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Cost of Food
Uncommon Ground
The price of a gallon of milk or a pound of sugar hinges on policies Congress enacts this summer in the five-year Farm Bill.

The Senate passed its Farm Bill 66-27 with seven members choosing not to vote. Montana Sens. Max Baucus and Jon Tester voted for the bill. Tea Party senators like Ted Cruz, Marco Rubio and Mike Lee opposed the measure, while Sen. Rand Paul simply did not vote.

The Farm Bill spends $120 billion over the next decade to protect mostly big agribusiness with crop insurance and guaranteed profits. The federal government pays 62 cents out of every dollar for private crop insurance and guarantees up to 85 percent of the profits for some agribusiness.

Corn, soybeans and cotton – all mostly GMO crops – garner over 70 percent of all crop insurance, while producing about 50 percent of farm sales nationally. Non-GMO wheat is 15 percent of crop insurance.

Selective fruits, nuts, vegetables and melons generate 20 percent of national farm sales, but receive less than 5 percent of crop insurance.

President Barack Obama called for a $10 billion per decade cut in crop insurance. Senators amended out $1 billion on the floor.

Vince Smith, an agricultural economist at Montana State University recently said that with farm profits projected at a record $128 billion this year that the House Farm Bill “is about as a bad a bill a I could think of writing as an economist.”

The House Farm Bill is far worse than the version that was never voted on the floor last year when the House speaker refused to put the bill to a vote in a presidential election year.

The House Farm Bill makes it illegal for individual states to label engineered food that has been gene-altered in a laboratory to tolerate herbicides or pesticides. It allows spraying chemicals directly by waterways, adds fees to Christmas trees and rocks.

But it’s the spending in the Farm Bill that most conservatives find objectionable. The Farm Bill spends more than either the recent federal stimulus or health care reform.

Crop insurance payments were up sharply last year, topping $17 billion. That’s a $6 billion increase from two years prior. In 2000, crop insurance cost the federal government less than $1 billion, today it’s $9 billion per year.

Secretary of Agriculture Tom Vilsack is creating federal “climate hubs” to help farmers deal with a hotter climate. Experts predict wheat production will decrease up to 17 percent over that time.

Smith called the climate risk payments “socialized losses and privatized gains,” saying that the federal crop insurance program has generated over $10 billion in profits for the insurance industry over the last decade.

Congress is pushing a dairy program that links milk production to crop insurance and sets price support for the margin between feed costs and the wholesale price of milk.

That’s quite different than the sugar import quota system that sets a nearly 19 cents price support per pound. Today, taxpayers are buying more than 10 percent of the nation’s surplus sugar stock to be sold to the ethanol industry for a 10-cent per pound or $38 million loss.

The House Farm Bill will not easily pass the chamber. Neither conservative groups nor key Democrats favor the House version.

Montana Rep. Steve Daines didn’t propose any of the eight dozen floor changes to the Farm Bill. Any Republican-passed House Farm Bill will mix with the Democrat-passed Senate version in a conference committee that tends to be highly secretive.

A new Gallup poll indicated that only 1 in 10 people have confidence in Congress. That’s not good news for midterm elections. Montanans hunger for a senator who can shake up Washington when choosing a replacement for a retiring Baucus.
On 06-26-13, RussCrowder commented....
The price of a gallon of milk or a pound of sugar this year is going to hinge on just how successful Obama will be on his newly announced “war on American domestic energy production”.
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