It was evident from the hello that the South Dakota rancher had practised his pitch before he dialed my office.
“I’m (so and so),” he said in a clipped, clear voice, “an independent cow-calf producer west of the (Missouri) river with 500 cows. I’m calling with one question: Where do I go to sign up for revenue-based cow-calf insurance?”
I’m sorry, did you say “revenue-based cow-calf insurance?”
“I did,” replied the cowboy. “You know, like revenue-based federal crop insurance. Farmers get that now and they’ll get even more when Congress passes the Farm Bill, right?”
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Probably, yes, but I’m sure you know there’s no such thing as revenue-based, federally subsidized cow-calf insurance.
A long, tired sigh came across 750 miles of cellular ether.
“Well, yeah,” he said finally, “but somebody needs to ask why taxpayers are guaranteeing my neighbours $300- and $400-an-acre profit through federal crop insurance to farm ranchland when I can’t buy any insurance — let alone subsidized insurance — to lock in one-tenth of that by doing the land right and ranching it.”
It was my turn to sigh. No argument; you’re right.
“Being right won’t mean much when my neighbours rent or buy the land I rent to plant more corn and beans while you, me and taxpayers buy most of the insurance to guarantee them a profit and me a smaller ranch.”
That was late March and this is late May and being right still won’t matter because each version of the 2013 Farm Bill that cleared its respective congressional ag committee earlier this month includes expanded versions of today’s generous federal crop insurance programs.
In fact, some of the liveliest debates on the bills centred on how to grow the federal crop insurance program while keeping ag outsiders — mostly environmental, nutrition and conservation groups — from either placing restrictions on the expanding program or poaching some of its funds.
Each bill is far from any finish line, though. The Senate bill (soon to be voted on by the full Senate), for example, includes compromise wording that links conservation compliance with the new, bigger insurance program. The House Farm Bill does not.
Some Farm Bill watchers now suspect the conservation part of the deal won’t survive the Senate-House conference to marry the two bills. They see the House version — no conservation compliance, no limits — gaining traction.
If so, my ranching pal’s future will sport more tractors and combines than cows and calves. Landlords and farmers, unleashed from any conservation requirement and able to buy cheap crop insurance that virtually assures a profit, will plow under more grass to plant more corn and beans.
But even if the Senate’s conservation linkage remains in the final bill, the rancher is headed for an almost equally woeful future because farm program benefits, be they direct payments or insurance subsidies, end up being capitalized in land.
That’s the biggest reason his cows and calves can’t compete with corn and beans now; the land has been made too valuable by the federal crop insurance guarantees paid for, in part, by American taxpayers.
In fact, that puts taxpayers in the business of pretty much putting this rancher out of business.
