The K Street Food Fight

UPDATE 7-27-12: Crops that create our junk food receive the most federal subsidies. Kind of odd, considering big-government’s obsession with healthy eating and taxing such junk food:

“According to CalPIRG, Uncle Sam bills each taxpayer $7.58 a year for commodity crops that produce junk food — and 27 cents for apples.

“Meaning, our tax money buys 21 Twinkies annually.

“But only half an apple.

“When it comes to what San Diegans are paying in federal farm subsidies, according to CalPIRG, an aggregate of $4.5 million a year goes to junk-food crops, versus $160,000 to healthy food.

“That’s the equivalent of 12 million Twinkies, versus 329,000 apples.”

While it’s egregious that the very lawmakers constantly telling us we don’t eat right are allowing junk food crops to receive the most subsidies, remember that the ultimate goal is for no federal subsidies to be going to crop industries, regardless of their nutritional value.

UPDATE 7-26-12: The Business Insider has written about the pork (no pun intended…well, maybe) included in the trillion dollar farm bill, and some of the pork they found is not included here. So here it is, all the previously unlisted pork is in bold:

“What’s hidden in this mess? How about money for windmills, for 15 different duplicative food programs, cash – lots of it – to make sure country folk get great Internet service, a grant to study moth pheromones, funding to help ethanol producers (thought we’d gotten rid of that, didn’t you?), protection of our wealthy sugar producers, $25 million to study the health benefits of peas and lentils, an amendment that could allow Californians to continue enjoying foie gras, insurance against lower milk prices for dairy farmers, grants for the locavore movement (consult your dictionary), help for popcorn growers, grants to study how to make cut flowers last longer in a vase, a boost to organic growers (as though their price premiums aren’t sufficient compensation), a boost for maple syrup makers, lofty cotton supports and money to underwrite wine tastings overseas.”

Talk about your handouts!

UPDATE 7-24-2012: Egg lobbies trying to poach their handouts! The United Egg Producers (UEP) wants farmers to completely replace all of their cages for egg-laying hens, which the Egg Farmers of America contend would cost an enormous amount.

One lobbying group wants more government control, ignoring the real world costs it would impose on people in the industry and the ripple effect it would have on the economy and food supplies. Just another reason why the current farm bill needs to be combed over. Spending nearly a trillion dollars of taxpayer dollars without looking at the consequences is not only reckless, but dangerous.

UPDATE 7-2-2012: The farm bill may have passed in the Senate, but the hidden subsidies and specialized handouts are still coming to light. Senator Chuck Schumer (D-NY) is touting the fact that the bill will help cherry and peach farmers:

“Schumer was planning to meet farmers Dan Van Acker, Gary Orbaker and Ned Morgan, along with Skip Jensen, the New York Farm Bureau Field Director, to press support for a farm bill that will help those farmers, among others, recover some of their uninsured losses.

“For instance, Van Acker Farm lost as much as $133,000 — an estimated 98 tons of cherries and 75 tons of peaches — when a harsh freeze followed warm weather earlier this year, according to a release by Sen. Schumer’s office.

“The farm bill, which has yet to receive approval from the House of Representatives, would allow certain farmers to retroactively purchase coverage through the Noninsured Crop Disaster Assistance Program, making them eligible to recover as much as 65 percent of their losses.”

Didn’t insure your crops? No problem! Now taxpayers will get to retroactively pay for their losses.

If someone fails to purchase insurance for their business, taxpayers should not pick up the tab to cover them. They should be responsible for their losses and lack of forethought.

UPDATE 6-2012: We’ve pointed out a lot of egregious handouts in the Senate farm bill, but Senator John McCain (R-AZ) has tweeted some more:

“#1 – Creates new USDA office to inspect catfish. FDA already inspects catfish, so this one’s a real bottom-feeder.

#2 – $200 mil Market Access Program promoting brands overseas. Example: Holding “liquor mixology demonstrations” in Russia.

#3 – $25 million to study health benefits of peas, lentils and garbanzo beans. Pretty sure they’re healthy.

#4 – Subsidies for mohair (AKA goat wool), which have cost taxpayers $20 million+ since 1954

#5 – New subsidy for popcorn producers. Yes, popcorn subsidies – after popcorn prices rose 40% in recent yrs.

#6 – $10 million to establish new USDA program to eradicate feral pigs. Talk about pork!

#7 – $15 million to establish a new grant program to “improve” the U.S. sheep industry. A ba-a-a-a-a-a-d idea.

