Last updated on 2013.02.08
We South Dakotans have been working ourselves up over the failure of Rep. Kristi Noem to get the House GOP leadership to treat the Farm Bill with some sense of urgency. David Montgomery notes that our Congresswoman faces more obstacles than her own ineptitude in pushing ag-related legislation. She also must overcome urban disinterest:
It's a bigger challenge to make sure we've educated the importance (to urban lawmakers) of ag policy and what it does to benefit every family" with lower food prices, she said [Christopher Doering, D.C. correspondent, quoted by David Montgomery, "On the Farm Bill, Disinterest from Urban Lawmakers," Political Smokeout, August 29, 2012].
Montgomery also cites a Drake University prof who says awareness of the Farm Bill is not a problem in places like Iowa, where "where something like 30 percent of the economy is ag-related."
30%? Really? That sounds like the boilerplate the South Dakota Department of Agriculture slaps on all of its propaganda, claiming that agriculture generates $21 billion of South Dakota's annual economic activity. $21 billion would be 52% of our state GDP.
The Bureau of Economic Analysis shows that in 2011, agriculture actually generated 6.6% of Iowa's GDP. That's the fourth highest reliance on agriculture in the nation. In South Dakota, agriculture produced $4.4 billion of economic activity in 2011. That's 10.9% of South Dakota's GDP, the highest ag proportion in the nation. Only two sectors of South Dakota's economy contribute more wealth: finance and insurance (15.5%) and government (12.7%).
Nationally, agriculture makes up less than 1.2% of our gross domestic product. In 27 states, agriculture's contribution to the GDP is below that national average. Those 27 states hold 284 seats in the House and 54 seats in the Senate.
South Dakota's lone Representative thus faces a serious challenge in pointing to that line of the ledger and explaining to a majority of her fellow Reps why Congress should spend so much time propping up such a small sliver of their home state's economy. That's all the more reason we need a Representative who isn't just a pretty face carrying a flag on a horse.
The biggest problem are those cuts to the food programs, Kristi commented on at her "Townhall" meeting.
The political combination of funding food programs and farm programs together has made the Farm Bill possible. By cutting food programs and leaving a Farm Bill largely heavy with subsidized crop insurance, the House has violated that long standing political agreement causing real problems for the Farm Bill.
Kristi can chastise and "educate" those house members as much as she wants. I suspect they understand the political reality of needing to combine these two program areas better than she does.
The election cycle is trending toward Democrats holding the Senate and taking more seats in the House, especially after the outrageous events last night in Tampa.
If South Dakota insists on returning an ineffectual opposition member to Congress in November the state has no reason to complain when nothing gets done.
The House GOP caucus is in a catch 22. They are philosophically opposed to much of the farm bill. If they hold it up or vote it down, their rural members are on the chopping block. If they pass it they betray their principles and tea party voters go ballistic. Plus they undermine their budget hawk message. We'll just have to wait to see how the House GOP plays it and how Rep. Noem spins it. Of course it will be the senate's fault whatever happens. Right, Rep. Noem?
Off topic alert!
Comments on the 'surplus water' dealio, group?
http://noem.house.gov/index.cfm/press-releases?ID=0e1bad26-eaf3-4591-a20b-deac43eb263f
Like I SAID i DIDNT VOTE FOR HER KEEP UP THE GOOD WORK c.h.
"That sounds like the boilerplate the South Dakota Department of Agriculture slaps on all of its propaganda, claiming that agriculture generates $21 billion of South Dakota’s annual economic activity. $21 billion would be 52% of our state GDP.
The Bureau of Economic Analysis shows that in 2011, agriculture actually generated 6.6% of Iowa’s GDP. That’s the fourth highest reliance on agriculture in the nation. In South Dakota, agriculture produced $4.4 billion of economic activity in 2011. That’s 10.9% of South Dakota’s GDP, the highest ag proportion in the nation. Only two sectors of South Dakota’s economy contribute more wealth: finance and insurance (15.5%) and government (12.7%)." Just curious. Are those figures based on direct agricultural production (feed sales, farm equipment, crop sales, etc.) or do they include indirect economic activity (farmers buying clothes, trucks, gasoline, food, hiring trucks to haul produce, etc.) There seem to be a lot of South Dakota communities that are basically a grain elevator, a gas station, and a mom and pop restaurant..
