We who understand economics and human nature – realize the omni-directional warping that government causes.
For instance, too many people do the subsidized thing – creating massive surpluses, and attending massive losses.
Surplus Wheat Production Resulting in Heavy Losses: “Atif Ikram Sheikh – who is also Group Leader of HCCI and Chairman FPCCI Regional Committee on Industries – said the support price of the wheat, which presently stands at Rs 1,300 per mound, is the reason behind all the trouble.”
Who sets “the support price of wheat?” Government, of course.
This bad government policy – is Pakistan’s. But it warps the entire global wheat market – screwing, amongst many others, United States’ wheat farmers. Bad government anywhere – is today bad government everywhere.
If you want actually free trade anywhere – you need to work towards less government everywhere.
This is no less true domestically. Speaking of crops: We less-government-types have long disliked our Farm Bill. Which is a 1930s New Deal relic. And as global trade became ubiquitous, the Farm Bill became not just a domestic problem – but an international one.
Why is Pakistan’s government propping up crops? In part in response to us propping up crops.
Think of the Olympics and steroids. If an athlete knows everyone else is juicing – the temptation to juice just to get even is huge. Governments juice their crops, which causes governments to juice their crops, which leads to governments juicing their crops, which….
Back to domestic juicing. The Farm Bill is juicing. And no industry has been more vocally opposed to the sugar portion of the Farm Bill – than the candy makers. Big Candy has spent a lot of coin opposing the Farm Bill. To wit:
‘Big Candy’ is Lobbying the Trump Administration. It’s Also Holding Events at Trump Hotels: “The National Confectioners Association is doing a lot of business with President Trump’s company….(T)he organization, representing candy titans Hershey, Mars and Jelly Belly, among other companies, is optimistic about scoring big, early policy wins from the Trump administration. Among the industry’s priorities: a long-sought rollback of government sugar subsidies that candy firms say drive up the costs of making their products.”
Ok, the claim that “sugar subsidies…drive up the costs of making their products” – has always perplexed me. In the sense that many of the very same people who make it – are all for foreign government subsidies because they drive down the cost of those subsidized imports.
How does one government subsidy lower prices – and another raise them?
That whiplash-inducing dichotomy aside – Big Candy shouldn’t be throwing government subsidy stones. Behold this from the National Confectioners Association (NCA) website:
Market Access Program (MAP): “More than $2 million in marketing subsidies is available to the confectionery industry for the 12-month period beginning in January. Designed to provide assistance in promoting confectionery products on the international market, these funds are available through the U.S. Department of Agriculture Market Access Program and are managed by the National Confectioners Association….
“NCA is a cooperator within the United States Department of Agriculture’s Market Access Program on behalf of the confectionery industry. This program helps U.S. producers, exporters, private companies and other trade organizations finance promotional activities for U.S. agricultural products. The MAP encourages the development, maintenance and expansion of commercial export markets for agricultural commodities. Activities financed include consumer promotions, market research, technical assistance and trade servicing.
“To learn more about how government reimbursement can help your company grow export sales, contact….”
Get that? Big Candy – the big money behind opposition to the Farm Bill – is on the government dole. Receiving more than $2 million per annum – allocated by and as a part of…the Farm Bill.
Get THAT? Big Candy opposes the Farm Bill – except when they’re receiving government money from the Farm Bill.
Oh – and how much government money has been spent on the sugar portion of the Farm Bill since its 2014 passage? That would be zero dollars. Or $6+ million worth of Big Candy Farm Bill marketing handouts.
As we said at the outset – we less-government-types want to see an end to as much government subsidy money and protectionism as possible. In all directions.
Big Candy? Not so much, it would seem.
This first appeared in Red State.