Farm Bill: Wheat Gets the Chaff--Again
For the second farm bill in a row, wheat producers look as if they'll be treated as second-class members of the subsidy fraternity. And yet they'll be expected to add their wagon to the circle 'round the status quo--the better to help cotton and rice come away with billions, it would seem.
The National Association of Wheat Growers started off this farm bill cycle with an impassioned demand for 'balance' in 2007 and ambitious goals for reform.
All that passion and ambition seem to have given way to acquiescence.
Here's a picture of their core complaint (courtesy of CRS):
NAWG wanted their fixed direct payment more than doubled, from 52 cents a bushel to $1.15. The Peterson draft gives them nada penny more.
They also wanted their target price raised from $3.92 to $5.29. The Peterson mark gives them $4.15.
To me, the wheat growers have the most compelling case among commodity crops for special consideration in this farm bill. They've been hammered more than anyone by drought (a major reason why EWG supported weather-related disaster aid legislation over the past two years--though not the 30 percent energy cost 'bonus' to direct payments). In big parts of wheat country, growers are not able to participate directly in the ethanol boom because it's just too dry to grow corn.
But as Capital Press reporter Scott Yates pointed out a few weeks back:
It hasn't been a particularly auspicious farm bill debate for the National Association of Wheat Growers so far.First, they were told their $5.29-per-bushel target price idea coupled with a $1.19 direct payment (base acres/historic yield) was dead on arrival. They protested the numbers that were analyzed by the Food and Agriculture Policy Research Institute of the University of Missouri and Iowa State University. The lobbyists and congressional aides said it didn't matter, and it didn't.
Now the one thing wheat growers have come to depend on in terms of government support - the one leg of the three-legged 2002 Farm Bill stool that actually worked - is under attack. The preliminary discussion draft for the commodity title of the 2007 Farm Bill puts direct payments squarely in the crosshairs for reduction. Under the 2002 Farm Bill wheat growers received a direct payment of 52 cents a bushel a year.
A letter NAWG President John Thaemert wrote Rep. Collin Peterson, D-Minn., expressed his concern over the effort to reduce the decoupled payment to provide increases in target prices and loan rates.
So the wheat DP did stay the same in the Chairman's mark, but the target price increase is minimal--and too far below the market to trigger countercyclicals anytime soon in all likelihood. Which is why that target price increase doesn't cost much. It's not worth much.
The wonder is that this offer is enough to get the wheat growers behind a bill that brings home a multi-billion dollar subsidy harvest for everyone else.
Comments
I remember the old days in the late 90's when farm subsidies were "ended" over a 7 year cycle. The government is the funniest comedy act going.
I think that I should buy a ranch, plant rice, watch it fail and then head to the mailbox for my check from D.C.
Though it might be simpler to just have my 100 closest friends give me $3,000 each and bypass the wasteful Feds.
Seriously, I see zero reason for any farm subsidy of any kind for any reason.
Posted by: Arnie Kriegbaum | July 10, 2007 1:45 PM
Although the drought has severely affected winter wheat farmers in south-central Kansas, that's not what hit us this year. Last year the drought dropped us to a 15-bushel yeild (from over 40 in recent years). This year was much worse. The severe late frost damaged much of the wheat, then the weather was too dry. Even worse, weeks before harvest, it started raining making it very difficult for many farmers to get in to their fields. The rains also brought a plague of wheat rust and caused the heads to sprout, so that it isn't even suitable for next year's seed. We like many who crop share, lost everything as we didn' t have crop insurance. We have zero yield but still have the cost of this "harvest's" seed and fertilizer to bear.
We don't "share" in the ethanol boom because we dry-land farm. More that that, we wouldn't do it because it is insane, in my estimation, for taxpayers to subsidize corn which inefficiently produces ethanol, at the same time growers are using copious amounts of diesel pumping 10,000 year old, post-Pleistocene era water out of the Ogallala Acquifer to grow it.
In the words of Walt Kelly's Pogo: "We have met the enemy and he is us."
FRANK: Very well said.--COOK
Posted by: Frank Smith | July 15, 2007 5:44 PM
Corrected copy!!!
Although the drought has severely affected winter wheat farmers in south-central Kansas, that's not what hit us this year. Last year the drought dropped us to a 15-bushel yield (from over 40 in recent years). This year was much worse. The severe late frost damaged much of the wheat, then the weather was too dry. Even worse, weeks before harvest, it started raining making it very difficult for many farmers to get in to their fields. The rains also brought a plague of wheat rust and caused the heads to sprout, so that it isn't even suitable for next year's seed. We like many who crop share, lost everything as we didn't have crop insurance. We have zero yield but still have the cost of this "harvest's" seed and fertilizer to bear.
We don't "share" in the ethanol boom because we dry-land farm. More than that, we wouldn't do it because it is insane, in my estimation, for taxpayers to subsidize corn which inefficiently produces ethanol, at the same time growers are using copious amounts of diesel pumping 10,000 year old, post-Pleistocene era water out of the Ogallala Acquirer to grow it.
In the words of Walt Kelly's Pogo: "We have met the enemy and he is us."
FRANK SMITH: Even better! --COOK
Posted by: Frank Smith - corrected copy | July 15, 2007 6:16 PM