- Jun 6, 2007
- 852
- 483
- 910
One major agenda item for next weeks G-8 summit in Japan is what to do about the commodity price crisis facing the world especially in so far as it pertains to non-wealthy nations across the globe having trouble feeding their people. The U.S. has a real opportunity here to demonstrate to the world it takes this problem seriously and is committed to backing up its words with deeds. The opportunity here is to not let the world lose millions of acres of crop land this year that currently looks lost because of the recent Midwest flooding and so not let the world lose the millions of bushels of corn and soybeans this land could produce. As it stands now many experts expect large numbers of Midwest farmers to just call it a year and not replant, just take their flood insurance money and cut their losses; such an outcome would not be good at all for the worlds commodity needs. The U.S. should put forth a bold and aggressive plan to reclaim this land for crop production this year.
Why doesnt the U.S. government initiate a program where it will give each Midwest farmer whose crop land was lost through the recent flooding a grant of one dollar for each two dollars that Midwest farmer puts into repairing, reseeding, refertilizing and repesticizing that farmers crop land. This program would be a grant program not a loan program, participating Midwest farmers would not have to pay the monies received back to the government. This type of program would be a program that Midwest farmers could not pass up on with the almost guaranteed high commodity prices farmers will be getting for the crops they produce this year and the government with this program picking up a third of the cost in replanting. This type of program would practically guarantee that hundreds of thousands of acres of flooded Midwest farmland that would otherwise be lost for farming this year will be reclaimed for growing crops this year. The U.S. government should allocate $400 million dollars to this program; this figure is reasonable if one considers what this money could mean in terms of making it easier for non-wealthy nations to feed their people and avoiding some of the problems that will accompany populations in various countries throughout the world angry about the lack of food available to them or the unaffordable high prices of food available to them.
The U.S. government could pay the $400 million dollar price tag for this program by selling some oil from our nations Strategic Petroleum Reserve (SPR), not much would be needed. Using a conservative figure, like $125 dollar for a barrel of oil, for how much the U.S. government could get for the oil it sells from SPR, the U.S. government would only have to sell
3.2 million barrels of oil from SPR. Today, SPR has a total inventory of 706 million barrels of oil, a 3.2 million barrel reduction would only be a reduction of less than ½ of 1% of its inventory; the remaining inventory would be the same level of inventory which existed in April of this year (2008), this inventory reduction would not harm America. Moreover, this removal from oil from SPR would not set a bad precedent. The last time oil was removed from SPR was after Hurricane Katrina because of the damage from that hurricane, this would be a similar type of removal, it would be a removal because of an extraordinary natural disaster (flooding levels unseen in the Midwest for over a decade if not much longer) that poses significant harm to the country if the world doesnt get these commodity prices down the world could likely see serious public unrest throughout the world which could weaken or destabilize governments that are pro-democratic, pro-human rights and support the fight against terrorism, a scenario that would definitely harm the interests of America since for one reason America is often the principal target of terrorist groups.
.
This price tag of this program would not be out of line if one considers the costs the U.S. government will incur if there is widespread hunger in non-wealthy countries throughout the world this year. The American people wont stand by while the U.S. government does nothing to alleviate that hunger. So if this hunger scenario occurs, the U.S. government will probably end up donating hundreds of millions of dollar to world food relief programs and it will probably end up utilizing its Air Force and Navy to bring food relief to these needy areas which will of course cost millions of dollars. So it is a situation like this for the U.S. government pay now or pay later.
A program like this could bring about the replanting of 300,000 to 600,000 additional acres of Midwest farmland this year that would not have been replanted without this program and even with only a fifty percent of ordinary crop yield coming from these replanted acres, using conservative figures to factor in late in the season planting, the total bushels of corn and soybeans produced from these lands would be significant. If the replanting split was 20% corn and 80% soybean which makes sense because the planting season is later for soybean than corn the estimation on bushels produced from these replanted lands would be between 4.2 million and 8.4 million bushels of corn (ordinary corn yield =140 bushels/acre) and between 4.8 million and 9.6 million bushels of soybeans (ordinary soybean yield = 40 bushels/ acre). The world desperately needs these bushels especially for soybeans because American farmers have shifted their production mix away from soybeans toward corn because of ethanol production and the good prices it has generated for corn which is the feedstock for ethanol even though the world still has the same need for the soybean crop.
