The Congressional Budget Office has scored the federal ag budget and has decided the next farm bill will have much less to spend than in 2002. No wonder, considering how political decisions are made in this country: Whatever is working at the moment - i.e. high commodity prices fueled by renewables - must mean those kinds of prices will be expected over the life of the next farm bill.
Perhaps Senate Ag Committee chairman Tom Harkin (D-Iowa) had similar concerns when he requested an additional $20 billion in funding. He won't get it. Instead, Sen. Kent Conrad (N. Dakota) wants to create a $15 billion 'reserve' fund, provided the cost can be offset in some other way. The agriculture committees would have to either generate revenue or cut other programs as a spending offset.
Will any of this early posturing matter? Probably not, says Kansas State University policy gury Barry Flinchbaugh. He predicted the lower CBO number a month ago when I spoke with him in Atlanta.
"With farm prices what they are today, that baseline is going to come in around $10 billion when the average expenditures are $20 billion," Flinchbaugh said. "So what? They use the same price structure to calculate the baseline that they use to estimate the cost of a new farm bill.
"Secretary (Mike) Johanns cut the budget $10 million so the president can balance the budget by 2012. But he also added $5 million above the baseline. It's the best of both worlds.
"In any case, the federal budget deficit is partially a bogus issue, and has absolutely nothing to do with the farm bill," says Flinchbaugh.
Big farms demand new business model
Purdue University Ag Economist Mike Boehlje, who spoke at our Farm Futures Management Summit last December, has released a new article on the skills and attitudes needed by managers as grain farms grow larger. Boehlje is one of the few voices in Academia who really seems to have a knack for teaching farmers who to grow into their ever-growing farm operations. This article is one of several that Purdue releases on its Top Farmer Workshop website. You can read it here.
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