John Block Reports from Washington

Hello everybody out there in farm country. This radio commentary is brought to you by the Renewable Fuels Association, Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary—

The farm programs that farmers rely upon expire at the end of 2012. Every commodity group, every farm association, the whole industry is running in circles, wringing their hands trying to get positioned to influence, if not write, the next farm bill. At one time, there was a chance the farm bill would be written by House and Senate Ag Committee leadership and accepted by the Super Committee. Of course, as we all know, the Super Committee failed to get anything done. When it comes to farm program policy, I am grateful that they failed.

The next farm bill should be written with the full participation of the House and Senate Ag Committees. And they should not have a Super Committee gun held at their head.

I don’t think we have had enough debate on what kind of support the next bill should provide to farmers. With an unsustainable deficit and political pressure to cut, cut, cut, we need to get it right.

The ag industry is enjoying “good times” like we have not seen for years. We will be forced to accept substantial reduction in farm spending. And, I might add, we should. We need to continue to move our industry along the path to less government interference in the markets.

When I came to town as Ag Secretary, we had “annual set asides.” In order to get farm price supports, we had to take ten or maybe fifteen percent of our land out of production. In an effort to stabilize and support prices, the government was cutting production. That’s history. We don’t do that anymore. We let the market call for more or less production.

I would submit that the Dairy Market Stabilization Program recommended to the Super Committee would have taken us back in time. That program is government supply management. We don’t want the government managing the milk supply. That would hurt our dairy exports which have shown an impressive increase to some 14% of our milk production. I liked what Jim Dunn, ag economist at Penn State, had to say about the dairy plan. He said, “This is old wine in new bottles.”

To the extent we can afford it, agriculture needs a safety net, but we need to let the markets work. Supply controls are “old hat.” We don’t want them for corn, or wheat, or pigs, or dairy.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

Until next week, I am John Block in Washington.