ON MAY 8 THE WINE INSTITUTE, one of Washington’s most effective lobbying groups, held a reception at the Library of Congress attended by some 300 senators, House members, pals of the administration, congressional staffers, U.S. Department of Agriculture employees, and businessmen. Even by Washington standards, the event was lavish, with trays of decorative hors d’oeuvres, jumbo strawberries dunked in chocolate, champagne, and, of course, bottomless goblets of California chardonnays and beaujolais.
The Wine Institute had much to celebrate on this evening. Just five days earlier Agriculture Secretary Dan Glickman had announced that the institute would receive a $ 3 million gift from USDA’s Market Access Program (MAP). No time was wasted spending it. The purpose of the MAP — previously called the Market Promotion Program and before that Targeted Export Assistance — is to help U.S. farm producers and food companies market and advertise their products overseas. Over the past decade MAP has pumped nearly $ 1 billion of taxpayer money into the coffers of many of America’s largest agri-businesses. More than $ 50 million of these funds has been captured by such impoverished vintners as Ernest and Julio Gallo, Fetzer Vineyards, and Kendall-Jackson. Gallo, which also receives a separate stipend of $ 300,000 for its brandy, announced sales of $ 1.5 billion last year.
At the height of last summer’s GOP congressional assault on the budget, when the future of the MAP seemed in peril, it was trade associations like the Wine Institute that waged a full-court press to save these business subsidies. John DeLuca, the institute’s CEO, told the San Francisco Chronicle that the MAP involves “all the essentials of what it takes today for America to be a leading international power.” He condemned budget cutters who fail to understand that with the $ 90-million-a-year MAP “we’re not talking about subsidies. We’re talking about partnerships with the government. ” Eliminating the MAP, he warned, would threaten tens of thousands of American jobs. Many of them in Washington, it would seem.
DeLuca and other program supporters recoil at the suggestion that the MAP is simply aid to dependent corporations. “If the worst features of modern society could be caught in one debate,” he complains, “it’s this one, with the sound bite of corporate welfare.” What then, one wonders, should one call a program that last year provided $ 500,000 to Tyson Foods; $ 730,000 to Welch’s Food, Inc., the fruit-juice company; $ 42,000 to Pepperidge Farms; $ 308,000 to Ocean Spray Cranberries Cooperative; $ 526,000 for the Pillsbury Company to advertise the dough boy; and $ 281,000 to the Campbell Soup Co.? The list of Fortune 500 companies on the dole could fill most of this page.
MAP funds are generally distributed through hundreds of agriculture trade cooperatives — ranging from the Potato Research and Promotion Board ($ 585, 000) to Asparagus USA ($ 175,000) to one of the bigger winners in 1996, the Kentucky Distillers Association ($ 1 million) — which pass the money on to the brandname companies and smaller firms.
One company, Newman’s Own Production, maker of the actor’s renowned salad dressing, was actually solicited by the Department of Agriculture to submit a request for a MAP grant. This prompted Rep. Charles Schumer, a New York Democrat and a longstanding critic of the MAP, to ask: “Is this a government program or is this a Publisher’s Clearing House contest?”
Secretary Glickman says the program increases food exports by helping put ” high-value U.S. products in the grocery baskets of foreign consumers and in the process create jobs here at home.” Just what is a “high value” agriculture item? Well, gourmet pet food for one. Last year Ralston Purina Co. of St. Louis was awarded $ 239,000 (Dick Gephardt is an enthusiastic MAP supporter), and this year a consortium called the Petfood Institute will divvy up $ 420,000.
Another high-value-added U.S. agriculture export is “frozen bovine semen.” This country is the global leader in breeding cows. This year American beef breeders will receive just under $ 1 million to keep America number one. The money gets passed on to firms such as Sire Power, Inc., and Select Sires, Inc. , to help sell Snuffy the Bull’s sperm. Then there’s the U.S. Surimi Commission, which gets $ 215,000 this year. The department explains that surimi, all the rage in Japan, is “chopped up fish that is artificially colored green or bright pink and then molded like jello.”
