As of July 23, there are 1,297 counties in 20 states officially declared by the U.S. Department of Agriculture as agriculture disaster areas. The July 23 weekly "Crop Progress" report — even discounting for USDA unreliability, had to state that 45 percent of the nationwide corn crop is rated as poor to very poor. In Illinois, the second largest corn-producing state, 66% is rated poor; in Indiana, the 5th largest, 71% is poor; in Missouri, 79% poor.
The Obama Administration Monday released its official USDA disaster response announcement by Agriculture Secretary Tom Vilsack, and its several measures, besides being each one inadequate, are characterized overall by remaining in the monetarist mode, which brought us to mass food shortages in the first place. It tinkers with disaster loan rates; reduces the cost of using land locked up in conservation set-aside programs; fiddles with crop insurance, etc. But it commits to no physical contingency mobilization to preserve herds, move water, give outright grants, keep farmers on the land, etc. It does nothing to stop and re-direct corn from going into biofuels.
Meantime: what is being done to deal for your food supply? Nothing.
If we're going to eat, we have to cancel Obama and monetarism. Go for the emergency measures in the domain of re-instating genuine commercial banking and credit, beginning with Glass-Steagall, and launching NAWAPA XXI.
LaRouche warned of the unfolding food shortage crisis last Winter. In his Jan. 18 State of the Union webcast, he said, "And we got to the point, that the whole nation, all of Europe, the United States, the trans-Atlantic region generally, has gone into a deep economic collapse. Such that we now have a situation where we could not, without a change from the current policies, we could not guarantee an adequate food supply beginning this Spring for the population of the United States, and for the populations of other nations! We've come to that point."
- Turning Farmers Into Gamblers -
One of the many killer aspects of monetarism for the food supply, is "risk management" applied to crop insurance. In fact, the premises of the new farm bills now stuck in the House and Senate are all in this mode, with the House version actually titled, FARRM—"Federal Agriculture Reform and Risk Management," and the Senate version having the same ideology.
Look back briefly. Crop insurance itself is a good thing, and in 1938, the FDR Administration and Congress set up the Federal Crop Insurance Corporation (FCIC), in the USDA. The FCIC continues to the present. At the time, it was part of the overall FDR policy — including parity pricing for farm-produced commodities, national food self-sufficiency, an ever-normal granary (food reserves), etc. The intent was, as FDR described it in his Four Freedoms, "freedom from hunger."
But over the post WW II decades, this perspective came to be undermined, until by the 1990s, it was eliminated. During the '90s, NAFTA, the WTO, and the end of Glass-Steagall were implemented. In 1996, the Risk Management Agency was instituted at the USDA. This agency was put overtop the FCIC, and in general, functioned to get farmers, especially younger ones, to see their personal interest as lying in futures-betting, hedging, and insurance-as-gambling.
Each year, you-the-farmer decide how much you are willing to pay for how much crop insurance that year, based on what you think the risk is of bad weather, price trends, even how old you are, and whether you think it's worth it to pay for a lot of insurance you might not need this year, because if it's really bad, you may just quit farming, etc. You might insure for a low level of coverage of 35% reimbursement for your crop losses (and pay a low premium), or insure up to the hilt, and pay a lot.
The Risk Management Agency contracts with private insurance firms, to sell and service premiums. Out of the 15 currently involved, the biggest ones include Wells Fargo, Allianz Group, ACE Ltd., based in Switzerland, and others. The Risk Management Agency reinsures them, subsidizes farmers' premiums, and pays for the private insurers to administer the programs.
At present there are about 264 million acres (out of a cultivated land base of some 325 million) which are insured. There are 1.14 million policies; and $110 billion worth of liability on 500,000 farms.
Farmers whose crops are damaged or ruined, should get their checks. But, as for your food supply, you're on your own.
Vilsack announced Monday that the USDA will help by ordering the private insurance companies to grant farmers in arrears on their monthly insurance, the dispensation of not having to pay interest payments on their overdue premiums, for an extra 30 days, up to November, 2012 anyway.