Crony Capitalism

How Government Cronies Redefined the Catfish

An industry clamored for more regulation-because it had a financial interest in doing so.

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Catfish
Vilmos Varga

Cronyism is the ugly marriage between special interest groups and politicians, which results in an abuse of the government's power to grant special privileges to a few winners—for example, unfairly preventing competition or doling out subsidies and bailouts at the expense of taxpayers. Though cronyism is always outrageous, the way cronies go about achieving their goals is sometimes oddly funny. Case in point: the government's changing the definition of catfish to classify the fish as—wait for it—meat, not seafood.

As Patrick Mustain reports in Scientific American, Sen. Thad Cochran, R-Miss., included an amendment in the 2008 farm bill designating catfish as a "species amenable to" the Federal Meat Inspection Act, which "requires appointment of inspectors to examine and inspect all meat food products prepared for commerce." The 2014 farm bill made this silly amendment official.

As a result, from now on, catfish and a few other species of fish will be inspected by the U.S. Department of Agriculture's Food Safety and Inspection Service rather than by the Food and Drug Administration's seafood inspection program. All other seafood will continue to be inspected by the FDA.

Does it really matter who inspects what fish? Yes, because the cost to develop the new program will be $14 million and the ongoing annual cost during the transition phase will be $2.5 million. The USDA's inspections are also much more burdensome and frequent than the FDA's.

Is that extra scrutiny necessary because catfish carry a high risk of causing food poisoning? Nope. Advocates for the rules will point to recent USDA "discoveries" of chemical residue in catfish, but that finding doesn't hold water. In May 2012, the Government Accountability Office noted that the USDA catfish program "would cause duplication and inefficient use of resources" because "as many as three agencies—FDA, FSIS, and (the National Marine Fisheries Service)—could inspect facilities that process both catfish and other types of seafood." That's insane because in 2013, the GAO also found that catfish are a low-risk food and that safety wouldn't be enhanced by switching inspections from the FDA to the USDA.

A look at who is behind this rule tells you all you need to know about how misguided it is. During the public comment sessions, the domestic catfish farming industry was very vocal about the need for more regulations and oversight of their business. This seems odd because it's not often that one hears of an industry clamoring for more regulations—that is, of course, unless it has a financial interest in doing so.

For years, domestic catfish producers were getting hammered by competition coming from China and Vietnam. Those same catfish farmers understood that unlike the FDA inspection program, the USDA inspection program has a separate "equivalency" test for imports, which adds a layer of regulations only on imports and could take countries years to implement. In the meantime, they'd be completely barred from the U.S. market. Domestic catfish farmers love that. Also, 94 percent of U.S. farm-raised catfish is raised in Alabama, Arkansas, Louisiana and Mississippi, hence the interest of Sen. Cochran to push this misguided regulation on catfish.

Unfortunately, there are many losers in this scenario. First, the reduced competition faced by catfish farmers guarantees that the price for the fish (or should I say meat?) will go up. Second, catfish processors are on the losing side of the USDA inspection rule because most of them process other seafood—and now they'll have to comply with the USDA rules and the FDA rules. Third, taxpayers will have to foot an expensive bill for a duplicative rule that will achieve little except artificially boosting the profits of a few domestic catfish farmers. Finally, non-catfish industries will suffer as a result of the trade retaliation against this catfish protectionism.

There is, however, some light at the end of the tunnel. As Heritage Action for America's Dan Holler recently told me, "the choice between consumers and well-connected parochial special interests should not be difficult for Republican leaders. With a presidential signature likely and a clear majority of House Republicans in support of overturning the … rule, now is the time to act." But will they?

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56 responses to “How Government Cronies Redefined the Catfish

  1. Ok, so based on the discussion in the comments earlier, Riven is now to be referred to as meat, and not as seafood.

      1. He’s suggesting Riven is catfishing the commetariat.

        1. I wasn’t privy to this conversation, but I’ll just observe that just because Riven isn’t into you doesn’t necessarily mean she’s a dude.

          Illocust, on the other hand…

          1. Don’t blame Chipper, it was my doing.

            1. Riven: the other, other white meat; comes with a side of calamari. Nomsayin’?

        2. “He’s suggesting Riven is catfishing the commetariat.”

          To what end?

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  2. Catfish is terrible. It’s going to taste terrible no matter what you classify it as.

    1. False. Blackened catfish with a side of brown beans and corn pone is God’s own nectar.

    2. You’re a horrible person, and you should feel bad about yourself.

    3. You do realize you cook it first?

    4. What? Catfish is terrible?

      What part of the country are you in Idle?

