Smashing the Illusion ‘Farmer Clout:’ Part II

This is Part II

Part I is here:  https://zcomm.org/zblogs/smashing-the-illusion-farmer-clout-a-white-paper-by-brad-wilson/ 

(Continuing from Part I.)

Specific Farm State Data

I’ve also started crunching the commodity crop numbers for various “farm states,” such as states where House and Senate Agriculture Committee members are based. For example, Iowa (Tom Harkin, Charles Grassley & Steve King, Leonard Boswell) and Kansas (Bob Dole, Pat Roberts) are major farm states that have been well represented on the Agriculture Committees, including the chairmanships. They have had a lot of seniority. They must have had a lot of clout. Yes, they have. Unfortunately, most of the Agriculture Committee clout of farm state legislators has been used to secretly “subsidize agribusiness buyers, while lowering farm income.

That’s certainly been true of Republican Kansas, which has suffered severely under the farm programs. For example, back in the years 1948-1952, it took, on average, 6,213 bushels of wheat to pay a congressional salary. With help from Bob Dole and Pat Roberts, however, clout was used to lower wheat income. As a result, by 1996-2010, in took, on average, nearly seven times more wheat to pay those salaries, 41,235 bushels.37 Likewise, back in 1974 it took just 3,545 bushels of wheat to buy a 110-129 horsepower farm tractor, but in 2007 it took 11,420 bushels to buy a tractor of that size, and that’s after wheat prices, over a short period, had nearly doubled. In 2005, for example, it took more than 20,000 bushels of wheat to buy that tractor.38 Some clout for Kansas “agriculture” interests!

Looking just at the years of 1995-2010, Kansas took in more than $11 billion in farm commodity subsidies, (wheat, corn, soybeans, sorghum,) fueling the myth that it’s “farm state” ag committee leaders had used their clout for true Kansas “farm” interests.” Wow, farm interests seem to have clout! In the bigger picture, however, these benefits were matched by market reductions, (from the reduction and elimination of price floors and supply management, led by the policy positions of Kansas and other farm state legislators,) reductions of almost $69 billion. The result was a net negative impact on Kansas commodity farm income of nearly $58 billion.39 The figures over longer time periods add significantly to these trends.

The same thing applies to Iowa, which has been the second largest recipient of farm commodity subsidies, as measured in the EWG database. Iowa received more than $18 billion for 1995-2010, almost all for corn and soybeans, but then also a bit for oats and wheat. $18 billion just for Iowa? Second largest? Wow! Lucrative? No, not at all. Not when figured in a valid context, with net results. Looking at market reductions we find that gross reductions add up to more than $149 billion over the 16 year period, for a net reduction of more than $131 billion dollars.39 What we find, then, is that Iowa is likely the biggest farm bill loser of all states (as I’ve found that it’s a bigger loser than Texas, which is the largest subsidy recipient).

Were you an Iowa farmer want to buy that 110-129 horsepower farm tractor in Iowa? In 1974 it took 4,801 bushels of corn to buy it. By 1998 it took 19,513 bushels (34,250 bushels in 2005).38 How does this demonstrate “farm clout” for cornbelt states like Iowa? How about those Congressmen? What do they cost in corn? For 1948-1952 it took an average of 8,765 bushels of corn to pay 1 Congressional salary. By 1998-2005 it took more than eight times as much, 72,748 bushels on average.38 Yes the Ag Committees had clout, but no, they didn’t use it in support of “farming” or “agriculture” interests. It was used in support of the agribusiness buyers. Oh yes, and their own salaries.

In the case of Iowa, however, I must point to a major historical exception. During the farm crisis of the 1980s and 1990s, Iowa Democratic Senator Tom Harkin, with Missouri Representative Dick Gephardt, (and with support from Tom Daschle: South Dakota, Paul Simon: Illinois, Paul Wellstone: Minnesota, etc.) introduced legislation that truly supported farm interests, the aforementioned Harkin-Gephardt Farm Bill. Harkin-Gephardt eliminated all farm commodity subsidies by raising price floors to eliminate the need for any subsidies.53 It is only when Harkin became Senate Ag chairman that they all quit using their clout to support these kinds of pro-farm-interest policies, and switched over to zero Price Floor programs, (to a somewhat greened up version of the Republican “freedom to fail” bill).40

