Tuesday, August 08, 2006

Post Stories on Ag Programs--Followup II

This continues my response to DZ, who commented on the Post stories in early July:

4) Should recipients of farm program payments be means tested? DZ mentions the means testing for student aid. We could also mention the earned income tax credit, TANF (welfare), etc. In the farm area, most (all?) of the disaster programs are limited to operations with less than $2.5 million gross income (provision dating back to 1986) and what's left of the old "Farmers Home Administration" loan programs require collecting extensive financial data. (Essentially FSA becomes the bank of last resort.)

My thoughts--means testing could attract urban support for the program, but would drastically change the programs as they operate now. Bureaucratically, we know that such provisions are subject to abuse and fraud, more so than the relatively simple entitlement programs FSA is used to. Confidentiality of data, which DZ mentions as an issue, is tricky. One of the strengths of FSA offices is that the workers are part of the rural community. It's lots different than entrusting your IRS-1040 to some anonymous clerk you never meet at church or the store.

5) DZ says some local governments have required developers of ag land which had the far lower farmland tax assessment to pay the difference between assessments when they finally develop the land.

I guess there's a difference between tax breaks based on usage and establishing "permanent" agricultural zones like Montgomery county, MD has done. Bureaucratically, I'm dubious of some of this sort of thing. The Post articles mentioned that Texas counties looked to FSA for their definition of "agricultural use." One of the problems I'd see is that there's no check and balance (except for the occasional muckraking journalist); no one looking over the shoulder of the bureaucrat to be sure the rules are followed, like whether the amount the developer is to pay is computed correctly and is actually paid. Both MD and Fairfax county have had problems where builders built houses bigger than the rules allowed. (Of course, assessments in Fairfax are now online, so maybe new technlogy is handling the problem.)

6) From DZ: "While the story largely focuses on non-farmers who receive money for land not producing crops, it also devotes a fair amount of attention to farmers and investors who own land and get farm payments on land producing "program" crops. Given the latter focus, it's interesting that there's no mention of the impact of the Real Estate Investment Trust on farmland purchases and prices. I know that's been a concern in the Cornbelt where property owners - for example, those in Chicago - have sold property and then bought land at much lower prices per acre. That's made it more expensive for "large and established" farmers to buy farmland, not to mention any impact on small/young farmers with little capital."

Yes, I've seen mention of this issue when I surfed some discussion sites devoted to agriculture. I'm no expert on it, but it might illustrate one of the problems for journalists writing on farm problems--there's overlap between sectors, like agriculture and financial, and the journalist almost has to grow up with the topic to follow all the ins and outs.

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