Apple Concentrate Tariff
by J. Christopher Robbins
[Posted May 2, 2002]
Think of a Red Delicious apple. It is the poster-child for the apple
family, perfect for a teacher's desk, a kid's lunchbox, or bobbing in
the autumn. I don't know anyone who has actually ever bobbed for apples,
but plenty of people buy Red Delicious. And I don't know why.
Red Delicious is to apples what Bud Light is to beer, what Gallo is to
wine, and what Kentucky Fried is to poultry. They are mealy,
thick-skinned, and bland. In Asia the Red Delicious is nicknamed "snake
food."
Yet ask farmers in China, and the real bad apples don't come from
Washington state. Those come from Washington, D.C. That's because, just
as with steel, our government recently imposed rules designed to drive
out foreign apple producers.
One method is through tariffs. Last year, for example, our government
instituted a 52-percent import duty on most Chinese apple juice.
[1]
Supporters say the tax is needed to offset a flood of low-priced
concentrate that started arriving on the West Coast in 1999. But what is
wrong with cheap juice? Instead, after adopting the juice tariff last
year, U.S. consumers have paid an excess $91 million for the product.
[2]
The money has unjustly enriched our domestic apple producers, now
comfortably insulated from competition.
Apples might be a particularly tart example of U.S. anticompetitiveness,
but they are hardly the only illustration of U.S. agricultural policies
that hurt consumers, inflate prices, and alienate other countries.
Take the case of milk. Americans currently pay two and a half times the
world market price for a gallon of milk.
[3]
This is thanks to federal regulations that permit states to establish
local milk cartels and thus keep less expensive milk out of the grocery
store. In fact, Americans are overpaying twice for the commodity: They
pay once at the supermarket and again on tax day, after which dairy
farmers skim $2 billion in cash subsidies from the federal budget.
Sugar is no sweet deal for Americans, either. We pay three times the
world market price
[4]
because our government imposes strict tariffs on cheaper foreign sugar.
The law also limits the amount of sugar U.S. companies are permitted to
process. For fat-cat U.S. sugar moguls, the policy is like stealing
candy from a baby. They have extracted a sweet $9.5-billion windfall
from American consumers since 1996, according to the General Accounting
Office.
I could go on longer about peanut crop policies that shell consumers for
$400 million a year,
[5]
corn subsidies without a kernel of logic, and wheat rules that chaff us
every time we step into a food market, convenience store, or restaurant.
All told, American consumers pay $272 billion more for food products a
year, courtesy of U.S. agricultural regulations that boost everyday
prices.
Returning to apples, there is a lesson to be learned from the Chinese.
Half a century of communist controls over Chinese agriculture yielded
only suffering, shortages, frustration, and even starvation. It was only
by dispensing with most government controls, price supports, and
subsidies in 1984
[6]
that apple production there expanded.
In fact, Chinese apple production has exploded. Today, China is the
worlds largest producer. They eclipsed our orchards in 1998. And they
don’t grow Red Delicious.
Comparing our two nations policies, it makes me wonder where todays
anticapitalists are really holed up. "Your country tells the world that
you favor free trade, but these rules [apple and steel tariffs] make
that position difficult for us to accept," a Yunnan province exporter
told me.
Indeed, while the Chinese have adopted laissez-faire agricultural
policies, our government still tries to regulate everything that grows,
grazes, or flowers. Its an easy job, since more Americans continue to
work as bureaucrats for the U.S. Department of Agriculture than till the
land east of the Mississippi.
[7]
Congress isnt helping much, either. They just inserted in this years
budget a $75-million straight cash subsidy for apple growers.
[8]
The provision
[9]
allows some firms to pluck $275,000 from the taxpayer money tree.
The apple juice-concentrate tariff is set to be extended this month if
it is not reviewed.
[10]
The Bush administration should put an end to this and other wasteful
agricultural policies that raise food prices for our families and
irritate our neighbors. |
