U.S. peanut growers have a problem. They've grown way too many peanuts for the market to bear. So now, instead of cutting back, they want the government to make them whole. Nothing better illustrates the craziness of American farm policies than this.
A recent Reuters report notes that peanut growers boosted their planted acreage by 20% this spring, leading to a 3.1 million ton crop. That is the second most ever produced, a glut, even as prices drop to near seven-year lows.
Why would they boost output if the bottom was falling out of the market? Simple. The government — that is, you — is paying them to.
|There goes your Tax Dollars|
Under current agricultural law, the U.S. Department of Agriculture pays peanut farmers anytime the price drops below the "reference price" of $535 a ton. Today, with the price at around $400 a ton because of the glut, taxpayers could be on the hook for as much as $2 billion in payments to peanut farmers, according to a Congressional Research Service report. That ain't peanuts. What's worse, those peanuts will now be taken off the market and stored. So while taxpayers pay for them, they won't get to eat them. The government-funded stockpile of surplus peanuts is growing, and no one knows what to do.Read the rest of the story HERE.
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