Ron Paul and the Farm Programs

Ron Paul released his budget outline, calling for a trillion dollars in cuts.  Looking at the details, Rep. Paul either proposes to continue farm programs unchanged, or considers them so unimportant as to ignore them.  For USDA he eliminates Food for Peace, FAS, WIC,  and research and education, and whacks food stamps. But no mention of FSA/CCC/NRCS.

Front Page of the Times

That's where an article on the proposed replacement of the direct payments program with something like ARRM finds a home. One knows the article won't be favorable to farm programs, even though it begins thus:

It seems a rare act of civic sacrifice: in the name of deficit reduction, lawmakers from both parties are calling for the end of a longstanding agricultural subsidy that puts about $5 billion a year in the pockets of their farmer constituents. Even major farm groups are accepting the move, saying that with farmers poised to reap bumper profits, they must do their part.

The author focuses on the Thune-Brown bill and opposition from EWG. 

Slow Blogging

Wife and I are traveling over a long weekend, so blogger will be slow or nonexistent.

Jobs and Proportional Spacing

In his famous commencement speech Steve Jobs took credit for bringing proportional spacing to the personal computer, claiming that Microsoft wouldn't have had the vision to do so.  It's possible his claim was tongue-in-cheek, but Mr. Manjoo at Slate took it seriously in his appraisal of Jobs. " If he hadn’t brought proportional typefaces to the Mac—if the Mac had never existed—it’s difficult to think of anyone else who would have. Microsoft? Dell? No way."

I beg to differ.  Several lines of development came together on the personal computer.  IBM in 1948 announced the IBM Executive Typewriter, which provided a proportionally spaced font.  To the best of my knowledge, such typewriters were always a class symbol, used for "executives". A second line was preparation of copy for photo-offset printing, with the Varityper and later the IBM Selectric Composer.  A third line started with the mainframe with the creation of typesetting.  These separate lines stemmed from the realization that print is just easier to read and prettier to look at if it's proportionally spaced, which then gets you into the details of font design, serifs versus no serifs, etc. etc. It didn't take Steve Jobs for people to realize this.  He didn't create the demand for it from scratch.

My own exposure to the issue came in the early 70's, when we were using IBM mag tape/selectric typewriters for directives. We were looking for replacement systems, which got me looking far afield at the minicomputers of the day.  The monitors on these were limited:; they could form letters with maybe a 6x9 dot matrix.  And their output was limited to the dot matrix or daisy wheel printer.

Another way to discuss this is to focus on the final product, which is "what you see is what you get"--WYSIWYG, both on the monitor and on the output device.  The Executive typewriter, Varityper, Composer all used hardware to provide the output.  WYSIWYG on the monitor required getting enough pixels on the screen to model different type fonts. WYSIWYG on the output device required a device which could vary the output under software control: inkjet, dot-matrix, or laser printers.  And, of course, you needed a software package between the monitor and output device.

What Apple did do by the mid-80's was package the three elements (monitor, software, laser printer) together in a package which could enable desktop publishing.  Once that was in place the doors opened wide and demand rushed in.

When Women Didn't Do Science and Technology

How short a time that was. A post from the winner of the Google Science Fair--all three winners were female, meeting the President.

A Generalization Too Far

I've taken to following the comments at Ta-Nehesi Coates' blog at the Atlantic.  Today he wrote a true sentence:

The disease of presentism, looking up the past from the strict moral, legal, cultural, political and economic context of our time, is a constant problem.

 There's another disease which I often see, which I can't name, except as in the title of this post.  It's generalizing too much, too far.  For example: the status of women. In today's America they have one status; in the America of 1850 they have another--right?  I'd say wrong. Forgetting about the past, the status of women in the Amish culture, the Hasidic Jewish culture, the Hollywood culture, the Mormon culture, the Salvadoran culture of recent immigrants, etc. etc. is very different. There's some continuities, but we always have these different groups in the bigger society. The best we can do, perhaps, is to recognize we're probably making generalizations about middle and upper middle class mainstream American society.

