Wednesday, June 20, 2012

Farm Bill update

The Senate is debating the 2012 Farm Bill, which reauthorizes agriculture, conservation, and nutrition assistance programs for another five years. You can read coverage at Politico, the Washington Post, the Food Politics blog, and Roll Call.

Overall, the Farm Bill is likely to save some taxpayer money by replacing some agricultural subsidies with new crop insurance programs.  These government subsidized crop insurance programs are likely to cover "shallow losses" -- comparatively modest losses that don't meet the threshold for serious losses already covered.  These new crop insurance subsidies may be a little less expensive than the crop subsidies they replace, but they still reflect the agriculture industry's capture of legislators, who can be persuaded to do the industry's bidding, rather than representing sound policy.

Senate leaders agreed to consider a list of 73 amendments. You can follow the specific votes on the Senate website. If I understand correctly, an amendment to approve a compromise between the egg industry and animal welfare organizations regarding treatment of chickens was not on the list of amendments for consideration, perhaps because it was blocked by hardliners in other meat industries who oppose such compromises. An amendment to protect the Supplemental Nutrition Assistance Program from medium-sized cuts failed (it would have saved the money by reining in the new crop insurance subsidies). An amendment to limit the size of payments in a marketing loan subsidy program passed.

The DeMint amendment that I discussed recently failed. DeMint (R-SC) noted that checkoff programs claim to have enthusiastic support from producers. If this were true, surely a voluntary contribution would be sufficient, right? Yet, only 20 Senators, all Republicans, backed DeMint's effort to make the contributions voluntary. My skeptical view of checkoff programs seems to have more friends at the Heritage Foundation than among the progressive Senators who ought to speak up for good governance and a coherent federal government message on this public health issue.

Thursday, June 14, 2012

Liberate the soybean farmers!

The American Soybean Association (ASA) this week slammed Senator Jim DeMint (R-SC) for proposing that checkoff contributions should be voluntary.

At present, the checkoff programs use the federal government's power of taxation to collect hundreds of millions of dollars each year in mandatory assessments from producers -- whether the producers want to contribute or not -- to be spent on advertising, marketing, research, and plenty of overhead.

The checkoff programs were the focus of scrutiny by USDA's Inspector General, who determined in a March report (.pdf) that the Agricultural Marketing Service (AMS) "needs to improve its governance over the boards."  AMS took some steps in 2010 to increase oversight and plans to release more detail about procedures the boards should follow in the near future.  A key example in the report came from the soybean checkoff.  According to the Inspector General:
A recent OIG investigative review reported that a subcontractor of the USB [the soybean checkoff board], the United States Soybean Export Council, used subcontracts as a mechanism for paying employees unauthorized bonuses totaling approximately $302,000. The Council’s executives did not obtain authorization from the USB to pay the bonuses. 
The American Soybean Association's vociferous email this week is misleading on several points.

In the email, ASA President Steve Wellman said, “The checkoff is not a tax. It is not something that is imposed upon us as farmers. Rather, it allows farmers to invest our own dollars to conduct research, build markets and create new uses for soy.” I cannot figure out who Wellman thinks he is fooling, checkoff farmers or the general public? For farmers who choose not to contribute voluntarily, the checkoff payment is imposed. The U.S. Department of Justice enforces the mandatory assessments. Although the checkoff collections do not appear in the federal government's official tax accounts, that omission is itself a scandal. In plain English, the checkoff is a tax.

The ASA email continues, “With oversight provided by USDA, producers have taken it upon themselves to fund over $905 million of research, promotion and consumer education programs annually through checkoff activities at no cost to the federal government.” Is that really the number? $905 million?! The USDA Inspector General's report said the soybean oversight problems mentioned above contributed to the IG's concern that "oversight controls were not adequate to prevent or detect the potential misuse of funds."  I would not say that USDA oversight strengthens the case for a mandatory assessment.

Describing the IG report and the soybean checkoff problems in particular, syndicated agricultural policy columnist Alan Guebert wrote in April, "When federal auditors examine almost any aspect of the 18 checkoffs created by Congress, they usually find the worst of times: funds misspent on illegal travel, subcontracts used to funnel money for unauthorized bonuses, no procedures to track money and audit rules so porous that a checkoff-bought Sherman tank could clank through most checkoffs without a question or an eyebrow getting raised."

In DeMint's proposed amendment to the Farm Bill, checkoff contributions would be voluntary and would no longer be enforced by the federal government's power of taxation.  Imagine that! Like every other industry, farmers would be free to contribute or not contribute, as they prefer, to private-sector marketing efforts.

Thursday, June 07, 2012

What ban?

Everybody seems to be saying that New York City Mayor Michael Bloomberg has proposed to ban sodas in containers larger than 16 ounces.

What ban?

My version: Bloomberg has proposed a cup-size restriction for selected soda sales in restaurants, movie theaters, and vending carts. 

You may agree or disagree with this proposed rule.  All I want to say is that trying out the rule has some merit.  There is a large literature showing that our brains mis-estimate the food energy content in large beverages, and our bodies physiologically mis-regulate liquid Calories.  Quite possibly, people will get as much -- maybe even more -- utility or satisfaction from a smaller cup.  Quite possibly, a smaller cup will be as profitable for NYC businesses.  Quite possibly, this rule offers a modest public health benefit at reasonably low cost in terms of money and personal well-being.  All of these possibilities are eminently testable.  I think it would be great to see NYC try out this policy on a pilot basis, and do a high-quality study showing the impact on health and economic outcomes.  Pursuing this pilot is a sober and sensible proposal.

If the pilot succeeds in promoting public health with few harmful side-effects for businesses and customer satisfaction, I would favor it.

I am not surprised that right-wing critics have gone all Defcon 1 about this proposal.  They say this proposal will cause a loss of liberty.  Puh-lease.  We are talking about the difference between a 12-oz and a 20-oz cup of soda in a movie theater.  We have a thousand personal liberties to worry about long before I will start to worry about the right to a particular soda cup size.

What really surprises me is that progressive supporters of the rule endorse the right-wing narrative about how this proposal will affect liberty.  What do I mean?  Consider Mark Bittman's column at the NYT this week:
On a more personal level, we hear things like, “if people want to be obese, that’s their prerogative.”Certainly. And if people want to ride motorcycles without helmets or smoke cigarettes that’s their prerogative, too. But it’s the nanny-state’s prerogative to protect the rest of us from their idiotic behavior....  To (loosely) paraphrase Oliver Wendell Holmes, your right to harm yourself stops when I have to pay for it. And just as we all pay for the ravages of smoking, we all pay for the harmful effects of Coke, Snapple and Gatorade.
In essense, Mark Bittman agrees with conservative critics that the cup-size rule is part of a broader agenda to forbid personal choices that could make us fat. Bittman says it is okay for the government to take away our liberty to make such choices, because we share the same insurance risk pools, so one person's medical costs affect another person's taxes and insurance premiums.

I don't think shared risk pools should give policy-makers the right to ignore personal choices cavalierly.  When describing sensible public policies that override personal choices, I would not toss in the term "nanny-state."  Unlike "Yankee Doodle" and "queer," there are poor prospects for converting "nanny-state" or "ban" from a term of insult to a term of praise.  A key feature of obesity policy is that many individuals themselves recognize that their short-term impulses are contradicting their own true long-term desires for health and satisfaction and good food and drink.  The NYC proposal may better serve the long-term desires of most people most of the time.

If this cup-size proposal really threatened important personal liberties, I would oppose it.

Why are this policy's supporters undermining its political prospects by making it out to be more than it is?  There is no ban.