Farm Supports Inflate Food Bills, Study Says

Farm subsidies for milk, peanuts and sugar add an extra $7 billion to Americans’ grocery bills each year and push the cost of foods containing those products to 25 cents of every food dollar, a consumer group study shows.

Farm price supports add 60 cents to the price of a five-pound bag of sugar, 15 cents to a half gallon of ice cream and 45 cents to a three-pound jar of peanut butter, Ellen Haas, director of Public Voice for Food and Health Policy, said Tuesday.

“American consumers are financing the sugar and peanut commodity programs with their grocery money, and they are getting absolutely no return,” Haas said in a statement. “On top of that, they are paying for the dairy program twice--with grocery money and again with tax money.”

Annual Cost

Overall, dairy supports cost consumers $4 billion annually, she said--$2 billion in higher grocery prices and $2 billion in taxes. Sugar supports add $3 billion to the cost of sugar-containing foods, and peanuts cost at least $250 million more than they would without price supports, she said.

Public Voice announced the figures at a news conference as the House and Senate agriculture committees put the final touches on new farm legislation to replace the law that expires at the end of this month. Haas said the figures were put together from research by the Agriculture Department. “Consumers favor paying their fair share to maintain a healthy, well-balanced farm economy,” Haas said. But, “these three commodity programs take unfair advantage of us, especially in the supermarket. That is our bottom line,” she added.

She said several members of Congress will attempt to amend the legislation to what her group considers a more pro-consumer form when the farm bills reach the full House and Senate later this month.

Bradley Is Sponsor

The sponsor of an amendment to the sugar program, Sen. Bill Bradley (D-N.J.), said it was impossible to make the changes during the committee bill-drafting process because the committees are dominated by special interests.

“Each of these proposals really goes at the heart of the log-rolling essence of federal farm programs,” Bradley told a news conference. He said he was within five to 10 votes of passing his amendment when it comes up in the full Senate.

Dairy interests are seeking renewal of a program that would pay farmers not to produce milk and would key milk price supports to the farmer’s cost of production.

Haas said a straight cut in price supports would be more advantageous to grocery shoppers. Such an option, she said, will be offered in the Senate by Sen. Paula Hawkins (R-Fla.) and in the House by Reps. James Olin (D-Va.) and Robert Michel (R-Ill).

Both agriculture committees propose to continue current sugar price supports, but Haas said cuts in the level will be sought by Bradley and Sen. Slade Gorton (R-Wash.) and by Reps. Thomas Downey (D-N.Y.) and Willis Gradison (R-Ohio).

Quotas Granted

For peanuts, pending legislation would retain essentially the current system, under which certain farmers are granted rights to grow a quota of peanuts at the higher domestic support price.

Proposed amendments by Sen. Richard Lugar (R-Ind.) and Rep. Stan Lundine (D-N.Y.) would either phase down or terminate the peanut quota system and lower price support levels.

Public Voice is a nonprofit research and lobbying group that concentrates on nutrition issues and receives support from foundation grants and private donations.