Tell Me What You Really Think (of 9-9-9)

Via Tyler Cowen, Bruce Bartlett assesses Herman Cain's 9-9-9 tax plan rather soberly.  He concludes:

Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived.

I Remember Hitchhiking

Freakonomics explores a couple reasons for the decline in hitchhiking: fear and the rise of women drivers and an associated rise in car ownership and multi-car families.  I'd add a couple: the rise of limited access highways and the diversion of traffic to them--even if hitchhiking is not explicitly prohibited it's harder to stop and pick up person in the midst of 70 mph traffic; the tipping point phenomena--if it's not often done it feels riskier.

I used to hitchhike on my way home from cross-country practice, though mostly I ended up walking all the way.  Modern kids are spoiled.

FSA Progress on Civil Rights

This press release claims progress. This demonstration presumably counters the claim, though the news report doesn't link the two.

What The? Used Cars Increase in Value

VA has a tax on the value of the car(s) you own (don't get me started on it) which means they have to determine the car's value each year, for which they use some standard NADA manual.   The Herndon Patch just has a post forwarding info from Fairfax County--15,000 cars increased in value over last year.

???  I guess it must be times are so tight that people are bidding up the value of used cars rather than buy new?    Strange times.

European Agricultture versus US

Haven't linked to posts at CAP Health Check recently. One subject the Euros are dealing with is whether to move to flat rate payments (paying the same rate per acre hectare regardless of the historical crop grown). For someone steeped in US farm programs that's an astonishing idea--I can't imagine anyone in the US proposing it, much less a realistic possibility of enacting it, but it's seriously on the table across the sea.

Why? I suspect one answer is there's more variation in US agriculture than in Europe, particularly within a country:

•  First of all each country is much smaller than the U.S.
• Second, there's much more climactic variation, consider dryland cotton and irrigated cotton.  Irrigation isn't that important, I don't think, in the EU
• Third, there's a greater diversity of important crops.  Specifically cotton and rice are much more important than in the EU.  And those are the high value crops, meaning thy get the biggest support payments.

Hatch Act Violations and FSA

A Politico piece on proposals to change the Hatch Act says:

Lerner also said the standard penalty dictated by the Hatch Act — termination of employment — is too harsh in most instances and may even encourage agencies not to report violation

Read more: http://www.politico.com/news/stories/1011/65374.html#ixzz1a89W5TEe

I'm too lazy to research, but if memory serves the ASCS employees in the 1990's were found guilty of violating the Hatch Act and paid $1,000 fines, but didn't lose their jobs.  One of them solicited me for money on the phone during work hours, not that I was ever asked to testify nor did I volunteer the information. Since the Dems were in power and the solicitation was on behalf of a bundling organization giving to Clinton, I doubt the agency reported the violation.  I think we can thank a whistleblower.

Sen McCaskill and MIDAS?

The Alaskan Native Corporation act permits Bering Straits to be the prime contractor for MIDAS. Another ANC corporation has just been tarnished by the indictment of one of its officials in a contracting scandal. Federal Computer Week has an article on whether other corporations will be tarred with the same brush, including this comment:

"The Alaska Native Corporations should compete for these large contracts and further should not be allowed to ‘front’ for other corporations that are actually doing the work,” McCaskill said in her statement.

I Was Wrong--Palin

I'm not sure I ever published a post on Sarah Palin, but I do remember thinking that she was no flash in the pan, as some commentators thought after the 2008 election.[Updated: I did say on Oct 31, 2008 we'd have Palin to kick around for a long long time. 4 years is not long.] In that I was wrong; her reputation has suffered enough I don't believe she will ever be a serious candidate for national office again.

No Flowers for Gates?

Turns out people have left flowers at the Apple store in Reston.  I don't expect Bill Gates to have flowers left when he dies: first there's no Microsoft stores; second he never established the personal connection that Jobs did.  But I do expect ambassadors and other figures from various countries to express their condolences.  Jobs never did charity; Gates is, and is making a difference.  To me that makes him a bigger man.

