Not From the Onion

by on June 17, 2011 at 10:15 am in Current Affairs, Economics, Food and Drink | Permalink

The headline says it all:

House keeps farm subsidies, cuts food aid

Here are some of the other provisions which seem designed just to be ridiculed by Jon Stewart:

Directs the Agriculture Department to rewrite rules it issued in January meant to make school meals healthier. Republicans say the new rules, the first major overhaul of school lunches in 15 years, are too costly.

Forces USDA to report to Congress every time officials travel to promote the department’s “Know Your Farmer, Know Your Food” program, which supports locally grown food, and discourages the department from giving research grants to support local food systems. Large agribusiness has been critical of the department’s focus on these smaller food producers.

Prevents USDA from moving forward with new rules that would make it easier for smaller farmers and ranchers to sue large livestock companies on antitrust grounds. The proposed rules are meant to address the growing concentration of corporate power in agriculture.

Delays for more than a year new rules for reporting trades in derivatives, the complex financial instruments blamed for helping precipitate the 2008 financial crisis. A Republican amendment adopted Thursday would require the Commodity Futures Trading Commission, which funded in the bill, to first have other rules in place to facilitate its collection of derivatives market data.

Prevents the FDA from approving genetically modified salmon for human consumption, a decision set for later this year.

Questions the scope of Obama administration initiatives to put calories on menus and limit the marketing of unhealthy foods to children.

Don’t get me wrong, I’d probably do away with a number of these rules as well. But anyone who argues against making school meals healthier because it’s too expensive at the same time as they vote for keeping billions of dollars in farm subsidies is not concerned about expenses. What unites the bill is not ideology but protection of agribusiness.

Perhaps the most outrageous provision was one the good guys won:

Critics of farm subsidies did score one victory: The House voted to block a $147 million annual payment to Brazil’s cotton industry. The United States agreed to make that payment last year after Brazil’s industry complained to the World Trade Organization that Washington unfairly was subsidizing U.S. cotton farmers. The United States lost the WTO case and agreed to make the payments to Brazil as a settlement.

So not only have we been subsidizing cotton farmers but we have been paying Brazil to allow us to keep subsidizing cotton farmers. Incredible. I wonder whether this provision will make it into the final bill.

Dan June 17, 2011 at 10:23 am

As absurd as most of these provisions are, I think the last one is equally detrimental. If the WTO ruled against us then we should abide by their ruling like any other country. To simply vote to block payment after the ruling international body has decided that we should pay is asinine and only too typical of the myopic, self-centered American mindset.

Alex Tabarrok June 17, 2011 at 10:26 am

I agree although I think the provision is that we stop paying and cut the subsidies instead. It’s a little unclear.

Andrew' June 17, 2011 at 10:29 am

Do we at least get some cotton?

Rahul June 17, 2011 at 10:36 am

On deeper reading this line explains it:

the U.S. should lower domestic cotton subsidies to comply with the WTO instead of paying the settlement to Brazil.

So, they had a choice: subsidize US farmers and then WTO says you must compensate the Brazilians affected. Or you get rid of the domestic subsidies and you don’t have to pay Brazil.

Sounds like a win-win. The US saves twice: on the domestic subsidies as well as the Brazilian payoffs.

I guess WTO worked out well for us; gave the motivation to cut the local subsidies at least.

Cindy June 17, 2011 at 5:26 pm

Perhaps it’s a win-win on a national level. Unfortunately this involves some reallocation of domestic resources, so it’s not a win-win when you look at interest groups.

Rahul June 18, 2011 at 8:52 am

cannot keep all the people happy all the time……

mulp June 17, 2011 at 6:41 pm

Congress is keeping the subsidies and Obama has no way to end them.

Obama does have the authority to negotiate within treaty authority, which was done with the extending of the US subsidy to Brazilian farmers, which might actually go to farmers instead of agribusiness as it mostly does in the US.

If Congress rejects the rider to the trade treaty, then Brazil has the treaty authority to punish the US corporations which have the best funded lobbyists as a way to force Congress to act to either end the farm subsidies, or more likely exted them to Brazil, and who knows who else, for cotton, and who knows what else.

The farm programs from the 30s was to protect farmers from too low prices and sought to increase prices so farmers could survive, and also protect them from bad crops so they don’t over produce by offering crop insurance and promoted stockpiling commodities.