One product that is not so hot in Japan these days is raisins. Several years ago the California Raisin Board spent $ 3 million of MAP money to run its famous dancing-raisin ads in the Far East. But the ads ran in English, and the baffled Japanese audience didn’t get the pun when the cartoon raisins started singing Marvin Gaye’s “I Heard It Through The Grapevine.” The Japanese thought they were watching dancing potatoes. It’s doubtful that the California Raisin Board would have cavalierly dumped $ 3 million of its own money into an advertising campaign without first testing its appeal.
One longstanding recipient of USDA foreignadvertising money is Sun-Diamond Growers of California, one of the nation’s largest producers of raisins, prunes, nuts, and other snack foods. Over the past several years Sun-Diamond has received more than $ 4 million in MAP funds. Now the $ 650 million firm is under indictment for providing thousands of dollars of illegal gifts — including meals, entertainment, campaign contributions, a five-piece luggage set, and other assorted freebies — to former Clinton agriculture secretary Mike Espy and his girlfriend. Sometimes government-industry partnerships end up a little too cozy.
So how, in the era of government downsizing, does this poster child for the corporate welfare state survive? On June 12 the House of Representatives soundly trounced an amendment sponsored by Schumer and Republican Edward Royce of California to terminate the MAP And last summer, the House actually voted to increase its budget. Yet for all its supporters’ pronouncements about its power to expand U.S. export markets — $ 16 of new exports for every $ 1 of MAP spending, is the latest mantra — almost no one believes it is effective. The independent U.S. General Accounting Office recently reported that the MAP had no discernible effect on America’s $ 60-billion-a- year agriculture export sales.
No, the MAP, like so many other corporate safetynet programs in Washington, survives through pure political muscle. When it comes to the MAP, many of the staunchest anti-government Republicans, like John Boehner, George Nethercurt, Frank Riggs, and most of the rest of the northern California delegation, become enthusiastic champions of industrial policy, while hordes of normally anti-business Democrats, like Richard Durbin, Vic Fazio, David Obey, and Gephardt, become flacks for giants in the corporate food chain.
To hold off its would-be executioners, the MAP is now in reform mode — hence the recent name change. In a bow to political correctness last year, the USDA announced that MAP funds would no longer subsidize mink and tobacco producers. It seems that Democratic support for the program began to erode after Doris Day’s League for the Protection of Animals and other liberal animal-rights groups discovered that in 1993 and 1994 U.S. furriers received more than $ 1.5 million in taxpayer subsidies.
To deflect the charge of “corporate welfare,” the MAP recently announced that more than half its grant money will be routed to small firms, rather than the Sunkists, Doles, and Pillsburys. Now more of the recipients will be small businesses, such as the Great Western Tortilla Co. in Denver and the Ramsey Popcorn Company in Ramsey, Indiana. Congress has also recently ended the entitlement feature of the MAP, which allowed the same firms to receive millions of advertising dollars from USDA year after year. Under new guidelines, no firm may receive MAP money for more than five years in a row. GOP and Clinton welfare-reform proposals would cut off single mothers’ stipends after two years but allow corporate America five years to get off the dole.
The Market Access Program cannot and should not be reformed, replaced, or renamed — it should be exterminated. It is ludicrous for Congress and the Department of Agriculture to be passing out $ 100,000 checks to favored firms with the political clout to chase tax dollars around Capitol Hill — particularly when the same firms that plead poverty turn around and bestow gifts and host lavish receptions as tokens of their appreciation.
Yet, depressingly, this and hundreds of other equally preposterous corporate welfare programs — from Export-Import Bank credit assistance to high-tech pork awarded to U.S. computer and electronics firms — have survived the Republican budget crusade nearly unscathed. All told, corporate welfare costs American taxpayers about $ 75 billion a year, enough to cut the budget deficit at least in half. Yet as Republican congressman Scott Klug of Wisconsin recently acknowledged, “We have not shown the same kind of fervor in cutting corporate welfare as we have in the social area.” This reluctance to take on corporate pork undermines the entire deficit-reduction effort and confirms many Americans’ suspicion that Republicans oppose big government except when it subsidizes their political allies.
It is true that if Congress takes away the $ 3 million taxpayer gift to California vintners, the Wine Institute might have to serve smaller strawberries and less expensive champagne at its annual Washington shindig. But apparently that’s something Congress simply will never permit.
Stephen Moore is director of fiscal-policy studies at the Cato Institute.
