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Farm Subsidies

All articles with the "Farm Subsidies" tag.

Published: Tue, 24 Apr 2018 00:00:00 -0400

Last Build Date: Tue, 24 Apr 2018 07:54:06 -0400


Current Farm Bill Waste Targeted as Congress Moves Toward Next Farm Bill

Sat, 18 Nov 2017 08:00:00 -0500

As Congress ramps up plans to renew the quinquennial Farm Bill next year, two separate efforts in Washington this month called for cuts to wasteful spending enabled by the stinky current Farm Bill. Both efforts—one a bill introduced last week, the other a report released this week—are making waves. The Farm Bill, in part, is intended to set federal farm policy for the next five years. While taxpayer-funded payments to farmers—farm subsidies—have under past farm bills always been wasteful, subsidies under the most recent Farm Bill grew by billions of dollars. Last week, Congress sought to rein in a portion of the out-of-control spending it enabled in 2014 when it passed the latest Farm Bill. A new, bi-partisan bill, dubbed the Harvest Price Subsidy Prohibition Act, was introduced in the Senate by Sen. Jeff Flake (R-Ariz.) and Sen. Jean Shaheen (D-N.H.). The bill—a companion was also introduced in the House—would eliminate the Harvest Price Option (HPO), a subsidy (tied to already subsidized crop insurance) that guarantees a higher price for farmers at harvest if their crop's price rose after planting. If that sounds needlessly confusing, it is. The short of it is, as Sen. Flake says, is that the HPO acts as "a taxpayer-subsidized profit guarantee." No business—small or large, farm or industrial, rural or urban—should have its profitability guaranteed by the government. Why not? "HPO is like insuring your car for $5,000, and getting a check for $10,000 after it's totaled," says Sen. Flake. "It's the kind of program that only makes sense in Washington." The HPO program has cost taxpayers more than $21 billion. Along similar lines, a report issued Tuesday by the Environmental Working Group, which monitors and criticizes farm subsidies, exposes how two other Farm Bill-enabled programs waste billions more. The EWG report, "Double Dipping: How Taxpayers Subsidize Farmers Twice for Crop Losses," focuses on two Farm Bill programs, known as Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Farmers who receive taxpayer-subsidized crop insurance may still choose to participate in either ARC or PLC, even though "all three programs essentially pay subsidies for exactly the same reasons." According to the EWG report, hundreds of thousands of farmers have taken advantage of the loophole by double dipping. That's put American taxpayers on the hook for nearly $24 billion in unnecessary double payments to farmers. "Farm state politicians sell farm subsidy programs to taxpayers on the premise that they help keep family farmers on the land," said Don Carr, a senior advisor with the Environmental Working Group, in an email to me this week. "But when year after year the same well off mega farms enjoy millions in redundant subsidies while the bruising agriculture economy continues to drive small and mid-sized farmers out of business, it becomes clear that the original intent of these programs has strayed way of course." These out-of-control giveaways are even more galling because the current Farm Bill was touted as the one that would help rein in spending. (To be clear, though, pretty much every Farm Bill is touted by Congress and lobbyists as a cost-saving measure.) Farm Bill critics, including me, predicted growing waste under the current Farm Bill. "During the most recent debates over passage of a Farm Bill, Sen. Thad Cochran (R-Miss.) urged support for crop insurance, which he referred to as a set of 'important risk management tools for farmers and ranchers nationwide' that 'can help reduce costs,'" I detail in my recent book, Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable. "Sen. Debbie Stabenow (D-Mich.), who chaired the Senate Agriculture Committee, of which Sen. Cochran is also a member, lauded the Farm Bill as 'an opportunity to cut spending.' That's not how it's worked out. Rather, costs have skyrocketed under the new Farm Bill thanks to crop insurance subsidies." Wasting taxpayer dollars is but one negative outcome of subsidizing farmers. Farm subsidies [...]

New Farm Subsidy Programs Were Supposed to Save Money; Instead They've Cost Billions More Than Predicted

Fri, 10 Nov 2017 13:05:00 -0500

The government tends to be terrible at pruning back spending. For evidence, consider the new form of farm subsidies it adopted in 2014—a reform that was supposed to save taxpayers' money but instead is costing us billions more than projected. According to new analysis by the Environmental Working Group, the government spent $8.8 billion last year on commodity subsidies, paid to the growers of corn, wheat, soy, and other crops. That's about twice the $4.8 billion the feds had anticipated its commodity programs would cost. As with past subsidy schemes the bulk of these billions are going not to small family farms but to the largest, most prosperous agribusinesses. In 2016, the top 1 percent of subsidy recipients were getting a minimum $116,501 payout, while the median recipient was recieving only $2,479. "When you look the current subsidy system," says Colin O'Neil, legislative affairs director for Environmental Working Group, "we are seeing a concentration of wealth with the largest, most successful farm businesses." The 2014 Farm Bill eliminated the government's system of direct payments to farmers, a change that was supposed to scale back spending and spread the subsidy benefits around more evenly. At the time, those direct payments had become a national embarrassment: A 2012 report by the Government Accountability Office found that a quarter of payments were going to producers who were not even growing the crops the program was supposed to subsidize, while another 2,300 farms were getting subsidies while growing no crops at all. "Everyone knew that the program that previously existed, the direct payment program, was going to go away," says Josh Sewel of Taxpayers for Common Sense. So the discussion between Congress and farm lobbyists became one of how to scrap the direct payments without losing the money attached to it. They settled on the new Agricultural Risk Coverage (ARC) program, which would pay farmers a subsidy whenever the revenue for their crops fell below a five-year average revenue set by Congress. They also created a smaller Price Loss Coverage (PLC), which pays out if prices fell below a particular point. This, proponents argued, would save taxpayers money by only funding farmers when their revenue saw a sudden drop. The Congressional Budget Office (CBO), working with revenue and price projections provided by Congress, estimated that these new subsidy schemes would cost $2.5 billion in 2015 and then only about $4.8 billion in 2016—almost a $1 billion less than what the direct payments would have cost. Instead, the new programs paid out $5.7 billion in 2015 and a staggering $8.82 billion in 2016, a combined cost overrun of $7.2 billion. "It has cost us a lot more money than if we had just kept paying farmers to be farmers," says Sewel. When Congress drafted the 2014 Farm Bill, lawmakers predicted that crop prices and revenue would remain at historic highs, necessitating little in the way of payouts. When those predictions proved wildly overoptimistic, the costs of the new programs skyrocketed. Those overruns are set to continue. According to a budget analysis released by the CBO in June, the new system of commodity subsidies will cost $22.1 billion from 2016 to 2018—$7.5 billion more than predicted. The new subsidy arrangements have not been more equitable either, with huge cash payments still going to the large agricultural producers. In 2016, the largest recipient of commodity subsidies was Deline Farm Partnership, which operates farms across six states and received a $4 million payout from the federal government. These programs are set to expire in 2018. When Congress takes up the issue again, Sewel hopes it will recognize that ARC and PLC have been failures. Not only are they "overgenerous" and "unnecessary," he says, but they also distort the market forces the agricultural industry relies on to spur change and productivity growth. "People tend to forget that farmers are some of the most innovative, dynamic, technically expert" producers, Sewel tells Reason. "There is a[...]

