Libertarian Think Tank Continues Clueless Farm Policy Critique

August 25, 2015

Larry Combest (R-TX), the former chairman of the House Intelligence and Agriculture Committees, didn’t pull many punches during a recent speech he gave about extreme-minded special interest groups attacking farm policy.

In particular, he zeroed in on Heritage Action, which Combest said “has either got a strange obsession over U.S. farm policy or it is beholden to some really high-dollar contributors with a financial stake against farmers.”

Combest noted that Heritage scored more votes on the Farm Bill than any other issue that came before the U.S. House of Representatives in the 113th Congress.

“More than the debt ceiling.  More than Keystone Energy.  More than the budget.  More than amnesty….Even more than Obamacare,” he said, noting that Heritage was so busy attacking farmers that it failed to score votes on EPA overreach, death tax repeal, tax reform, gun rights, religious freedom, and other conservative priorities.

And from the looks of things, Heritage doesn’t plan to change course anytime soon.

Just weeks after Combest’s remarks, the Heritage spin machine wasn’t focused on EPA’s waters of the U.S. land-grab set to kick in on Friday.  Instead, it was promoting an article by one of its “scholars” that solely blamed U.S. sugar policy for a recent decision by Mondelez to move an Oreo assembly line from Illinois to Mexico.

“The leading ingredient in Oreos is sugar, and U.S. trade barriers currently require Americans to pay twice the average world prices for sugar,” Heritage’s “expert” wrote.  “Sugar-using industries now have a big incentive to relocate from the United States to countries where access to their primary ingredient is not restricted.”

In true Heritage fashion, the think tank presented a false argument that crumbles just like an Oreo once the facts are presented.

Mexico is anything but an open sugar market.  Mexico has tariffs in place to block foreign sugar imports, and Mexico imports far less sugar than America, which is the world’s second biggest importer.

And sugar prices in Mexico are no big savings from U.S. prices, according to data by the U.S. Department of Agriculture.

Mexican food companies, for example, paid on average 31 cents per pound of refined sugar in 2014.  The average U.S. price was 32 cents per pound.  Go back to 2013 and Mexican prices were at 29 cents, compared to 27 cents in America.

As for the claim that sugar is the largest ingredient in a box of Oreos?  That’s true, but it’s clearly not the most costly.  There’s just 12 cents worth of sugar in a $5.89 box of Oreos—or about 2 percent of the product’s cost.

These are pretty big oversights by Heritage, but none are as startling as the omitted fact that the U.S. confectionery business is growing, not declining, as Heritage would have readers believe.

U.S. Census Bureau figures show that confectioners like Mondelez have expanded and added jobs since 2008—a time when overall U.S. unemployment rates were worsening.

In fact, the American Sugar Alliance has, in recent years, tracked more than 100 examples of sweetened product producers expanding in America. And yes, Mondelez is among those companies that have announced U.S. expansions, as have food makers based in Mexico and Canada that are building in the United States.

Since Heritage is incapable of presenting a factually accurate account of the Oreo relocation, what’s the real story?

According to the Chicago Tribune: “The company decided not to make a $130 million upgrade to the facility, the company’s largest U.S. bakery, which dates to the 1950s, because the three unions that represent workers either did not make a proposal to keep the work or their concession packages were inadequate, said Laurie Guzzinati, a Mondelez spokeswoman.”

Heritage is no fan of unions, so the fact it ignored Mondelez’s own explanation and instead tried to pin blame on U.S. farm policy certainly supports Combest’s thesis.

“Heritage Action and groups like it had better get serious because they are losing credibility fast and they are damaging the conservative cause,” he rightly observed.