No bailout for small business, fishing industry

By , Guest blogger

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    Workers fill cans with sardine steaks at the Stinson sardine cannery in Gouldsboro, Maine. The cannery, the last of its kind in the U.S., will shut down this week.
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The last remaining sardine packing plant in the United States is closing. The plant closing will force the 130 plant workers to find employment elsewhere.

The plant’s owner, Bumble Bee Foods, blames the closure on drastically lower limits on the amount of herring that regional fishermen are allowed to catch. The New England Fishery Management Council (an intergovernmental entity controlled by both state and federal government) slashed the quota in half from the 180,000 metric tons allowed in 2004 to today’s 90,000.

Consumer demand for sardines is insufficient for the price increases needed to offset the increased costs imposed by the government’s stringent quota.

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Meanwhile, the government is busy creating havoc in the dairy industry. While sardine canning industry was destroyed by government intervention and regulation, the dairy industry is coping with soviet style price fixing. Dairy farmers across the nation are bemoaning the prices set by the government and demanding even greater subsidies and interventions.

Various price floors set by the government, such as the Dairy Price Support Program, have been distorting U.S. dairy markets for decades. The situation was made far worse by the Milk Income Loss Contract (MILC) which pays farmers nationwide every month in which milk prices in Boston fall below the minimum price. Even the White House has noted the failure of these programs. These interventions, and most of the “reforms” being proposed, will soon put the milk industry in the same condition as the sardine industry. Unfortunately, when the disaster reaches its peak, politicians will likely be all too happy to buy votes with another massive bailout rather than truly solving the problem by getting the government out of the milk business.

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