Chicago's Soda Tax Fizzles

Sat, 14 Oct 2017 08:00:00 -0400

Chicago's controversial soda tax is dead. Lawmakers in Cook County, Il., which includes Chicago and more than 100 surrounding cities, towns, and villages, including Evanston (where I went to grad school) and Des Plaines, voted this week to repeal the tax. It was big news when lawmakers in the second largest county in the United States voted last year to adopt the soda tax. Supporters hailed it as "the biggest deal yet." But guess what? It's an even bigger deal that the tax has been repealed. The short-lived tax, passed in November 2016, was a disaster. Billed as a way to raise revenue and improve residents' health, instead it spurred lawsuits and threats from the federal government. Retailers complained beverage sales had plummeted by nearly half, thanks in part to wealthier consumers avoiding the tax by driving outside the county to buy soda. Chicago learned soda taxes aren't the panacea their supporters claim. I oppose them for many reasons. For example, they're regressive, promote layoffs, don't reduce obesity, and could be the foot in the door that's used to further erode food freedom, I wrote last year in a Sun-Times op-ed. Chicago's two main newspapers, the Tribune and the Sun-Times, published strongly worded editorials and columns in recent days blasting the tax and celebrating its looming demise. "Crack open that can of soda with gusto, taxpayers," the Tribune editorial board wrote. "You won." The Tribune's editors used words like "deceit" and "a lie" to describe the tax. They'd used similar language just last month in another scathing editorial blasting the tax. The county had billed the tax as a health measure. But, as criticism mounted, even supporters on the council were forced to admit the obvious: the tax was nothing but a money grab. Sun-Times columnist Neil Steinberg labeled the tax "a bald cash grab" that "was never about battling obesity or diabetes." "That penny-per-ounce soda tax had nothing to do with our health," wrote Tribune columnist Dahleen Glanton. "It was only about the money." Glanton dubbed a flurry of pro-tax ads targeting African American and Latino voters "insulting," "condescending," and "insincere." Those ads were bankrolled by former New York City mayor Michael Bloomberg, a longtime soda foe, in an effort to rescue the tax in the face of what Glanton and others rightly painted as an "angry backlash" from consumers. If all this sounds kinda familiar, then you've been paying attention. Like Chicago's reviled foie gras ban—passed by the city council in 2006 and repealed by the same council 2008—the county soda tax was voted in and then out largely by many of the same lawmakers who'd passed the law. In 2016, a decade after its passage, the Tribune dubbed the short-lived foie gras ban a "fiasco." In 2027, I have no doubt, if newspapers still exist in some form, that a post-mortem of the soda tax might use similar language. Though recent ballot measures have seen some victories for soda taxes, this repeal is further evidence that the tide may be turning. Philadelphia's tax, already facing a legal challenge, has seen collections fall short of lofty revenue projections. A similar repeal move by lawmakers in Philadelphia isn't looming, but it's also not out of the question. Still, the fact lawmakers and pundits in Cook County came to their senses doesn't mean soda taxes are verboten. Last month, the Des Moines Register editorial board urged the state—home to highly subsidized corn farmers who raise crops that are turned into the high fructose corn syrup that commonly sweetens soda—to adopt a soda tax. I flew into Chicago's O'Hare airport yesterday, on my way up to a board meeting in Wisconsin. While the tax is still in effect until December, and I don't normally drink soda (maybe a six-pack or so per year, total), I made an exception after I landed in Chicago. It tasted sweet, like victory.[...]

