NCPA - National Center for Policy Analysis

The Corporate Welfare Prize Goes To Ethanol

April 9, 1998

Advocates of reduced government spending are constantly amazed at what the Archer Daniels Midland Company gets away with in government subsidies. They say the latest outrage by the agricultural processing giant is pulling off a continuation of the 54 cent-per-gallon tax exemption for ethanol in the highway bill.

This subsidy reportedly accounts for the bulk of the more than $10 billion ADM has received from the federal government since 1980.

  • At least 43 percent of ADM's profits come from products subsidized by American taxpayers.
  • The firm benefits from the federal sugar program, trade subsidies and "Food for Peace" shipments.
  • Analyst James Bovard estimates that every dollar in profits earned by ADM costs taxpayers $30.

ADM's former chairman, Dwayne Andreas, was once indicted -- and later acquitted -- on charges of making an illegal $100,000 contribution to the 1968 Humphrey presidential campaign, funneling $100,000 in cash to the 1972 Nixon re-election campaign, and was fined for exceeding contribution limits in 1993.

A federal price-fixing investigation forced ADM to pay a $100 million fine -- and cost the company another $100 million to settle private lawsuits.

Critics point to the company's practices as a prime example of how businesses -- and the federal government -- shouldn't operate.

Source: Doug Bandow (Cato Institute), "Bigger Government?" Washington Times, April 9, 1998.

 

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