Farm Bill Hurts ‘Sweetest Place on Earth’

If you thought Soviet-style central planning ended when the Iron Curtain fell, think again.

In January, the US House passed another five-year farm bill "to provide for the reform and continuation of agricultural and other programs of the Department of Agriculture through fiscal year 2018, and for other purposes."
Earlier this month, the Senate followed suit. And President Barack Obama signed the bill last week.

The legislation’s 950-plus pages contain only modest reforms, but many old and new programs that are generous to the farm lobby.

Nothing in farm policy has greater resemblance to Soviet central planning than the bill’s reauthorized sugar program. And, although sugar products aren’t grown or refined here, arguably no provision has had greater impact on central Pennsylvania.

The sugar program rewards politically-generous sugar producers and refiners by limiting the domestic supply of sugar, guaranteeing sugar producers a minimum price and restricting imports.

Sugar price supports and tariffs waste taxpayer dollars, raise food prices, kill confectioners’ jobs and limit opportunities for small farmers in poor countries.
For three decades, American sugar policy has made consumers and confectioners pay two to three times the world price for sugar.

A 2006 Commerce Department study estimated that saving one job in the sugar industry costs three jobs in the confectionery industry.

The Hershey Company in Derry Township, is part of U.S. Rep. Charlie Dent’s 15th District, and it draws most of its local employees from Dauphin, Lebanon and Lancaster counties. Those areas are also represented by U.S. Reps. Jim Gerlach, Scott Perry, Lou Barletta and Joe Pitts.

In thirty years, the Hershey Company has relocated thousands of local, mostly-union jobs outside the United States. Some of that emigration was meant to service foreign markets, but the company also benefits from accessing lower world prices for sugar, a primary end-product ingredient.

The maker of LifeSavers candies was candid about exporting jobs for lower sugar prices.

Congressional members favoring the farm bill preserved special benefits for the sugar industry which kill American jobs among confectioners like the Hershey Company.

Pitts, whose district includes Wilbur Candies in Lititz and some of the richest farmland in America, voted against the bill along with 62 other Republicans.
Republicans Dent (who concedes the impact of sugar policy on Hershey jobs), Gerlach, Perry and Barletta, all voted "Aye."

Farm policy is a bipartisan outrage: 89 House Democrats voted for the bill, too. In the Senate, Democrat Bob Casey and Republican Pat Toomey voted "Nay."
Former U.S. Rep. Tim Holden, a labor-friendly House Agriculture Committee Democrat whose district included Hershey Company headquarters and operations for ten of his twenty congressional years, voted for sugar lobby giveaways and, specifically, against ending the sugar program.

The bill is an example of legislative log-rolling, or vote trading. As written, farm benefits make up about 20 percent of the farm bill’s cost. Because food stamp funding appears in them, urban legislators otherwise disinterested in farm policy vote for farm bills.

Farm-household incomes are substantially higher than U.S. household averages. Most farm aid goes to giant agri-businesses rather than small family farms. About a third of subsidies in the last bill went to the wealthiest 4 percent of farm businesses. 80 percent of farms nationwide shared only one-tenth of benefits.

Lawmakers say the new bill’s projected ten-year $950 billion cost is a $23 billion cut.

But, setting aside the bill’s food stamp funding, Mercatus Center economist Veronique de Rugy reported that its agricultural provisions contain new programs that are likely to increase spending by an inflation-adjusted $258 billion above the ten-year cost of benefits in the 2008 farm bill – a 37 percent jump in real spending – mostly on corporate welfare.
Ms. de Rugy is right.

The bill’s most encouraging reform, eliminating the Direct Payment of crop acreage subsidies, is offset by new farm subsidies having no income thresholds or caps and expanded crop insurance. Taxpayers will pay two-thirds of farmers’ premiums for crop coverage through which the federal government will indemnify farmers from losses due to lower yields or prices.

Price support triggers are set at levels which almost ensure that payoffs begin quickly when prices drop — as corn prices would if the unpopular ethanol fuel mandate were eliminated.

It’s a symbiotic relationship.

Big Agriculture liberally dispenses campaign cash – $65 million to federal candidates in 2008, $480.5 million in two decades. Both Democrats and Republicans harvest the lucre.

Politicians will frame passage of the farm bill as an example of how the parties can work together, while omitting that their "compromise" has shafted American consumers and taxpayers – and Hershey workers – again.