Subsidies Encourage Maine Farmers to Keep Growing Too Many Blueberries

Fri, 16 Jun 2017 08:02:00 -0400

During a multi-year wild blueberry glut, government agencies have been using subsidies and grants to encourage Maine farmers to keep growing the crop. Too bad no one seems to want them. Maine has a glut of the berries, and now the governor of Maine hopes to help sell them off by spending $2.5 million on agricultural marketing. Farmers have been growing wild blueberries in Maine since the mid 1800s. The berries perish quickly, so 99 percent of the crop is frozen, making it easier for a berry surplus to continue from previous years. Maine farmers are already at a market disadvantage because their main competitors, Canadian farmers, trade with a weaker currency. John Bott, the director of communications and special projects for the Maine Department of Agriculture, Conservation, and Forestry told Reason that there has also been a surplus of frozen highbush blueberries, a separate breed competing with wild blueberries in the market. A combination of falling prices, increased competition, and advances in production technology should have reduced the number of blueberry farmers. Yet, government intervention has caused a multi-year surplus. According to Bott, berry prices have plummeted: 100 million pounds sold for $1 per pound in 2011 but only 25-27 cents per pound in 2016. Despite these low prices, Canada and Maine churned out a bumper crop of blueberries in 2016: 400 million pounds, almost double the typical 250 million pounds. Bott explained that much of the wild blueberry surplus comes from improved production technology, pollination, good fertilizer, and favorable weather. Last year's berry surplus prompted the U.S. Department of Agriculture (USDA) to spend $13 million buying up some of the berries. A $50,000 grant from the Department of Agriculture, Conservation and Forestry helped fund marketing to public schools—the berries will now be served in 19 states. Despite obvious changes in the market, subsidies have encouraged farmers to keep at it; the number of farmers and acreages has not decreased this year. There have been some indications of scaling back production by using less fertilizer and fewer bees for pollination—perhaps because farmers in two Maine counties, Washington and Hancock, are producing at annual losses of $70 million. The state of Maine is now hoping to solve problems exacerbated by government spending with more spending. Gov. Paul LePage's budget proposal allocates $2.5 million to promote Maine agricultural products by advertising the nutritional benefits of wild blueberries and promoting the berries at trade shows. The hope is that this program will find new markets where wild blueberries could be desirable, such as in Asian cuisine, Bott said in a phone interview with Reason. "We are trying to develop new markets for lots of agriculture in Maine. For wild blueberries, we can promote its uniqueness," Bott said. "They are a good source of antioxidants and have lots of health benefits. … We want to make connections between the grower and seller for this is specialty product. We have started to do some marketing events outside of the state, which resulted in new regional, national and international opportunities. … Traditionally, there has not been a lot of state money for this, and small farmers don't have a lot of resources, so we need to band together. If we can create new partnerships, there will be opportunities for growth." The governor's latest proposal may keep farmers afloat for another year. Yet, farming has become more productive, thanks to better irrigation methods and improvements in technology. Eventually, Maine will need fewer farmers producing frozen blueberries. A fear of the creative destruction to traditional farming practices is driving some of the market interventions. Nancy McBrady, executive director of the Wild Blueberry Commission of Maine, makes her position clear: "There is a real possibility that some growers might exit the business entirely, which is a real tragedy because this is a 150-[...]

Congress Takes Steps to Renew Farm Bill Boondoggle

Sat, 04 Feb 2017 08:00:00 -0500

It's Farm Bill time again. And that's too bad. Perhaps wary of the fact that it took years to pass the most recent Farm Bill in 2014, Congress has already moved to begin deliberations over the next five-year bill, which would likely become law in 2018. The U.S. Senate Agriculture Committee will hold its first hearing on the upcoming Farm Bill in Kansas later this month. The Farm Bill is perhaps best known for handing billions of dollars of taxpayer money to a small number of the shrinking percentage of Americans who farm. Pres. Franklin Roosevelt's agriculture Henry Wallace pitched payments to farmers during the Great Depression as "a temporary solution to deal with an emergency." The emergency—the Depression—ended around the same year that my grandparents went to prom. But the subsidies remain. In fact, they've only mushroomed in the decades since their adoption. In the most recent version of the bill, which took effect in 2014, Congress voted to subsidize farmers' purchase of crop insurance. In earlier versions, Congress had forced taxpayers to prop up farmers largely through direct payments. The move to subsidized crop insurance was supposed to save taxpayers money. But, as I detail in my recent book, Biting the Hands that Feed Us, it's had the opposite effect. During the most recent debates over passage of a Farm Bill, Sen. Thad Cochran (R-MS) urged support for crop insurance, which he referred to as a set of "important risk management tools for farmers and ranchers nationwide" that "can help reduce costs." Sen. Debbie Stabenow (D-MI), who chaired the Senate Agriculture Committee, of which Sen. Cochran is also a member, lauded the Farm Bill as "an opportunity to cut spending." That's not how it's worked out. Rather, costs have skyrocketed under the new Farm Bill thanks to crop insurance subsidies. In 2011, before crop insurance supplanted direct subsidies, I noted in a Baltimore Sun op-ed that farm subsidies cost taxpayers approximately $15 billion per year. With crop insurance subsidies now having gained favor over direct subsidies, the latest EWG estimates show farm-subsidy payments could reach $30 billion annually by 2018. All of this was predictable. As I wrote in 2014, "the bill taxpayers may foot for crop insurance subsidies . . . may outweigh what taxpayers would have contributed in direct subsidies." So much for reducing costs. While it's a sure bet to assume that the Farm Bill's costs to taxpayers will continue to rise, we won't know by how much until taxpayers are already on the hook. That's because even in the wake of a Farm Bill's passage, it's difficult to predict the cost of the bill over a period of years, as this recent economic analysis demonstrates. This uncertainty over exact numbers doesn't mean the next Farm Bill will be any better than the last one. It will be worse, for several reasons. For one, Sens. Stabenow and Cochran still hold seats on the committee. Sen. Stabenow has made clear that "support" for farmers—generally, code for "subsidies"—is a precondition of her vote on the current nominee to head the USDA, the agency that doles out subsidies. "It is imperative that the next Agriculture Secretary is ready on day one to support our nation's food producers and local communities," she said in a statement last month in the wake of Gov. Sonny Perdue's nomination to serve as secretary of the USDA under the current president. She's got little reason to worry. Gov. Perdue, notes the Environmental Working Group—a nonprofit that's critical of farm subsides—has himself received farm subsidies. Then there are the powerful state and national farmers unions. These groups—including the Indiana Farm Bureau, in the home state of current Vice President Mike Pence, a supporter of subsidies—are telling their members that Congress wants their input "about the type of safety net that works best for them." What else can we expect out of the next Farm Bill? At least one writer has sugges[...]

