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It Ain't Just Peanuts


Economic Trends

IT AIN'T JUST PEANUTS

How much are agricultural price supports costing U.S. consumers? In the case of peanuts and sugar, the numbers are documented by numerous studies.

Dating from the 1930s, the peanut program aids growers via price supports, production quotas, and import curbs. According to the General Accounting Office, the U.S. support price ran about 45% above the world market price in the 1980s--providing quota holders with juicy net returns of at least 51% after costs.

What's more, in 1991, just 6,182 producers--or 22% of America's peanut farmers--owned 80% of the quotas, and at least half of the quotas are rented out to other producers. The GAO reckons that consumers have shelled out as much as $500 million extra a year for peanuts because of the program.

Similarly with sugar: In recent years, the U.S. price has been kept at almost twice the average world level--through import quotas, a high tariff, and domestic marketing allotments. While the program's annual costs to consumers have been estimated at $1.4 billion to $1.6 billion, the GAO figures that about 150 farms--less than 1% of all sugar growers--receive 42% of the $336 million in benefits reaped by growers, or an average of $940,000 apiece.

Given the costs and Congress' zeal for deregulation, the days of the peanut and sugar programs should be numbered. But so far, they have survived the budget wars relatively unscathed.BY GENE KORETZ


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