Nixon, faced with high food prices set Earl Butz on a mission to lower food prices. Crop failures still happen, so low food prices requires both crop insurance and over production.

The crops Butz focused on were the commodities which never get put on the table without going through a factory involving milling and grinding at a minimum, but with at least a two times value add. And the focus on crop yield made the Monsanto and DuPont key suppliers in the value chain. But Butz made no beans about family farms being replaced by big corporate farms because in his view, only big corporations had the capital access required to industrialize food manufacture which was his vision for the future. In an interview at age 98, Butz defended his policies and called today’s US farming to be the best, and he defended the subsidies as key to low food prices.

US farm policy is totally opposed to the Ayn Rand individualist fighting the corporations. Given the political leanings of the farm States, are the individual farmers fighting the corporations by making sure they get paid by the government to work for the corporations (most years, crop sales cover only input costs, and the farmer lives off the government payments), or are they corporations making sure their government subsidies ensure their global marketing advantage?

In any case, Congress is the decider, not the WTO, the president, or Brazil.

Douglas Knight June 17, 2011 at 11:19 pm

It’s unclear because he’s trying to confuse you.

Rahul June 17, 2011 at 10:32 am

Exactly.

Aren’t WTO rulings binding to its signatories? Or are WTO case-rulings as toothless as UN-resolutions?

rpl June 17, 2011 at 1:08 pm

Planet Money did a podcast on this. Briefly, the WTO has just one remedy available to enforce its rulings, which is to grant the country that won the case the right (but, take note, not the obligation) to raise retaliatory tariffs. So, what Brazil did was to hire a “retaliator” (that was apparently his job title. Amusingly enough, he was an American) to figure out what tariffs, for the most part unrelated to cotton or products made from it, would cause the most political backlash in the US. The US took note, but felt that ending the cotton subsidies would be politically unfeasible, so they made a deal with the Brazilian government to extend the subsidy to Brazilian cotton growers. This apparently satisfied the Brazilian government, which canceled its plans to raise the retaliatory tariffs.

Here’s the story from PM: http://www.npr.org/blogs/money/2011/01/26/131192182/cotton

Francisco Carvalho Venancio June 19, 2011 at 5:54 pm

Brazil actually got its internal process to raise tariffs under way, only halting it after the US conceded to negotiate a settlement. It will probably just continue the process from the point where it was halted.
The list is enormous, Brazil would retaliate in all products related to cotton, auto parts, cosmetics, some drugs, electronics and boats, among others. That would equal $591 million in tarrifs, there would also be a $238 million retaliation in intellectual propriety that was not yet defined how would be applied when Brazil halted the process.
Brazil’s retaliation will probably be ready within a month of the US suspending the settlement.
Although it is important to remember that the Senate will probably keep this in mind and not keep both the subsidy and nix the settlement.

anonygoat June 17, 2011 at 11:43 am

Up yours, Dan.

Dan June 17, 2011 at 11:49 am

Obviously another far too typical American. You should run for office- I’m sure you can make a positive difference in the world.

k.o. June 17, 2011 at 6:07 pm

Anonygoat, just what are you doing with goats? Maybe you should get an education instead.

Jim June 17, 2011 at 10:24 am

>… is not concerned about expenses.

It’s not their money.
What do they care?

And I’m sure Mr. Stewart will get back to ridiculing the Federal Government in 2012.

neil June 17, 2011 at 2:38 pm

I take it you don’t watch the Daily Show much.

U. June 17, 2011 at 6:06 pm

The refrain “it’s not their money” is incorrect. It is the government’s money. You might not agree on how it becomes that, but it’s legally the governments money through taxation. The people authorized to spend it are legally elected by the citizens who manage to vote. Unless, of course, one is wearing a tin-foil hat, and thinks the Illuminati have rigged an unconstitutional law that deputizes black helicopters to force us to pay for things we choose to use, like our military, highways, GPS system, CDC, Coast Guard, etc. If the money does not belong to the government, then the Marines are stealing from us and every penny they spend on protecting us is ill-gotten gain that would be better spent by us on our ipods or day-trading, and every time we use a federal highway, we are driving on someone else’s property.

Anon June 18, 2011 at 5:30 am

Then, legally, all the Jews belong to Hitler.

