farm bill

USDA Puts Fox in Charge of Guarding the Hen House

by Greg Conko on November 8, 2010 · 1 comment

in Agriculture, Legal, Regulation

Via former Congressman Bob Barr and sitting Congressman Collin Peterson, I’ve learned about some troubling new regulations on the livestock industry proposed by the USDA’s Grain Inspection, Packers & Stockyards Administration (GIPSA). GIPSA may not be as sexy a regulator as PCAOB or NHTSA, but this is one more example of obscure regulatory agencies run amok. What makes this particular proposal especially problematic is that the GIPSA Administrator, a former trial lawyer named J. Dudley Butler who made his bones suing poultry producers, seems to have intentionally introduced a level of vagueness into the rule that, in his own words, makes it a “plaintiff lawyer’s dream.”

Under the terms of the 2008 Farm Bill, Congress instructed GIPSA to promulgate new rules governing the contractual arrangements between cattle and poultry producers on the one hand and stockyards and slaughterhouses on the other, in order to “help ensure fair trade and competition in the livestock and poultry industries.”  However, according to a letter from House Agriculture Committee Chairman Peterson to Ag Secretary Tom Vilsack, which was signed by 114 other members of Congress (for a total of 68 Republicans and 47 Democrats), the proposal strays “far beyond Congress’ intent in the Farm Bill” and “would precipitate major changes in livestock and poultry marketing”.  In addition,  the “analysis contained in the proposed rule fails to demonstrate the need for the rule”.

Like many federal regulations, the proposed rule would also have little impact on the three largest U.S. meat packers, but could wreak havoc on smaller, regional packers “who have carved their niches out by differentiating themselves by creating supply chains that allow them to hit differentiated, value-added markets more consistently.”  It’s also based on a premise that has been tried before at the state level, but later abandoned as a total failure.  According to Troy Marshall, a contributing editor for Beef magazine:

We all remember what happened when the state of Missouri enacted a similar rule – nobody wanted to buy cattle in the state of Missouri, and they quickly acted to rescind the law. Admittedly, if these GIPSA rules pass on the national level, the packing industry won’t stop buying cattle, but the results are predictable and almost the opposite of what proponents are arguing will happen.

Fortunately, some aggressive oversight by the House Ag Committee has caused GIPSA to postpone implementation of the rule and extend the comment period.  But let’s not forget that a good part of the problem can be attributed to Congress’s willingness to enact vague legislation that leaves too much discretion in the hands of largely unaccountable bureaucrats.  Of course, it was wildly inappropriate for the Obama Administration to put a fox in charge of guarding the hen house by installing a tort-happy plaintiff’s lawyer like Dudley Butler in a position to re-write rules that could make it way too easy to successfully sue meat and poultry producers.

Sugar Program Opponents Stake Out Their Position

by Fran Smith on September 30, 2010 · 3 comments

in Agriculture, Economy

Sugar producers got a sweet deal in the 2008 Farm Bill. Now, with the next bill scheduled for 2012, some opponents of the U.S. sugar program are already positioning themselves for another battle over one of the most egregious examples of central planning that raises prices for consumers and costs jobs.

On September 29, 2010, Rep. Joe Pitts (PA-16) introduced a bill — The Free Market Sugar Act — that takes direct aim at the sugar program administered by the U.S. Department of Agriculture.  Here’s Pitts’ statement:

The USDA sugar program is a needless waste of government money that is actually counterproductive to the goal of creating jobs in the U.S. Using taxpayer money to back loans to the sugar industry and buy sugar should not be a function of our federal government. Since the program actually raises the U.S. price for sugar, we see some food industry jobs shipped overseas.

Sugar producers are using the public backing to pocket healthy profits. The American people are fed up with bailouts, and my legislation would stop public money from propping up companies that should be providing for themselves.

Other policy makers were taking their own steps to focus attention on sugar and the next farm bill.  Congressmen Danny Davis (D-IL) and Mark Kirk (R-IL) sent a “Dear Colleague” letter to their fellow members of Congress asking them to sign on to a letter to the House Agriculture Committee leadership.  The letter points out some of the major problems with the program that need to be corrected in the 2012 farm bill:

The U.S. Department of Agriculture is keeping sugar prices at all-time highs by limiting the amount of sugar that can be grown in the United States and imported each year to meet domestic needs.  The sugar program is being run solely for the benefit of sugar growers and processors, with complete disregard for consumers and other sugar users.  The net result is that consumers are paying more for food products and workers are losing jobs at food processing and manufacturing plants.

It’s good that they’re starting early to position this issue, because they will be facing the sugar lobby, one of the strongest lobbies on the Hill — that day-in-an-day-out focuses on this one issue and spreads their largesse in a bipartisan manner.

See some of CEI’s earlier articles on the sugar program here and here.

Fishy Politics May Harm US Consumers

by Greg Conko on July 14, 2009 · 2 comments

in Agriculture, International, Natural Resources, Regulation, Trade

The Wall Street Journal has a great editorial today on one US industry’s latest attempt to secure some protection against foreign imports, which just may spark a trade war with an important target for American exports. This time, it’s the farmed fish industry, and the imports in question are catfish from Vietnam.

