One of the more confounding political riddles pundits love to debate is how Democrats “lost” rural America. If the past month is any indication, however, it looks less like the Dems lost rural America and more like they are just lost in rural America.
For example, on April 28, the White House asked Congress for $33 billion to purchase more weapons of war and supply more “economic and humanitarian aid” to Ukraine. According to Politico, $500 million of the request is targeted at “American farmers… [to] help boost domestic production of wheat, soybeans, rice and other food commodities” lost to the global market when Russia invaded Ukraine.
Big problems
There are several problems with this request, but two stand out. First, as described, $100 million of the new money “would go toward providing a $10-per-acre payment to farmers” who plant a soybean crop after a winter wheat crop in 2023.
If this is such a red hot idea — and a $10-an-acre subsidy is, at best, lukewarm — why wait a year? The 2021/22 winter wheat crop will be harvested in the coming months, leaving tens of millions of acres ready for double-crop soybeans this year.
Second, the Biden proposal offers “another $400 million [to] fund a two-year increase in loan rates for U.S. producers to encourage them to grow more select food commodities, including wheat, rice and oilseeds like soybeans, sunflowers and canola.”
It’s very unlikely, however, that higher loan rates will deliver more of these needed commodities — let alone in the time frame the White House says they will be needed — because that’s not how commodity loan rates work.
“Loan rates really give producers liquidity to hold on to a harvested crop until they market it. I don’t know if they encourage more production,” a senior Republican Senate aide (with kind deference to the White House) told Politico shortly after the Administration announcement. So, “I’m not sure how loan rates are going to be helpful.”
If the Biden request survives Congress — and already there’s talk of modifying the plan — both ideas might have a short shelf life. Even Joe Glauber, the chief economist at the U.S. Department of Agriculture under Secretary Tom Vilsack during the Obama Administration, is at a loss to explain Biden’s Big Ag ideas.
“‘I don’t think that this sort of intervention from the government makes any sense, other than to read it in a pure political sense …” Glauber remarked shortly after the proposals were announced.
Ethanol plan
The same is true for the Biden Administration’s other big April farm idea: expanding sales of E-15, gasoline with a 15% ethanol blend rather than the usual 10%, between June 1 and Sept. 12. The announcement, made in ethanol-loving Iowa, was touted as a way to lower nationwide gasoline prices by 10 cents per gallon.
That’s a big job for such a tiny hammer since less than 2% of all gasoline stations nationwide have E-15 pumps. Indeed, there’s little evidence that this relatively tiny boost in ethanol sales — if it materializes at all — will impact U.S. gasoline prices this summer.
Moreover, the Biden ethanol plan overlooks an authoritative March report from the National Academy of Sciences that “estimated that corn-based ethanol was at least 24 percent more carbon-intensive than gasoline when emissions from land-use changes … were included,” reported the New York Times April 12.
So, in fact, the Biden announcement of summer E-15 sales “ … will actually work in the opposite direction of the administration’s climate goals rather than being a benefit,’ Jason Hill, a professor of bioproducts and biosystems engineering at the University of Minnesota,” told the Times.
If Land Grant University professors think government expansion of ethanol is a bad idea, it’s probably a really bad idea. But bad ideas rarely stop politicians from pandering and posturing to constituents — even if it’s the wrong pandering and posturing.
So, pundits, stop wondering about rural Dems; they’re there. They just don’t know where “there” is anymore.