TallDave June 17, 2011 at 10:26 am

OTOH, we apparently just opened the market to Brazilian cane ethanol.

Dan June 17, 2011 at 10:34 am

The Senate voted to reduce the Brazilian tariff but unfortunately- “the ethanol amendment was added to unrelated legislation that the U.S. House of Representatives isn’t expected to take up”. I don’t think the US sugar industry will let this go through so easily.

http://www.marketwatch.com/story/brazil-sugar-group-cheers-senate-ethanol-vote-2011-06-16

Curt F. June 17, 2011 at 10:47 am

The market to Brazilian ethanol was opened not by eliminating existing regulations, but by adding more. The imported ethanol tariff and the subsidy paid to domestic but not imported ethanol blenders are still in place. However the 2007 energy bill which mandates millions of gallons of “advanced” biofuel production means that blenders *must* buy advanced biofuels, or more precisely, Renewable Identification Numbers (RINs) that correspond to government-tracked lots of advanced biofuels. Since the hundreds of millions of gallons of US cellulosic ethanol capacity that was supposed to have materialized by now has not, blenders face no choice but to buy Brazilian ethanol, which qualifies as an advance biofuel, despite the fact that the tariff is still in place.

TallDave June 18, 2011 at 6:44 am

Dan — I think it’s more the corn growers they have to worry about. Corn ethanol refineries were popping up all over the country the past few years. But cane ethanol is considerably cheaper.

Curt — That’s interesting. Take out the tariff as well, and I think Brazil has a huge new market given the price differential.

I think it’s a change we should welcome. Better the Brazilian famers prosper than the House of Saud, Chavez, the Iranians, etc., and right now we are creating huge inefficiencies by burning corn instead of cane.

Martin June 17, 2011 at 10:32 am

The further education of Alex. One can always hope. I was stunned when I looked up and read the byline.

Slocum June 17, 2011 at 1:54 pm

Why would Alex posting this be the least bit surprising?

Rahul June 17, 2011 at 10:40 am

Banning the GM salmon would seem like a thing the Democrats would do ( I am assuming environmentalists align with Democrats).

It’s interesting that the GM-salmon would earn the republican wrath.
Can’t make sense. Cui bono? Unless this was a concession pushed by the Democrats.

neil June 17, 2011 at 2:44 pm

Rep. Don Young, R-AK, is behind the ban; he does not want farmed GM salmon to compete with the wild salmon fishing industry which is big in Alaska. Other Alaska politicians feel the same way, including Sen. Murkowski.

Funny, because protectionism is supposed to be aligned with Democrats too. Or maybe that old saw has finally broken.

TallDave June 18, 2011 at 6:47 am

Capitalists hate capitalism, too.

Rentseeking is, unfortuantely, generally profitable for all involved, at the expense of everyone else.

engineer27 June 17, 2011 at 10:56 am

More information on the Brazil cotton thing…..
Cotton Wars.

Gabe June 17, 2011 at 10:58 am

Summary of the comments on this blog

Libertarian person: democrats = republicans. Both parties are owned. Both support big agra-facism. Both support the endless wars and endless odious national debt interest payments from the productive americans class to the oligarchy.

Democrats: But their guy is dumb, has a southern accent and wants to outlaw abortions. All people not in our goup hate poor people.

Republicans: But their guy is for REALLY big government and wars are good for the economy and I cannot see the distinction between crony-capitalism and real capitalism.

Oligarchy: Barbarian muslims in caves are trying to kill you, because they hate your freedoms. The internet must be controlled. Carbon taxes will solve most problems.

Edward Pierce June 17, 2011 at 11:27 am

I thought when the Republicans took control of the House in 2010, backed by an anti-recession populist surge, they were going to bring rational and fiscally responsible policy to an otherwise out-of-control Congress.

I just did *not* see this coming.

dbeach June 17, 2011 at 1:11 pm

Wait, you really thought that? Or perhaps it’s snark? When have Republicans ever been fiscally responsible? They care about cutting taxes. They don’t care about the deficit except as a talking point.

Edward Pierce June 17, 2011 at 5:56 pm

Yup, I really believed this time would be completely different from every other time.

J Thomas June 17, 2011 at 2:23 pm

Edward Pierce, I know just exactly how you feel. In 2008 I hoped that Obama would bring change. But somehow he had this idea that he could have bipartisan change. He kept trying to do cooperative negotiations with the Republicans.

