Awesome Idea
Libertarians can be reasonable. We can support some regulation, when it is absolutely necesary. Like this idea, via Sallie James at Cato:
James Gibney, a reporter from the Atlantic, called me last week to ask some questions about dairy supports. He was preparing a blog post to propose a new labelling idea that might help break the frustrating stranglehold that the farm lobby has over U.S. agricultural policy. Here's James' idea:
To wit, every product whose ingredients benefit from a subsidy should include the following language on the label:
"This product has been subsidized by the U.S. government at taxpayer expense. For more information, please visit usda.gov."
And every product that benefits from tariff protection should have the following language on the label:
"This product is protected from foreign competition by U.S. import tariffs. Its price is higher as a result. For more information, please visit usitc.gov."
MikeB:
All for it. I would add that this should apply not only to products but also advertisements. And the label should include some info about the specific piece of legislation that imposed the subsidy or tariff, if possible.
For instance, the following might run on the bottom of an advertisment for a traditional 30-year mortgage:
"This financial product is regulated by American Recovery and Reinvestment Act of 2009. Interest rate and fees are higher as a result. For more information, please visit usitc.gov."
July 9, 2009, 11:47 amBart Hall (Kansas, USA):
I farm for a living -- as in no off-farm jobs and not a nickel of subsidy or grants -- and very much wish to see the farm lobby crushed. The best path to that end, however, is not via labelling but by a) moving Food Stamps from the USDA to HHS, and b) moving the Forest Service from the USDA to Interior.
Labels create all manner of problems the moment you encounter processed foods, which account for most sales volume at retail. At what percentage of subsidised product would a manufacturer be required to include label mention?
Dairy subsidies are doubly bad because they increase with distance from Eau Claire, Wisconsin. As a result California dairies can raise cows in total confinement, feed them on alfalfa grown with immense quantities of subsidised water, and then get a really good subsidised price for a generally poor product.
It's all tremendously distorted, and the path towards some halfway logical denouement is best begun by cutting the USDA's political base down to some 20 states or so. Changes the Senate dynamic quite drastically.
July 9, 2009, 12:48 pmOneEyedMan:
It would have to be a direct benefit or it would be unworkable.
July 9, 2009, 1:09 pmThat is, if they place a tariff on imported wine and that makes people drink more domestic beer, I would assume that would not require the label.
Otherwise, who is to say what domestic (or imported) products are more expensive because of a certain tariff?
At least if tariffs are high on imported cars then we can clearly say that domestic ones receive a price advantage.
Jeffrey Ellis:
Great idea! They will have to put it on GM and Chrysler cars too, right?
July 9, 2009, 2:16 pmJoshua Swink:
My god, what a barrage of non-sequiturs James has had to endure in the comments to his article. With the stupid so entrenched, who has any hope of ending these protectionist measures?
July 9, 2009, 2:33 pmLorenzo (from downunder):
Yes please! What a great idea :)
July 9, 2009, 2:45 pmfeeblemind:
You could add to the expense of packaging food by adding the label, but the effect would be negligible. Perhaps Ivy Leaguers read the fine print on food packages but the unwashed don't. BTW let's not forget to increase the bureaucracy to administrate and enforce compliance. Yeah. Let's just expand Government a little more. What could go wrong?
July 9, 2009, 3:53 pmthreecollie:
I am not exactly a fan of farm subsidies. They skew commodity prices to other farmers as well as in the store. However, much of the Dept of Ag budget goes into people feeding programs...a larger percentage all the time.
Right now pretty much every dairy farmer in the country is subsidizing somebody else's cheap milk. That includes farmers in California.
Cost of production in the USA, where nearly every breath a cow takes is inspected by somebody, equals at least sixteen dollars per hundredweight. The price paid to farmers right now, set, by the way by the government, is between ten and twelve dollars per hundredweight.
How much of a decrease in price have you seen in the stores?
Of course, if our dairy farmers pack it in and you don't mind melamine and leather powder in your milk, China's fast-growing dairy industry will be delighted to fill all your needs......
July 9, 2009, 3:58 pmIan Random:
I couldn't agree more, but I would want to make it mandatory for companies that produce and market the raw ingredients like dairies. I would make it optional for those that use the ingredients like bakers as they don't really have a choice. As for Bart Hall's point about moving the agencies around, that's even better.
July 9, 2009, 8:06 pmCraig S:
Hmmm...
I see some good arguments for and against...
I'd love to see farm subsidies and tariffs decline or be eliminated, but as mentioned, is it worth the increase in government oversight leading to a larger beaurorcracy? And, of course, just because tariffs are eliminated, do we really want to drink milk imported from China, for example, as pointed out by Ian Random? Hmmm....the answer doesn't look so simple.
But hey, keep trying, there's gotta be a way!
July 10, 2009, 11:55 amMikeB:
feeblemind -- I have to disagree that people don't read the labels. The notorious warnings on the labels for Olestra potato chips come to mind...
But you are right -- the labelling would wind up being irrelevant to consumer behavior cause the labels would be on so many products. But the point would be that it'd be out there as a constant reminder of how the gov has insert itself into the market, for better or worse.
July 10, 2009, 1:38 pmwindyridge:
I don't want milk from China! In fact I don't want anything food related from China.
July 12, 2009, 6:53 pm