A crop shortage should provoke policy changes
- Article by: EDITORIAL
- Chicago Tribune
- October 2, 2012 - 11:38 AM
Autumn. The air cools, the leaves turn color and Midwest farmers deliver another corn crop to waiting bins.
Just one problem: Not enough corn.
Not enough standing in fields to be harvested. Not enough stashed in bins from previous harvests. Not nearly enough.
The U.S. Department of Agriculture reported Friday that America's grain stockpiles stand at the lowest level in eight years. The shortage comes as farmers plant fence row to fence row in the interest of maximizing their crops.
This summer's terrible drought will cut deeply into future supplies - but that's not why the bins stand as empty as they do today. The 2012 harvest, though ahead of schedule, is just getting under way in the northern tier of the Corn Belt.
The bins are depleted because demand for corn from previous harvests has run stronger than anticipated. High prices have not greatly deterred the world's appetite for American grain. The amount of corn on hand in the U.S. has dwindled from more than 6 billion bushels as of March 1 to less than 1 billion as of Sept. 1.
The consequences of this shortage are starting to show up in the marketplace. Wealthier countries such as the United States will experience rising prices for meat and dairy products as a result of higher animal-feed costs. In poorer nations, food will become scarce and increasingly unaffordable for the most vulnerable parts of the population. Hunger will be on the rise. Civil unrest could follow, as it has during food shortages in the past.
The only good part of this scenario is that it should provoke U.S. lawmakers to get serious and reform federal farm policies. Gridlock and inaction on Capitol Hill unwittingly provide the opportunity for a wholesale rethinking of business as usual on the farm.
This summer, Congress failed to approve a proposed five-year renewal of the farm bill, the legislation that governs agriculture policy as well as the food stamp program for the poor.
The farm bill proposals from both sides of the aisle were awful. They embraced market-distorting giveaways that would expand subsidized crop insurance to grotesque proportions. The effect would be to encourage over-planting on marginal land and other reckless practices on the farm. And why not, since the government would be insuring against losses? The proposals also would pointlessly line the pockets of insurance companies and their agents by adding billions of dollars in unnecessary coverage.
Mercifully, the farm bill proposals collapsed under their own weight. Congress adjourned without taking action, despite deadline pressure: The current farm bill, enacted in 2008, formally expired Sunday. (Most policies remain in effect.)
Here's hoping that Friday's report and others like it highlighting the need for food will change the debate in Washington.
We have said many times that brewing ethanol fuel from perfectly good corn is an unconscionable waste. It's time to eliminate the federal Renewable Fuel Standard that in effect diverts a huge amount of grain into gasoline tanks. It's time as well to eliminate farm subsidies that shower taxpayer money on farmers, landowners, crop insurance companies and other favored constituents that have prospered in recent years, while most other Americans endured economic hardships.
Here's another reason to push for genuine reform: trade.
Agricultural products are among America's biggest exports. It is critical to ensure that the nation remains a stable, reliable supplier to its customers overseas. Federal policies that subsidize row-crop production act as a form of protectionism. They shield the ag industry from market forces. In the long run, they do more harm than good. They open the door to self-defeating, centrally planned schemes ... such as requiring the use of corn for ethanol.
Some policies also discourage farmers in other nations from competing with the U.S. That might sound like a plus for American agriculture, but we believe competition through free trade makes businesses more efficient. The market should be given a greater opportunity to shape world supply and demand, without government interference.
Although no one can control the weather, shortages and surpluses of staple crops would be less problematic if market forces had more of a hand in determining the planting intentions of farmers around the globe.
We're confident that U.S. farmers would do better, not worse, if they were freed from the red tape and nanny-state handouts that have characterized decade after decade of farm bills. A hungry world awaits. Members of Congress, let the grain shortfall of 2012 provoke a policy overhaul.
---Distributed by MCT Information Services
© 2014 Star Tribune