It’s hard to negotiate with people who want to eat your liver.

So, do these two parties actually want to do different things? They emphatically dislike each other, but do they actually disagree? They seem to give us the same results, and then argue about who to blame it on.

Tom June 18, 2011 at 7:05 pm

“He kept trying to do cooperative negotiations with the Republicans.”

Barack”I won” Obama tried to cooperate with Republicans?
I guess I missed that 10 minutes.

J Thomas June 18, 2011 at 9:17 pm

Tom, I’m sure you did.

It used to be, there was this saying that went “You’re entitled to your own opinions, but you aren’t entitled to your own facts.”.

That’s out of date. Now you’re entitled to your own special reality, which can be completely different from somebody else’s reality. It probably isn’t worth arguing with such people. It probably isn’t even worth trying to communicate with them. If their reality is too different from yours, you’ll only annoy each other.

neil June 17, 2011 at 2:45 pm

Democrats sure saw it coming.

Rahul June 17, 2011 at 11:34 am

I was ruminating on a thought-experiment (clearly in the realm of fantasy):

What would happen if one day the US suddenly removed all import tariffs?

Overall (say, using GDP) would the nation be better or worse off? Which sectors would cry murder and which ones will be unaffected? What areas of the economy would change the most?

What price changes would the median consumer notice the most?

clayton June 17, 2011 at 11:54 am

I think it’s time to finally acknowledge that neither party is for smart or small or fair government: they’re just opposed to government programs/spending that benefits the other side’s constituents.

We should also note that both parties share as many constituents as they have opposing constituents, banks, for example.

Benny Lava June 17, 2011 at 12:39 pm

A wise observation.

chris June 17, 2011 at 4:18 pm

..but a false one. Old people are overwhelmingly Republican, but who is up in arms about a plan to replace Medicare with something far less valuable to the beneficiaries?

dirk June 17, 2011 at 12:14 pm

Here’s my question: why haven’t Coca-Cola and Pepsi managed to successfully lobby congress on eliminating the sugar tariffs? It seems directly detrimental to their businesses as the corn syrup they use now tastes like crap and people are avoiding it more and more. Sugar ain’t so good for you either, but I have trouble passing up a Mexican Coke or a bottled Dr. Pepper with real sugar in it cause it tastes so damn good. Are sugar farmers really that much more powerful in Washington than Coke and Pepsi would be combined? Or do they believe it’s not worth the fight?

Jonathan Beerhalter June 17, 2011 at 12:51 pm

Since you’re going anecdotal, let respond in kind. I hate Mexican Coke. I heard the hype and I tried it and I hate it. Maybe it’s because I was raised on HFCS, and my taste buds crave it, I don’t know. What I do know is, I’m not alone.

I will agree that if the demand for the new Pepsi and Mountain Dew throwback start to climb to serious levels, we’ll see those sugar tariffs disappear real fast.

dirk June 17, 2011 at 2:07 pm

Maybe it is what you’re raised on. What I like about Mexican Coke is that it tastes a lot more like American Coke tasted when I was a kid (so I’m attributing it to the sugar). But better than a Mexican Coke is a Colombian Coke. (No, this is not a cocaine reference.) If you’re in Colombia try the Coca-Cola there. Or maybe there is cocaine in Colombian coke, I don’t know. But it hits the spot and makes its American cousin taste like soda water by comparison.

Gepap June 17, 2011 at 1:04 pm

Given that the soft drink makers use cheaper HFCS, why would they care? That they get to charge a premium that individuals are willing to pay here in the US for the stuff they bottle outside the US is simply a plus to them.

On the question of power, Sugar farmers might not be more powerful nationally than the soft drink companies, but they are far more powerful than them in those localities in which they exist, and the Senate being what it is, that is all the matters.

dirk June 17, 2011 at 2:16 pm

Aren’t sugar tariffs part of what makes HFCS so much cheaper? Seems there would be more real sugar used by soft-drink manufacturers at the margin if the price of US sugar dropped relative to HFCS. Or maybe that explains it! Coke and Pepsi have decided to go with HFCS (which may still be cheaper than sugar even without tariffs) and don’t want to risk competing with other brands who might want to use real sugar for the sake of differentiation, so the sugar tariff actually helps deepen the economic moat around the duopoly. Coke may like sugar tariffs for the the same reason Bristol-Myers likes the bureaucracy of the FDA.