Sen. Lugar Is Heard From

Via FarmPolicy, here's an analysis of Senator Lugar's plan to put FSA mostly out of business (tongue in cheek). Centerpiece seems to be a version of the ARRM I blogged previously, plus cutting CRP, consolidating other programs and some other stuff I can't follow.  But here's a command: "This section directs the Secretary to create a simplified form for initial requests by producers for
assistance. This section also directs the Secretary to evaluate how all conservation application
materials can be streamlined to make it easier for producers to apply to one or more programs."

[Updated by adding all the language after "previously".]

A Hole in the Crop Insurance Safety Net

FarmDocDaily has a post pointing out a hole in crop insurance as a one-stop, do-it-all safety net: periods when crop prices are low for multiple years (mid 80's, late 90's).  (His graph misled me, because it compares the 5-year average price with the projected price used for setting crop insurance.  I believe the actual price for the year would show more variability.) Of course, in such years the political pressure becomes such that Congress will do something to patch the hole; at least, that's been the experience in the past but whether it works that way in the context of large deficits is another question.

On Line Education

Margaret Soltan at University Diaries has a major vendetta against on-line education, as well as laptops in class, Powerpoint, etc., all positions you might expect of a humanities professor at GWU. In my younger days I used to be an early adapter, so the idea of online education makes a lot of sense to me.  So I'm torn.

Matt Yglesias came out with a good post which strikes to the heart of the problem of online education, but I'll link to Kevin Drum's commentary/excerpting of it.  The problem is, of course, almost no one is self-motivated enough to do online education.

I think there's a simple solution to that problem: your online university requires the student to deposit a total fee, say 50 percent of the cost of an in-person education, or $50,000, whichever is smaller.  Then, as the online student completes courses and passes tests, she gets a refund of part of the deposit..

Problem solved.

Harvest Time at the White House

Apparently today is harvest time for the White House garden. Either I've not kept up, Obamafoodorama hasn't kept up, or the White House hasn't been publicizing it, but I've lost track of what they're growing.  According to today's post, sweet potatoes.

In our own garden the tomatoes are done, cleaned up the rest of the vines this morning (early blight is a problem so the vines go out in the trash, not back into the ground. We don't grow sweet potatoes, though we like them well enough.  The fall vegetables have been in the ground for a good well: lettuce and brassicas.

Back to the White House garden--if I remember correctly next spring they can claim to be organic, since the land has been free of chemicals for 3 years next March.

[Updated:  Apparently in June they were planting the three sisters of Native Americans, corn, beans, and squash--that's from a link in the post above.]

What Is the Proper Role of the Bureaucrat?

The NYTimes has an article discussing the pipeline being proposed to run across Canada and much of the US.  The pipeline opponents believe that a bureaucrat in the State Department was inappropriately helping a lobbyist for the pipeline, who had a political connection to Clinton.  It raises for me the question of what is the proper role of a bureaucrat:

• the neutral arbiter of the rules, enforcing them as best you can, rather like an umpire in a baseball game?
• the advocate for the cause, like the Army Chief of Staff for the army? 
• the helpful postal clerk, who attempts to guide the aged customer with an odd package through his options?
• the social worker, encouraging the client to do the right thing? 
• the FBI agent, enforcing the law? 

Seems to me all of the above are appropriate in context.  

There's also the question of different personalities: some people are effusive and outgoing, others (the better ones I say with total bias) are reserved and taciturn.

It's often difficult to judge a bureaucrat's behavior fairly without seeing a lot of their interactions with clients/customers.

Those Underpaid CEO's

The Post today reveals the nation-wide shortfall in CEO pay: it seems at least half the CEO's in America are underpaid, failing to make the median income.

Great Bureaucrats?

Government Executive Magazine has a list of 20 great American government bureaucrats. Not sure I agree with all the judgments: if number of Presidential nominations is the rule Elliot Richardson might deserve a mention, as well as his resignation in the Saturday Night Massacre.  I'd also throw Ben Franklin into the mix.

Farm Bill Proposals

Stu Ellis at Farmgate reviews some proposals for changed farm programs.

The Pack of Aides

The Project on Government Operations observes that the top brass arrive to testify before Congress with a pack of aides.  They're critical, as well they might be.  Their point is there are too many generals and admirals in proportion to the grunts.

