I'll have the ham and cheese

The Drudge Report has attracted the attention of Agriculture Secretary Tom Vilsack:

The Recovery Act funds referenced in press reports allowed states to purchase ham, cheese and dairy products for these food banks, soup kitchens and food pantries that provide assistance to people who otherwise do not have access to food. This program will help reduce hunger of those hardest hit by the current economic recession.

The references to "2 pound frozen ham sliced" are to the sizes of the packaging. Press reports suggesting that the Recovery Act spent $1.191 million to buy "2 pounds of ham" are wrong. In fact, the contract in question purchased 760,000 pounds of ham for $1.191m, at a cost of approximately $1.50 per pound. In terms of the dairy purchase referenced, USDA's Farm Service Agency (FSA) purchased 837,936 pounds of mozzarella cheese and 4,039,200 pounds of processed cheese. (more)

Agriculture chief lends ear to struggles of NH dairy farmers

Paula Tracy covers Agriculture Secretary Tom Vilsack's visit to New Hampshire in the Union Leader. The former Iowa Governor said he is planning to form a commission to examine the current milk pricing system:

The price per hundred weight of milk in New England dropped from a high of about $20 in December, to about $12 now in New Hampshire. The price to produce it is about $18 per hundred weight.

"It's not sustainable," Gov. John Lynch told the audience.

The federal milk pricing system is one of the most bysantine and inefficient structures in the U.S. It seems designed to not only make milk more expensive, but to keep as many dairy farmers making as little profit as possible. Market forces have been pushing towards fewer, larger dairy farms producing large amounts of milk at lower prices. Smaller dairy farmers have exerted political pressure to have government design a system to guarantee them above-market prices to stay in business.

Family farmers are a very sympathetic group. Milk is the most wholesome of foods, and the image of the New England dairy farmer waking before dawn to milk the cows is both romantic and nostaglic. These leads to tremendous pressure for politicians to intercede on their behalf, at the expense of consumers. We all pay a little more for every gallon of milk.

The milk pricing system has not prevented consolidation of the industry. Price supports along can't overcome the economies of scale that larger farms provide, and the government hasn't been willing to articificially raise milk prices high enough for smaller farms to turn a profit. In the end, we end up with a system that lets small dairy farms hang on to the edge of solvency with the promise of government assistance, but little hope to compete.

Secretary Vilsack, please stop killing people.

Secretary of Agriculture Tom Vilsack is in Concord today as part of the Obama Administration's efforts to woe rural America. If he were serious about helping rural America, he would work to reverse the nation's disastrous farm policy.

Simply by eliminating federal subsidies for ethanol, Vilsack could help reduce food prices, improve fuel economy, and reduce America's counter-productive food assistance programs that prevent small farms in Africa and throughout the developing world from feeding their own populations.

Because farm subsidies encourage overproduction, the federal government ships the surplus food as "foreign aid". These surplus American goods, when they are not stolen by feuding warlords or confiscated by local tyrants, do help feed people. But they also crash the local farm economy, preventing local farmers from getting a decent price for their crops and discouraging farms from even entering the market.

And because our farm policies are so hideously distorting to international trade, other nations are allowed to impose punitive tariffs on American goods that would not otherwise be allowed under our trade agreements.

In exchange for higher food prices, lower fuel economy, diminished exports, and continued starvation, our farm policies allow politicians to hand out money. Which means we're not likely to see an end to this pernicious policy anytime soon.

But maybe the new Secretary of Agriculture can bring hope and change to America's farm policy. Vilsack is the former Governor of Iowa, so I'm not hopeful.