Douglas Knight June 17, 2011 at 11:25 pm

From 1980, when they switched to HFCS, to about 2005, sugar outside the US was cheaper than HFCS, maybe 1/4 the price. Now that Brazil turns so much sugar into ethanol, sugar is expensive everywhere, so it’s a moot point.

JordanT June 17, 2011 at 1:35 pm

Considering that sucrose breaks down into a 50/50 combination of fructose and glucose in the acidic environment of soda and HFCS is 55% fructose and 45% glucose, I have high doubts that most people can taste even difference. I will concede that there are super tasters among us who can tell the difference. I also know that we eat with our eyes as well, so my guess is that the difference is more about thinking that sucrose is better than HFCS.

I’ll also add that this is in the acidic environment of soda, but doesn’t necessarily apply to everywhere HFCS is used.

Rahul June 17, 2011 at 1:58 pm

And then again the USA-Mex taste differential might have to do with something else in the formula. HFCS vs. sugar may not be the only difference.

dirk June 17, 2011 at 2:26 pm

Maybe, but you can perform this test: both Dr. Pepper with real sugar and Dr. Pepper with HFCS are available in the US. Compare the two. The Dr. Pepper with real sugar tastes very different and the difference is that it tastes more like sugar. Yeah, this is anecdotal and I haven’t done a double blind taste test or anything like that — but I’d bet money that if someone did most people could tell a huge difference. Though there could still be other differences in the formula, I guess.

Anyway, anecdote shouldn’t be inappropriately denigrated. The scientific method begins with mere speculation.

Rahul June 17, 2011 at 2:44 pm

Interesting. I didn’t know a sugar version of Dr. P is available. Anecdotes are fine. I like them.

J Thomas June 17, 2011 at 2:52 pm

Taste test:

Prepare 3 small cups on a tray. Label them A B C.
Open a bottle of Coke and a bottle of Pepsi. Pour one of them into one of the cups, and pour the other into two other cups. Note which cups got which liquid.

If you don’t trust your body language not to give it away, send the tray of drinks with somebody else into the room with the taster. I usually do it myself, single-blind instead of double-blind.

Ask the taster which cup is different. Ask the taster whether the different one is Coke or Pepsi.

My experience has been that people are always very surprised that they can’t tell the difference. Then they look for subtle cues and choose. In my experience they pick the right cup 1/3 of the time, and pick the right beverage half the time. It’s hard to get good statistical results in a social setting because after they try a few times and fail they get bored with it.

Sometimes within a couple of weeks people find explanations. “I can’t tell the difference when I taste them together. Maybe drinking one changes my taste buds or something. But I can tell the difference just fine when I drink them separately, and I know which one I like.”

J Thomas June 17, 2011 at 2:55 pm

Lots of people can’t tell the difference between Coke and Pepsi, even though they think they can.

Could they tell the difference between HFCS Coke and sugar Coke?

Quite possibly. There could easily be more difference between HFCS Coke and sugar Coke than between Coke and Pepsi.

It isn’t hard to try it out. It’s fun, particularly at parties where people aren’t drinking a lot of alcohol.

Nylund June 19, 2011 at 5:30 pm

The original Dr. Pepper plant (in Dublin Texas) sells “Dublin Dr. Pepper” in my parts of Texas. Dublin Dr. Pepper is made with the original recipe (including the use of real sugar). It does indeed taste quite different. Dublin Dr. Pepper tastes more like sugar water but I am not sure the only difference is just in the sugar. Dublin Dr. Pepper lacks the “bite” of “normal” Dr. Pepper, and seems substantially less carbonated. I was actually quite disappointed with it. It was a bit like drinking simple syrup with some food coloring added to it. I suspect the recipe may differ. There are also a few other plants (and variations such as Heritage Dr. Pepper and “Old Doc”) that purport to make Dr. Pepper with pure can sugar instead of HFCS. I have not tried them.

efp June 17, 2011 at 3:05 pm

There is a huge difference. They use cane sugar in Europe too (where a beer costs three euros, and a coke five euros). Diet Coke with Splenda tastes more like real Coke than real Coke with HFCS.