That's a really good point, Frank. If anyone outside farm country needs educating, tying food assistance to the farm bill does that, reminding lawmakers that everybody, including the poor, need to eat. Not all districts have lots of farmers, but all districts have eaters. Kristi appears to need the educating: if urban lawmakers see cuts to support for their much more numerous eating constituents, they have no reason to support continued pork for a few rich farmers like Kristi.
Yet the House holds up the farm bill because Reps. like Paul Ryan and the other Tea Partiers want more cuts to food assistance. Goodbye, farm bill.
I'm puzzling over that one, MJL. I assume BEA lists the direct economic activity. Their numbers add up to the total economic activity in the state.
Do you know if there is a standard formula for indirect economic contributions? Whatever that formula is, it must do some double-dipping. If ag in South Dakota has $21 billion in direct and indirect effects, then other sectors (e.g. finance, insurance, health care) must also be able to claim comparable indirect effects... and in sloppy claims like the Dept. of Ag's that don't distinguish direct from indirect, we end up with lots of dollars counted twice and portraying much more economic activity than really happens.
I guess I should have done the research before being lazy and asking you to do the work for me. I did find these number from a research paper from an assistant professor at SDSU.
"Agriculture remains a significant contributor to the total economic activity generated in the state of South Dakota. The total direct impact of the agricultural sector of the economy in South Dakota
is $14.3 billion. This would still make the agricultural sector the largest single sector of the South Dakota economy, at approximately 19.8% of the total output. In addition it generates approximately $389,052,694 in indirect business taxes and accounts for 143,873 jobs in the state. Each dollar of direct output in agriculture also generates an additional $0.47 of economic activity in the state. Even after the structural adjustments in the economy and the production function adjustments in the model agriculture is still a significant source of growth for South Dakota."
http://www.sdstate.edu/econ/commentator/upload/No523.pdf
His account sounds fairly accurate. I am not a farmer. My father however managed grain elevators, both of my grandparents were farmers in South Dakota. No one was willing to carry on the tradition of farming the land my grandfather owned for many reasons. The biggest was that it is very hard to have any sense of security. They never became rich off of farming, but were able to support their family. I think Kristi should call in some favors with Fox News to put the pressure on other Republicans to pass the Farm Bill so it can go to conference. Krist, you have spent plenty of time over there, you gotta know someone.
$14.3 billion, versus the $4.4 billion cited by BEA? Someone's using different formulas. I see Dr. Taylor calculates gross sales, not GDP. His methodology indicates that gross sales include inputs; GDP does not. By Taylor's numbers, in 2008, the ag sector produced 12.3% of gross sales in the state, the second largest chunk. Manufacturing accounted for 23.0%, the largest chunk, as opposed to 9.1% of SD-GDP in 2011. Gross sales vs. GDP makes a notable difference in how some activities count.
But dang it, now you've got me wanting to go find the national data on gross sales and calculate how many Reps and Senators come from states where ag is below the national average... and I have French lesson plans to write! ;-)
Do all entitlement programs end if the Farm Bill reverts back to the old law?
At one point in time I seem to remember that of all food assistance dollars in the Farm Bill, .16 goes directly to all ag producers. So it's not just the crop insurance and subsidies that would be lost.
That's a good question, Michael! I'm not sure, but this article from Nebraska Public Radio says that in the case of no action, 90% of USDA's programs would go poof. The article also says there's no way Congress would let that happen, so they would just pass an extension of the 2007 Farm Bill.
Bonus: that same article also has Amanda Taylor of the Iowa Corn Growers Association backing Frank's point above perfectly:
"...nearly 80 percent of the farm bill focuses on the nutrition side, but the corn association's Taylor said having those other programs wrapped into the bill actually helps.
"'If we were working on simply a farm bill that affected only farmers, I find it very difficult to think that urban legislators from either side of the aisle would be (one) very excited about it, (two) work very hard on it, and (three) even vote for it,' Taylor said."
Good call, Frank!
I'm not so sure Cory. I think we will see deadlock and the blame game instead.
One thing that the article pointed out is that we would go back to parity pricing based on the 1920's/ The reading I've done referring to the old law said that the sec of ag would set the rules and prices for wheat and corn.
If the farm bill is not renewed (which prolly won't happen). You won't see much change in the near future. The prices will stay similar, the policies will still somewhat be in place even if not there. The problem will be come spring, once spring occurs and people can't buy their federally subsidized crop insurance because no private company will be able to afford to dole out insurance without the governments back. That is when you will see the big problems.
I actually know of some farmers who are hoping for a small lapse in the farm bill
Joe, what advantage would those farmers you know get from a lapse?