Next time you stand in line at the supermarket, divert your eyes from the National Enquirer and notice that nearly one in six Americans pays for groceries with food stamps. Let’s throw partisan pitchforks aside and ask this question: If 47 million Americans can’t afford to toss a slice of cheese, a few chicken wings and a stalk of broccoli on the table tonight, why don’t we make the price of food cheaper? To do that, President Obama and other government officials must undo government policies that drive up prices. (this article appears today in the Orange County Register)
Farmers, importers and retailers would love to deliver more stuff to American dinner tables but face three major obstacles that contribute to higher food prices, and prevent lower-income Americans from enjoying a decent meal tonight:
The ethanol mandate. Imagine inviting a hungry family to your home for barbecued steak and corn on the cob. As the smoky aroma wafts across the patio, you lead your guests out to your garage, where you jam the food into the fuel tank of your SUV. That’s what the federal government has done to the grain market by mandating that refiners use 13.8 billion gallons of ethanol derived from corn. When nearly one in six Americans may be hungry, remember that one in three ears of corn goes to ethanol rather than onto dinner plates or in the food troughs of livestock. The United Nations and International Monetary Fund conclude that ethanol mandates have driven up food prices by 15 to 30 percent.
For nearly all of human history, man’s greatest challenge has been to gather enough calories to make it through the day. But now Congress and the White House have declared that fight over and instead battle to make sure the internal combustion engine gets enough to eat.
Price Supports and Protectionism
I don’t know whether Milton Friedman ever tapped his foot to Bono’s music, but both would have agreed that protectionist policies hurt poor children. Take a humble school kid’s lunch. Under the National School Lunch Program, about 32 million kids get free or subsidized lunches.
For twelve years in public school, I ate the same lunch: peanut butter and jelly with a glass of milk. The government, using the Milk Price Supports program and trade protectionism, pushes up the price of the humble PB&J and glass of milk lunch. This, of course, is often done in the name of keeping us safe from dangerous foreign food suppliers from regimes like …Canada. The U.S. International Trade Commission figures these rules make your kid’s milk 25 percent more expensive.
It’s worse for the sandwich. Strawberry jelly contains sugar, derived from cane, beets and corn. Americans pay almost twice as much for sugar as the rest of the world. Federal bureaucrats, holding a big map of the world and wielding a Sharpie, decide how much sugar each exporting country is allowed to bring to the U.S. Less foreign sugar means higher prices for beets and corn. It also crushes jobs, as candy makers like Lifesavers move plants to Canada.
Peanut butter lovers suffer, too. Whether smooth or crunchy, peanut butter costs more because the U.S. limits how much we can buy from foreigners. Don’t like PB&J? A grilled cheese sandwich also costs more, as dairy supports drive up cheese prices by about 37 percent.
These three hurdles help shunt 47 million people into the line for food stamps. We need fewer handouts and cheaper food.