A Payoff That’s Not Just Peanuts : Washington should scrap peanut import quotas, not just briefly lift them

Peanut lovers, rejoice--but only briefly. Your favorite munchie may soon cost less. President Bush has temporarily lifted import quotas to relieve the severe peanut shortage that has sent prices, especially of peanut butter, soaring since last fall.

But consumers would get a far better and longer-lasting break if Washington scrapped the quotas and other policies that unduly protect U.S. peanut farmers.

The peanut quotas are a perfect example of the negative effects of protectionist U.S. farm policies: They keep prices artificially high because imports are kept out. With the President pushing free trade, it’s no time to hold peanuts sacred. That would be like Japan’s virtual ban on rice imports, long criticized by the Administration.

The sharp run-up in peanut prices began last autumn with the dismal peanut harvest, hard hit by a drought in the Southeast. Consumers saw the price of a pound of raw peanuts double to $1.20. The price of 18 ounces of peanut butter rose to $2.70 from $1.89. The steep price hikes even caused the government to drop nutritious peanut butter from its school lunch program.

For the last nine months, consumer groups and food processors have been pleading for relief. President Bush last Friday quietly approved a temporary increase in peanut imports, but with a catch: The 100 million pounds of peanuts allowed in have to get to U.S. ports by July 31. A day later the import quotas revert to the longstanding, paltry 1.7 million pounds, or less than 1% of U.S. peanut consumption. Let’s hope those ships full of peanuts from Argentina and China don’t encounter stormy seas.

The onetime increase in imports is only one-third of the 300 million pounds of imports recommended by the International Trade Commission. The nation’s 200,000 peanut farmers have had virtually no competition since 1953 and are guaranteed $631 a ton by Washington, about double the world price. That’s not peanuts. At the risk of one pun too many, this shell game should be abandoned.