#8 – $700 million for “Ag and Food Research Initiative” funding grants to research pine trees in FL & study moth pheromones

#9 – $40 million in grants from USDA to states to encourage private land owners to use land for bird watching or hunting

#10 – $200 million for ‘Value Added Grant Program’ often used to give grants to wine producers (& cheese makers too)

UPDATE 6-19-12: Here comes the granola crowd. Now organic farmers want special protections in the farm bill, and Senator Jeff Merkley from Oregon (the organic capital of the country) is happy to oblige:

“Merkley’s amendment would require that organic farmers participating in the crop insurance program be compensated for losses using appropriate price assumptions within three years of the enactment of the 2012 farm bill. Under current law, producers of most organic crops are compensated for their losses based on the price of a non-organic product, which is often much lower, even though they pay a 5 percent premium buying insurance. The premiums on organic crops, which are considered riskier, would remain higher under the amendment. “

Who will lose in this agreement? Consumers of organic food. Organic food is already more expensive than alternatives, and ensuring that organic farmers are guaranteed an income on par with prices will cause prices to go even higher.

But that seems to be what the farm bill is all about: paying farmers no matter what they produce, while consumers pay far more at the grocery store.

UPDATE 6-18-12: Pass the syrup, please! An amendment to the Senate farm bill, introduced by Senator Charles Schumer (D-NY), would promote the production of maple syrup:

“The amendment allows the secretary of Agriculture to introduce grants to states and tribal areas in an effort to promote maple syrup production through education and research, natural resource sustainability within the maple syrup industry, market production and efforts to expand maple sugaring activities. The secretary can also issue grants to states and tribal areas that make land available for ‘maple-sugaring activities.'”

Maple syrup has been around since before America was colonized. Native Americans in the northeast were the first known to have made maple syrup. That being said, it’s hard to argue that more education and research is needed for a food product that has been around (that we know of) for over 200 years.

“Resource sustainability” means subsidy. As we’ve pointed out with other farm bill subsidies, shallow-loss and direct payments guarantee profit, regardless of production. This amendment means that taxpayers will be paying to promote the production of a product that is already easily accessible.

There’s no shortage of maple syrup in the world (have you ever gone to a restaurant where they were out of syrup or rationing due to a low supply?) so why do we need to start subsidizing this industry?

UPDATE 6-14-12: Peanut farmers are fighting back! Upset that the farm bill was written by Midwestern corn and soybean growers, peanut farmers in the south want their hand out. See, they don’t want to let the free market work, they want to guarantee profit, no matter what:

“‘We don’t need to depend on the federal government for everything, but we sure can’t have all of our safety net taken away,’ [Alabama peanut farmer Randall] Beers said. ‘I’m a fifth-generation farmer and this is certainly what I love to do, but it’s certainly been a struggle lately to make ends meet.'”

By safety net, he means subsidy.

UPDATE 6-13-12: CATFIGHT! Well, catfish fight, but it’s still going down in the Senate farm bill. Catfish farmers believe a new specific inspection program is going to increase food safety, but the National Fisheries Institute is saying this is a carve out because the program would essentially halt catfish imports from Vietnam:

“‘This is at heart a trade issue,’ said Gavin Gibbons, a spokesman for the National Fisheries Institute. ‘The domestic catfish folks aren’t interested in a new regulator. They’re actually interested in a new trade barrier.'”

Oh, snap! So they really just want this provision to get a leg up on their competition. Caught!

UPDATE 6-12-12: Popcorn! Popcorn is getting its own subsidy! The delicious, salty, kernel-in-your-teeth movie theater snack will be getting its own special subsidy in the farm bill:

“Indeed, it all began as an almost advisory opinion: the secretary of Agriculture ‘may’ do such and such on popcorn’s behalf. But with little public notice, a ‘technical correction’ to the bill in May changed ‘may’ to ‘shall’ in what’s become a full-fledged campaign to qualify popcorn growers for what could be millions in revenue insurance subsidies.

“Enter Sen. John McCain, who knows a headline — and comedy — when he sees it.

“The Arizona Republican wasted no time last week before filing an amendment to strike the popcorn language. And this sets up one of those classic farmyard brawls: an obscure provision (made more obscure by its sponsors) that invites ridicule but is also serious stuff for real producers caught up in the shifting maze of subsidies that passes as policy in Washington.”

This is what happens when 1,009-page, trillion dollar bills get no scrutiny.

UPDATE 6-11-12: The Soybean Association, along with other agricultural groups, want the farm bill to to establish a new agency dedicated to farm research:

“In a letter to House Agriculture Committee leaders, the American Soybean Association joined several agricultural groups urging committee members to consider a provision in the 2012 farm bill establishing a Foundation for Food and Agriculture Research, much like the provision already included in the senate version of the farm bill. In a separate letter, the groups also asked the committee to consider creation of Under Secretary for Trade and Foreign Ag Affairs at USDA. “

All we need is a new place to funnel taxpayer dollars.

UPDATE 6-4-12: Regional crops have gotten their handouts in the farm bill, even state-specific crops have gotten special treatment, and now state-specific biotech industries will be getting preferable treatment.

