Tad DeHaven over at the Cato Institute made a list of this year’s beneficiaries of the U.S. Department of Agriculture’s Value-Added Marketing Grant program. The program, which is relatively small compared to others, will spend some $56 million in taxpayer dollars on “producers of agricultural commodities” who can use the money “for planning activities and for working capital for marketing value-added agricultural products.” As DeHaven explains this year the winners are wine producers:
The rationale behind this grant is that the producers will generate economic growth and jobs. That’s the excuse behind most of these grants without much evidence to support the claim. And while the grant may help a company stay in business — for now — or help produce a bottle of wine at a price that consumers can stomach, these subsidies are paid for by taxpayers through their taxes or with more debt which ultimately will have to be paid for by taxpayers. The government doesn’t have money of its own, and in order to subsidize wineries it needs to get the money somewhere else in the economy. (Obviously this is true for all subsidies whether for oil, gas, wind, sugar, small businesses, etc.).
As DeHaven concludes:
The $56 million Value-Added Marketing Grant program is a pretty small outlay in a $3.8 trillion federal budget. However, it’s not so much the size of the program that’s the problem. Rather, the program symbolizes the problem with allowing the federal government to spend other people’s money on virtually anything that the politicians on Capitol Hill desire. Given the government’s rising debt load, that situation must be remedied before Washington sends the economy off the cliff.
Sigh . . . somebody pass me a bottle of wine.
I'm not exactly boycott-minded, but I do distinguish between brands and I do consider whether a company is a good citizen. Companies that get subsidies? I avoid them. It's not a strict thing, so I can't say I'll never buy a GM car... but it would be extremely unlikely.
Remember that Christmas tree tax they wanted to add? The one for "marketing" purposes? Yeah, as soon as that passes I get myself a plastic tree. Or grow my own.
And the wine thing? I probably can't keep track of which labels are tapping my paycheck. So maybe I'll just stick to the imports. Chile has a market economy. And some nice wines.
Reply to this commentLinkReport AbuseAwesome wines!
Chilean reds are a bit weird at first, cos they tend to be muddier than the European or American reds.
But I find they're lower in tanins, and so are smoother in quantity.
And of course, they're WAAAAY cheap. That's how come they and me introduced ourselves originally.
I haven't even SEEN any Chilean whites, though. Strange. And I won't buy anything produced in Argentina, if I know it came from there in advance.
Like, 2/3 of all surviving Reichsfuhrer SS agents are in Argentina, protected by the government, as some sort of sick consolation prize for my "unfortunate" existence.
Reply to this commentLinkReport Abuse"The rationale behind this grant is that the producers will generate economic growth and jobs. That’s the excuse behind most of these grants without much evidence to support the claim. "
If you are looking for evidence to support this claim, I would encourage you to read Virginia Governor Bob McDonnell's February 2, 2012 report on the Virginia Wine industry (available here: External Link
). The report quantifies the substantial growth in the Virginia wine industry between 2005 and 2010. During his tenure as Governor, McDonnell has been a driving force behind this effort. Many wineries throughout the country utilize nominal grants and loans to support this growth, which has a positive impact on tax revenues, job creation, and fueling the tourism economy.
Among the highlights, "Virginia’s burgeoning wine industry contributes almost three-quarters of a billion dollars – or $747 million – annually to Virginia’s economy, an increase of 106 percent over the figures from the last economic impact study conducted in 2005." Also, "the number of full-time equivalent jobs at wineries and vineyards rose from 3,162 [in 2005] to 4,753 [in 2011], a 50 percent increase, and wages from jobs at wineries and vineyards increased from $84 million to $156 million, an 86 percent increase, during the same time period." And of particular interest to state and local governments "the amount of taxes paid to the state and to local
governments grew from $21 million to $43 million, a 105 percent increase."
Governor McDonnell's report acknowledges the "significant support from Virginia state government over the last few years," to include "establishment/expansion tax credit program created by Governor McDonnell and approved by the Virginia General Assembly in 2011, as well as the "increase of appropriations into the Virginia Wine Promotion Fund for wine-related research, education, and marketing. Governor McDonnell requested the funding increase and the General Assembly approved it in 2010."
These efforts have resulted in tremendous benefits for Virginians, in terms of both job opportunities, growth in the economy and increased tax revenues. I suspect that similar efforts in other states can yield equally favorable results.
Reply to this commentLinkReport AbuseWould this growth have occured had there been no subsidies?
Reply to this commentLinkReport AbuseWhat about the jobs the extra taxes needed to pay these subsidies, destroyed? Don't they matter?
So it was a great business opportunity... One that private investors, what, couldn't figure out how to exploit? Private individuals investing in private companies don't benefit from expanding the economy? Did they just miss the profit opportunity that only state planners could recognize?
