Crop Insurance and Organics

Sustainable AGriculture highlighted RMA's dropping of the 5 percent surcharge for organic insurance, which seems to have been counterbalanced by their acceptance of OIG recommendations on transitional yields and loss adjustment for organic crops.

This OIG report finds that FCIC/RMA has been offering "transitional yields" (the crop yields assigned to a farm for years when there's no actual production history availabe) for organically grown crops which are too high.  For example, if the transitional yield is 125 bushels an acre for organically grown corn, and the true yield is 11...  Congress has pushed the expansion of crop insurance to organic crops, RMA has responded, but had a contractor evaluate the experience. Excerpts:

The contractor recommended that transitional yields be lowered by 35 percent for insurance plans that use APH yields as the basis for the production guarantee in order to better reflect experience data and lower loss ratios. RMA acknowledges that transitional yields for organic crops are generally too high, but has not implemented the recommendation because it considers the production data currently available to be too “thin” to support a methodology for setting separate transitional yields for organic crops.

We found that insured producers for 35 of 48 organic crop policies with losses did not have production histories supporting that they could grow the insured crops to reach the yields used to determine the production guarantee or amount of insurance.16 This occurred because RMA directs AIPs to apply transitional yields and underwriting standards established for crops produced using conventional farming practices to crops produced using organic farming practices. As a result, at least $952,000 of $2.56 million in indemnities that RMA underwrote were excessive. In addition, insured producers with organic crops experienced a programwide loss ratio of 105 percent.17 In contrast, insureds with conventional crops experienced a loss ratio of only 67 percent.

OIG also found the loss adjusters did not follow procedures for adjusting organic crops.·

Twenty-two stated that the AIPs do not require them to obtain and/or review the organic plan and inspection report.
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Seven said that the loss adjustment requirements for adjusting crops produced using organic farming practices were no different than for crops produced using conventional farming practices.
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Five stated that the agent and underwriter collected the organic plan and inspection report.
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Five loss adjusters gave varying reasons for not obtaining and reviewing the organic plans and inspection reports.

 Bottom line: Organic crops can't actually match conventional cropping in yields, at least not on available data.  It will take years to build the data and the loss adjusting experience to do a good job on organics.

The Persistence of Historical Patterns

Mississippi was a major source of the guns which the Chicago police department recovered (third ranking state after Illinois and Indiana). Mississippi was also a major source of the black population of Chicago during the "Great Migration".

Henry Wallace Revisited

Oliver Stone with a collaborator have made a program/book revisiting American history: the untold story.  One of their themes is praising Henry Wallace, former USDA secretary, former VP, for his position in 1948 challenging the Cold War.  In their view, the aggressive stance of the US vis a vis  the Soviet Union under Truman triggered it; a more conciliatory attitude would have avoided it.

Brad DeLong links to a reconsideration by Wallace in 1952 of his 1948 views, in which he totally recants his views.  It's worth mentioning, because some on the left took a lot longer to become skeptical of the Soviets. It took Khrushchev's speech criticizing Stalin, then the violent putdown of the Hungarian rebellion in 1956 (a rebellion which led to soccer-style place kickers in the NFL in the form of Pete and Charlie Gogolak), to convince many.

Al's Back Reinventing Government

Government Executive reports Al Gore will speak at a 20th anniversary event of his "Reinventing Government".   Though I voted for the guy, 3 times actually, I didn't and don't think much of his initiative. Why?

• one big thing was government procurement credit cards.  A fine idea, except someone forgot to include oversight functions to catch fraud, abuse, and screwups.  Those had to be added later, after news reports which gave bureaucrats a bad name.
• another big thing was flattening the bureaucracy, reducing the number of layers. I'd like to see a GAO analysis comparing now with 20 years ago.  My bet is there's been no real change.
• a small thing--getting rid of agricultural programs.  As I remember, he got the honey loan program and the wool/mohair incentive programs.  Last I checked, Congress had replaced both. 

More generally, I thought he was too conservative in his approach, just adopting a few ideas which might be good, but didn't really reinvent government

Uphill Both Ways

Memory is fallible.  I posted a comment on the Wonkblog yesterday recalling the 1986 Gramm-Rudman-Hollings reductions.  Easy to do, since it was agony for us.  All fine, except I wrote it was a 5.6 percent reduction.  Did a little searching this morning; it was actually 4.3 percent.

So memory is fallible, but I know I walked to and from school uphill both ways.

COBOL and Binary

Back in the dark ages when I learned COBOL, the prerequisite was a course on computer basics, including number systems, binary, hex, etc..  Which is why I unabashedly steal this joke from James Fallows:

"There are only 10 types of people in the world: those who understand binary, and those who don't."

Least Surprising News of the Day

"Agriculture Has Slipped from DC's Radar" is the headline on a Politico article.

Innovation and Productivity

The head of Yahoo is making the news because she's telling her employees to come to work; they can't work from home.  Apparently there's research showing there's more innovation when employees meet face-to-face, have casual interactions, etc. (I don't remember which company, Bell Labs, Apple, who, which designed its building to maximize such interactions. On the other hand working from home increases employee satisfaction, enables you to hire better employees, maximizes productivity, etc.

My only contribution: face time and casual conversation is important.  That's also a reason for meetings, national conferences or just meetings in the FSA context.  Perhaps my best contribution to FSA was when I overheard Solomon Ramirez talk about his work with DFU (an early System/36 utility software package) when we were all imbibing after a national meeting.

[update: see article on Google's building]

Parker on the Past and USDA Sensitivity Training

Kathleen Parker, the conservativish columnist for the Post, writes mocking the sensitivity training at USDA.  I understand the mockery, but she grew up in a very different America than I did, when she writes:

There was a time when such lessons, otherwise known as manners, were taught in every American home [emphasis added]. Said homes were not privileged in most cases but they were occupied by a mother and father who, though they perhaps did not adore each other every waking moment, were at least committed to the mutual task of rearing thoughtful, well-behaved children.

The WASPy upper middle class was taught to be considerate of people's feelings; we would use "Negro" rather than "colored", at least to people's faces, and the "n-word" was reserved for the locker room.  But those "good manners", if they were such, are not sensitivity to others.

When I Don't Post, My Page Views Go UP?

Having been traveling for a few days, I find the increase in page views amazing.  I don't really want to face the logic of the message the statistics are sending me: my audience [sic] wants me to blog less.  I take back everything I've written about wanting government websites to publish their statistics.