However there's a counter argument, which may not apply to testimony before Congress but can apply to attendance at meetings.  One of the best things I think a manager can do is to highlight the contributions of subordinates. If a manager brings staff to a meeting, he/she should often be able to have the staff person do the talking and arguing.  I was able to do that sometimes, though often my know-it-all tendencies interfered.  :-(

The Solar Decathlon and the Weather

Several colleges are participating in the "Solar Decathlon", a contest to build green housing within a set of constraints, with the model house erected on the Mall, or this year in West Potomac Park.  U of MD won the architectural award.  This year since Tropical Storm Lee went through earlier this month the sun has been in little evidence.  That's unfortunate, because many of the features of such houses depend on reasonably sunny weather, which the DC area usually has in September, but not this year.

WSJ Gets Something Wrong

Greg Mankiw links to a Wall Street Journal story about SSA and the processing of disability claims.  It includes this paragraph:

The directive stemmed from a wrinkle in the federal calendar, in which this week fell between the federal government's 2011 and 2012 fiscal years. This happens every five or six years, as officials are allowed to count just 52 weeks in their calendar. Counting this week would make the current fiscal year 53 weeks long. That meant any applications for disability benefits completed between Monday and Friday wouldn't count toward the annual numerical targets set for Social Security judges or field offices.

This is, of course, wrong, at least in the sense the federal government's fiscal year is 365 or 366 days, not 52 weeks.  I suspect SSA set up weekly and yearly targets in their workload reporting system, with no provision for part-week reporting.  So this is a case where the bureaucratic system pinches the applicant, and shouldn't occur.

ARRM Bill S 1626

Farm Policy has the text of the Brown/Thune/Lugar/Durbin   bill establishing the Aggregrate Risk and Revenue Management Program. Given the prominence of the co-sponsors, it's got to be taken seriously.  See this for a diagram of the calculations.

I'm too far away from current law to comment reliably, but I didn't see the commodity-specific determination as all that specific in the bill's language.  I do wonder about WTO compliance, because the program is tied to planted acreage and seems to discourage switching to new crops. That was a prime selling point for "Freedom to Farm", which became the direct payment program.

In terms of administration, I surely hope FSA and RMA have merged into one entity, because I don't see how it can be effectively administered otherwise.  Assuming FSA writes the checks, they need the RMA APH and insurance premium amounts, plus the planted acreage and the actual production.  I shudder at the complexities.  I also wonder how MIDAS would plan to handle it.

French Bureaucrats Are Like American Bureaucrats

Words of experience from Dirk Beauregarde:

"The problem comes from our new boss. Like animals marking their territory as only animals know how, our new big chief is busy reorganising his new "kingdom" by changing acronyms and getting all his staff to play musical offices. Only a question of time before the new headman starts to come up with ideas - I believe they are called initiatives -

Initiatves are generally old ideas that get rediscovered when a new boss open the bottom draw on his desk and finds files crammed with "ideas". These ideas have been consigned to the bottom draw[er] because they were essentially bad ideas, but the new boss will get them out, dust them down, set up a commiittee to look at the idea and how it can be implemented. After the committee has held endless meetings and rehashed the unworkable idea into words of several syllables, the old idea becomes a new initiative. We are bound to follow the new "policy" and thus are asked to attend hours and hours of training sessions, given by people who don't understand the new initiative themselves.

Of course, nothing works, or if it does work, it is because we all ignore the initiatve and do things the old way. No matter, things are working and the credit is thus given to the boss and his new idea.

Sod/Swamp in New Farm Bill?

Philip Brasher reports Sen. Grassley is undecided on whether sod/swamp provisions should apply to farmers who buy crop insurance.

I don't know how well NRCS and FSA are doing these days in coordinating their work flows, but back in the old days LaVonne Maas and Sandy Penn got gray hairs trying to work out the problems.  Making the eligibility data available to crop insurance companies would be a new challenge.

