Corporate Welfare Queens, Big Sugar & Big Bad Ag
The cost to American consumers resulting from agricultural subsidies in terms of high food costs and the taxes needed to support one of the biggest corporate welfare boondoggles is a real shocker. Take milk for instance. Americans pay far more for milk under the subsidy system than they would pay under a true free market capitalist system because the subsidy costs are passed from taxpayers to dairy producers for the sole enrichment of the rich and powerful dairy industry.
In 2007, Cato.org published a piece stating:
The Organization for Economic Cooperation and Development found that U.S. dairy policies create a 26 percent “implicit tax” on milk consumers.4 This milk “tax” is regressive, causing relatively greater harm to low-income families. The Government Accountability Office compared U.S. dairy prices to world prices over a seven-year period.5 It found that U.S. prices for butter averaged twice the world price, cheese prices were about 50 percent higher, and nonfat dry milk prices were about 30 percent higher….
The ultimate effects are to transfer income from consumers and taxpayers to dairy businesses and to stifle innovation in this $90 billion industry.
Does Congress care one iota if Americans are being looted when they buy milk and other dairy products? Hell NO! Congress critters only care about having their campaign coffers filled with special interest dough even if consumers and taxpayers are stiffed.
In a Cato.org article on sugar subsidies, it’s more than clear that Americans are looted by the U.S. sugar industry and Congress.
The sugar program is essentially a producer cartel run out of Washington. The Agriculture Department operates a complex loan program to guarantee sugar growers certain prices, which it enforces with import barriers and domestic production controls.
The sugar program also causes environmental damage. Large areas of the Florida Everglades have been converted to cane sugar production as a result of sugar protection. That has caused damage from the related land drainage, runoff of chemical fertilizers, and the destruction of natural habitat.
With all the negative effects of the sugar program, why does it survive? Because Congress often puts the interests of the favored few ahead of the general public good.
Besides charging American families higher than the “free market” cost of sugar and destroying the environment, the sugar subsidies really hurt the third world and their ability to dig their way out of poverty by exporting food stuffs.
But Obama has proven to be very much a sugar daddy to big sugar and has continued Republican style agricultural welfare by implementing import quotas on imported sugar. Congress has been strengthening the power of the U.S. sugar cartel since the 1980’s. In America, you fill a few campaign coffers and you buy yourself an incredibly profitable legalized monopoly. The high cost of sugar in the U.S. has cost 6,400 jobs in the sugar processing industry and the U.S. Trade Commission has the brazen audacity to claim that the program saves 2,200 jobs in the U.S. That’s government math in action – lose 3 jobs for every job it claims to save and drive up consumer food costs. Meanwhile, the number of sugar processing plants in the U.S. has dropped from 23 to 8 and producers making products containing sugar are moving out of the U.S. In Canada, sugar is 50% cheaper than in the U.S.
Back in 2002, the Heritage Foundation, a conservative think tank, wrote of agricultural subsidies:
Members of Congress who are poised to spend at least $171 billion on direct farm subsidies over the next decade would be wise to examine newly released statistics detailing who actually receives these subsidies. In 2001, Fortune 500 companies and large agribusinesses shattered previous farm subsidy records, while small family farmers saw their share of the subsidy pie shrink.
These subsidy programs tax working Americans to award millions to millionaires and provide profitable corporate farms with money that has been used to buy out family farms. The current farm bills would provide even greater subsidies for large farmers, costing the average household $4,400 over the next 10 years, while facilitating increased consolidation and buyouts in the agricultural industry.
Thus, large farms and agribusinesses--which not only have the most acres of land, but also, because of their economies of scale, happen to be the nation's most profitable farms--receive the largest subsidies. Meanwhile, family farmers with few acres receive little or nothing in subsidies. In other words, far from serving as a safety net for poor farmers, farm subsidies comprise America's largest corporate welfare program.
Republican or Democrat, both political parties are committed to stiffing American consumers.
An American family of 4 was spending $709 per month on food, according to the U.S. Department of Labor and that was in 3/08. (http://www.healthline.com/blogs/diet_nutrition/2008/03/whats-gobbling-your-grocery-bill.html).
It’s been estimated that agricultural subsidies add 10% to our food costs. With the average family of 4 spending $709 a month, 10% is a whopping $851 a year per year an American family is overpaying for food alone. But it’s getting far worse because the outrageously stupid energy scam of churning our food into fuel (another taxpayer subsidized boondoggle) is causing massive global hungry as corn prices rise. The agricultural lobby known as Big Corn has now seized upon an opportunity to double its subsidies and welfare profits, first with food and now with the energy scam know as the ethanol boondoggle. Congress Critters also got their cut because every step along the way, somebody’s campaign coffer was filled with taxpayer cash or special interest dough. Owning a legislative body is about the easiest way to make money and Congress and its Critters are cheap to buy.
Americans like to think that America is a humane nation who cares deeply about the plight of the poor in third world nations. Neither America nor any other westernized nation gives a hoot about the starving around the world. Farm subsidies only accomplish one thing – they vastly enrich US and European powerful agriculture interests at the expense of the starving third world simply because poor nations cannot produce and grow food stuffs when they are forced to compete with highly subsidized products produced in America and Europe.
Western style agricultural welfare causes horrific human suffering throughout the world and the welfare subsidies to western agricultural interests keep increasing and expanding. Cato.org reported in 2005:
The EU's agricultural support amounted to about $133 billion, Japan's to $49 billion, America's to $47 billion, South Korea's to $20 billion and Canada's and Switzerland's to $6 billion each. Moreover, in 2003, the British think-tank Policy Exchange found that EU consumers "pay 42 percent more for agricultural products than they would if the system were dismantled. Americans pay 10 percent extra, Japanese more than twice as much. For less well-off families, for whom food takes up a large proportion of household income, freer trade would mean a noticeably higher standard of living."
Western corporate welfare queens are directly responsible for much of the human misery on the planet. In the U.S., Archer Midland Daniels is a case study in corporate welfare and is consistently mentioned no matter who is analyzing the issue and the players – the left, the right, Ralph Nader and just about everybody who follows the most egregious corporate welfare abuses in our emerging corporatist society. But the problem extends much farther than raping the taxpayers/consumers and starving folks in the third world. Corporate welfare is not only the lifeblood of public corruption, there are draconian agricultural plans on the drawing board to outlaw small farms, organic farms and backyard farms, and give big agri-business 100% control over our food supplies and all seed production, under the supervision of the federal government of course.
Though little MSM media reporting is ever done on agricultural subsidies, every now and then a few morsels of information on agricultural subsidies does slip out. The Seattle Times reported “A sports-team owner, a financial-firm executive and residents of Hong Kong and Saudi Arabia were among 2,702 millionaire recipients of farm payments from 2003 to 2006 — and it's not even clear they were legitimate farmers, congressional investigators reported Monday….. An individual or farm entity was ineligible if average adjusted gross income exceeded $2.5 million over three years — unless 75 percent or more of that income came from farming, ranching and forestry.”.
According to the report, the 2,702 recipients exceeded the $2.5 million and got less than 75 percent of their income from these activities. The payments to them totaled more than $49 million.”
American style welfare keeps corporate welfare queens rich with subsidies while driving up the cost of just about everything. Consumers and taxpayers are always screwed.