J Thomas June 17, 2011 at 11:03 pm

It’s very very easy to test, if you can get both of them at the same time and you have somebody to be the taster. Then they can test it with you as the taster.

I don’t believe people who tell me they can tell the difference when they haven’t tested it, because of my experience with Coke and Pepsi. People are sure they can tell the difference, and when it’s tested they can’t, and then after they experience that they can’t tell the difference then sometimes later they go back to thinking they can. There’s something strange going on there.

But it’s very easy to test, and I’ll believe it when it’s tested.

Henry June 17, 2011 at 2:02 pm

By the way Mexican Coke uses sugar because of a law restricting the import of HFCS. Both Coca-Cola and Pepsi were up in arms at the time. But the Mexican Sugar Lobby won that one.

J Thomas June 17, 2011 at 2:39 pm

Here’s my question: why haven’t Coca-Cola and Pepsi managed to successfully lobby congress on eliminating the sugar tariffs?

On the one side we have the dinky little sugar industry with their lobby. Oh, wait! We also have the HFCS lobby! They don’t want cheap sucrose either. And they are part of — the corn lobby. Every ton of sucrose that gets used is a ton of HFCS that didn’t get made from corn.

How much should Coke and Pepsi spend to oppose their HFCS suppliers?

dirk June 17, 2011 at 3:53 pm

Good point. I didn’t even think of that.

dbeach June 17, 2011 at 1:06 pm

The cotton subsidy thing is amazing, especially since cotton farmers are swimming in cash right now. Cotton has come down from its highest levels but is still trading at roughly double its historic norm.

As to the general point, Alex is clearly right. If Republicans can’t manage to cut farm subsidies, they aren’t serious about cutting spending.

In my dreams, deficit reduction would work like this: Republicans say how much they want to cut spending, but the Democrats get to choose the cuts. On the other side, Democrats get to say how much they want to raise revenue, but the Republicans get to design the tax hike. Let’s see how far you’re willing to go when it’s your own ox that gets gored.

Rahul June 17, 2011 at 2:03 pm

How exactly are these subsidies administered? You sell your crop to the USDA at an elevated price? They send you a check for every acre planted? Or on every pound harvested?

I’m curious about the details.

Cottonfarmer June 18, 2011 at 2:24 pm

The farmer has base acres, which used to be the average acres planted to a crop. The farmer also has a historic yield. (acres X 85%) X Yield X support price = $$$. Up to $40,000 per “person”(that subject for another post). The farm program is rural development, every dollar in a farmers pocket was turned over many times in rural areas, before GM crops anyway.

Rahul June 18, 2011 at 5:11 pm

So do you have to actually plant and grow the crop? Or do they pay you to keep the field fallow?

neil June 17, 2011 at 3:10 pm

They are only serious about cutting entitlement spending. They have nothing against redistributing income towards big business and towards the rich. They are also not serious about decreasing the national debt; they know as well as anyone that the U.S. can borrow money at rock bottom rates and that any business with this kind of problems with access to that kind of credit would jump on it in a heartbeat. They want to use it as leverage to end entitlement programs.

Anon June 18, 2011 at 5:36 am

Obviously, if the Red Party are evil and the U.S. has infinitely increasing credit and productivity, then they must be lying.

chris June 17, 2011 at 4:24 pm

Republicans say how much they want to cut spending, but the Democrats get to choose the cuts. On the other side, Democrats get to say how much they want to raise revenue, but the Republicans get to design the tax hike.

This is an unfair deal: the Democrats can only cut spending that already exists, but the Republicans would be able to create new taxes that didn’t already exist, giving them a lot more freedom in who to hurt on the way to deficit reduction.

And what about the school of thought that says deficit reduction should be delayed until unemployment falls? Do they not get a seat at the table at all?

Aggie June 18, 2011 at 11:20 am

The specific mechanics of agricultural supports are too complicated to discuss here, but they boil down into two forms: income supports and price supports. Income supports are direct cash payments to producers regardless of market prices, while the price supports use a system of loans and compensatory payments to offset differences (‘deficiencies’) between market prices and ‘target’ prices. For the most part, the USDA is no longer the buyer of last resort for commodities and hasn’t been for 40 years. However, the existing programs have up until recently been very price distorting and have generally pushed overall food prices downward – they are one of the reasons US per household income shares on food expenditures have been so low.

