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this post was submitted on 26 Oct 2023
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Jimmy Carter gave struggling dairy farmers money to encourage dairy production at a time when the costs of these products were rising like crazy.
~~The government bought a bunch to spur production and decrease costs for the average family. It was literally meant to help poor people the most.~~
*I must correct myself, the dairy farmers were struggling because previous government interventions had tanked the cost of dairy so low that farms weren’t turning a profit. So the government bought up supply to increase prices to a more sustainable baseline for everyone. I apologize for my mistake and will post links below so people can read some sources and decide for themselves.
They also never intended to give the cheese away at all. They were hoping to eventually sell it in some capacity.
It was only later in the early 80s under Reagan that they decided to give the cheese away, once again, to poor people and the elderly specifically.
And they only did that after a public spectacle was made when Agriculture Secretary John R. Block showed up at a White House event with a five-pound block of greening, moldy cheese and showed it to the press. “We’ve got 60 million of these that the government owns,” he said. “It’s moldy, it’s deteriorating … we can’t find a market for it, we can’t sell it, and we’re looking to try to give some of it away.”
At one point they had so much cheese it was recommended they just dump it all into the ocean because it would be the cheapest thing to do.
But yeah, it was given away mostly because we had a lot of it and we needed to get rid of it somehow.
https://www.npr.org/2021/05/21/999144678/big-government-cheese-classic
https://www.history.com/news/government-cheese-dairy-farmers-reagan
This makes little sense. If the government makes big purchases of a product, the increase in demand raises, not lowers, prices. Also, if people aren't interested in eating that much cheese that the government has trouble giving it away, "spurring production" is an insane objective. It only makes sense if, as OP said, the whole point was a giveaway to farmers.
I’m no economist, I apologize, it went like this:
So they were struggling due to inflation, and the government was buying their products to prop them up for the time.
If the policy was simply meant to address a shortage of dairy products in the market, the government should not have ended up with mountains of cheese that had to be given away.
You’re correct, I updated the post with better info. Thank you for keeping it accurate.