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Senator Stabenow announces plan for more corporate subsidies

October 25, 2011

Yesterday, Michigan Senator Debbie Stabenow announced a new $5 billion dollar subsidy to Michigan companies that would manufacture bio-based products.

One story appeared on MLive, which in many ways mimicked the Press Release that Senator Stabenow’s office sent out on October 24.

The MLive story presents the announcement from Senator Stabenow as a benefit for Michigan in two ways. First, it suggests that this $5 billion subsidy would create jobs for Michigan and it would “reduce our dependence on foreign oil.”

The only sources cited in the MLive article were Senator Stabenow, one of her aides, a company spokesperson from Zeeland Farm Services and the Zeeland Chamber of Commerce.

Besides having limited voices in this story, the MLive writer did not ask any questions or verify any of the claims made in the story.

One claim made was that the $5 billion tax incentive/subsidy would create jobs in Michigan. There is no evidence presented that tax subsidies create more jobs and if one was to look at the only company cited in the article that would give an indication that the subsidies are not necessarily creating jobs, but it is assisting Zeeland Farm Services to expand as a company.

The MLive story touts Zeeland Farm Services as a family run business, but doesn’t acknowledge that the company has grown significantly since the recent push in the US to produce more bio-fuels.

Zeeland Farm Services have purchased several out of state companies in recent years, including an ethanol plant in Nebraska and in Cambridge. The Zeeland based company also entered into a joint venture with Renew Energy in Wisconsin to use the waste from bio-fuel production as livestock feed.

What the MLive story or the Press Release from Senator Stabenow does tell us is that Zeeland Farm Services has a history of receiving taxpayer subsidies, especially since the push for bio-fuels increased in 2005. According to the Environmental Working Group, soybean subsidies in Michigan have total $589,798,311 from 1995 – 2010.

However, one of the consequences of such a push to turn corn or soybeans into fuel, resulted in food price increases globally that has had serious consequences for the world’s poor. Food First provides a clear example of how the bio-fuels push was devastating to agriculture in Africa and how there has been a drastic consolidation of bio-fuel plants ownership, where fewer companies control more of that industry.

The MLive story and Senator Stabenow also celebrate the soy-based products that are currently being made in Michigan, such as seats and gaskets for the auto industry. Why is that something we are also supposed to celebrate. How is perpetuating the auto industry a sustainable means of transportation?

The MLive story also doesn’t question the notion that taxpayers should subsidize corporations to increase their profits. Isn’t this a fundamental distortion of capitalism? Capitalists are always telling the government to let the free market operate without government intervention, when the reality is that corporations are always willing to take taxpayer money that will increase their profits and allow them to expand their businesses.

Lastly, it should be mentioned that as Chair of the Agriculture, Nutrition and Forestry Committee, Senator Stabenow is presiding over the next round of negotiations with the Farm Bill. Stabenow seems to be leaning towards continuing huge subsidies to agribusiness based on the hearing that took place in Michigan this past Spring.

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