Washington Insider -- Tuesday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Treasury's Lew Raises Concerns About Next National Debt Increase

Treasury Secretary Jack Lew says he anticipates another fight later this year when Congress will need to raise the government's borrowing capacity by increasing the debt ceiling. Speaking at an event in New York City, Lew said it was up to Congress to raise the debt ceiling and that failure to do so year might disturb a fragile world economy.

"It is Congress' responsibility to raise the debt limit when we need to," Lew said. "Congress is going to have to do that. The sooner they do it, the better. I think if you look at the global economy right now, the last thing the world needs is another debt limit fight in the United States."

Treasury has been using accounting maneuvers to keep below the $18.113 trillion debt limit since March. Those moves have freed up enough borrowing room, in combination with healthy tax receipts, to push the "drop dead" date for Treasury to late November or to December, according to private sector forecasters.

Members of Congress already have a sufficient number of issues over which they disagree. Once again going through the ritualistic finger-wagging that often precedes the inevitable vote to increase the country's borrowing authority really should be unnecessary this year.

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USTR to Increase 'Transparency' of TTP Trade Deal Details

The Office of the U.S. Trade Representative says that cleared trade advisers, including representatives from labor and environmental groups, industry experts and public advocates, can begin viewing draft Trans-Pacific Partnership (TPP) negotiating text as part of the congressionally established trade advisory process.

In an email to Bloomberg BNA, a USTR spokesman said, "These advisors will receive full and equal access to the draft negotiation text in an effort to ensure that they can adequately prepare congressionally-mandated reports on TPP."

Members of Congress and many parties with a stake in the Pacific Rim talks have complained that they were being excluded from the negotiations and that the discussions were being conducted in secret. This latest move may help quiet some of the complaints, but the logistics could prove problematic for USTR. Given the large number of interested parties, the agency's reading room could become somewhat crowded during peak times.

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Washington Insider: Farming as a Public Utility

Last week, Liz Carlisle, a fellow at the Center for Diversified Farming Systems at the University of California, Berkeley, wrote an Op-ed piece for the Los Angeles Times to suggest that farming is a public utility. And, she's not kidding. She says, "Certainly the history of U.S. farm policy would suggest that lawmakers have long seen agriculture as a public good. Why else would they pass a farm bill that, in its most recent iteration, commits $134 billion to farm subsidies, commodity programs and insurance?"

That may look like a big figure, but it is right out of the estimates issued by the Congressional Budget Office. It is estimated outlays for a decade, mostly for crop insurance — $89.8 billion. But, $55.5 billion is for commodities.

Then, she admits that reality is quite complicated because U.S. crops become fuel, animal feed, processed food components, export commodities and some are wasted. So, she thinks that agriculture really is a hybrid public-private activity, and when it comes to evaluating the costs and benefits of its public fraction, not all farming is created equal.

The dominant approach to farming in the United States, she says, and the one encouraged by the last 150 years of agricultural policy, focuses on maximizing the immediate private benefit to the farmer, measured in the yield of cash crops. Public benefits of commodity farming, its supporters argue, include open space, the preservation of rural life and the American agrarian tradition, and the boon most touted by the architects of 20th century farm policy: an advantage in the balance of foreign trade.

However, some of these benefits have proved hollow, Carlisle charges and commodity farming has led to a number of public "bads," from dead zones in the Gulf of Mexico (caused by nitrogen fertilizer runoff) to toxic manure lagoons and poor air quality (due to confinement animal feeding operations).

Plus, if you follow these commodity crops all the way to their eventual consumption by the public, an epidemic of obesity and diabetes. When you consider all its externalized costs, cheap food is not so cheap, she says.

In addition, Carlisle thinks educating young farmers won't help. Instead, she says, what is needed is subsidized land access for farmers who commit to water conservation practices, cover cropping, crop rotation and avoidance of toxic chemicals. And why not expand the program that directly funds young people to participate in public service –– AmeriCorps –– including the portion that focuses on the food system, FoodCorps?

So, this is some of what is passing for new ideas among the east and west coast foodies these days. It is simplistic to point to the colossal failure of Central Planning in Russia, Europe and other places where it was seriously tried. Carlisle may think her cheap food is not cheap, but she needs to look into the cost of food and everything else when shortages are real.

The fact is that government-owned and -distributed land wouldn't be free, either. But, it likely would quickly remedy the "problem" of cheap food.

In considering all the countries where extreme government intervention has been tried, Washington Insider finds it difficult to name one that had produced the beneficial results outlined in the op-ed article.

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(GH/CZ)

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