The USDA’s Peanut Prop-Up

While the Department of Agriculture’s various protectionist and taxpayer subsidized programs cover a whole host of agricultural commodities, its special treatment of peanuts is especially egregious.

As Veronique de Rugy, senior research fellow at the Mercatus Center, explains in a new piece for Creators, “The USDA recently announced that U.S. peanut farmers will produce 6.1 billion pounds this fall, on top of 2.9 billion in leftover stockpiles.”

The nearly three billion pounds in excess supply should lower the price of peanuts and incentivize farmers to produce less. However, as de Rugy notes, “Uncle Sam won’t let the market work its magic to eliminate excess supply. Instead, it subsidizes the farmers whose income might have otherwise suffered from the reduction in price by paying them most of the difference between a reference price of $535 per ton and the market price.”

Furthermore, beyond simply propping up our own peanut producers, the U.S. government actively undermines foreign markets by “us[ing] its stockpiles of peanuts to decimate peanut farmers’ earnings in poor countries by dumping free peanuts under the cover of foreign aid.”

The USDA’s peanut program is a clear cut case of corporate welfare, and a boondoggle that only persists by staying out of the public eye.

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