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June 2011 Archive for John Block Reports from Washington

RSS By: John Block, AgWeb.com

John Block has dedicated his professional career to the fields of agriculture, food and health.

Ag Cuts

Jun 23, 2011

The ax did fall on ag spending in the House. Another sharp ax fell on ethanol subsidies in the Senate. 

The massive unsustainable debt has Members of Congress doing things they never have done before. They seem to be willing to deny many of their constituents the handouts they have always expected.
 
The House ag spending bill for next year cuts $2.7 billion of discretionary spending. Money is taken away from all the food assistance programs, including food for women, infants, and children and Food for Peace. The hunger lobby is furious. The fight is not over. The Senate will no doubt change the spending plan. The House bill was passed without one single Democratic vote. The Senate, controlled by the Democrats, will have an entirely different take on the issue.
 
Historically, the food groups would help the farm groups get funding and the farm groups would help the food groups. “You scratch my back, and I’ll scratch yours.” Not anymore.
The stage is set for a war when the next farm bill is written. Farm program supporters versus nutrition program supporters.
 
Over in the Senate, a vote to take away all the subsidies benefitting ethanol passed by a wide majority. No more tax credit for blending ethanol with gasoline, and an end to today’s tariff of 54 cents a gallon on imported ethanol. This bill in the Senate is not expected to become law. The House has the ability to reject it because tax bills must originate in the House.
However, this successful attack on ethanol by the Senate is telling us something – ethanol supports are no longer politically untouchable. What next on their hit list? Wind, solar, maybe oil subsidies.
 
With a diminishing pot of money, the fight over what is left is going to be fierce. The food and ag industry is going to be expected to pony up a bunch of money to deal with our debt problem. The only question is – how much?
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.

The State of the U.S. Postal Service

Jun 16, 2011

It’s Saturday. I just went to the mail box and brought the mail into the house. We’ve always expected mail on Saturday. But for how long? The U.S. Postal Service is an independent service. At least, it is supposed to be. However, it relies on the government for money to operate whenever it comes up short. Last year, the U.S.P.S. lost 8.3 billion dollars.

Now, with “hat in hand,” they want to borrow more money from Uncle Sam. They are telling the government that they’re not asking for a taxpayer bailout. They just want a loan.
 
If the postal system was really a private business, they would discontinue Saturday mail delivery. That would save a lot of money. They would consolidate post offices. Even my little country town in Illinois has a post office with population of under 100 people. As much as we would like to preserve Saturday mail and our little post offices, we can’t afford it.
 
However, since the U.S.P.S. is not really private and since their management can hardly make a move without Congressional consent, their hands are tied.
 
They aren’t able to make the necessary adjustments. We should really privatize the postal service as some European countries have done. Computers, E-mail, and cell phones have changed the communications environment.
 
So, we have the U.S.P.S. unable or unwilling to balance their books. We shouldn’t blame them. The federal government isn’t rushing to cut spending – at least, not yet.
 
President Obama just wants to raise the debt level and borrow more money – just like the postal service. Two of a kind. I know, in one case we’re talking about billions, and in the other, trillions. But as former Illinois Senator Everett Dirksen once said, “A billion here and a billion there and pretty soon we’re talking about real money.”
 
We’re talking about real money here in this town – real money that we don’t have. I congratulate Congressman Paul Ryan and the House Republicans for their courage in putting on the table a plan to deal with our debt. Where is the Senate Democratic plan? Where is President Obama’s plan? Don’t hold your breath.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.

 

Michael Pollan

Jun 09, 2011

I wasn’t even going to mention the name Michael Pollan, professor at Berkeley. Unfortunately, he has a following of people that listen to him and think he knows what he is talking about. 

A friend of mine, Marshall Matz, who served as Chairman of Farmers and Ranchers for Obama in the last campaign does have it right. Marshall, just back from Africa, points out that “In order to feed the world, we will need every advantage of science to boost production.”
 
When I came back to farm with my father after serving in the Army, the U.S. had too much capacity to produce food. The government instituted land set-asides to cut production. Today, we’re not sure if we can grow enough. We are told that we will have to double production by 2050. A long article in the New York Times this week laments about “A Warming Planet Struggles to Feed Itself.” The Wall Street Journal in my hand talks about a large list of U.S. companies “Racing to catch up in Africa.”
 
The challenge before us is to ramp up food production. And yet, we have Michael Pollan saying, “We need to give up cheap food.” That’s his plan to fight obesity.
 
I admit that expensive food would serve to reduce obesity. In countries where they spend 50% of their family income on food, they don’t have an obesity problem. That’s Africa. But we’re not going to go that way.
 
Most of Africa right now is farming the way Michael Pollan and his followers think we should be farming – without the benefit of genetic engineering, commercial fertilizer, crop protection chemicals, and modern machinery. They are starving. However – they aren’t obese.
 
Obesity is a problem but failure to utilize modern farming technology and practices would guarantee global hunger and starvation. However, that doesn’t seem to be a concern of Michael Pollan’s and the anti-commercial agriculture crowd.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.
 

 

Issues of the Day

Jun 03, 2011

What do I want to talk about this week? There are so many issues swirling around, it’s hard to decide. I’m just going to go down a list.

Crops – most reports suggest that we have had 3.5 million acres damaged from both floods and drought. Even on my farm in Illinois, with mostly upland crop ground, we have had about 100 acres of bottom land flooded. Unless it just keeps raining, we will replant. So it’s not a total loss. I suspect that a lot of other farmers will find a way to salvage something. If we have average weather the rest of the growing season, I think we will produce a bigger crop than many predict today.
 
Trade – I have mentioned it before, but we are losing market share every day that we fail to ratify the Colombian, South Korean, and Panamanian trade agreements. When we lose market share, we lose jobs. I thought with 9% unemployment, we would want to save all the jobs possible.
 
Farm prices – weather worries might top the list of concerns, but farm prices are not far behind. For the most part, farm prices are very good – unbelievably good. Corn, wheat, soy beans, hogs, cattle – we’re on a roll! We worry that we’ll wake up one morning and find it all gone. Was it just a dream? You know the rule – “The best cure for low prices is low prices and the cure for high prices is high prices.” Don’t get over-confident.
 
Farm policy – this is not a guess. It’s a lead pipe cinch. The budget of the USDA is going to be chopped.
 
Debt ceiling – the House of Representatives voted by a very wide margin to not raise the debt ceiling even though we are just about out of money. Will we raise the debt ceiling and borrow more money? Probably – but not without some serious spending reductions written into the law. The Republican House has powerful leverage and can demand serious cuts in spending in exchange for raising the debt ceiling. The simple fact is that we are spending too much money. We are morphing into a welfare state. 40% of Americans receive at least 45% of their income from the federal government, as reported by the Tax Foundation. We can’t keep this up. My judgment is that this fight over raising the debt ceiling is just beginning. It’s going to be a bloody battle.
 
In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.
 
Until next week, I am John Block in Washington.

 

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