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And that ain't peanuts

By Vin Suprynowicz
web posted March 11, 2002

Nearly a century ago, something good started to happen to Americans who consume peanuts -- not just kids with sandwiches in their lunchbox and old men in rocking chairs, mind you, but also tens of thousands of hard-working Americans who labor in factories making candy, and peanut butter, and all kinds of products processed in peanut oil.

Technology and the spread of the agricultural revolution -- increased harvests due to pesticides and fertilizer and better farming methods -- started to reduce the price of peanuts. And peanut prices tend to drop even further when competition is allowed from imported foreign peanuts, of course -- often grown in poor countries to which the U.S. doesn't have to send so much "stabilizing" foreign aid if people there are simply allowed to sell their produce into the hungry American market.

So how do you suppose the United States government responded to this trend, with its potential to leave even poor Americans better fed for less money?

Why, by steeping in and putting an end to it, of course. Several thousand peanut farmers in Georgia and Texas and Alabama were very upset by falling peanut prices. Given the choice between searching for more profitable crops during the Great Depression or simply calling their congressmen, they called their congressmen. Up went the protective tariff barriers, up went the expensive government "peanut quota" boondoggle to protect existing farmers (and those to whom they chose to sell their "quotas"), and back up went the price of peanuts ... reaching $610 per ton last year for those who held the quotas, as opposed to a mere $150 a ton for those who didn't.

Yes, the "temporary relief" program has now been in effect for 70 years.

And among the investors who now hold those limited but highly profitable "peanut quotas" is the John Hancock Insurance Co. (The beneficiaries of this decades-old scam, some as far afield as Anchorage, Alaska and New York City, grew irate when the Environmental Working Group, a research and advocacy organization, recently posted their congressional subsidies, by name, on the Internet.)

$1.2 billion ain't peanuts
$1.2 billion ain't peanuts

The current situation being so transparently absurd, Congress now debates spending $1.2 billion or more over the next five years to buy out 70,000 "quota holders," who argue they often had to borrow heavily to purchase their quotas and would thus be ruined if the whole scheme were to be simply abandoned. (The price of the transferrable "quotas" has now risen into the millions of dollars, the same way it will for anything which is held by the government in artificially short supply.)

Indeed, $1.2 billion might even be worthwhile, if when Congress was done the free market in peanuts were fully restored, import restrictions removed, the price of peanuts allowed to fall where it may, and farmers left to thrive or fail as best they can in that open market.

But that's not what Congress intends, of course. Oh no. Instead, the cautious fiduciary guardians of our public treasure now propose "to replace the peanut quotas with a new system of direct subsidies to growers -- similar to those now handed out to corn, wheat and cotton farms," The Associated Press reveals.

So, do I have this straight? We taxpayers (the only ones not consulted) have to pay the peanut farmers -- and thousands of absentee "quota holders" -- $1.2 billion to keep them in business this year, so they'll still be there next year to accept more billions in direct cash handouts? All to prevent the disaster of Americans finding themselves awash in cheap peanuts?

O brave new world, that hath such creatures in it.

Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal, a monthly contributor to "Shotgun News," and the author of "Send in the Waco Killers." For information on his monthly newsletter, "Privacy Alert," or on his new book, "The Ballad of Carl Drega," write 561 Keystone Ave., Suite 684, Reno, NV 89503; e-mail privacyalert@thespiritof76.com; or dial 775-348-8591.

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