Michigan’s biotech industry will be receiving special incentives from the federal government to help “jumpstart” the industry. Because that has worked so far thus far (remember Solyndra):

“The bill contains loans and loan guarantees to get bio-based startups through the “Valley of Death,” Stabenow said, along with new biorefinery loan funding and bio-based research funding increases.”

UPDATE 5-31-12: Even though it takes just as much gasoline to produce the same yield of ethanol, the ethanol lobbyists are working hard to maintain their share of handouts in the upcoming farm bill. An executive of the American Coalition for Ethanol made the following comments to Members of the House:

“The ethanol industry recognizes the need for farmers and ranchers to succeed, and we support a robust commodity title in the farm bill which helps mitigate the risks of price volatility and weather-related crop loss. We strongly support the energy title included in version of the farm bill enacted by the Senate Agriculture Committee, which contains $800 million in mandatory funding for critical initiatives such as the Renewable Energy for America Program (REAP) and Biomass Crop Assistance Program (BCAP).  Specifically, USDA has been very resourceful and proactive in the last year by using a modest share of REAP funds, about $4.5 million, to help install nearly 300 blender pumps across 30 states.”

Like the other industries shoring up their handouts, ethanol wants to make sure they make money whether or not they produce a product.

UPDATE 5-30-12: Sugar lobbyists are now pushing to limit the free trade of sugar in an effort to boost U.S. sugar growers and growers from poor nations:

“In fact, sugar producers in developing nations fear that eliminating or weakening U.S. sugar policy would only benefit large food companies and agricultural superpowers like Brazil, while proving particularly punishing to the world’s poorest economies.”

Current U.S. policy tilts the play field toward domestic producers and poorer nations, who want protection from competition from countries such as Brazil. It’s just another crop looking for its handout.

UPDATE 5-21-12: Sen. Debbie Stabenow (D-MI) is seeking to alleviate concerns that southern farmers have with the farm bill:

“Southern rice and peanut growers are the two primary outliers, and the backroom talks are focused on tailoring some modest countercyclical program as a safety net for these commodities.”

Yet again, we have special interest subgroups lobbying the government for personal protections. Instead of letting the free market run the economy, the farm bill purports to completely control the food industry. The result is higher taxes and food prices for the American people, while special interests get subsidies and protections so that they will never have to plan for any hardship that might affect the industry.

While the rest of the country must take life as it comes, those in the food industry have a set future.

UPDATE 5-16-12: Specialty crops (like grapefruit) now want their own specific handouts from the farm bill. The chairman of a prominent west coast farmers association decried the hardships that these crops must endure:

“The world is smaller now for all of us,” he said. “There is much more competition from an international perspective than there was before.”

Oh, how sad that life is hard! That does not mean the government has to intervene to to help a struggling industry. Subsidizing struggling and failing industries is what lead to the Solyndra debacle. The chairman even tried to defend the subsidies he was asking for:

“We are very anti-subsidy but we are only looking at support to help grow our business.”

That’s what they all say: subsidies are bad, unless they benefit them personally.

UPDATE 5-9-12: Wheat, specifically wheat grown in Texas, is the latest special interest group to get their carve-outs in the farm bill. With the bolstering of crop insurance comes special protections for Texas wheat growers:

“Throughout the process, the [Texas Wheat Producers Association] has been working with legislators to ensure adequate coverage for Texas wheat growers through a comprehensive and diverse farm policy package which complements a strong crop insurance program.

“’We need options in crop insurance coverage and Title I programs that will work for farm operations across our diverse state and country,’ said TWPA President Ben Scholz, a wheat grower from Wylie, Texas. ‘Regional differences across the country do not allow for one-size-fits-all farm policy.’”

UPDATE 5-3-12: Beefing (no pun intended) up crop insurance is the central “reform” of the current farm bill. Previously, the government gave handouts to farmers if their crops were destroyed by bad weather or if they produced less than anticipated. The new farm bill does away with these direct payments and increases the availability of crop insurance. This will benefit farmers not in the Midwest, like, New York farmers:

“Instead of making those direct payments, the proposed Farm Bill beefs up the federal crop insurance program.

“Matt Nelligan is glad.  He’s spokesman for the New York Farm Bureau.  And says when Tropical Storms Irene and Lee hit last year, it became obvious that New York producers didn’t have enough of a safety net.

“‘We needed a specialty crop insurance program that gave us a fair shot for apples, and tart cherries, and all the various crops that we grow in New York state.’

“Crop insurance covers farmers if their yields are low, or if prices decline.”

So in addition to specific crop industries receiving special protections in the farm bill, now specific regions of farmers are receiving special treatment.

