This is a story about peanuts.
When Congress passed an updated Farm Bill in 2014, the legislation included a program focused on the legume. The economics of agricultural subsidies are notoriously complex, but the important part here is that the price point established by the government tacitly encouraged more peanut production, as a Congressional Research Service report from last year noted. So farmers planted more peanuts -- so many that there may not be enough warehouse space this year to contain them all.
There's another important aspect to the government's relationship with peanut growers. The Marketing Assistance Loan program provides up-front financing to peanut-growers (and growers of other crops). The goal is that farmers repay the loans once they sell their crops. But if the price is too low to recoup the cost of the loan, they can also turning the product over to the government as a form of repayment.
See where this is going? A glut of peanuts has pushed prices lower, meaning that more farmers are handing their peanuts over to the Department of Agriculture instead of paying off their loans. Reuters estimates that about 145,000 tons of peanuts were forfeited to government last year. "That stockpile is enough to satisfy the average annual consumption of over 20 million Americans — more than the population of Florida," Reuters's Chris Prentice writes, "and puts the administration in a bind." After all, storing those peanuts is expensive and selling all of them could just push prices lower.
The solution? Give them away. The Department of Agriculture just announced a program to send "nutritious U.S. peanuts" as part of a "humanitarian effort" to Haiti, as writer Abe Sauer noted on Twitter. "USDA crafted a deal that will result in 500 metric tons of packaged, dry-roasted peanuts grown in the United States to be shipped later this year to school children in Haiti who have little access to food," the department reports. Problem solved.
Except that a number of farmers in Haiti already grow their own peanuts. In January of last year, the U.S. government's Global Hunger and Food Security Initiative praised an effort to bolster peanut production by Haitian farmers. That effort was funded in part by the Clinton Foundation, which created the Acceso Peanut Enterprise Corporation to partner with a non-profit called Meds & Food for Kids and the University of Georgia.
The foundation has spent $30 million in the country overall. Last year, we looked at its successes and failures -- and the improvements in peanut crop yield seen by Haitian farmers participating in the program were counted among the former. Acesso buys farming products at bulk rates and sells them to farmers at lower costs.
The USDA's announcement about shipping peanuts to Haiti met with a number of unhappy responses. "Its an admirable concept," one commenter on the department's website wrote, "but why on earth are you importing American peanuts when peanuts are one of the few agricultural products Haiti is able to produce? Do you realize you are totally undermining the local peanut market and therefore putting the farming communities, whose children you are trying to help, increasingly at risk by jeopardizing their livelihood!??"
In 2014, the Haitian peanut market was hampered when one use for the product -- providing a nutrient-rich food for malnourished children -- was undercut by American food donations. The World Food Programme had been buying peanut butter from Meds & Food for Kids and the Clinton partnership -- about half of the group's sales went to creating the paste -- but switched to a soy-corn blend after the United States Agency for International Development oversupplied the product in anticipation of a bad hurricane season.
"No one seems to have pondered the local implications of the decision," the Guardian wrote at the time.
That appears to be the case once again. The situation prompts an interesting question: What happens if the peanut glut continues into 2017, and the new president is named Clinton?