Further, why doesnt the Whitehouse come out with a major initiative besides this program which only addresses the financial assistance needs of Midwest farmers to help these farmers reclaim their land for farming this year? The White House could mobilize National Guard units across the nation to help these farmers. National Guard units across the nation regularly go on duty for two or three weeks during the summer. Why not change the work these guard units do this summer to helping Midwest farmers. Ask governors across the nation to allow their National Guard members to volunteer for duty for two to four weeks to help Midwest farmers. Why not ask the agricultural department to initiate a program across the nation to ask farmers across the nation to loan Midwest farmers their tractors to repair and replant their fields and the Agricultural Department would warranty to repair any damaged tractor. The National Guard units could be used to transport these tractors to the Midwest where Midwest farmers could use these tractors for repairing their fields. Such a comprehensive program as outlined above announced publicly before or at the upcoming G-8 conference would make America look good to not only other G-8 countries but also countries throughout the world.
The U.S. government has other compelling reasons for implementing the above outlined initiatives to help Midwest farmers replant their fields. Many American families are experiencing real hardship when they buy groceries at the grocery store because of high food prices. These initiatives would be a meaningful step to try to stem food price increases thus providing relief to American families. The crop price increases being seen are hurting businesses throughout the food chain. They are hurting food processors or producers because it increases their costs which they cant always pass on to their customers and they are hurting restaurant types of businesses for the same reason. In another direction, if the U.S. government could bring about a high percentage of Midwest farmers replanting their fields and the weather cooperates and these farmers can bring in a harvest this would inject significant amounts of money into these Midwest communities, from these Midwest farmers selling their crops at market, providing an economy boost to this region of our nation.
Aggressive initiatives like proposed to help Midwest farmers replant makes sense from multiple perspectives. Lets hope the U.S. government seizes the opportunity here to do some good. It would be a nice change from seeing major countries going to major world issue forums, like the G-8, and just doing the pointing the finger routine in the fashion of the problem is because of other countries dont do this, that or the other things and we do good for this, that and the other reasons, otherwise known as the pathetic behavior routine.
Why doesnt the U.S. government initiate a program where it will give each Midwest farmer whose crop land was lost through the recent flooding a grant of one dollar for each two dollars that Midwest farmer puts into repairing, reseeding, refertilizing and repesticizing that farmers crop land. This program would be a grant program not a loan program, participating Midwest farmers would not have to pay the monies received back to the government. This type of program would be a program that Midwest farmers could not pass up on with the almost guaranteed high commodity prices farmers will be getting for the crops they produce this year and the government with this program picking up a third of the cost in replanting. This type of program would practically guarantee that hundreds of thousands of acres of flooded Midwest farmland that would otherwise be lost for farming this year will be reclaimed for growing crops this year. The U.S. government should allocate $400 million dollars to this program; this figure is reasonable if one considers what this money could mean in terms of making it easier for non-wealthy nations to feed their people and avoiding some of the problems that will accompany populations in various countries throughout the world angry about the lack of food available to them or the unaffordable high prices of food available to them.
The U.S. government could pay the $400 million dollar price tag for this program by selling some oil from our nations Strategic Petroleum Reserve (SPR), not much would be needed. Using a conservative figure, like $125 dollar for a barrel of oil, for how much the U.S. government could get for the oil it sells from SPR, the U.S. government would only have to sell
3.2 million barrels of oil from SPR. Today, SPR has a total inventory of 706 million barrels of oil, a 3.2 million barrel reduction would only be a reduction of less than ½ of 1% of its inventory; the remaining inventory would be the same level of inventory which existed in April of this year (2008), this inventory reduction would not harm America. Moreover, this removal from oil from SPR would not set a bad precedent. The last time oil was removed from SPR was after Hurricane Katrina because of the damage from that hurricane, this would be a similar type of removal, it would be a removal because of an extraordinary natural disaster (flooding levels unseen in the Midwest for over a decade if not much longer) that poses significant harm to the country if the world doesnt get these commodity prices down the world could likely see serious public unrest throughout the world which could weaken or destabilize governments that are pro-democratic, pro-human rights and support the fight against terrorism, a scenario that would definitely harm the interests of America since for one reason America is often the principal target of terrorist groups.
