Bloomberg’s ‘Big Idea’ a Bust

February 3, 2012

Given Bloomberg News’ expertise in financial markets and the U.S. economy, their editors’ unexpected attack on one of America’s few fiscal success stories came as a big shock.

Agriculture—and by extension, America’s food and fiber supply—isn’t worth much government investment, Bloomberg’s editors surmised in a January 30 opinion piece.

Try telling that to the 21 million Americans employed in some stage of agriculture, or to the scores of businesses—ranging from publicly traded equipment manufacturers to Main Street retailers—that benefited from the more than $300 billion farmers spent in 2011 and the $400 billion worth of goods they produced.

Never mind the fact that every government since the beginning of time has made agriculture a priority since people cannot survive without food or clothes.

And never mind the fact that our current investment in agriculture represents less than one percent of the federal budget; or that agriculture has stood alone in shouldering $15 billion in funding cuts in recent years to help America tame its deficit.

What is truly appalling is that Bloomberg’s suggestion—halting spending for the infrastructure in place to help growers manage weather risk and markets crawling with speculators—is that it would derail an industry that boasts America’s lone trade surplus and has been hailed by the Federal Reserve for leading our economic recovery.

Of particular surprise was Bloomberg’s laser-like focus on crop insurance—a system that was specifically designed by Congress to limit taxpayer exposure to agriculture risk while speeding relief to farmers when they need it most.  This policy, which makes valuable private crop insurance policies more affordable and widely available to the masses, worked to near perfection in 2011.

By offsetting a portion of their premiums, Uncle Sam helped farmers and ranchers in every state secure a total of $113 billion in liability coverage.  And when record freezes, floods, droughts, and hurricanes slammed crops throughout the year, taxpayers were not asked to pay for damages.

Private insurers have already sent out a record $9 billion in claims checks—far more than the government invested in farmer premiums—and that figure is expected to climb.

Without this public-private partnership, there is no doubt that Congress would be debating a messy ad hoc disaster bill for farmers today to keep America’s food supply secure.

Instead, lawmakers can spend their time fixing the parts of our economy that aren’t working, while farmers prepare their fields for what they hope will be a bumper 2012 crop.

Bloomberg needs to keep this “big idea” where it belongs: at the bottom of the heap, before they send rural economies spiraling and do more harm to us all.