Election Focus on Food Policy Is Lacking

Sat, 05 Nov 2016 07:10:00 -0400

As the presidential race drags into the home stretch, food law and policy issues—to my dismay—are polling about as well as is Gary Johnson. Why don't these issues loom larger? I think three key factors are in play. First, polls show most voters don't care much about food and agricultural issues. A Pew poll taken over the summer found that voters didn't identify food and agricultural issues as one of their top priorities in this election. Second, donations from the food sector to presidential candidates sometimes lag compared to other sectors. That's not to say that the agricultural sector doesn't support candidates. They just appear more likely to pump money into state races. For example, a recent Associated Press investigation found that the sugar industry in Florida donated nearly $60 million to state and local political campaigns between 1994 and 2016. Third, points one and two appear to have been reflected in the words of the candidates themselves—or, rather, in the lack thereof—about food and agricultural issues during the election. Still, none of this is to say that money from agricultural interests hasn't made its way into the presidential election. Last month, Mother Jones columnist Tom Philpott published an interesting piece on agricultural-sector donations to Hillary Clinton and Donald Trump. Philpott, using data from the Center for Responsive Politics (CRP), notes that Clinton leads Trump by a roughly 2-1 margin in donations, and refers to Clinton as "the race's chief agribusiness cash magnet." Clinton has most definitely pulled in more donations from the agribusiness sector than has Trump. But, as I noted in an NPR Marketplace/BBC Radio interview that aired yesterday, the numbers don't shake out so much in Clinton's favor on closer inspection. (A few words on CRP's methodology: First, CRP's sector data includes donations from large and small companies, trade unions and associations, and their employees. Second, CRP's definition of "agribusiness" is a bit squishy. Merriam-Webster defines "agribusiness" as "the business or industry of farming or agriculture[.]" Grocers—for example—don't meet that definition. Yet CRP includes them in their agribusiness sector just the same.) The "cash magnet" remark is a bit of an overstatement. Agribusiness donations are a tiny percentage of the overall amounts raised by Clinton and Trump. Agribusiness donations to Clinton and outside groups supporting her to date total around $1.7 million. By contrast, CRP data show that plumbers unions have donated more than $2.5 million to her campaign and outside groups supporting her. And while Trump has raised $1 million in agribusiness donations, he received that same amount from one small casino in Southern California. The recent narrative is that large organic and biotech food companies love Clinton. But so-called agribusiness doesn't really love either Clinton or Trump. For example, Whole Foods, the third biggest organic donor to Clinton, gave less than $12,000. The bigger picture is that former candidates Marco Rubio, Jeb Bush, and Mike Huckabee each raised more from so-called agribusiness interests than have Clinton and Trump. In fact, if you were to add up Clinton and Trump agribusiness donations and multiply them by two, they'd still fall nearly a million dollars short of agricultural sector donations to Marco Rubio. Among those who are donating, what are some factors that might be influencing where they direct their dollars? Immigration—which impacts food and agriculture—is one big issue. Trump has promised to deport many of the people who grow and cook our food (or their families, or both). This would have a tremendously negative impact on America's food production and preparation. As Politico reported earlier this year, many farmers fear that "Trump's positions jeopardize their livelihoods—and the nation's access to fresh fruit and vegetables." Forcing millions of taxpaying, [...]

The Panderer in Chief and the 'War on the American Farmer'

Thu, 03 Nov 2016 00:01:00 -0400

(image) Auditioning for the title of panderer in chief during this election cycle are two potential masters. On one side, you have Hillary Clinton constantly offering "free" stuff, such as college tuition. On the other side, you have Donald Trump promising to protect Michigan's cars, Idaho's potatoes, Harley-Davidson in Wisconsin, Caterpillar in Illinois, and corn-based ethanol in Iowa. But nothing beats Trump's contention that there is a "war on the American farmer" requiring his help to end. The truth is that if there's a war on anyone, it's on taxpayers and individual freedom.

To be fair, there is no doubt that Trump's promises to implement regulatory reform and to eliminate the estate tax would be an improvement for farmers and everyone else. However, farmers are such a protected class that it's hard to take the notion of a war against them seriously.

By the end of 2016, the U.S. Department of Agriculture will have spent approximately $25 billion subsidizing farmers this year and another $10 billion to subsidize other agricultural interests, including rural businesses. Introduced in the 1930s to help struggling small family farms, the subsidies now routinely draw condemnation from both the left and the right as wasteful corporate welfare. Though the number of farms is down 70 percent since the 1930s—only 2 percent of Americans are directly engaged in farming—farmers aren't struggling anymore. In 2014, the average farm household earned $134,164—which is up over 50 percent from 2010 and is 159 percent higher than the income of the average American household.

Also, for all the talk about small family farms, the data show that the market is dominated by massive farm businesses. According to the USDA, 88 percent of U.S. farms are small family farms, but 64 percent of vegetable sales and 66 percent of dairy sales come from just the largest 3 percent of farms.

What's more, only a handful of farmers reap most of the benefits from the subsidies. Traditionally, wheat, corn, soybeans, rice and cotton have taken the lion's share of the feds' largesse. The nonprofit Environmental Working Group reports that "the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014."

The EWG adds: "Under 30,000 farmers received over $46 billion in subsidy payments in that time period. The top 20 percent of subsidy recipients received 91 percent of all subsidy payments, while the bottom 80 percent received just 9 percent of subsidy payments at an average of $7,100." So don't be surprised if you hear that Saudi Prince Khalid bin Abdullah, a billionaire, could be collecting "hundreds of thousands of dollars in U.S. taxpayer-funded crop insurance subsidies through farms he owns in Kentucky."

As with other crony programs, it might not even be in the farmers' interest to be reliant on handouts from taxpayers, given that economists have repeatedly shown that privileged sectors of the economy often do not receive any actual benefit in the long run.