.
This price tag of this program would not be out of line if one considers the costs the U.S. government will incur if there is widespread hunger in non-wealthy countries throughout the world this year. The American people wont stand by while the U.S. government does nothing to alleviate that hunger. So if this hunger scenario occurs, the U.S. government will probably end up donating hundreds of millions of dollar to world food relief programs and it will probably end up utilizing its Air Force and Navy to bring food relief to these needy areas which will of course cost millions of dollars. So it is a situation like this for the U.S. government pay now or pay later.
A program like this could bring about the replanting of 300,000 to 600,000 additional acres of Midwest farmland this year that would not have been replanted without this program and even with only a fifty percent of ordinary crop yield coming from these replanted acres, using conservative figures to factor in late in the season planting, the total bushels of corn and soybeans produced from these lands would be significant. If the replanting split was 20% corn and 80% soybean which makes sense because the planting season is later for soybean than corn the estimation on bushels produced from these replanted lands would be between 4.2 million and 8.4 million bushels of corn (ordinary corn yield =140 bushels/acre) and between 4.8 million and 9.6 million bushels of soybeans (ordinary soybean yield = 40 bushels/ acre). The world desperately needs these bushels especially for soybeans because American farmers have shifted their production mix away from soybeans toward corn because of ethanol production and the good prices it has generated for corn which is the feedstock for ethanol even though the world still has the same need for the soybean crop.
Further, why doesnt the Whitehouse come out with a major initiative besides this program which only addresses the financial assistance needs of Midwest farmers to help these farmers reclaim their land for farming this year? The White House could mobilize National Guard units across the nation to help these farmers. National Guard units across the nation regularly go on duty for two or three weeks during the summer. Why not change the work these guard units do this summer to helping Midwest farmers. Ask governors across the nation to allow their National Guard members to volunteer for duty for two to four weeks to help Midwest farmers. Why not ask the agricultural department to initiate a program across the nation to ask farmers across the nation to loan Midwest farmers their tractors to repair and replant their fields and the Agricultural Department would warranty to repair any damaged tractor. The National Guard units could be used to transport these tractors to the Midwest where Midwest farmers could use these tractors for repairing their fields. Such a comprehensive program as outlined above announced publicly before or at the upcoming G-8 conference would make America look good to not only other G-8 countries but also countries throughout the world.
The U.S. government has other compelling reasons for implementing the above outlined initiatives to help Midwest farmers replant their fields. Many American families are experiencing real hardship when they buy groceries at the grocery store because of high food prices. These initiatives would be a meaningful step to try to stem food price increases thus providing relief to American families. The crop price increases being seen are hurting businesses throughout the food chain. They are hurting food processors or producers because it increases their costs which they cant always pass on to their customers and they are hurting restaurant types of businesses for the same reason. In another direction, if the U.S. government could bring about a high percentage of Midwest farmers replanting their fields and the weather cooperates and these farmers can bring in a harvest this would inject significant amounts of money into these Midwest communities, from these Midwest farmers selling their crops at market, providing an economy boost to this region of our nation.
Aggressive initiatives like proposed to help Midwest farmers replant makes sense from multiple perspectives. Lets hope the U.S. government seizes the opportunity here to do some good. It would be a nice change from seeing major countries going to major world issue forums, like the G-8, and just doing the pointing the finger routine in the fashion of the problem is because of other countries dont do this, that or the other things and we do good for this, that and the other reasons, otherwise known as the pathetic behavior routine.
