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CommStock Report

Friday, September 7, 2012

The farm lunch at the GOP convention touted deregulation, trade and tax reform as reasons for farmers to vote for Romney. Yet Romney's hard line China trade stance would almost certainly produce repercussions damaging ag trade. While I don't think that they are totally on track with what farmers need on those issues, they made little mention of the farm bill, other than that they would eventually get around to it ... whatever that means. They called the House bill that was passed out of committee "a Republican-minded bill," but there was no explanation why then, they would not vote on it.

They booed food stamps. How do you square that theologically as a Christian? What SNAP reforms are needed beyond those already imbedded in the House bill to neutralize this general condemnation?

While S.D. Senator Thune, a pro-ethanol senator, was the official representative of the Romney campaign, there was no mention of support for ethanol. That is what is wrong with our farm state GOP politicians. They are great supporters of ethanol when they are back home, but when they are with their party they do not promote ethanol to their political colleagues. In the old days, they would have demanded support for ethanol from those wanting support from them for other issues, like oil subsidies. GOP farm state politicians are not fighting hard enough for us in their party. They are floating along with the current because that is easier, but it is not in our interest.

There is a small chance that the RFS will be modified under Obama, but odds flip to that being very likely to happen under Romney. If it were not so, they would be telling us they support the RFS, and no such words are being uttered. They essentially want farmers to vote for Republicans, not because of Republican farm policy, but in spite of it. They in fact appear ready to do some negative things to the farm sector because of ideology.

A subscriber gave his perspective on what is going on with the farm bill. "Crop insurance is in great jeopardy. If the farm bill is not passed before the election, the fuel will be on the fire. MSNBC is at the Progress Show talking about the profit in crop insurance. We know the ag sector will not skip a beat from this drought in most cases because of crop insurance. If the farm bill is not passed before the election we may find a big surprise in February. I see crop insurance being gutted for the cause. Without good revenue assurance, corn acres will be closer to 85 than 95-100 million acres. MSNBC says that crop insurance insures a profit for farmers. Is that bad? It stabilizes ag sector employment and most of the profits find their way into the economy somewhere. Is that bad? An employer guarantees an employee a set wage or salary. Maybe home and car owners should not be able to insure for more than 75 percent of a loss or not at all. Government's role in the private sector should be to support areas in which the private sector cannot, and where the economy of the whole finds those activities essential for success. Crop insurance is no different than roads, bridges, and REA. It is and should be government's job to supply the economy with such tools at the expense of all."

I agree with this subscriber. Delaying passing the farm bill puts crop insurance at risk. It is our primary safety net but I think that we will find out in the next few years when crop prices fall that it has some holes in it.

It used to be that we could depend on Republicans to fight for us on these safety net issues, but today not only does no one have our backs, everyone it seems is trying to stick a knife in it. Romney's top ag advisor is from Florida. How much do you suppose he understands about the Corn-Belt ag economy? He would be the first alligator ever in an Iowa creek. Mitt's other ag advisors are Tyson, Smithfield Foods and the NCBA.

The Iowa Farm Bureau Convention passed a resolution stating, "We support continuation of federal government financial support of crop insurance at a percent not less than current levels." They also voted "to support the RFS to increase the use and development of renewable fuels." I have been a member of the Farm Bureau since I was 19 years old and I certainly support both those resolutions.

I am not against Republicans when they are not against me. I have been surprised at the drift in the GOP on farm policy. My position is called self-defense. When the GOP not only says that they will adopt those Farm Bureau resolutions but actually produces some hard evidence to back up the policy then my problem with them ends. Until then, if they intend, as it appears, to become agriculture's enemy, then the enemy of my enemy is my friend.

- David Kruse is president of CommStock Investments Inc. author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet. CommStock Investments is a registered CTA, as well as an introducing brokerage.


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"They booed food stamps. How do you square that theologically as a Christian?"

Indeed. Jesus would be horrified at the position of Republicans towards the poor.

-- Posted by leannsj on Fri, Sep 7, 2012, at 2:58 PM


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