I find, then, that this pattern extends across all of the farm commodity states. Mississippi, known for upland cotton, but also soybeans, corn, rice, wheat and sorghum, and for Ag committee member Thad Cochran, received $6.3 billion in subsidies, but got reduction of $30.4 billion, for a net reduction of more than $24 billion.39 Arkansas, known as a major rice producing state, with co-ops ranking at the very top of the Farm Subsidy Database,41 but also for soybeans, upland cotton, wheat, corn and sorghum, (Rick Crawford,) received more than $9.1 billion in subsidies, versus reductions of $54.8 billion.39 Be assured that the same thing applies to dairy states and dairy subsidies.42

Curiously, California, which has argued that it has been ripped off by the farm bill compared to states like Iowa, got subsidies of $6.3 billion (rice, upland cotton, pima cotton, wheat, corn, barley,) versus reductions of $28.3 billion, for a net reduction of $21.9 billion.39 As it turns out, however, California farm commodities got back in subsidies 22% of what they lost in market reductions (the most of the states mentioned here). By comparison, Iowa got back in subsidies only 12% of what it lost in market reductions!39 It was the biggest loser of these states, both in terms of the gross numbers, and also in the ratio of benefits to costs.

Fruits and Vegetables

These data should put to rest claims that fruits and vegetables are treated poorly compared to commodity crops like corn, wheat and cotton. Are they asking that California fruits and vegetables be reduced in net value as severely as Iowa corn and soybeans? The view of farm justice commodity farm activists is, and long has been, that fruits and vegetables should have fair prices too. For example, they have defended fruit and vegetable farmers from cheap imports in times of crop failure.

Fruit and vegetable prices have gone down a lot over the years, and that should be fixed. On the other hand, on a comparative basis, as measured by the standard of parity, fruit and vegetable prices have usually faired significantly better than commodity crop prices. In fact, I find in spot checks that fruit and vegetable prices, as a percent of parity, have been higher than commodity crop prices, plus commodity crop subsidies.43 Here too, the simplistic perception that has looked only at subsidy data is being proven false. (At present I am crunching a large mass of additional data on this point. Look for future blogs, data slides and videos that document my results for fruits and vegetables.)

Food Movement, Progressives, Buy the Myth of Farmer Clout

It is very clear that, because of the subsidy myth, the false “Food Subsidy Paradigm,” the new Food Movement has strongly bought into the myth of farmer clout. The kinds of data presented here are almost totally unknown in the Mainstream Media and Food Movement.44 Farm commodity subsidies are viewed with little or no real context for explaining their actual absurdities.

We saw these claims of farmer clout in 2012 in Michael Pollan’s food course session on the Farm Bill.45 There, Ken Cook from the Environmental Working Group stated: “…If you’re a farm organization, you’re the ones who are in control of the agriculture committee. That’s who runs it.” No Ken, if you’re Cargill or the Corn Refiners Association, or the Grocery Manufacturers Association, or the National Grain and Feed Association, or Monsanto, or ADM, then you’re in control, then you own the committees. Never if you’re an authentic “farm” organization.

As expected, Cook’s explanation for this preposterous position was along the lines of “farm subsidies,” where, he argued, “Of the 435 districts in the House of Representatives, something like 30 get about half the” money.” “They’re there to get money for agriculture.” No Ken, they’re there to take away money from agriculture, and give it to the agribusiness buyers, at a rate of $8 taken for every $1 in compensatory farm subsidies, as the full data clearly shows. So take that “half the farm subsidies” that the 435 House districts get and multiply by 8, then subtract that from the subsidy amounts. So no Ken, “that’s your brain on agribusiness” speaking. You’re advocating against your own values and goals.

Another, example of this view was seen a few years back on Bill Moyers Journal, starting with his guest, David Beckmann from Bread for the World. Bread for the World is one of those groups who’s writings on the Farm Bill miss these issues, and make no mention of the agribusiness exploiters. The discussion was also placed in the context of a Washington Post series on Farm Subsidies, a series that only looked on the subsidy side of the ledger, and not at all at market reduction and the Farm Bill changes that caused them.46 Here’s the conversation on the Moyers Show:

DAVID BECKMANN: The main thing is that the people who are getting- who have their hands in the cookie jar are well organized. And according to the Wall Street Journal, they spent eighty million dollars last year lobbying Congress to defend those subsidies to affluent people.

