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Pundit’s Mailbag – The McDonald’s Study, Nanny-Stateism And The Role Of Industry Advocacy Groups In Promoting Big Government And Budget Deficits

Jim Prevor’s Perishable Pundit, July 26, 2013

Sometimes the story behind the story is a bigger issue than the story itself, such was the reaction of one industry participant to our piece titled, Do Consumers Eat More When Given Calorie Recommendations At Restaurants? ‘McDonald’s Study’ Demonstrates Nanny-Statism May Have Unintended Consequences.

Please keep writing articles like this one!

The produce industry seems to be full of willing participants in big government solutions of all kinds, from immigration amnesty, to subsidizing businesses in the so-called “food deserts”.  Our industry needs a thoughtful voice who will question the conventional wisdoms and ask his readers to check their own self-interests and those of their businesses against the greater good of a free people.

— Doug Stoiber
Vice President, Produce Transportation Operations
L&M Transportation
Raleigh, North Carolina

We appreciate Doug’s note and support.  He raises an important point, one that actually has less to do with the produce industry than the future of America. The point is that our political system leads to immense pressure to expand government.

When the last farm bill was being debated, we wrote a piece titled, Farm Bill Passes House…Good For Produce; A Problem for America.

It is “high five” time among those the produce industry retains to represent its interests in Washington D.C. Whereas traditionally the Farm Bill was succor for program crops and had little or nothing for the fruit and vegetable industry, skilled lobbying and persistent effort brought about $3 billion over the next five years for produce interests. United sings the praises of the bill this way:

For almost three years, the produce industry has supported a common goal to engage in developing U.S. farm policy that recognizes the significance of the fruit and vegetable industry in agriculture and advances key policy initiatives that enhance the competitiveness of our industry in the global marketplace. Today, this vision becomes more of a reality as Congress finalizes its work on the Conference Report. For us, this represents a sea-change on how farm policy in this country will be developed in future farm bills.

In particular, this bill will significantly expand the USDA Fruit and Vegetable School Snack Program, expand state block grants to increase industry competitiveness, purchase more fruits and vegetables for school lunch, continue the DOD Fresh Program for schools, provide technical assistance to address international market access issues, invest in specialty crop research including produce food safety, enhance programs to prevent invasive plant pests and disease, and target funding to address conservation priorities.

Most importantly, this Farm Bill will help all sectors of the produce industry deliver the highest quality, safest and most affordable fresh produce to consumers in the United States and around the world. Bottom line, every dollar spent to increase the competitiveness of U.S. fruit and vegetable producers serves all Americans who desperately need our products for their health and which will come back many times over in better health for our children and reduced long-term health care costs for the next generation.

United Fresh also wants to thank the tireless efforts of Congressman Dennis Cardoza (D-CA) and Congressman Adam Putnam (R-FL) for being our “champions” in the House of Representatives. Their vision and dedication to ensuring that fruits and vegetables would be part of the Farm Bill was monumental.

United, WGA, PMA and the whole Specialty Crop Farm Bill Alliance merit industry praise for tireless effort and intelligent assessment of the situation, prudent strategy development and efficient utilization of industry assets.

From an industry point of view, they played the trade’s cards perfectly. Instead of sitting out the battle or opposing the Farm Bill, both likely to win the industry nothing, our lobbying pros made a deal and brought us into the coalition to pass the Farm Bill in exchange for endorsement of several industry priorities.

So if we played the game so smart and accomplished so much, why does this Pundit feel a little sick? Because when we take off our industry hats and put on our American hats, the whole process reveals deep flaws in our governance structure, flaws that are inflating the budget and weakening our country….

….In fact, although the $3 billion for the produce industry often makes industry releases, the total cost of the bill — in excess of $300 billion — is rarely mentioned.

Don’t be upset that the trade only succeeded in getting 1% of the bill — that was truly a great accomplishment. Trading a particular industry’s support for 1% of the cost of a bill is par for the course. The thing to remember is that exactly what has gone on with this bill goes on with bills all the time.

In this case, we got a little for the home team — most of the time, the money is going to coal mine owners or used car lot dealers or some other industry that traded its support for cash. It usually isn’t even on the radar screen of most in the produce industry.

Maybe there is enough “time we got ours” sentiment to make this all seem great. But it is worth noting who pays for all these payoffs to buy industry support for every law. We call those payers taxpayers, like all of us. And this whole process impoverishes us all.

What happens is that some small group — say sugar cane growers — gets a subsidy, and because the subsidy is large and the number of sugar cane growers are few, they are intently focused on the subsidy. So they work for candidates who support the subsidy, donate money to the politicians who support the subsidy, etc.

In contrast, the subsidy is paid for by hundreds of millions of people paying a little more for the sugar in their coffee. Most voters won’t even know they are paying more, and if they did, the amount would be so small it wouldn’t be determinative in their vote, much less motivate them to campaign and donate to candidates who oppose sugar subsidies.

So, in the end, politics becomes all about politicians looking for special interest groups whose support they can buy off at the expense of the general welfare.

So the problem is you have a group such as the produce industry, which is almost surely opposed to giving farmers in big program crops subsidies, but because the odds of being able to stop such a program are small and the benefits to stopping it would be spread among the whole population, the intelligent thing to do is to sell the produce industry’s support for the Farm Bill in exchange for a small allotment for our favored programs.

Multiply that across every industry and every law and you understand why our system isn’t working as well as we need it to.

Asking people to be selfless and disregard their own interests is not likely a sustainably successful strategy. The Founders thought that by pitting faction against faction — see Federalist #10 — they could keep a check on the propensity of interests to capture government in their own interest. This works but only as long as the sphere and budget of government is limited. If government can do anything and spend anything, then the factions just agree to all eat at the public trough.

Those urging things such as balanced budget amendments are searching for the kind of structural change that would make a difference in the way factions negotiate. We don’t know the solution yet, but we know it will take more than urging people to leave self-interest at the door.

Many thanks to Doug Stoiber for weighing in on this important topic.

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