Nonsense.
If you didn't get grant money there's still a great investment opportunity available to you: open a storefront selling tar and feathers.
Reply to this commentLinkReport AbuseWhat part of NON-FEDERAL do you have the genetic disability to not comprehend?
Unbeknownst to that little, sweet snap-pea between your ears, you just perfectly proved that the federal government need not engage in this sort of budgeting.
As well, you have served to highlight the quintessentially INTRASTATE nature of the particular program, which implicates -- against your argument -- Article I, Section 8, Clause 3.
(That would be a citation to that old, worn out, inconvenient, document that the political left despises -- our Constitution.)
Who are you? KGVA?
You must be the polar opposite of a Soviet-era Hollywood useful idiot.
In one comment, you utterly destroyed the agricultural program at issue, by highlighting, through clear example, that federal tax dollars are totally unneeded to spur particular industries in particular states.
Since most -- not all, most -- of the states listed in the DeHaven report have Democrat governors, maybe all those states need is the next gubernatorial election, in which they can select an effective conservative governor like Bob McDonnell.
But, I cannot express enough my gratitude that you just unwittingly shot an arrow through using federal tax money for this sort of thing.
Smooches, idi.
Reply to this commentLinkReport AbuseAnd this growth in the Virginia wine industry wouldn't have occurred without taxpayer "support"? Why not? Are Virginia state bureaucrats really that much savvier than private investors? Pardon me if I don't take the Governor's self-serving report as proof.
Reply to this commentLinkReport Abuse*Sigh* ... Why in the world do we need to spend tax dollars so wine makers -- excuse me, producers of "value-added agricultural products" -- can engage in "planning activities" or "marketing" or anything else?
And what's a NON-value-added agricultural product? Ethanol? I guess those are covered by a different, more lavish federal subsidy program.
Reply to this commentLinkReport AbuseAs a resident of Cumberland County NJ I look forward to the prosperity these measures will bring!!
/sarc
Reply to this commentLinkReport AbuseThank you, DeHaven.
A few comments:
1) What did Wild Wines in Oregon do to tick off the USDA? Only $94? That'll cover the cost of, like, three oak casks. Cheap ones. They need to do a better job performing favors on Ron Wyden, apparently.
2) Ben Nelson's Cornhusker-Kickback for ObamaCare is the pork-laden bribe that keeps on giving its larded result. I bet the voters of Nebraska are kicking themselves that hewon't grace them with his presence in this year's sure-to-be too-close-to-call Senate election.
3) What a waste of money to give NY wineries anything!
NY wine sales are dictated by the NY legislature to be 75% lower than they otherwise could be. This artificial deflation of sales of NY wine is caused by the liquor store lobby securing a mandate that wine not be sold in supermarkets. It can only be sold in liquor stores.
That may make sense for a state like Kansas, who values its blue laws and has no vibrant wine industry to speak of. I would welcome a few extra blue laws, if this state had witnessed the growth of ONE SINGLE INDUSTRY over the past three decades.
Instead, they're all in decline, wine included. And forcing people to go to a liquor store to buy wine severely depresses sales, and jacks up the price, diminishing the comparative advantage of locally produced wine.
So, that's probably the biggest waste in the entire federal budget, subsidizing NYS wine producers.
They'd be better off spending $1,000,000 to "convince" Shelly Silver and 1/2 his caucus to resign.
They could call it the "Excelsior Extortion"!
Reply to this commentLinkReport AbuseIf all it took was $1 million to get those vicious kleptocrats out of Albany you'd be able to raise it in bars and train stations just by passing the hat.
THAT would be stimulus you could believe in.
But I suspect those crooks rake in far more than that on just the quotidian skim.
Reply to this commentLinkReport AbuseThe one million was for Silver alone, but you're still right!
Well, Booz, as to their actual selling price?
EXCELSIOR!
Reply to this commentLinkReport AbuseAny package that convinces that crowd to leave would probably have to include a private jet and enough fuel to make it to Cuba.
Reply to this commentLinkReport AbuseGrad students should be able to charge off all their expenses for these wines to Uncle Sam. Who are we to insist on their paying the tab or even cutting consumption?
Reply to this commentLinkReport AbuseI deserve flogging for not pointing this out at first blush:
NOTICE:
Your federal government plans to become fehitzed (illogically obsessed) with the value that producers add to their products, in conjunction with the tax code.
WHIF:
The noxious fumes of a big, fat VAT wafting over our heads, in anticipation of Senator Present's re-election.
Reply to this commentLinkReport AbuseAmista will be glad to sell you a bottle of un-subsidized Sonoma County wine - red or white?
Reply to this commentLinkReport Abuse$94 for wild wines. Crazy money!
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