DAVID BECKMANN: Commodity growers, the corn growers, the cotton growers.

BILL MOYERS: Rice growers. We saw rice growers in that film.

DAVID BECKMANN: Absolutely. So they’re well organized. A group of church and environmental groups went to see Senator Reid, the majority leader of the Senate, about this issue. He came in and the first thing he said is, “Look, I’ve been here 35 years.” He said, “I think the two best organized interests in the United States are the insurance companies and the commodity groups.”47

Incredibly, as we see here, both Moyers and Beckmann fall for the myth that farmers themselves have a lot of clout, basically all the Farm Bill clout! The Moyers show then featured links to a Wall Street Journal article48 and a website, (the Center for Responsive Politics,) that documented the eighty million dollars in lobbying money mentioned on the show and in the article.49 What the hard data showed, of course, is that the lions share of the big money was all spent by the agribusiness-input and output-complexes, and only very tiny amounts were spent by anything remotely resembling authentic farmer interests. In other words, Moyer’s own data links contradicted his own specific claims about the growers themselves, the farmers, as having clout.

Based on the mass of data I’ve presented, you should now be able to see the big clue to how Moyers and Beckmann could be so wrong: they argued that subsidies are the primary thing that the farm bill does, and clearly imply that subsidies are a net benefit, and not a front or cover for massive hidden farm program penalties.

Anomaly? “Yes Brad, but, in Fact, Ag Committee Leaders are Ticked Off!

Yes, farmers alone haven’t had any real clout in decades, but Agriculture Committee leaders have had clout and are angry that the Farm Bill process has gone off in a direction that they don’t like. First we had naive Tea Party members forcing the Farm Bill into the Democratic New Deal of Roosevelt and the Steagall Amendment! Talk about ticking off Cargill! Such a comparison must have been very embarrassing to the “Freedom to Fail” Democrats of today! So the Ag Committee lost control of the way they usually protect agribusiness from the traditional views of Progressive Democrats. The 1949 law would have completely removed the Farm Subsidy smokescreen and instead forced the Agribusiness-Input-Complex to pay at traditional “fair trade” “living wage” levels. Secretly, it was the Agribusiness Cliff, The Kraft-Cheese/Dean-Foods cliff, not the dairy farmer cliff, as claimed. The Cargill/Kelloggs/ADM/Tyson/Smithfield cliff! It was the cliff for those who paid that $80 million in lobby money that was mentioned on the Moyers show!

But who believed that had a chance of happening? Certainly not Iowa Ag Committee Member Charles Grassley! Don’t be absurd. All they needed was a simple farm bill extension to protect the massive flow of corporate money. Cargill, don’t get your knickers in a knot!

Ok, beyond the absurdity of extreme Tea Party liberalism, what really happened? Here we have, every five years, a farm bill that’s massively FOR agribusiness and massively AGAINST farm states, which are then strongly represented on the Agriculture Committees, as I’ve documented over and over again. Ok, but think about it. You don’t just do that out in the open! How do these legislators get away with it? How do the actual farm state legislators on the Ag Committees manage hide their support for programs causing their farm commodity states, for example, to be the biggest Farm Bill losers? And this is really the crux of the issue. Since our farm state reps never “dazzle us with brilliance” any more, they have to resort to well developed ways to “baffle us with bullshit.” That’s how they survive, and that is exactly what has been threatened in these maneuvers. Spin.

The case of Colin Peterson, (House Ag Chair when the Democrats were in charge,) is a classic example. Peterson has been a huge advocate for the agribusiness buyers. Hey, he represents the home state of Cargill! Ok, but we’ve had a few years of much higher market prices, where 3 crops, anyway, corn, soybeans and rice rose above zero vs full costs (not wheat, cotton, barley, oats, grain sorghum)! Whoopy! That then takes pressure off, as Minnesota “farm justice” farmers are not so much trying to eat Peterson for breakfast. But then he faces that dairy problem, and Minnesota is a big dairy state. With no price floors, we’ve had a massive crisis that has been devastating dairy farming across Minnesota and the US (and globally). (I’ve documented that extensively elsewhere.42)

Dairy is the canary in the mine. When dairy dies, it shows how the full range of commodity crop farming can die also, a massive devastation for corn, soybeans, rice, etc. It shows the lie in the Farm Bill. Dairy is the poster child for what’s wrong with the Farm Bill, and what we need (ie. the major “Farm Justice Proposals,” like NFFC’s SB 1640, that the Cargill/Peterson/Kraft coalition detests). So how does Colin Peterson spin this? For years he’s pushed bad dairy policy ideas in a major way, and the results, right there in Minnesota, are now devastating. What Peterson does, then, is to repackage the bad ideas in new ways, (re-stack the BS,) and then spin it as though he’s taking action to save his state’s farmers (as though the farm Bill stack smelled different now).

