Miss America, Farm Bill Author, Federal Reserve Offer Pearls of Wisdom
When I first got word that Miss America 2011, Teresa Scanlan, was interested in helping spread agriculture’s good message, I had some reservations.
Blinded by stereotypes and generalizations, I figured an 18-year-old pageant winner couldn’t possibly be an effective spokesperson for an industry as serious and established as agriculture.
An industry this revered, I thought, needed the trusted voice of wisdom—undisputed economic and political intellectuals with decades of real-world experience and a knowledge of how to avoid the past’s pitfalls.
Ten seconds into my first conversation with Teresa, my fears were gone. She was a blessing for farmers and ranchers.
Now, three months after becoming an advocate for agriculture, Teresa and some of the most qualified voices in the world of economics and the halls of Congress are all offering valuable lessons to U.S. leaders in their own unique ways. And together, they make a pretty compelling case.
First, the academics. The Federal Reserve Bank of Kansas City recently released a white paper that essentially warns of the next real estate bubble.
“Today’s soaring farmland values have boosted farm wealth and driven the U.S. farm balance sheet to its strongest level since the 1970s farm boom,” the Fed wrote.
“If farmland values were to fall sharply, as they did in the farm crisis of the 1980s, both farm balance sheets and farm wealth would suffer…[and] producers with higher levels of non-real estate debt would face the greatest risks to farm bankruptcy,” the white paper concluded.
Inflated real estate prices…increasing debt loads…false financial security tied to a seemingly never-ending stream of good real estate news. Sounds familiar.
For some, the situation is directly parallel to the farm crisis three decades ago that ended with widespread bankruptcies. For others, it looks an awful lot like the mortgage collapse of a few years ago that ended with widespread foreclosures.
In either case, America could be teetering on the edge of a nightmarish outcome. And according to Larry Combest, a lead architect of the 2002 farm bill and former House Agriculture Committee Chairman, the potential perils just around the corner could become very real and very serious if the policies farmers depend on are gutted in the name of budget reduction.
“Farmers and their bankers made business decisions with the belief that farm policies and funding for those policies would remain in place through 2012,” Combest explained. “It’s reckless to reverse those policies as the next bubble market may be emerging and weather disasters are rampant.”
It’s not the first time Combest has seen such misguided efforts. The farm bill has been depleted bit by bit in recent years, leading Combest to tell the New York Times earlier this year: “Against all the misrepresentations about farm policy, I have some sobering news: if the bottom falls out on agriculture, existing farm policy is already too weakened to prevent a crisis.”
He hopes lawmakers will learn from the past before cutting too deeply and leaving the country’s food supply, and a major economic engine, even more vulnerable to economic collapse.
Sage advice from the former chairman, although the best advice I’ve heard in years came during Miss America’s recent trip to Washington, DC.
When asked whether steep budget cuts to farm policy were warranted, she calmly responded: “I don’t know about federal budgets but I do know about household budgets. And I know that you would never cut food from your family’s budget—so why from the country’s? It’s something we simply cannot do without.”
Leave it to an 18-year-old to lead with common sense instead of pennywise but pound-foolish theories. Common sense is exactly what America needs right now, especially as so many look to bite the hand that feeds us.
About the author: Phillip Hayes is communications director for the American Sugar Alliance and is a regular content provider to The Hand That Feeds U.S.