UPDATE 5-2-12: Dairy farmers are the latest interest group to receive a special handout in the farm bill, and like most government handouts, while the dairy farmers win, consumers lose:

“Federal support kicks in only when profit margins are seriously squeezed. To counter particularly steep price declines or prolonged periods of low margins or red ink, milk production also could be reduced temporarily. This is an insurance program for hard times, not a handout when times are good. As a result, it saves money over the current system.

“Predictably, some dairy farmers don’t like to see limits on production. They don’t want anyone telling them how much milk they can or can’t produce.

“For that reason, the entire Peterson-Simpson program is voluntary. Farmers have a choice between a safety net — funded jointly by government and the farmers themselves — or no protection at all. But choosing the safety net requires them to reduce their milk output when times get especially tough.”

In other words, if you the dairy farmers want government protection, they have to do what the government says, which will mean milk shortages for the rest of us.

UPDATE 4-27-12: “Green” energy gets a boost in the farm bill as well! Not only are old, wasteful projects reauthorized, but so are so-called “incentives” (i.e. subsidies):

“The farm bill doesn’t create any new energy programs but reauthorizes current ones, including the Rural Energy for America Program established in the 2002 farm bill that provides loan guarantees for renewable-energy and energy-efficiency projects.

“Other provisions include incentives for production of advanced biofuels, and a program help rural electric cooperatives leverage capital for energy-efficiency upgrades.”

UPDATE 4-26-12: It seems as though every crop industry wants their own protections in the farm bill, making it arguably one of the biggest government handout bill routinely passed. The latest offender? Cotton:

“Among Southern crops, cotton is promised its own income protection program, costing $3.1 billion, but producers of peanuts and rice remain unhappy with the proposed tradeoffs. Dozens of Southern commodity groups weighed in this week with a letter asking for the postponement.”

UPDATE 4-25-12: The Congressional Budget Office (CBO) reports that the current proposed farm bill does not meet the savings requirements sought by the House Republican budgets – or even President Obama’s budgets. Why? Because, most of the savings achieved are funneled into crop “insurance” programs…essentially just a different kind of subsidy:

“Most of the savings come from ending direct payment subsidies, which pay farmers cash even if they do not produce crops any longer. However, more than half of the $50 billion in savings from cutting subsidies is used to create new crop insurance programs.

“The farm bill creates a shallow-loss crop insurance scheme favored by producers of commodities like corn and wheat. Peanut, cotton and rice farmers were not pushing for this program, instead wanting increased counter-cyclical payments, which are made when commodity prices fall beneath set target prices. “

Corn and wheat have now received their handouts at the expense of other crops. They can now be added to the list.

Everyone hates market-distorting subsidies, unless they are on the receiving end of the distortion.

Take the upcoming legislative battle over the farm bill. The reauthorization extends numerous subsidies and when one of those subsidies is considered for dismissal, the industry it disproportionately helps gets up in arms. Heritage Action will keep a running list of all the nasty K Street food fights!

Politico reports the issues that the rice industry has with the Senate’s 900-page draft farm bill:

“Because of its high capital costs, rice has relied most heavily of the direct cash subsidies and will lose as much as $3 billion from the proposed change in commodity payments. At the same time, rice has been reluctant to jump into crop insurance, since the crop is grown in flooded paddies not vulnerable to drought.

“Indeed, an earlier draft farm bill embraced by top House and Senate lawmakers last November had included targeted prices — to help rice initially. But when other crops jumped in with demands of their own, lawmakers became concerned about distortions disrupting markets and crop growing decisions. The new draft rolled out last Friday by the Senate Agriculture Committee leadership included no target price language.”

So far, the list of subsidy-seekers includes the following industries:

  • Rice
  • Southern Rice
  • Southern Peanut
  • Corn
  • Wheat
  • Texas Wheat
  • Cotton
  • Biofuels
  • Michigan Biotech
  • Ethanol
  • Milk
  • New York farmers
  • Specialty Crops
  • Sugar
  • Soybeans
  • Popcorn
  • Catfish farmers
  • Maple Syrup
  • Organic farmers
  • Peas
  • Lentils
  • Garbanzo Beans
  • Mohair
  • Feral Pigs (eradication)
  • Sheep
  • Pine Trees
  • Moth Pheromones
  • Private Land Owners (to use their land for bird watching or hunting)
  • Wine producers
  • Overseas wine tasters
  • Cheese producers
  • Cherry farmers
  • Peach farmers
  • Egg farmers
  • Windmill operators
  • Rural citizens (so they can get internet)
  • California foie gras
  • Those who subscribe to the notion of locavore
  • Florists

As is the usual in Washington, we can expect such market distortions to continue. Heritage Action will continue to follow this bill and the subsidy-hungry industries fighting for a piece of the tax dollar pie, and update you on any and all industry transgressions.

Related Links:
Farm Bill 2012: Agriculture Policy Ripe for Reform

Please Share Your Thoughts