degree of flexibility RMA has in implementing legislative changes in its crop insurance policies.  I assume from past experience they've less flexibility than FSA.

Interesting times.

Charles Peters, NASS, and Bureaucratic Maneuvers

Charles Peters, the founder of the Washington Monthly, is a sometimes cynical viewer of the Washington merry-go-round (to mix up journalistic references).  He observed that whenever there was a battle over appropriations and budget cutting, the smart bureaucrats would, if they were in the National Park Service, plan to close the Washington Monument.  In other words, they'd threaten visible cuts of things near and dear to the appropriators, or at least the appropriators constituents. 

I think a hat tip is due to the bureaucrats at NASS, who may well have executed a classic closing-the-monument move.  With due credit to Chris Clayton, at DTN Progressive Farmer, he narrates:

Last week the New York Times had a good feature on the cutting of National Agricultural Statistics Service reports ranging from counting goats and catfish to minks, beer hops and bee keeping.

http://www.nytimes.com/…

It was good timing, as the House and Senate appropriators met to hammer out differences in budgets. Appropriators opted to spend $6-9 million more on NASS than the two committees had individually budgeted, as an agricultural economics firm highlighted Tuesday.

Appropriators wrote in their conference report,

"While it is imperative for all of USDA's agencies and offices to prepare to address potential reductions in funding, the conferees are concerned that the agency made this announcement before the final appropriation was determined."

In other words, You guys made us give you more money because we didn't want to hear from the catfish guys that you are neglecting to count them."

Appropriators asked NASS to reconsider its decisions about cutting the reports and reinstate as many as possible.

Habemus Billum? Not Yet

When the white smoke rises over the Vatican, the next step is the announcement: Habemus papam--we have a pope.

But according to Chris Clayton this morning, we don't yet have a draft farm bill to submit to the supercommittee.  (I never took Latin, so I've no idea what Latin for "bill" is.)

Complexity of Regulations

The Reps often complain about complex regulations, complain, that is when they aren't complaining about any regulation at all.  Some bloggers have talked about why regulations are complex.  There's probably some truth in all positions, but there was an episode Sunday which illustrates one factor.

Scene: surfing NFL football. A contested call.  The quarterback is standing on his own 1-foot line, he draws his arm back, so the football is over the end zone. He throws the ball and is called for intentional grounding.  Now the rule is, if you're called for intentional grounding while in the end zone (note: I think this was the situation, but my memory is untrustworthy, but the issue is right) it's a safety. 

So the official called a safety.  Then the officials conferred and ended up reversing the call.  The announcers agreed they'd never seen that exact situation, and suggested that the rule book would be changed in the future to clarify that the issue is whether the quarterback is standing in the end zone, not where the ball is.

So that's an example of how regulations grow: you start with a simple rule, then you encounter a situation you've not thought of so you change and add to the rules to cover it.  And things keep on growing. How much of the growth in regulations is accounted for by this process I don't know.  But it's significant, and a factor no one addresses.

[updated with this]  Here's a somewhat related Politico post, on the issue of tomato paste in school lunches. Politico addresses it as an issue of industry influence on regulations, and it is.  But back in the day we didn't have pizza in school lunches.  I'm not sure there was pizza in the 1980's.  Back then the Reagan administration notoriously tried to change the rules to give credit for the nutrients in ketchup (another form of tomato paste) in school lunches.  They got shot down because it was framed as calling ketchup a "vegetable".  It's an example of the same process: if you count nutrients in school lunches, how do you count, and what do you count when you've got pizza or ketchup involved.  The simplest solution is to go back to the school lunches in my day: meat loaf and overcooked vegetables, and only salt and pepper.

Common Reporting Dates

From the press release announcing FMA and RMA have come up with common acreage reporting dates(ARD):

Before the streamlining, RMA had 54 ARDs for 122 crops, and FSA had 17 ARDs for 273 crops. The review team consolidated all of them into the 15 common ARDs.

 RMA and FSA will implement the July 15, 2012, and August 15, 2012, ARDs for certain commodities during the 2012 crop/program year. The remaining common ARDs will be implemented during the 2013 crop/program year.

Back in 1993 or so there was an initiative along these lines. one which obviously was unsuccessful. I wasn't involved in those discussions.   I'd be curious whether the resistance in the 1990s, and up to now, came more from RMA or FSA,. My guess, given the ratio of dates to crops between the two agencies, is that RMA had more problems.  They also perhaps had greater leverage.  Note that only 2 of the 15 common dates are being implemented next year.  That's probably because RMA needs to revise crop insurance policies, which requires a long lead time. I can imagine meetings where the prospect of such a long time to implementation was a wet blanket on any enthusiasm on the FSA side. Maybe there was more leadership from the top in 2011 than there was in 1993/4. Or maybe the people at the operating level (i.e., branch chiefs and specialists) were more capable and flexible this time around..

This is one prerequisite for the ACRSI common reporting initiative. Not sure how the software will work when you don't have common reporting dates for the crops: might be a real problem, might not be, might be something to be solved by a kludge.

EWG and Direct Payments

EWG released their database on direct payments on Friday. Here's the press release.  A quote I can't figure out:

The EWG database also smokes out the names of the individuals who ultimately cashed the subsidy checks. Their identities have been hidden by these corporate structures and not publicly disclosed by the US Department of Agriculture since the 2008 farm bill.

(FSA quoted EWG what was, IMHO, a ridiculous price for doing the processing necessary to attribute payments made to an entity like a corporation down to the constituent individuals.) I'm not sure how EWG did this.  Their statement about individuals "who ultimately cashed..." is technically inaccurate.  What they mean to say is something like "individuals who were the ultimate beneficiaries of subsidy checks written to corporations."

Surprising Factoids

"...police work is actually less dangerous than nursing." 

The omission is a critical qualifier, in terms of nonfatal injuries.  From Matt Yglesias

A less surprising but completely true factoid: farming is twice as dangerous in terms of fatal injuries as police work.