Transcript The Dumbest Public Policies

The Dumbest Public Policies
The Farm Bill
Farm Bill
• 1996 FB: Promised drastic future reduction in
Farm aid in exchange for one time payments.
• 2002 FB expired in September, 2007. If no new
FB, reverts to permanent 1949 FB
• Farm Bill contain authorization for Agriculture
and Food Stamps.
• 2007 Farm Bill (one a one-week extension)
2007 Farm Bill
• Add (at least) $10 Billion to President’s budget
• New subsidies for Fruits, Nuts and Vegetables
• Adds $2 billion for permanent disaster
assistance.
• Crop loans and disaster payments for wheat,
corn and soybeans.
• Market controls for oranges, sugar, hops, and
milk
• $2.4 billion in tax cuts (timber industry and
horse-racing investors)
• Senate Finance Committee chairmen Baucus receives $83,000
from timber industry. Is that a birbe? "Absolutely not," Baucus
aide says. "That's never the case with Max Baucus.“
• $5.2 billion in direct payments to farmers
(mostly, corn, soybeans, cotton and wheat)
• Income caps?
– Current $2.5 million income limit
– Bush: $200,000 limit (saves $1.5 billion per year)
– House $1 million ($2 million per family)
The Sugar Subsidy
• Loan program guarantees sugar producers a
set price
• Import restriction: 15% of the domestic
market
• 42% of sugar program benefits go to just 1% of
sugar growers.
Beneficiaries
• 54% sugar beet production is in Minnesota,
Idaho, North Dakota, Michigan and California
• 46% sugarcane production is in Florida and
Louisiana.
• 17 cane sugar growers get 58% of the benefits
(one received $68 million)
• Corn farmers – as HFCS replaces sugar
Losers
• $2 Billion cost to US Consumers
• Sugar-using companies moving to Canada or
closing (price per .lb US: 21¢ CA: .9¢ per lb.)
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Fannie May (Chicago) closed
Brachs (Chicago) moved to Mexico
Life Savers moved to Canada
Hershey (CA, CO, PA) to Canada
• Florida Everglades
• Sugar can producers in third world countries:
Haiti, Philippines, Mexico
• Sugar refiners: 1/3 have closed
Problem: NAFTA and CAFTA
• Would allow Mexican and Central American
sugar imports
• Proposed Solution:
extra $1-per-gallon subsidy to make sugarbased ethanol (on top of the 51¢ subsidy)
• 100 million gallons per year