In farming, for example, the value of the subsidy is capitalized into the price of farmland. So farmers have to pay exorbitant prices for the land entitling them to subsidies. Factoring in these prices, they are no better off as a group. However, while some subgroups of farmers capture the benefits of the subsidies (the ones who own the land), others are worse off a result (e.g., young farmers with less capital looking to purchase land).

In other words, if there is a war on farmers, it is being waged by a federal government that hands out subsidies to a few rich farmers while placing lower-income and younger farmers at a disadvantage along the way.

EpiPens and Government Cheese

Tue, 04 Oct 2016 06:00:00 -0400

At the end of August, the U.S. Department of Agriculture bought 11 million pounds of cheese—that's a cheese cube for every man, woman, and child in America—in order to bail out the nation's feckless cheesemongers. Secretary of Agriculture Tom Vilsack touted the aid package, worth $20 million, as a win-win: "This commodity purchase is part of a robust, comprehensive safety net that will help reduce a cheese surplus that is at a 30-year high while, at the same time, moving a high-protein food to the tables of those most in need." (Most of the federal government's new stockpile will go to food banks.) This bailout of Big Cheese came on top of an $11.2 million infusion earlier in the month to dairy farmers enrolled in a 2014 federal financial aid scheme. The deal comes after months of lobbying by the National Farmers Union, the American Farm Bureau, and the National Milk Producers Federation, who were too antsy to wait for their next big cash cow to come ambling in with the farm bill. The same week, Sen. Chuck Grassley (R–Iowa) wrote a letter to the pharmaceutical company Mylan, demanding an explanation for why EpiPens, the epinephrine auto-injectors that severely allergic people carry in case of an emergency, have quadrupled in price since 2007. Grassley cited constituents paying $500 to fill their prescriptions. Hillary Clinton issued a statement about the price increases as well: "Since there is no apparent justification in this case, I am calling on Mylan to immediately reduce the price of EpiPens." Donald Trump used the occasion to score points, tweeting out a story about hundreds of thousands of dollars in donations to the Clinton Foundation from the disgraced company. Sen. Amy Klobuchar (D–Minn.) echoed Clinton's sentiment in a letter to the Federal Trade Commission: Lamenting that "antitrust laws do not prohibit price gouging," she asked the regulatory body to look into whether Mylan has used "unreasonable restraints of trade" to keep prices high. The summer's cheese bailout and EpiPen price scandal are ideological Rorschach blots.Where one observer sees only the evils of the profit motive, another looks at the same fact pattern and sees the perils of an overweening regulatory state. Vox sided solidly with the profit shamers, declaring: "We are the only developed nation that lets drugmakers set their own prices, maximizing profits the same way sellers of chairs, mugs, shoes, or any other manufactured goods would." But pseudonymous blogger Scott Alexander of Slate Star Codex responded with a tidy reverse Voxsplanation: The cronyist Food and Drug Administration (FDA) and other government forces have squelched nearly every effort to compete with Mylan's EpiPens, distorting the market beyond recognition via a process he chronicles in painful detail. Mylan acquired the EpiPen from Merck in 2007, by which time the product was already 25 years old, which means the question of paying back research costs was moot. In 2009, Teva Pharmaceuticals tried to enter the market—and Mylan sued. Teva managed to get its product to the FDA anyway, only to be told that it had "certain major deficiencies," unspecified. In 2010, Sandoz Inc. tried its luck and got bogged down in the courts, where the case still dwells. In 2011, the French drug company Sanofi made a bid to gain approval for a generic, which was delayed for years because the FDA didn't like the proposed brand name. Which brings us to this year, when Adamis decided to sell plain old pre-filled epinephrine syringes directly to patients without the fancy injector. Cue an FDA recall, on the rather vague basis that insufficient study had been done on standard administration of a drug whose medical properties have been known since the turn of the last century. And sometimes the tangled, dysfunctional relationship between big business and big government gets even more personal. The CEO [...]

Can You Have Your Subsidized Peanut Butter Cake and Eat It, Too?

Fri, 29 Jul 2016 00:01:00 -0400

The federal government is packed full of crony programs, such as the Export-Import Bank and the ethanol mandate. When it comes to the unhealthy marriage between government and the private sector, however, the U.S. Department of Agriculture may take the cake. With the exception of food stamps, which should have nothing to do with the farm bill, every program in the agency is meant to subsidize or boost the profits of farmers. We have such programs as the Dairy Margin Protection Program and the Dairy Market Stabilization Program. The former effectively guarantees profits for dairy farmers, and the latter is a complicated program meant to drive up milk prices to benefit small-scale dairy farmers. Then there are sugar tariffs, which are meant to artificially boost the profits of a few companies by keeping the price of sugar high in the United States at the expense of consumers and taxpayers. In the same vein, we also have the peanut programs. The USDA recently announced that U.S. peanut farmers will produce 6.1 billion pounds this fall, on top of 2.9 billion pounds in leftover stockpiles. Total peanut demand isn't that high, and we will start the next year with a 3.2 billion-pound stockpile. And unless you like your peanut butter and jelly sandwich with a side of government subsidies, you should care. An excessive supply of peanuts depresses the price of peanuts. Unfortunately for us, Uncle Sam won't let the market work its magic to eliminate excess supply. Instead, it subsidizes the farmers whose income might have otherwise suffered from the reduction in price by paying them most of the difference between a reference price of $535 per ton and the market price. Obviously, the lower the price the higher the payout. That's a terrible incentive structure, if you ask me. In addition, the government takes on the extra peanuts and stockpiles them at a cost. Finally, the loans that peanut farmers may have taken based on the value of their crops, which they may not be able to repay, are guaranteed by your hard-earned tax dollars. Let me sum this up for you: First, the government gives an incentive to peanut farmers to take on loans that they wouldn't have to pay back if the price of peanuts were to fall under an arbitrary price set by politicians and bureaucrats in Washington. The result of this mad-scientist peanut plan is something like this: Overproduce peanuts and depress peanut prices; don't pay your loans; and collect taxpayers' money. According to the Congressional Budget Office, this year's overflow of peanuts will cost about $2 billion in subsidy payments to farmers by 2018. But misery, as we know, loves company. In a May article for The Wall Street Journal, James Bovard documents how the U.S. government uses its stockpiles of peanuts to decimate peanut farmers' earnings in poor countries by dumping free peanuts under the cover of foreign aid. In particular, he writes about the devastating impact of a plan by the Obama administration to unload a million pounds of its excess peanuts in Haiti through its food donation program. The country has its own peanut farmers—about 150,000—and they provide the foundation for the livelihood of about a half-million Haitians. Image what happens to these people when the U.S. government floods the market with free peanuts. Who will buy relatively expensive peanuts if they can buy subsidized American ones? This has been going on for so long that farmers have long known not to even bother bringing their crops to market when the American government is feeling "generous." But the USDA's bureaucrats don't want to hear it. They claim that American "peanuts won't hurt Haitian farmers because they will be packaged in one-ounce bags that 'are to be consumed at school only,'" Bovard reports. Never mind that after the massive 2010 earthquake in Haiti, the then-president of Haiti begg[...]

