Trump's MFP Leads to WTO Violation?

That's the Congressional Research Service's tentative conclusion--US may be billions over its "amber box" limit in 2019.. Its conclusion:

According to the scenarios developed in this analysis, including a projected set of market conditions, the United States may potentially exceed its cumulative amber box spending limit of $19.1 billion in 2019. Excessive amber box payments in 2019 could result from the addition of large MFP payments to the traditional decoupled revenue support programs ARC and PLC.
However, this analysis found that U.S. compliance with WTO amber box spending limits was very sensitive to a change in market conditions and market valuations. Noncompliance hinges on many key market factors that are currently unknown but would have to occur in such a manner as to broadly depress commodity prices through the 2019 marketing year (which extends through August 31, 2020, for corn and soybeans). Another crucial uncertainty is how the U.S.-China trade dispute—with its deleterious effects on U.S. agricultural markets—will evolve.51 Resolution of the U.S.-China trade dispute and an improved demand outlook could lead to higher commodity prices and output values while lowering payments under countercyclical farm programs such as MAL, PLC, and ARC. Such a turn of events could help facilitate U.S. compliance with its WTO spending limits.

Count Me a Pollyanna

I know President Trump has support for his China policy from many Democratic politicians and in academia and the chattering classes.  The conventional wisdom today seems to be we need to be tough on China on intellectual property issues and other non-tariff issues.  That's not an endorsement of Trump's specific decisions on tariffs.

I may be naive, I think in the long run, maybe the long long run, that policy is ill-advised.  That feeling isn't based on much knowledge, but these are pointers:

• Theft of intellectual property might be bad, but it seems also true that it's not always easy to exploit stolen ideas.  Ideas rely on a network, a specific environment for their implementation and and further development.
• "theft" of ideas is applying a concept which applies to personal or real property to intellectual things.  Another way to look at it is that the "theft" means additional minds working on scientific and technical issues, coming up with new property which, if shared with the world, can help all of us.
• In the bad old days of the cold war it was reasonable to worry about theft of weapons designs. These days there's no country with an ideology of world domination.
• We used to dream of the US as a model for the world (see the Gettysburg Address).  We're losing that dream.

Fact--China has 7 times more African students than the US.

Note on Marijuana

Among the things I didn't know about marijuana is that it needs a Mediterranean type of climate--hot and dry and sunny, not the sort of climate we have in the East.  This Post story informed me.

How To Do Big IT Projects

FCW has a post on how to do big IT projects, referring back to a study of 5 years ago.    There are four keys listed, but I can boil it down to one:

• Get the right bigshot personally involved from start to finish and be sure she has skin in the game, as in will lose her job if the project fails.

Early on I was involved in a project to bring computers to county administrative actions (payroll and related services).  The big shot then was the deputy administrator, management (Felber) who brought people together from DASCO and DAM to do the project.

In the middle of my career I was involved with implementing the Payment-in-Kind program in 1983.  The big shot then was Seeley Lodwick, who was the Under Secretary (following service in a previous administration as exec assistant to the Administrator, ASCS)  He pulled together lawyers and program people and kept on us until it was off the ground.  

By contrast other projects failed because either they lacked bigshot involvement and/or the bigshots moved on with a change of administration.

The Obama administration did one thing right--put Biden in charge of the stimulus package implementation and one thing wrong--ineffective leadership in rollout of Obamacare.

Hemp and Tobacco (and Taxis) III

Reverting back to tobacco, in contrast to the article quoted in my first quote, there was at least some evidence that the benefits of the tobacco allotment/quota programs eventually benefited the owners of the quotas more than the actual farmers.  This article from the 1981 Washington Post discusses the issue, tied to the fact that Sen. Helms, a man for whom I had about as little respect as possible, was pushing the tobacco program while his wife was an owner of tobacco quota.

Note: IIRC over the years, maybe in the 1990's, the law was changed so that absentee owners of quota had to either sell the quota or become more actively engaged in farming.

Hemp and Tobacco (and Taxis) II

I never did get to the "taxis" part of my post yesterday.

The NYTimes yesterday had a piece on how New Yorkers had made inroads on the Chicago taxi industry.

To recapitulate the Times' previous articles on taxis in NYC:

• to operate a cab you need a medallion, issued by the city.  IMO medallions are a way to limit entry, by restricting entry you're able to manage the prices/rates charged and limit turmoil.  That's very similar to supply management for tobacco in the US and dairy and eggs in Canada; also it's similar to the marketing co-ops for things like cranberries
• NYC had a bidding war for the medallions,  which savvy investors used to manipulate prices and make exploitative loans to individual drivers hoping to gain an asset for their retirement..  With Uber and Lyft hitting, medallion prices have plunged, and drivers are unable to repay the loans, forcing them into bankruptcy.
• in yesterday's article the same pattern was followed in Chicago by wised-up guys from NYC.