But note specifically how he does this. (This is important for understanding what clout Peterson lost, and why he got angry.) The “core” of Peterson’s proposal was an insurance program, “margin insurance.”50 It’s a subsidy program, to compensate farmers in some small, very partial way, for massive market losses, while adding a new category of agribusiness subsidization, crop insurance companies, to send a new category of lobby money Peterson’s way.

In moving toward subsidies labeled “margin insurance,” Peterson and others like him much better conform to the dominant ideology of agribusiness, an ideology that very effectively dupes the farmer front groups into accepting low market prices. The basic tenet in this ideology is that of “farming as a business” and not “farming as a way of life,” which is their standard straw man. The way to pretend to support “farm” interests, (when you don’t at all,) is to couch everything in the language of business jargon, implying that you’re pro-farm businesses, when it comes to the bottom line. What’s been ideologically chosen, more and more in recent years, is “risk management,” and margin insurance is a great example example of that. You’re a farmer complaining about low prices caused by Congress. Do what other businesses do. Manage your risks in a business-like way (buying services from a wide range of agribusinesses). You say you’ve been devastated by volatility? That’s because you haven’t been speculating on the futures market enough, or you did it wrongly. Either way, you’re a bad business manager, as defined by your complaining. Hey, look backwards at what the market did! Through puts and calls, one or the other, you could have solved all of your financial problems. You still want to complain to your Minnesota Congressman. We’ll he’s helping you get more risk management options.

Historically, some years back a major jargon word was “de-couplng,” which was related to major international economic negotiations (“free” trade). What we had were technical formulas based upon assumptions about a farmers business decisions. To give counter-cyclical subsidies (only when you need them desperately,) as they had for years with deficiency payments, was defined as causing bad decisions. To simply give subsidies in a “decoupled” way, (without regard to whether or not you need them,) would then affect a farmers rational business planning decisions in a very different way. This was all hogwash, but it was effective spin into the farmer front community (ie. especially for conservative-voting farmers). It was a great way to “baffle them with bullshit,” while it lasted.

But then we saw that the 1996 farm bill failed totally, the general public became hugely aware of farm subsidies, and the WTO agriculture consensus came crashing down. There was massive opposition to the self-serving theory that rich country de-coupled subsidies were fine and dandy. Then farm prices went up! Suddenly decoupled subsidies, the notorious Direct Payments, were massively exposed. Basically, you got just as much DP with $6.00 corn (2011) as you did with $4.00 corn (2008) or $2.00 corn (2005), under any given Farm Bill standard (ie. 2002, 2008, meaning that the standards changed a little from one farm bill to another, but stayed the same through the life of these Farm Bills).

Ok, so helping farmers balance supply and demand like other businesses, and make a profit, you know, basic business values, were rejected as the approach labeled soft, as “farming as a way of life.” Turning farm programs into huge welfare programs where the U.S. lost money for decades, (ie. Republican farmers as “Welfare Queens,”) was spun as the hard-nosed “business” approach. It was all spun as just the opposite of what it was, in true Orwellian fashion.

But then it all got massively exposed, across the US, (and across Europe and across the globe). De-coupled Direct Payments became the laughingstock of the Farm Bill, all across the mainstream media. They needed a new approach. The answer: spin the farm “safety net” as “business insurance,” as a new kind of “risk management.”

The advocacy behind all of this is very well documented, not just for the dairy program, but for the 2012 farm program as a whole.51 Thus we see that the ACRE revenue insurance program of the 2008 Farm Bill, designed and pushed by the National Corn Growers Association and other farmer front groups, was hugely rejected by farmers themselves as not in their own financial self interest.34 But what did we find heading toward a 2012 (2013) farm bill? Major farmer front groups lined up to push for exactly what farmers themselves had throughly rejected,51 a switch from stupid subsidies programs to even stupider insurance subsidy programs.52 It was a flurry of defensively macho “business” talk, of risk management, margin insurance, etc., which all served as a smokescreen to divert attention from the mega Farm Bill beneficiaries, especially the Agribusiness buyers.

