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The Inconvenient Drought

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Droughts are never really convenient; they are never invited, stay too long, and — most annoying — are resistant to manmade efforts to alleviate them. The drought of 2012 is no exception. As droughts go, this one is turning into one of the worst in recent years. While confined to the Eastern Cornbelt, it is showing signs of spreading west and south. While droughts are best viewed after they are over, at this point in time the drought of 2012 looks like it will make it into the record books somewhere in the top 10 rankings of all time droughts. According to Purdue University officials, so far it has surpassed the last two big Midwest droughts 1983 and 1988.   But the real legacy of the drought of 2012 may the political and policy ramifications it causes.

 

For most Americans, a drought is a minor annoyance. It browns their suburban lawns, drives their electric bill up, and may force the postponement of a few backyard cookouts. For other groups, however, the drought provides some unique opportunities.  For the media, it is a story that hangs around for months and makes for great sensational headlines and dramatic TV shots. We have all seen the photos of the egg being fried on a hot sidewalk or the TV standup in a dying corn field with the reporter talking about massive food price hikes and food shortages.  After a recent 50 minute press briefing by Purdue experts, all the non-agricultural media in the room produced the same story, “Food Prices to Rise.” While Ag economist Dr. Chris Hurt did say food prices would go up, he also said the hike would be about 3.5%, which was within the range predicted by the USDA at the beginning of the year — before the drought. Yet, for most consumers, that will be the take away message from the drought: “My grocery bill is going up.” Coming during a prolonged economic slowdown, the drought has arrived at a very inconvenient time for most people.

 

For another group, however, the drought has arrived at a very opportune time. It is an election year, and Congress is writing a Farm Bill. These two factors, when combined with the drought, make for a potentially explosive situation. While farmers are watching their crops burn up in the field, there is no government safety net or disaster program to provide them any help. The SURE program, the safety net piece of the 2008 Farm Bill, expired last year. Meanwhile, Congress is trying to craft a new program while at the same time cutting billions of dollars from farm program spending. Some, including the White House, have suggested cutting funding from crop insurance.  Now that is a real politically smart thing to do in an election year during a drought.  As lawmakers come home to Midwestern districts to campaign, they are going to feel the pressure to pass a Farm Bill with an adequate safety net.  While the drought may be convenient for helping to get a Farm Bill passed, it may prove to have some very inconvenient consequences when it comes to energy.

 

Under current law, roughly the first 5 billion bushels of corn produced in the US must go to the ethanol industry to produce ethanol. Gasoline makers must blend a certain amount of ethanol into our fuel. Already we are hearing the food vs. fuel debate.  Anti-ethanol forces will likely fan the flames of panic; and the livestock industry will ask, “How can you take away grain from hungry animals to put into cars?”   And, if we don’t use corn-based ethanol as a gasoline additive, what do we use?  Government leaders may be put in the very difficult position of choosing between high food prices and high gas prices or between food shortages and gas shortages — all in an election year.

 

This may not come to pass because we may produce enough corn to meet the demand, but we will not know that until after harvest. In the meantime, there will be plenty of speculation and media-induced handwringing about what the drought might do and what should be done about it.  Oh, and don’t forget the global warming nutcases, who will crawl out from under their rocks with their debunked scientific theories. They will claim that the drought is proof that they are right and we all need to go back to living in caves and hunting for roots and berries. While droughts may be inconvenient, they are also generally short-lived and survivable. Making long term decisions based on short term weather events is not wise policy.

 

As the drought of 2012 lumbers on, keep in mind that the productive power of the American farmers has not changed. We will have the ability to, on average, produce enough to feed, fuel, and clothe the world affordably and sustainably.  Adequate support of production agriculture and continued investment in research and technology will insure that will be the case in good weather and bad. A drought this bad, 50 or 100 years ago, would have been a major disaster.  Today, it is an inconvenience because of the power of modern production agriculture.

 

by Gary Truitt