Rahul June 18, 2011 at 5:16 pm

So if suddenly USDA got rid of farm subsidies you think supermarket food prices would shoot up?

Also, if the commodity buyers are private anyways what prevents, say Cargill from buying (cheap) subsidized US corn and routing it to international markets and selling at a profit and thus pocketing the government subsidy?

Joshua the PostLibertarian June 17, 2011 at 1:22 pm

At least the Senate voted to end billions of dollars in support for the ethanol industry. Or something. And a good chunk of the Republican candidates are at least paying lip-service to ending ethanol subsidies now, accompanied by news articles talking about how “unpopular” it all is now. Things unheard of a few years ago.

So at least we’re moving in the right direction. Kinda.

neil June 17, 2011 at 2:56 pm

It’s much easier for the Senate to pass something that they know won’t become law.

h June 17, 2011 at 3:24 pm

Regarding Brazilian cotton case:

The US lost, and WTO said, “US either reform your cotton subsidies to come into compliance, or we will authorize Brazil to retaliate.”
US said, “We’ll make some minor changes, but we refuse to change our cotton subsidies so that they fully comply because we don’t want to anger our cotton industry.”
Brazil said, “OK, then compensate us in some other way, or we will retaliate, as authorized. And if we do retaliate it will be on intellectual property items, so it will royally piss off Disney and big Pharma, which we hope will persuade the US government to see that the cotton industry is not the most politically powerful industry.”
So the US said, “Here’s some money to compensate you in an effort to convince you not to take those retaliatory measures.”

http://www.reuters.com/article/2010/03/08/brazil-usa-cotton-idUSN0810219620100308

And now apparently Congress has said (or is close to saying), “What the hell are we paying Brazilian cotton farmers for?”

LarryM June 17, 2011 at 5:45 pm

Gabe’s comment is funny, even though exaggerated to be sure and with a libertarian POV that, while largely correct, isn’t shared by many rank and file libertarians, as sadly demonstrated by comments later in the thread.

So let me re-label his libertarian argument the left libertarian argument, and add one

Cato libertarians – Republicans and Democrats are both equally bad statists, but the people who pay my salary are rent seekers who benefit more under Republicans, so I’ll be sure to mute my criticism of Republicans and sharpen my criticism of Democrats, and abandon my libertarian principles entirely when the interests of my pay masters are at stake.

TallDave June 18, 2011 at 6:53 am

This country would be so much better off if every graduate from high school was required to understand the meaning of “rentseeking” — and its consequences.

J Thomas June 18, 2011 at 7:44 am

Oh lord, I hope not.

We’d have everybody wanting to do it.

Although, come to think of it, my daughter had her required sex education class this year, and I think it squicked her out enough to slow her down for a couple of years.

Gabe June 20, 2011 at 2:27 pm

I like your addition Larry.

mulp June 17, 2011 at 5:45 pm

“So not only have we been subsidizing cotton farmers but we have been paying Brazil to allow us to keep subsidizing cotton farmers. Incredible. I wonder whether this provision will make it into the final bill.”

How is continuing the subsidies to US cotton farmers while paying Brazil so Brazil under treaty and judgement authorized to tax US imports into Brazil in the way that most damages a US corporation with good lobbying resources a “win for the good guys”.

Congress set the cotton subsidies and there is nothing Obama or any other president can do about it.

Well, maybe Obama could find some way to tie the cotton subsidies to unions – can he get the UAW and Teamsters to lobby to hike the cotton subsidies and call it key to green jobs? That would get the Republicans to end Obama’s “big government socialist leftist takeover of the cotton industry as payoff to the unions.”

The interesting politics in all of this is Grover Norquist’s organization opposition to ending a number of subsidizes that are structured as tax credits, rebates, and deductions because they are tax hikes pushed by Obama and Democrats. So, for Republicans, voting to end farm subsidies risks being rated a tax hiker adding to the list of reasons to be challenged by Norquist’s Tea Party enforcers. At this point in the cycle, a member of Congress who begins to have trouble raising money has time to “correct” his voting and get back to supporting farm subsidies which are big tax loopholes.

TD June 17, 2011 at 5:57 pm

On a more serious note, if the Brazilian farmers were being unfairly affected by US farm subsidies, why didn’t they just move into farming for coca, marijuana or other illegal drugs?