Of course, remember again that, without Price Floors and Supply Management, farmers needed subsidies of some kind, and so did bankers and the whole farm input economy. Farmers still have an interest in staying out of Hooverville!

This then is where the ag committee leaders lost out. They had a whole smorgasbord of new improved “business”-BS lined up to replace the de-coupled Direct Payment whipping boy, (the failed business-BS of the past,) but then, with the extension deal, that was taken away from them! They would return to their home districts without the long lists of minor features that they could use in long speeches about how much they had held the line for farmers. (You can be sure that Colin Peterson had quite a list of such features from his dairy bill.) Instead they would be in a vulnerable position, where their past failed ideas would still be the ones on the plate.

We saw this general scenario very clearly here in Iowa after Senator Harkin, (with Gephardt, Wellstone, Daschle, etc.) switched sides and stopped supporting the big Farm Justice proposals, the authentic interests Iowa agriculture, in 2002. Harkin had become Senate Ag Chair, and had decided to break his previous promises and switch his advocacy to the Freedom to Farm (Freedom to Fail) approach. Why? So as Chairman, his own bill would actually pass, we must assume. I was there when Harkin came back to Iowa after passage of the 2002 Farm Bill and spoke to the Iowa Farmers Union. We all knew that he had hugely betrayed our interests. Harkin gave a speech, however, in which he presented a long list of (good or great but relatively minor) things he had won for us. Basically, he had supported a greened-up version of Freedom to Fail, so he emphasized the “green” parts. It included a variety of proposals from the Sustainable Agriculture Movement.

With the rise of the Food Movement, these kinds of lists are improved by the new local foods and urban agriculture provisions. In taking away, at least for now, the ability of the top Ag Committee leaders to be able to present any such lists of wins back to their constituents, the Farm Bill Extension has thwarted their clout, and that’s why they’re angry. They have nothing new to spin. The new stuff all got dumped out by Congressional leaders with greater power, who were, no doubt, protecting their own clout, their own speeches to constituents.

In all of this, the food movement, in presenting a lot of minor reforms but no major “Farm Justice Proposals,” naturally gets tossed around, mystified and de-powered. Some Sustainable Agriculture Groups (ie. The Center for Rural Affairs) said great things about the 2002 Farm Bill (which massively preserved below cost grain for unsustainable CAFOs, and which led to the lowest corn market prices in history, for high fructose corn syrup makers). The purpose of this white paper is to provide clarity about what’s really been happening, clarity that is not available from the Mainstream Media, from the Food Movement, or even from the Sustainable Agriculture Movement. My goal is de-mystification and re-empowerment. Enough already. Let’s clear our brains!

That’s Your Brain on Agribusiness”

If you want to learn about something, try to change it. In the case of the farm bill, when you try to change it, you learn that we live in the time of Orwell, when farm interests are not farm interests, when clout is not clout, and when program benefits are not program benefits. In all cases our minds, when fooled, are dominated by the ubiquitous paradigm of agribusiness, which itself, often remains entirely out of view. Agribusiness farm commodity buyers are not the major recipients of farm subsidies, and therefore they don’t show up benefitting from the farm bill, so Food Movement activism goes after “Big Ag” commodity farmers and ignores the ways that mega-agribusiness is helped by it. “That’s the real problem and solution,” we are told! Unfortunately, That’s just your brain on agribusiness! “‘Real reform’ means subsidy caps for commodity farmers!” No. That’s your brain on agribusiness! “Since agribusiness doesn’t get benefits, it’s not what the clout issue is all about.” Wrong again. That’s your brain on agribusiness! “Fruits and vegetables are being ripped off by cornbelt and wheatbelt states. It’s us against them.” False. That’s the divide and conquer strategy of agribusiness. That’s your brain on agribusiness! That’s spin, without a valid factual context to undergird it. Enough already!

