Friday, January 8, 2016

"This process subsidizes food growers and packagers to the tune of billions of dollars and drives up food bills for families by hundreds of dollars each year."

Depression-era laws raise your annual food bill by hundreds of dollars

by Bob Livingston

Anyone who does any grocery shopping knows that food prices are going through the roof. What most people probably don’t know is how Depression-era laws are responsible for much of food’s high prices.

The Agricultural Marketing Agreement Act of 1937, which forced farmers to kill and bury livestock and let produce rot in fields as starving people stood in line for soup kitchens during the Great Depression, continues to drive up food prices and manipulate supply. There is no free market in farm prices, nor in any segment of the American economy for that matter. U.S. democracy is best described as fascism.

The U.S. Department of Agriculture maintains market orders — which are caps on the volume of produce sold and its quality, restrictions on shape and size of the fruits and vegetables, and its packaging and handling — on 28 types of produce, from almonds to walnuts. These market orders are set each year by a cabal of big farmers, producers and packagers (like Sunkist) and by cubicle-dwelling government functionaries whose interests are in higher food prices. No consumers or consumer representatives are included.

The market committee makes a proposal to the USDA, which rubber-stamps it and sends it to growers for approval. If two-thirds of the growers in a designated area approve, the order takes effect.

Market orders prevent misshapen, but perfectly edible, fruit and vegetables from being sold at discount and mandate that fruit that is smaller than a prescribed (and arbitrary) standard must be discarded and left to rot — or sometimes shipped overseas at profit to the packagers. In December, a market order prevented 40 percent of the California orange crop from going to market, despite wholesale prices being 12 percent above last year’s.

This process subsidizes food growers and packagers to the tune of billions of dollars and drives up food bills for families by hundreds of dollars each year.

Last June, the U.S. Supreme Court sided with California raisin growers who had defied a market order by packaging and selling their own raisins. Under the raisin market order, growers were told what percentage of their crop they could sell and the price they would get. The rest had to be turned over to the USDA’s “reserve pool.” Crony corporations like Minute Maid and Sunkist took the raisins from the pool and packaged them for use in government school lunch programs or to be sold at reduced prices overseas.

The rub came when the USDA decided to quit compensating growers for what it took for the reserve pool. The USDA claimed to the court that the taking was voluntary. But the court ruled that “voluntary exchange” wasn’t a very appropriate definition of the government’s forcing the growers to turn over 47 percent of their raisin crop one year and 30 percent the next without compensation.

Despite that Supreme Court victory, central planners continue to manipulate food prices, subsidize food growers and packagers (which is wealth redistribution as corporate welfare), and create artificial shortages, all to the disadvantage of the consumer.

Meanwhile, the USDA makes war on the common people, targeting people like magicians, rabbit growers and small farmers.

(This information in no way is meant to disregard the role inflation plays in rising food prices. The U.S. is currently experiencing a deflationary recession in commodities and energy that is hiding the inflation in food and other consumer items. BL)


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