I've noted the parallel with agricultural supply management already.  While the medallion program likely worked reasonably well for many years, as did the tobacco program, with time smart people with money found a way to exploit the rules and make money, gaining their returns at the expense of those with fewer smarts and/or less money.

Hemp and Tobacco (and Taxis)

The Atlantic has an article using a history of the tobacco program to talk about hemp.

The history is accurate enough.  The professor points out that tobacco quotas were initially based on past tobacco production, so they tended to provide existing tobacco farmers with a guaranteed annual income (disregarding weather and similar hazards) for years.  That stabilized the regional economies.  When the program was ended there was immediate upheaval and consolidation of farms. By locking out new farmers (she doesn't note the limited provision for new farmers in the program, though the amount of quota available each year was small) it meant black and white sharecroppers lost a chance for upward mobility.

Her argument thus becomes:

"Instead of charging would-be cannabis growers for the privilege of growing, states should award licenses to a larger number of applicants from communities that have been hit hard by the War on Drugs. Much as small-scale tobacco farms anchored entire communities across the Southeast, cannabis cultivation on a human scale, rather than a corporate one, can build wealth within communities of color where opportunities to amass property have been denied—frequently at the hands of the government.

 The argument seems good, but as I've argued in other posts, the growing of hemp in the new world of legal pot (and industrial hemp) is subject to many hazards, even for experienced farmers trying to add a new crop to their operation.  If the argument was that people who had been growing illegal pot should be given licenses to grow it legally, I'd have fewer concerns.  But asking people from the inner city to grow hemp would be stupid. You'd have to have a new hemp producer program to offer financing, help gain access to land, and provide mentoring. ( I don't know the failure rate for new farmers of conventional crops, but I suspect itt's high.) That's not happening.

In the absence of such a program what would likely happen?  As in programs reserving government contracts for minority and female owned companies--you use a figurehead with the right attributes, while the real money goes to the men behind the curtain.

Hemp Problems Again and FSA/NASS?

The Rural Blog has this post.

I wonder if NASS and FSA are now taking acreage reports for hemp. A claim of more than a half million acres licensed for hemp means it's one of the mid-major crops.

And has it been added to the NAP list of crops?

Interesting Questions on Foreign Investigations

When should an American official at any level suggest/request a foreign government investigate an American citizen?

I think the first question you have to answer is, what is the purpose of the investigation?  Is it because the official believes the citizen violated the laws of the foreign country?  Do we assume the country's judicial system is fair?  What is the US interest in seeing the citizen investigated and possibly convicted of a crime (or suffer civil penalties)?

Another set of questions around "investigate".  Is it okay for an American official to give incriminating information to a foreign government if the government is unaware of any offense?  What is the US interest is seeing the crime investigated?

How about trades of information--an intelligence operative trades info on citizen A for info on foreign citizen B?

How about cases where a crime/offense perhaps has crossed jurisdictional lines, so the start of an investigation in the foreign country might start dominoes toppling and permit an investigation in the US?

Without delving further into the issues, it seems to me possible circumstances in some cases could justify a request or a passing of information.  But, none of those would apply as I understand it in the case of Ukraine and the Bidens.

[update--addendum: I think the propoer course is to refer any suspicions to DOJ for an FBI investigation and possible grand jury.  If there's no offense under US laws but might be under foreign law, passing information from the FBI to the foreign country is possible.]

Supply Management in Our Future?

There's a discussion of "supply management" in this twitter thread:

I agree with much of this and am still preparing for SM policies for grains by next year. Would have been this year if not for planting fiasco. https://t.co/cJLXWd2lwO

— John Phipps (@jwphipps) October 1, 2019

1 - SM, by fixing parity prices for commodities, won't help specialty producers. Palouse lentils, hoop-house raised heritage hogs, organic arugula won't get meaningful price parity (using differentials from marker prices? See how well it worked for OPEC in the 70s) 2/n

— Silvia Secchi (@ProfSecchi) October 1, 2019

Canada has had supply management.  

The Farm Bureau didn't like the idea of a government program in the spring.

Here's a more recent article on it.

My own thoughts are:

• I think supply management would slow the exit of farmers (perhaps fewer bankruptcies and more sell-offs when retiring) but aren't a magic bullet. There's value in slowing the exits, both in impact on the farmers and their communities and perhaps in allowing more time to find niche alerantives to the commodity milk market.
• I'm not sure why alternative "milks" have gained so much market share--price or perceived health benefits or animal welfare concerns  If it's price, supply management would shift demand out of milk.. At least it improve the outlook for those alternatives.