JL June 17, 2011 at 6:30 pm

This doesn’t in any way justify our subsidies, but it should be noted that the Brazialians also subsidize their cotton farmers and at a higher rate than the US does. The reason they won the WTO case is because they are treated differently under the law because they were classified as a developing country. It is shameful that NPR never mentioned this in their story. It’s also shameful that we have these price supports when subsidized crop insurance already exists.

Bill June 17, 2011 at 8:18 pm

Despair over commodity programs,, especially cotton. For products that are volatile, farmers can now use futures markets. Ag programs have needlessly distorted markets. To the extent some of the support programs raise one price, say corn, they squeeze another sector, pork and beef. And poor people who spend more of there disposable income on food, the school lunch changes on top of price supports add insult to injury

athEIst June 18, 2011 at 12:17 am

Henry June 17, 2011 at 2:02 pm
By the way Mexican Coke uses sugar because of a law restricting the import of HFCS. Both Coca-Cola and Pepsi were up in arms at the time. But the Mexican Sugar Lobby won that one.

And they don’t grow corn in Mexico

Cottonfarmer June 18, 2011 at 2:39 pm

You are very wrong. Mexico has grown corn for over 1,000 years. Read 1491 by Charles C. Mann.

TallDave June 20, 2011 at 12:39 pm

In fact I think it’s now believed they invented it (corn used to be teosinthe) over centuries of breeding..

societax June 18, 2011 at 1:06 pm

“…to promote the department’s “Know Your Farmer, Know Your Food” program, which supports locally grown food, and discourages the department from giving research grants to support local food systems”

The republicans are finally looking to support the small businesses that are the backbone of our economy! Oh wait…

JW June 18, 2011 at 6:37 pm

I don’t believe people who tell me they can tell the difference when they haven’t tested it, because of my experience with Coke and Pepsi. People are sure they can tell the difference, and when it’s tested they can’t, and then after they experience that they can’t tell the difference then sometimes later they go back to thinking they can. There’s something strange going on there.

1) I’m certain that I can tell the difference, because I have ordered a Coke in a restaurant several times where the waitress has brought a Pepsi without the typical “Pepsi okay?” disclaimer, and I’ve noticed. I’ve never once asked “Is this Pepsi?” and been told that it was Coke.

2) I can describe the flavor differences. Served the same way, Coke is more strongly carbonated, and Pepsi is sweeter. Now, if the Coke is warm, and the Pepsi is cold, they taste more similar, because warmer soda loses carbonation more quickly and tastes sweeter. Fountain soda is harder to tell apart (but still noticeable) because it tends to be less carbonated.

I would never confuse the two poured straight from a cold can right after opening. Also, warm Pepsi is entirely undrinkable as the sweetness gets exceptionally overpowering. This is also why diet soda tastes terrible when it’s warm but regular Coke is still tolerable.

J Thomas June 18, 2011 at 9:50 pm

It’s quite possible that you can tell the difference. I will believe it when you can tell the difference in the controlled test I described. It isn’t hard to do.

Many people who tell me in detail how they tell the difference, just as you did, have failed the controlled test. It would not particularly surprise me if you can tell the difference even though they couldn’t. Across the internet there are probably thousands of people who can tell the difference in blind tests.

My korean grocery store had Mexican Cokes with sugar, and I bought one in a glass bottle, along with a regular HFCS Coke in a plastic bottle. I have put them in the refrigerator and sometime in the next few days my family will see whether we can tell them apart. I will not be too surprised if we can tell sugar Coke from HFCS Coke even though none of us can tell Coke from Pepsi.

Again, the test is easy. Three marked containers. One person hidden from the taster puts one liquid in one container and the other liquid in the other two. The taster has no cues to judge by, except the actual liquids in similar containers, and he chooses which one is different, and then guesses which of the two choices is which. Repeat until it’s clear you can tell the difference or it’s clear can’t. Most people get convinced they can’t tell the difference the first try, because they notice that they really can’t tell which is which.

Nylund June 19, 2011 at 5:31 pm

As pointed out elsewhere, the estimated cost of the “healthier” school lunch proposal that we “can’t afford” amounts to the equivalent of one week of the Bush Tax Cuts.

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