[Just joking about the gray hairs]

Bittman and Cooking

Sunday NYTimes columnist Mark Bittman had a misleading article entitled "Is Junk Food Really Cheaper?"  His answer is "no", but he cheats, hence my "misleading". What he compares is junk food/fast food to meals cooked at home.  Buying the ingredients and cooking at home is cheaper.  An economist would object, however, that he fails to account for the cost of the cook's labor. You answer: but my wife isn't paid?  Makes no difference, you need to include the value of her time, which is more than minimum wage. Do that and I suspect you'll find a fast food meal is cheaper than home cooking.  Throw in home delivered pizzas or TV dinners and the good old days of home cooking really lose out.

He briefly considers a calorie versus calorie comparison, but avoids carrying through with the comparison.

I can agree with his point that Americans generally, even those on food stamps, have enough money to eat well if they cook, and cook wisely.  USDA even has recipes for such diets.

But that "if" is a big one.  Few people really like to cook, not on a regular basis.  It's a chore, like milking cows or gathering eggs. Bittman recognizes this: "The core problem is that cooking is defined as work, and fast food is both a pleasure and a crutch." He goes further by saying fast food is addictive..

His penultimate paragraphs:

To make changes like [returning to home-cooked meals] this more widespread we need action both cultural and political. The cultural lies in celebrating real food; raising our children in homes that don’t program them for fast-produced, eaten-on-the-run, high-calorie, low-nutrition junk; giving them the gift of appreciating the pleasures of nourishing one another and enjoying that nourishment together.
Political action would mean agitating to limit the marketing of junk; forcing its makers to pay the true costs of production; recognizing that advertising for fast food is not the exercise of free speech but behavior manipulation of addictive substances; and making certain that real food is affordable and available to everyone. The political challenge is the more difficult one, but it cannot be ignored.

 Of course, the real answer is for women (or their spouses) to leave the workplace and return to the kitchen.  Good luck to Mr. Bittman to push that!

Seasonal Dairy?

One of the certainties of my life has been that dairy farmers work harder than other farmers, since they have to milk cows 365 days a year.  Turns out that's not true, you can go with the "seasonal" approach as described by MO extension. (For those not familiar with mammalian milk production, a cow's milk production dwindles slowly as time from when she last gave birth grows. Dairy cows are milked for about 300 days, then "dried off" for the last two months before they give birth again.)  I follow the concept, but it used to be that milk prices were higher in the winter months, when milk supply was lowest, so there was a financial incentive to spread calving times out, not to mention the need to get a monthly milk check.  Things may have changed since I was a boy.

Lines Heard in the Theater Watching "Contagion"

From the movie, as the epidemic is gaining speed:

"The Secret Service has moved the President to an undisclosed location.

Congress is trying to learn how to work online"

From the audience:

"Why bother"

Improving Federal Websites

If you've bitched, you can offer input.  See this link for a schedule .

[Update--Another link   ]

[Second update: link to the government site]

Papa and the Bulls--Barcelona's Last Bullfight

By chance the Sunday paper had a review of a new book on Hemingway and this morning I see on Treehugger that Barcelona held its last bullfight.

My impression is Hemingway's reputation started slipping in the late 50's, even before his suicide, and continued to decline until recently.  He certainly loomed large in the early 50's, writing for popular magazines and being a presence.  My first contact with his writing was a bullfight article, though I can't remember where it was published.  One thing which he thought he saw in the bull ring, but left to us all, is: "grace under pressure", his definition of "guts".  The popularity of that phrase is still growing.

Great Untold Story: James Angleton's Offspring

James Angleton was the long time head of counter-intelligence for the CIA.  Some say he was paranoid about moles in the CIA; others say he was right. 

Anyway, his widow's obituary was in the Post this morning--sounds as if she was an interesting person in her own right: a history scholar and a poet with several volumes published.  But what struck me was this final paragraph:

Survivors include three children, James C. Angleton of Los Angeles, Guru Sangat Kaur Khalsa of Great Falls and Siri Hari Kaur Angleton-Khalsa [emphasis added]of Espanola, N.M.; two grandchildren; and three great-grandchildren.

How does one connect these dots, particularly when you throw in the fact that in the CIA, dominated by Ivy Leage WASPs in his time, he was apparently half-Hispanic, albeit a Yalie and a poet?