Food Policy and the 2016 Presidential Election

Sat, 28 May 2016 06:00:00 -0400

With the Libertarian Party picking its nominee this weekend, and with Democrats and Republicans having all but chosen their respective nominees already, it's as good a time as any to chew on some of the key food-policy issues candidates should be discussing as we inch toward the general election in November. In that spirit, here are nine key issues I'd like to see the presidential candidates discuss this year. 1) Ending farm subsidies and other protection/promotion of food crops. Farm subsidies waste billions of taxpayer dollars every year; promote growing a handful of crops (like corn and soy) that are more likely to become sweeteners, ethanol, or animal feed than they are to become food for people; and likely play a role in America's high rates of obesity. Sugar tariffs, USDA marketing programs (for dairy, nuts, fruits, and vegetables), and U.S. Department of Agriculture (USDA) checkoff programs (for dairy, beef, pork, and other foods) waste billions more dollars to promote and protect wealthy incumbents that deserve neither support nor protection. 2) Embracing GMO neutrality. The government should neither disparage nor favor farmers who raise GMO (genetically modified) crops. Mandatory labeling and bans would do the former, while subsidies and other laws, including the lapsed Farmer Assurance Provision (dubbed the "Monsanto Protection Act" by its detractors), have unfairly promoted GMO crops and protected GMO farmers. Farmers and consumers—not government—should be the only ones choosing whether they prefer GMO crops, organic crops, conventional crops, or some combination thereof. 3) Ending federal support for state unpasteurized (raw) milk bans. The Food and Drug Administration's (FDA) ban of interstate raw milk sales only came about in 1987 in the wake of a federal court ruling that forced the agency's hand. Whether you believe that court ruling makes sense, the federal government should not encourage states to ban raw milk sales (as the agency does today). 4) Reining in the FDA. The FDA's crackdowns on salt, sugar, caffeine and trans fats; its overreaching food-safety schemes that have targeted farmers markets, organic farmers, beer brewers, startup food entrepreneurs, and artisanal cheesemakers alike; and its misbegotten food-labeling rules have made the FDA under President Barack Obama the most activist in history. The FDA has a role to play in ensuring the safety of our food supply. Reining in an unfocused and misadventurous FDA can help the agency to refocus on its core mission. 5) Ending the federal ban on sales of locally slaughtered meat. In 1967, Congress delegated to the USDA a power it did not have: to require that all meat sold commercially in this country—even meat that is (or could be, were it not for the law) raised, slaughtered, processed, and sold in just one state—be slaughtered and processed at a USDA-inspected facility or equivalent state facility. The result? Massive industry consolidation, a depressed supply of locally raised beef (at a time of rising demand), costly food recalls, and dangerous lapses in food-safety oversight. 6) Ending federal policies that promote food waste. Food waste is a costly and largely preventable problem that is often the unintended consequence of bad lawmaking. For example, the USDA's behemoth National School Lunch Program hemorrhages money, has seen participation plummet, fails to feed schoolkids adequately, and promotes more than $1 billion of food waste each year. Let's end the National School Lunch Program. In its place, encourage states to combat food waste locally by having families who can afford to do so pack brown-bag meals for kids (which reduces food waste at home and at school), and encourage businesses to prepare and donate food to kids whose families cannot afford to pack a brown-bag lunch (which reduces[...]

Cabbage 'Spills,' Hog-Hunting, and Farm Aid Vetoes: Three Food Policy Stories from the States