References(to Part II)

37. Iowa Farm Activist , How Many Bushels of Kansas Wheat Does it Take to Pay Pat Roberts Salary?Daily Kos, 9/25/11,http://www.dailykos.com/story/2011/09/25/1020031/-How-Many-Bushels-of-Kansas-Wheat-Does-it-Take-to-Pay-Pat-Roberts-Salary.

38. Brad Wilson, unpublished data analysis based upon USDA numbers and the Farm Subsidy Database.

39. Brad Wilson, data slides, “Hidden Farm Bill: Debunking 3 Myths, ZSpace, click “next” or follow direct link: http://www.zcommunications.org/albums/287?page=2 to see the slides (images) numbered 3 to 10, on state Farm Bill Data.

40. Brad Wilson, letter to the editor,Iowa Farmer Today, circa 7/6/02. Brad Wilson, letter to the editor,The Gazette, Cedar Rapids, circa 7/6/02.

41. Environmental Working Group, Farm Subsidy Database, Top Recipients 1995-2011, http://farm.ewg.org/top_recips.php?fips=00000&progcode=totalfarm&regionname=theUnitedStates/

42. FireweedFarm, “The Dairy Crisis & the 2012 Farm Bill,” YouTube, 8/24/12,http://www.youtube.com/watch?v=P2UZg0GzOcI&list=PL9AB172F046C852C2&index=1; Brad Wilson, “Slides: The Dairy Crisis and the Farm Bill,” ZSpace, Jun 14, 2012, http://www.zcommunications.org/slides-the-dairy-crisis-and-the-farm-bill-by-brad-wilson.

43. Brad Wilson, unpublished analysis of USDA data, but see “Farm Bill Slides 2,” ZSpace, http://www.zcommunications.org/albums/277. See slides 1 & 2.

44. I’ve reviewed hundreds of examples of this in online comments and blogs. See my content box (list of links to blogs and articles), “Movement/Media Reviews,” at ZSpace,http://www.zcommunications.org/zspace/bradwilson. Cf. footnote 29, and it’s context.

45. ESYProject, “Edible Education 103: ‘The Farm Bill’ by Chellie Pingree, Dan Imhoff and Ken Cook,” YouTube, http://www.youtube.com/watch?v=dJIYCDmmOy4.

46. See, for example, Editors, “Stuck on the Farm: While food prices soar, Congress dithers over agricultural subsidies,” Washington Post, 3/9/08, http://www.washingtonpost.com/wp-dyn/content/article/2008/03/08/AR2008030802164.html.

47.Bill Moyers Journal, transcripts, 4/11/08, http://www.pbs.org/moyers/journal/04112008/transcript4.html

48. Lauren Etter & Greg Hitt, “Bountiful Harvest: Farm Lobby Beats Back Assault On Subsidies,” Wall Street Journal, 3/7/08, p. A1,http://online.wsj.com/public/article_print/SB120657645419967077.html

49. Center for Responsive Politics, seehttp://www.opensecrets.org/industries/totals.php?cycle=2012&ind=A. The data has been revised downward since the WSJ article mentioned in footnote #48. I have the original detailed information on who gave the money in that analysis, and it was clearly the Agribusiness-Input and Output-Complexes that dominated the scene, as can still be seen, through various searches, here: http://www.opensecrets.org/industries/contrib.php?ind=G2100. It was not money contributed by groups supporting higher prices for farmers!

50. “NMPF Praises House Agriculture Committee Leadership on Inclusion of Dairy Policy Reforms in Farm Bill Draft,” National Milk Producers Federation, 7/6/12,http://www.nmpf.org/latest-news/press-releases/jul-2012/nmpf-praises-house-agriculture-committee-leadership-on-inclusion

51. Daryll Ray has a list of reviews of the major proposals, showing how everybody started talking about Revenue Insurance and similar measures, as if it was the “farm” interest, even though farmers had wisely and overwhelmingly rejected this approach as contrary to their interests. I’ve collected these and other links here: Brad Wilson, “Primer: Revenue Insurance in the 2012 Farm Bill,” May 11, 2012, http://www.zcommunications.org/primer-revenue-insurance-in-the-2012-farm-bill-by-brad-wilson.

52. See the stupidity of Revenue Insurance in Brad Wilson, “Talking Points for the 2012 Farm Bill,” May 13, 2012, http://www.zcommunications.org/talking-points-for-the-2012-farm-bill-by-brad-wilson.

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