US Refrigerators 3X European

That's a factoid from a NY Times article on an automated refrigerator recycling facility: US refrigerators are three times the size of European ones.

Eliminating Earmarks = Eliminating Ag Research?

That's from Farm Policy: "Sen. Stabenow noted that, “And in the current budget situation, the way we fund ag research has been eliminated, a lot of that through direct funding to universities and through community designations and so on, what’s been called earmarks in the past. And that’s fine to change that structure, but it wasn’t replaced with anything. And so we’ve seen huge cuts in the current budget that are very concerning to me."

Yellow Margarine

Via Ezra Klein, a history of coloring margarine. New York was one of the states in which Parkay margarine was sold white, with a packet of coloring which you kneaded into the product to turn it yellow. I remember my mother doing this, so it must have been right at the end of WWII.  I'm sure mom, being a true believer in the virtues of dairy, was not using margarine willingly.

Picking on FSA

Just a late afternoon Friday thought:  my impression is that FSA was the first government agency to be dinged by GAO/IGs for issuing payments to dead people.  That was maybe 3 years ago, but since then there have been a number of agencies hit the headlines for the same problem, including this week OPM.

Was that just chance, because someone has to be first, or do the dark forces have it in for FSA?

Obama Overreacts Again

With the Shirley Sherrod incident the Obama administration over reacted: fearing adverse publicity they pulled the trigger first and then worried about their aim. They may be doing it again in the case of conference costs (the $16 muffins which were reported in the Post earlier this week.).  The Washington Post piece includes a reaction from the Hilton Hotels explaining, including this: " In Washington, the contracted breakfast included fresh fruit, coffee, juice, muffins, tax and gratuity, for an inclusive price of $16 per person."  The Post rather weakly says they relied on the DOJ's OIG report, which cited "$16 muffins"--in the print paper this morning this correction was buried inside on the Federal page.

In Obama's defense, there's a very small window in which to calibrate one's reaction, and the politics of modern media are such it's usually better to shoot first.

Gee Modern Technology Works

Was at a Starbucks this afternoon to get coffee, a deviation from my usual routine of getting coffee at the Starbucks in the local Safeway. Was struck by the guys ahead of me, both of whom paid by using their cell phone (I've no idea which one). The Times today had an article on Google Wallet, which makes your phone into a credit card.  I've no idea whether the guys I saw were using that, or some Starbucks application.  Anyhow, it's amazing.

Copier Jams Are So Twentieth Century

This MSNBC piece reports that the Federal Reserve's decision yesterday was 7 minutes late because they had a copier jam, preventing them from distributing the release to all reporters simultaneous

You see, in the arcane world of covering the Federal Reserve, reporters are "locked up" in a room at the Treasury and forbidden to release the Fed statement until every reporter has a copy. This is to ensure a level playing field.
Then all the reporters get a signal to transmit the news. The idea is to get the Fed statement out there before the next reporter because the financial markets hang on every word, comma and period.

This sounds like the process used for NASS crop reports, which can also move markets.  John Kenneth Galbraith's only novel dealt with a plot to get an early look at the crop report and exploit the information.

My question: why don't all such institutions just post their data in the cloud, with email/twitter notifications to the relevant people.  Avoid this 20th century stuff and recognize everyone and her brother has an Ipad now.

Farm Bill Politics

Charlie Stenholm, who I believe used to be Rick Perry's Congressman, writes finis to farm subsidies in this Politico article

Best News of the Day from Achenbach?

"It traces a path that can now be constrained a great deal, and if you look at this map from the Aerospace Corporation you’ll see that it’s not going to hit the U.S. Capitol and disrupt the highly productive political process that is going to solve the fiscal conundrum and put Americans back to work."  From a post on the predicted splashdown of the UARS satellite.

New Farm Bill

Farm Policy has some discussion of a new farm bill from which I gather different commodity groups may head in different direction as they try to cope with budget pressures.  On the other hand, if the super-committee writes the farm bill instead of the Ag committees, it will be logistically easier to just modify current legislation.  And that would be easier for FSA to implement, rather than a return to the old days with each crop (grouping) having its own program. It will be an interesting study in interest group legislation.