Sat, 21 May 2016 08:00:00 -0400

I often write about pressing national food-policy issues like farm subsidies, the FDA's war on added ingredients, and dietary guidelines; key state stories pertaining to food freedom, cottage food laws, and GMO labeling; and local stories like food truck regulations, soda taxes, and restrictions on gardening. But plenty of interesting stories fly far enough under the radar that I never get a chance to comment on them. That's why I decided this week to focus on a handful of quirky state food-law stories. Let's start in Hawaii, where, reports West Hawaii Today, the state's Supreme Court just ruled in a case that centered on whether it was proper to fine a farmer for failing to retrieve a handful of cabbage leaves that flew out the back of his truck. The case began in 2013, when a police officer saw several cabbage leaves fall from a truck owned by farmer Max Bowman. The ticket meant a $250 fine for Bowman. "Vehicles carrying agricultural produce from fields during harvesting shall be exempt from the requirements of this section[,] but the owner of the vehicle must provide for the reasonable removal of all such produce spilled or dropped on the highway," reads the Hawaii statute at issue in the case. Ultimately, the case hinged on whether Bowman's refusal to risk his life to pick up a few cabbage leaves was "reasonable." "I feel risk of life and limb, running onto the road, grabbing three or four leaves of cabbage as opposed to letting it decompose naturally does not sound reasonable to me," Bowman had testified before a lower court. That court—and an appellate court—ruled against Bowman, who represented himself in court. But the state's highest court overturned those decisions, ruling "that it was unreasonable for Bowman to risk 'life and limb' on a busy highway in order to pick up cabbage trimmings, especially if the trimmings posed no threat to the safety of other motorists and would naturally decompose on their own." Moving on to the issue of wild hogs, we travel to Oklahoma, where a bill would allow a resident to use a spotlight at night to hunt wild pigs without a hunting license. Critics fear the bill would promote poaching of other species. But proponents suggest expanded hunting opportunities will help rein in the state's wild hogs, a huge problem in parts of the American interior. Much of the problem with the pervasion of wild hogs—Oklahoma estimates there are at least 1.6 million in the state—centers on their ravenous destruction and consumption of crops that were intended to be eaten by people. If wild hogs are eating our food, why not hunt and eat them? In fact, eating invasive species is a popular strategy for limiting or eliminating their numbers. "We can eat the shit out of [invasive species] because they eat everything in their path and it's a real problem," says chef, author, and television host Ben Sargent, whose alter ego I profiled in a Reason piece in 2011, in comments that appear in my forthcoming book, Biting the Hands that Feed Us. Sargent singled out snakehead fish, an invasive species in the mid-Atlantic states, and one I've eaten and enjoyed thoroughly, noting that it tastes fantastic. He told me we should "fish the crap out of" the snakehead. While I agree with Sargent, that solution could pose its own challenges. Josh Galperin from Yale Law School has pointed out to me (and, more broadly, in a variety of lectures and publications) that promoting the eating of invasive species can, at least theoretically, have the unintended consequence of creating a self-perpetuating market for those species. That, in turn, can create commercial interest in propagating the species—which runs counter to efforts to eradicate the species via consumption. He's right. But it's illegal to sell hunted wild game, including wild hogs, in Okl[...]

Runaway Farm Subsidies and Diet Guideline Fights: Federal Food Policy Is a Mess

Sat, 16 Apr 2016 08:00:00 -0400

Recently, a pair of controversial federal food issues has made the news. The unpredicted increase in USDA farm subsidies and continuing fallout from the new dietary guidelines have captured headlines. They're worth focusing on together, as they represent some varied and truly awful federal food law and policy. Earlier this week, House Agriculture Committee Chairman Michael Conaway (R-Tx.) blasted critics of farm subsidies, claiming we live in a "fantasyland" where such subsidies aren't needed. Conaway's remarks come as news broke this week that Congress has woefully underestimated the cost of farm subsidies. The latest figures show taxpayers are on the hook for $13.9 billion this year, according to reports. A separate estimate shows congressional predictions fell more than a billion dollars short of actual predicted payment figures. When the most recent Farm Bill passed, Sen. Debbie Stabenow (D-Mich.), then-chair of the Senate Agriculture Committee, touted the law as "an opportunity to cut spending." What's happened since? Spending has only risen. Last year, the nonprofit Environmental Working Group predicted subsidies could reach $30 billion by 2018. I'm no economist, but doesn't encouraging farmers to plant as much corn and soy as they can help depress prices, which in turn triggers the very conditions (depressed priced, supply gluts) under which taxpayers are then put on the hook to pay for crop insurance subsidies? It's facts and factors like these that make Rep. Conaway's "fantasyland" comments appear beyond the pale. If we are indeed living in such a fantasyland, then it's a fantasyland designed by Rep. Conaway, Sen. Stabenow, and their fellow lawmakers in Congress. There's nothing inherently wrong with crop insurance. But taxpayers shouldn't have to pay to insure farmers against risk any more than they should be on the hook for subsidizing NASCAR drivers' auto insurance. "If crop insurance is an important element of farming," I wrote in 2012, "then let farmers buy such insurance on the open market—without taxpayer support—and, if need be, pass the costs on to consumers." While farm subsidies stink, consumers and taxpayers are treated no better by the federal government's malleable and controversial dietary guidelines. I interviewed journalist Nina Teicholz, a thoughtful and leading critic of the guidelines, last year. Teicholz, author of the bestseller The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet, was invited to speak at a national food policy conference in Washington earlier this month. That was, until the conference's sponsor, the Consumer Federation of America, disinvited her. Asked to comment on its snub of Teicholz, a CFA spokesman told Politico curtly that "it didn't work out." Teicholz, who would have been the lone dissenting voice on the panel over the issue of saturated fat, was forced to book space at the National Press Club to deliver the talk she would have given at the CFA event. While the CFA is a private group and should be free to invite or disinvite whomever it wants for its panels, Teicholz told Politico she was disinvited after other panelists said they wouldn't sit on the panel with her. Those other panelists included a USDA official and a member of the congressionally mandated Dietary Guidelines Advisory Committee. It's one thing for the CFA to stifle dissent. It's quite another for it to apparently do so at the behest of those in government who help set federal nutrition policy. "To my mind, this is an effort to exclude uncomfortable realities, where you simply don't allow alternative viewpoints to be part of the conversation," Teicholz said. Needlessly using taxpayer money to pay farmers. Attacking critics of the policy as living in some sort of "fantasyland." He[...]

Matt Welch: ‘Every single GOP strategist under the age of 40’ Might Be Unacceptably Libertarian

Thu, 19 Mar 2015 10:07:00 -0400

Last night I appeared on MSNBC's All In With Chris Hayes to talk about Scott Walker hastily firing online campaign consultant Liz Mair (a past Reason contributor) over some mildly intemperate prior comments Mair had made about Iowa (and after a heavy-breathing article about Mair's allegedly untenable views in favor of gay marriage, abortion, and legal immigration). Watch the whole segment below:

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Who Can Save Us From the Farm Bill's False Savings?