The U.S. catfish farming industry, located primarily in Alabama, Arkansas, and Mississippi, faces tough competition from Vietnamese imports, the value of which rose from $2 million in 1998 to $46 million in 2002, and $77 million last year, all the while chipping in on the US-produced market which fell from about fell from $488 million to $410 million during the same time period. That didn’t sit well with American fish farmers. So, in 2002, they convinced Congress pass a law forbidding Vietnamese catfish, which is a different species than the one farmed domestically, from being labeled as “catfish.” Instead, you’ll see it in supermarkets labeled as “basa” or “tra,” even though taxonomically, the Vietnamese fish are members of the family Pangasiidae within the order Siluriformes, which makes them genuine, authentic catfish.

American consumers seem to like the relatively inexpensive imports, no matter what they’re called. So, in 2003, the US farmed fish industry secured a punitive tariff of up to 64 percent on the Vietnamese fish. And, last year, the federal Farm Bill included a provision introduced by Republican Senator Thad Cochran (Miss.) that would authorize the federal government to shift the inspection of “catfish” from the Food and Drug Administration, which currently oversees nearly all seafood, to the US Department of Agriculture. According to the Associated Press,

“The inspections requirement could be the U.S. producers’ silver bullet, stopping imports in their tracks. Applying to all catfish sold in the U.S., it would require Vietnam to establish a complicated inspection system and demonstrate that it is equivalent to U.S. inspections, a process that could take years.”

Ironically,

“after years of arguing that the Vietnamese fish is not catfish — and winning a federal law saying as much — the U.S. farmers are now trying to have it both ways. Under their latest lobbying strategy, they want the Vietnamese imports considered catfish so that they will be covered by [the] new inspections regime”.

This is reminiscent of a similar dispute between the European Union and South American fishing industry that arose earlier this decade. In an effort to protect the European fishing industry, the EU adopted a rule that forbade Pacific Ocean-caught Sardinops sagax from being labeled as “sardines” despite their taxanomic similarity to Mediterranean-caught Sardinops walbaum. In 2002, the World Trade Organization found that this violated the EU’s GATT obligations and ruled in favor of the complainant, Peru.  It’s worth noting that the US sided with Peru and the other South American countries in that dispute, but is now doing exactly what it condemned the EU for doing just a decade ago.

The various US attempts to hobble the Vietnamese farmed-catfish industry is no less underhanded. And, in order to prevent a trade war with Vietnam, it would be wise for Agriculture Secretary Tom Vilsack to reject the pleas of US fish farmers to harm US consumers by making it harder for us to enjoy a good, safe, and inexpensive food.

Stimulus to Hunger

by Iain Murray on January 27, 2009 · 4 comments

in Agriculture, Economy, Energy, Environment, International, Sanctimony, Stimulus to Nowhere

Great. Now USDA head Tom Vilsack is saying the US ethanol industry needs to be protected in the borrow-and-spend bill, and beyond:

“The ethanol industry is under particular strain,” Vilsack said in a
conference call with reporters.

Loan guarantees for the industry, distributed by the USDA as part of the
2008 Farm Bill, “can help more of these companies stay in business,” Vilsack
said, though he warned that “there will be a premium on ethanol producers who
can stay efficient,” a clear warning that there is overcapacity in the US
industry.

Vilsack expected more aid to the industry would be forthcoming in a later
energy package, though he said that aid from the Farm Bill provisions for the
ethanol industry “would be the first step in stimulating the economy.” The
grant program guarantees loans up to $250 million, the USDA said.

Hang on, if there’s overcapacity, doesn’t that mean that some firms need to go under or all firms need to cut back? So there should be less spending, not more, on ethanol. It’s not as if they haven’t got a bundle of mandates subsidies already.

But the stark fact is that every bit of public money that goes into supporting the ethanol industry artificially raises the price of corn, which in turn artificially raises the price of food around the world, which in turn artificially raises the level of hunger in the world. This isn’t stimulus, it is close to murder.

UPDATE: Note also Jonathan Tolman’s post below about taking farmland out of production, and his noting that the bill also includes relief to the elderly on account of rising food prices. There is plainly no “joined-up thinking” going on in the drafting of this pathetic bill.

Farm Bill veto would be richly deserved

by Fran Smith on May 9, 2008

in Agriculture, Energy, Politics as Usual

Right after House-Senate conferees announced that they had reached agreement on a new farm bill yesterday, the U.S. Secretary of Agriculture said that President Bush would veto it because it didn’t reform wasteful farm programs, continued to provide subsidies to rich farmers, and still used some budget machinations to hide the costs.

Indeed, the boondoggle bill deserves a White House rejection for its almost $300 billion of farm programs that will be paid for by taxpayers and consumers. Farm bills, however, no matter how wasteful, have a way of surviving, and this legislation may be no exception, since it’s a case study of bipartisanship gone bad.

Besides the sugar provisions we’ve written about here and here, the biofuels programs’ grants and loan guarantees, plus moneys for R&D and “energy efficiency” projects, together with the extension of the tariff on imported ethanol, will continue to exacerbate the food vs. fuel program.