Government "Waste"

Politico and other media outlets have pieces on the Gallup poll, which seems to average the guesstimates of their respondents to say that 51 percent of Federal tax dollars are wasted. Room for lots of ambiguity there: does "tax dollars" include FICA or Medicare taxes?  What is "waste"--how many of our aircraft carrier groups are "waste"?  So much ambiguity it's relatively meaningless, but it makes a good story.

As for me, if I stipulate that spending in accordance with legislation passed by Congress is not waste, my guesstimate is less than 5 percent waste, and even that is high.

How the Cost of Crop Insurance Grows

Farmdocdaily has a post on the 2012 wheat insurance.  The main paragraph:

The 2012 projected price of $8.20 is $1.01 higher than the 2011 price of $7.19. As a result, guarantees will be higher for the same coverage level in 2012 as compared for 2011. Take, for example, a 75 percent Revenue Protection (RP) policy for a unit having an Actual Production History (APH) yield of 55 bushels. In 2012, the minimum coverage level is $338 per acre (75% coverage level x 55 bushel APH x $8.20 projected price). The 2012 minimum guarantee is $41 per acre higher than the 2011 minimum guarantee of $297 per acre (75% coverage level x 55 bushel APH x $7.19 projected price). For the same APH yield and coverage level, 2012 minimum guarantees will be 14 percent higher than in 2011.

And since the government's exposure and subsidization of cots changes as the guarantees change, the possible cost to the taxpayers of wheat crop insurance is rising.

Obama's Proposals

Obama has released his deficit reduction proposals.  For agriculture he proposes to eliminate direct payments, cut crop insurance and support SURE. The following are from pages 17-19 of the plan.

Eliminate direct payments. The direct payment program provides producers fixed annual income support payments for having historically planted crops that were supported by Government programs, regardless of whether the farmer is currently producing those crops—or producing any crop, for that matter. Direct payments do not vary with prices, yields, or producers’ farm incomes. As a result, taxpayers continue to foot the bill for these payments to farmers who are experiencing record yields and prices; more than 50 percent of direct payments go to farmers with more than $100,000 in income. Economists have shown that direct payments have priced young Americans out of renting or owning the land needed to enter into farming. In a period of severe fiscal restraint, these payments are no longer defensible, and eliminating them would save the Government roughly $3 billion per year. [Note: why they don't claim the $4+ billion figure I don't know.]

Reduce subsidies to crop insurance companies. Crop insurance is a foundation of our farm safety net. Our Nation’s farmers and agricultural bankers understand the value of this effective risk management program, and currently 83 percent of eligible program crop acres are enrolled in the program. However, the program continues to be highly subsidized and costs the Government approximately $8 billion a year to run: $2.3 billion per year for the private insurance companies to administer and underwrite the program and $5.7 billion per year in premium subsidies to the farmers. The Administration has made a continued effort to improve the crop insurance program by covering more crops, while implementing it more efficiently In 2010, the U.S. Department of Agriculture (USDA) and the crop insurance companies agreed to changes that saved $6 billion over
10 years from administrative expense reimbursement and underwriting gains while also
improving service to underserved States. The Administration believes there are additional
opportunities for streamlining of the administrative costs of the program. A USDA commissioned
study found that when compared to other private companies, crop insurance companies’ rate of return on investment (ROI) should be around 12 percent, but that it is currently expected to be 14 percent. The Administration is proposing to lower the crop insurance companies’ ROI to meet the 12 percent target, saving $2 billion over 10 years. In addition, the current cap on administrative  expenses is based on the 2010 premiums, which were among the highest ever. A more appropriate
level for the cap would be based on 2006 premiums, neutralizing the spike in commodity
prices over the last four years, but not harming the delivery system. The Administration,
therefore, proposes setting the cap at $0.9 billion adjusted annually for inflation, which
would save $3.7 billion over 10 years. Finally, the Administration proposes to price more accurately
the premium for catastrophic (CAT) coverage policies, which will slightly lower the
reimbursement to crop insurance companies. The premium for CAT coverage is fully subsidized
for the farmer, so the farmer is not impacted by the change. This change will save
$600 million over 10 years. The Administration also proposes modest changes in subsidies for producers. Today, producers only pay 40 percent of the cost of their crop insurance premium on average, with the Government paying for the remainder. This cost-share arrangement was implemented in 2000, when very few producers participated in the program and “ad-hoc” agricultural disaster assistance bills were regularly enacted. The Congress increased the subsidy for most insurance coverage by over 50 percent at the time to encourage greater participation. Today,
participation rates are 83 percent on average, and the rationale for high subsidy rates has
weakened. The proposal would shave two basis points off any coverage premium subsidy
levels that are currently offered above 50 percent, saving $2 billion over 10 years. Farmers
who have premium subsidies of 50 percent or less would not be affected.

