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Aid For Spinach Losses

Jim Prevor’s Perishable Pundit, March 28, 2007

We received a note from a well-respected reader about a news item:

My issue is concerning a recent article, Spinach growers get aid provision as food safety-standards bills stalls, which I read in USA Today on Thursday on my way to Charlotte to attend PMA’s Produce Solutions Conference.

Buried toward the back of the front section was an article about how Congress has passed $25 million to help the spinach farmers recover from their recent episode.

I find this really interesting.

So now, every time there is a commodity crisis we should expect some sort of federal relief? And how about the retailers and food service establishments that lost revenue and profits due to consumer reaction?

The whole bag salad category got hammered, so should there be some relief for Fresh Express, Ready Pac, Dole, and others? I’m not trying to rain on the spinach parade, as I guess I’m always happy that growers can get help.

In my mind, however, this raises a whole philosophical issue and to the role the government plays in these things.

First, just to clarify, Congress has not actually passed such a law, nor has the President signed it. It was — as the editorial, Pork has no place in ‘emergency’ war bill, pointed out the next day in USA Today — a provision put in the House bill to buy support for the Democratic version of the emergency war bill.

The issue does raise philosophical questions about the role of government. But, of course, so do many other issues.

The problem for our society, of course, is that every special interest believes that the philosophical issue should be set aside for a later day while the current situation is resolved as these things are often resolved in our society — with federal funds.

The theory behind the bill is that it is important we not punish the innocent along with the guilty — or we reduce the incentive to invest in proper food safety procedures.

And there is plenty of precedent. After 9/11, when the government grounded all airlines, the airlines got compensated. So if the government bans all spinach consumption, well, why not compensate the spinach growers?

Sure it is imperfect justice. After all, the aid went to airlines, though hotels also got burned, but some would argue that imperfect justice is better than no justice at all.

The Pundit wound up participating in this issue. When the Bill was an open-ended attempt to compensate the spinach farmers, the Congressional Budget Office asked the Pundit to help “score” the bill, or determine what the actual cost would be to the U.S. Treasury. The issue became moot when the decision was made to cap the bill at $25 million.

There is a very strong argument that the government should not bail people out in emergencies. Some people don’t buy hurricane insurance and they move into hurricane-prone regions, in part, because they get bailed out of disasters. Some farmers don’t buy crop insurance, in part, because they get all kinds of aid when the crops fail.

Some people build houses on beachfront land because the government comes and renourishes the beach when it gets thin.

Yet, all this being said, these things are part and parcel of our society. You would have to be a tougher guy than the Pundit to say we should stop it all and start right here, right now, with the spinach growers.

As it happens, the prospect for passage of the law isn’t particularly good.

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