In the long, glorious history of America, it’s unlikely that April 22, 2008, will be remembered as anything other than just another balmy, bureaucratic spring day in Washington, D.C.
Meetings met, talkers talked and, in typical Washington fashion, the day ended with little movement other than finger pointing.
Such were the outcomes of key meetings that day to address the still-not-completed 2007 farm bill and the growing disconnect between futures and cash commodity markets. How both eventually are resolved will affect every food producer and consumer.
Painful
The farm bill stalemate remains as painful to watch as a root canal is to endure. This House-vs.-Senate-vs.-White House-vs.-everyone marathon has lasted longer than last year’s baseball season and this year’s hockey season.
President Bush hoped to end it all April 22 by floating the Pontius Pilate-like compromise of simply extending the 2002 law for one year. Senate ag chief Tom Harkin, D-Iowa, summarily dismissed the idea prior to chairing another Senate-House conference committee to get the legislation moving.
And move — finally — it may.
Farm bill insiders say key Senate and House members hope to hammer out an agreement by April 25 (when the latest extension to the 2002 law expires) on how ag-only tax changes will be used to fund both a permanent disaster program and increased spending for food aid programs.
Poison
Even if they do succeed and the 15-month farm bill process finally concludes by mid-May, the resulting legislation will make a dandy poster child for Washington’s poisonous politics.
To take so long to update a law as vital to the national interest as food sullies every farm bill player as well as Congress and the White House. But reputation seems to matter little.
Petty, personal and party politics governs those elected to govern, not national interest.
Long-time political observer Kevin Phillips, in his just-published book Bad Money, astutely notes that Washington, once the nation’s “vital center,” is today its “venal center.”
For proof, look no further than the public approval ratings of Congress and the president: both register near 20 percent. You earn those low marks by meeting and yakking rather than thinking and acting.
The former was on display at the packed Commodity Futures Trading Commission hearing in Washington April 22 to discuss the ongoing breakdown between commodity futures markets and country cash markets.
Volatility
Today’s historically tight global grain stocks, a flood of wealthy, nontraditional players into futures markets, the disappearing dollar and the nation’s credit squeeze have combined to ignite an incendiary futures markets.
That never-before-seen volatility, in turn, has pushed country grain buyers to protect themselves by either offering farmers far cheaper 2008/2009 prices — widening the basis, the difference between cash and futures prices, to record levels — or leaving the forward pricing game altogether.
Either action places far greater risks, risks previously shared with futures speculators, onto farmers.
The Commodity Futures Trading Commission yakkers all agreed the price discovery and hedging links between today’s futures and cash markets are breaking, but all claimed their market role — regulators, specs, bankers, farmers, investors — wasn’t the cause. And maybe they’re right.
Disconnect
Perhaps the cause of today’s growing disconnect between futures and cash markets isn’t singular; maybe it’s a perfect storm of complex and complicating factors all arriving together.
Or maybe it’s just all our chickens — political inaction, unprecedented deregulation, monstrous trade, government and personal debt, a fast-falling dollar, a collapsing housing sector, dumb bankers, et. al. — finally coming home to roost.
Whatever it is, typical Washington dawdling, dickering and dithering aren’t options anymore because, as National Farmers Union President Tom Buis told the Commodity Futures Trading Commission meeting, “We’ve got a train wreck coming like we’ve never seen before.”