Better target agricultural conservation  assistance. Farmers, ranchers, and forest landowners share a critical role in conserving the Nation’s soil, water, and related natural resources. The Administration is very supportive of programs that create incentives for private lands conservation and
has made great strides in leveraging these resources with those of other Federal agencies
towards greater landscape-scale conservation; however, the dramatic increase
in funding (roughly 500 percent since enactment of the Farm Security and Rural
Investments Act of 2002) has led to difficulties in program administration and redundancies
among our agricultural conservation programs. At the same time, high crop prices
have both strengthened market opportunities to expand agricultural production on the
Nation’s farmlands and decreased producer  demand for certain agricultural conservation
programs. These current economic realities and the ability to better target existing funding
for maximum environmental outcomes support a proposal to reduce the deficit while
preserving the most important agricultural conservation programs. To reduce the deficit,
the Administration proposes to reduce conservation funding by $2 billion over 10 years
by better targeting conservation funding to the most cost-effective and environmentallybeneficial
programs and practices. Even under this proposal, conservation assistance is
projected to grow by $60 billion over the next decade.

Extend mandatory disaster assistance.
The Administration strongly supports disaster assistance programs that protect farmers
in their time of greatest need. The Food, Conservation, and Energy Act of 2008 provided
producers with mandatory disaster assistance programs for the 2008 to 2011 crops. To
strengthen the safety net, the Administration proposes to extend these programs, or similar types of disaster assistance that are of a similar cost, for the 2012 to 2016 crops. The programs provide financial assistance to producers when they suffer actual losses in farm
revenue, loss of livestock or the ability to graze their livestock, loss of trees in an orchard, and
other losses due to diseases or adverse weather. To be eligible for the programs, farmers must
purchase crop insurance. The Supplemental Revenue Assistance Program provides whole
farm revenue coverage to farmers at a revenue level that is essentially 15 percent higher than
their crop insurance guarantee. Payments are limited so that the guaranteed level cannot exceed
90 percent of expected farm income in the absence of a natural disaster

A Question of Taxes

From Illinois farmdocdaily, comes this observation, based on their surveys of farmer's accounts, comparing 2001-5 with 2006-10:

It would seem that to add over $100,000 in net farm income while adding just under $6,000 in income and social security taxes doesn’t quite add up! We know that tax rates…even at their lowest…are not at the 6% level. What gives?

 The writer goes on to offer some possibilities, some of which amount to farmers deferring tax liabilities down the road, and warns of a possible day of reckoning (my words, not his). 

I hate to be cynical about the hardworking people in American's heartland, the truest of all Americans, but it might just be that one or two of the farmers is indulging in that oldest of American pastimes, the pursuit of which led directly to our Revolution: fudging on one's taxes.

I'm sure no one in Congress is going to suggest adding one or two auditors to the IRS as a partial fix to the budget.

(To be fair, I should note my understanding of federal tax laws as they apply to farmers is very close to zero.)

One question: if farmers have to pay self-employed SS taxes of 13.3 percent on income less than $102K, shouldn't one expect to see more than $19000 social security and income taxes paid on over $200,000 income? What are the limits to deferring income?

Charles Kenny Takes on the Food Movement

He writes in Foreign Policy in favor of efficiency and against locavores, supporting GM crops and importing food from the Third World over growing out of season crops in the Northern Hemisphere.