Sat, 06 Dec 2014 08:00:00 -0500

When the U.S. Senate voted in favor of passage of the 2014 Farm Bill in February, the buzz on Capitol Hill was that the bill would "save" taxpayers lots of money. A giddy press release put out by the Senate Agriculture Committee, hailing the passage of the Farm Bill as it awaited Pres. Barack Obama's rubber stamp signature, used some version of the word "save" at least eight times. The Farm Bill "[s]aves $23 Billion.... save taxpayer money... finding savings... save taxpayers billions.... saves taxpayer dollars...." and so on. Many of the savings claims in the press release are attributed to the Ag Committee chairwoman, Sen. Debbie Stabenow (D-Mich.), who authored the bill. Stabenow issued a slew of her own press releases touting the bill's cost-saving ability. The bill will "reduce the deficit," boasted one. And she touted the bill's savings in comments to the media. "Specifically," read a New York Times report on passage of the Farm Bill, "Ms. Stabenow pointed out that the bill eliminates a much-criticized $5 billion-a-year crop subsidy to farmers who received the payments whether they grew crops or not." She also put this shift front and center in her press releases. "Eliminates unnecessary direct payment subsidies, a significant reform in American agriculture policy," her office wrote in a prominent bullet point on the Farm Bill. "Direct payments are paid out every year whether or not there is a need for support." Stabenow is right that direct subsidies are an enormous waste of money. But instead of simply eliminating such subsidies, critics like me suggested Stabenow and her bipartisan, bicameral colleagues in Congress were simply replacing them with another form of subsidies—taxpayer supported crop insurance—which could end up costing taxpayers even more money. Still, Congress estimated the switch could save up to $14 billion per year. How's that working out? Not so well. In fact, crop insurance subsidies in the Farm Bill could cost billions more than predicted. "U.S. farmers are about to reap a bumper harvest not just in corn and soybeans but also in new subsidies that could soar to $10 billion, blowing a hole in the government’s promise that its new five-year farm bill would save taxpayers money," reported Reuters last month. The news agency notes that would be "more than 10 times the U.S. Department of Agriculture's working estimate" of crop insurance payouts. Not surprisingly, advocates I spoke with by email this week are outraged. "While it's not surprising that the Farm Bill is outstripping cost estimates before its first year is over, it certainly is appalling," says Andrew Moylan, executive director of the R Street Institute. "When Washington fails to honestly account for how much the federal government spends on food and farm programs, it gets in the way of much-needed reform," says Christine Harbin Hanson, national issue campaign manager with Americans for Prosperity. "These latest reports serve as a reminder of why it's so important not to accept promises of spending reform at face value," says Coalition to Reduce Spending president Jonathan Bydlak. "The next time Congress wants to spend nearly a trillion dollars and promise reform, elected officials and voters alike ought to remember this case." "Conservatives warned lawmakers that Farm Bill apologists were pulling a bait and switch by swapping the discredited direct payments program for even more costly open-ended 'shallow loss' subsidy schemes," says Joshua Sewell, senior policy analyst with Taxpayers for Common Sense. "We’ve been proven correct." As if all this bad news weren't enough, news of the Farm Bill's massive waste coincides with the release of a damning new GAO report on crop[...]

Foodie Elite Push Obama to Create National Food Policy

Tue, 11 Nov 2014 12:35:00 -0500

A group of prominent foodie intellectuals are calling for President Obama to cement "his legacy" by implementing a national food policy. In a recent Washington Post op-ed, author and Berkeley professor Michael Pollan, New York Times food columnist Mark Bittman, Union of Concerned Scientists researcher Ricardo Salvador, and Catholic University human rights professor Olivier De Schutter laid out their plan for driving American agriculture, food production, and eating habits in the right direction via increased federal micromanagement of the food economy. The national food policy Pollan et al. dream of wouldn't simply guide federal nutrition recommendations, public health campaigns, or farm subsidies. It would include everything from environmental policy to rules on food marketing to raising fast-food workers' wages. "When hundreds of thousands of annual deaths are preventable—as the deaths from the chronic diseases linked to the modern American way of eating surely are—preventing those needless deaths is a national priority," they write. A national food policy would do that, by investing resources to guarantee that: All Americans have access to healthful food; Farm policies are designed to support our public health and environmental objectives; Our food supply is free of toxic bacteria, chemicals and drugs; Production and marketing of our food are done transparently; The food industry pays a fair wage to those it employs; Food marketing sets children up for healthful lives by instilling in them a habit of eating real food; Animals are treated with compassion and attention to their well-being; The food system’s carbon footprint is reduced, and the amount of carbon sequestered on farmland is increased; The food system is sufficiently resilient to withstand the effects of climate change. Only those with a vested interest in the status quo would argue against creating public policies with these goals. That last little flourish is fun, because it positions anyone opposed to massive federal intervention in the "food system as a whole" as at worst cartoonishly evil—you're either with us or you want Americans to live on Cheetos and three-eyed fish!—and at best suspiciously interested in perpetuating the status quo. There is no rhetorical room here to care about advancing nutrition science, fixing federal farm policy, expanding access to healthy foods, promoting humane treatment of livestock, or anything related to agriculture and eating without endorsing intense government action as the best way to accomplish these goals.  The good news, they tell us, is that "solutions are within reach"—and it's here that this piece really start to get amazing. The authors acknowledge that many of the problems with America's food economy are not market failures at all but "largely a result of government policies." So the solution surely must be to get goverment meddling out of food and farm policy as much as possible, no? Ha! "We know that the government has the power to reshape the food system because it has already done so at least once—when President Richard Nixon rejiggered farm policy to boost production of corn and soy to drive down food prices," they write. And because government can, it should, apparently. The authors are somehow able to see the corrosive effect of previous government overreach on our food system, but they feel confident that this time! they'll get it right. "As Obama begins the last two years of his administration facing an obstructionist Republican Congress, this is an area where he can act on his own—and his legacy may depend on him doing so," they suggest, urging Obama to "announce an execu[...]