      Come down here and let me fry you some up. It is so good it will make you cry, and you will want more. And more. And more.

    5. I agree, add a side of collared greens and grits and it’s vomit.

  3. So now when a some who claims to be vegetarian tells me that they also eat fish I can not only call them an asshole, but legally also a liar? Assuming that list of fish includes catfish of course.

    1. The prefered term is pescatarian.

    2. No human is a vegetarian.

      Humans may choose to consume a vegetarian (or vegan or venusian or whatever) diet, but (with very few exceptions, like people with digestive tract injuries) physically they are still omnivores.

  4. So the Pope isn’t infallible after all when the Catholic Church for centuries insisted you had to eat fish on meatless Fridays? How does this affect the upper Midwest with their traditional Friday night fish frys?

    1. Meat fries?

    2. You can still eat beaver. The beaver of genus Castor, I mean.

    3. Fun fact: some Catholic dioceses found loopholes – various bishops in Europe declared goose a seafood (since they were believed to have grown from barnacles), and French bishops in Canada and the upper Midwest decided that beavers were also a type of fish and could be eaten on Fridays.

      1. Late post to the thread, but I believe that the Catholic church also classifies the capybara as a fish since it spends the bulk of its life in water. The more you know.

        1. I’ve always wanted to try capybara.

  5. Why isn’t all fish classified as meat? It’s dead animal.

    1. And why do they call it Ovaltine? The can is round. The mug is round. Thy ought to call it Roundtine.

      1. /sloopy shakes fist at kids on lawn

      2. That’s gold, Jerry, GOLD!

    2. Fish are not 100% real. I mean, we know more about space than our own oceans, man! You can’t classify anything that comes out of it as meat. You throw a cockroach in there for long enough and it comes out delicious lobster, so can you really trust anything from there?

      This is why we should only ever fry fish. Make sure it’s extra dead.

      In my defense, I haven’t had my coffee yet.

      1. This makes perfect sense to me, but then I haven’t either.

  6. This is straight-up Europe and Japan level protectionism. All these years of poking fun at their silly “health and safety” regulations that basically read “no imported X from America”, and now we pull this idiocy.

    Still, it gave me a moment to reflect on my favorite stupid protectionist regulations. Remembering the 80’s rise of Japan and our auto manufacturer’s fight to enter their market, there was a parallel fight to get Kodak into their domestic film market. Someone wrote an article detailing the levels of protectionist regulation in Japan. The best one was a ban on US made luxury textiles (remember when we had a textile industry?) . Japan had a ban on thicker US bath towels. They had drop quotes from the Japanese Health Minister saying that Japanese people’s ears were smaller than American’s ears, so the thicker US made washcloths and towels couldn’t fit in their ears. Hence the ban.

    Winner, winner, chicken dinner!

    1. Winner, winner, chicken dinner!

      Was it regulated chicken? Inspected? Do you have a permit and a commercial kitchen? Let’s see the ruling on this contest, just to make sure you didn’t pull anything funny. Oh, and give us $30,000.

      /government jobs program

    2. Sorry dude, read my other post. You need to become better informed before you reach stupid conclusions.

  7. Isn’t the right question “Why does land meat have more intrusive regulations that fish meat?”

    Unless there’s something relevantly different about all land meat animals vs all farm fish, it seems likely that either one group has too many regulations or one has too few.

    1. I think the right question – WTF is the fuss about catfish? I mean talk about a petty instance of cronyism. No wonder people who get worried about ACTUAL fucking cronyism in the economy end up listening to the Sanders/etc of the world. Because the Reason crowd of libertarians is too busy looking for cronyism in the shit on the bottom of muddy rivers.

  8. Isn’t the right question “Why does land meat have more intrusive regulations that fish meat?”

    Unless there’s something relevantly different about all land meat animals vs all farm fish, it seems likely that either one group has too many regulations or one has too few.

    1. Why does land meat have more intrusive regulations that fish meat?

      In the US. ranches have been around a lot longer than fish farms. Regulations accumulate, like barnacles.

      overturning the … rule

      Members of Congress are unfamiliar with that procedure.

  9. Can we have a Catfish Girl kissing that one? It looks adorable.

  10. Look, it’s got “cat” right in its name. Of course it’s a meat…

  11. I was recently Serv-Safe certified (a manager level food safety certification program), and remember being confused when learning about the different regulatory and inspection agencies and how catfish was different from all other fish products in how its inspected.

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  13. Ah, in Reason articles, like other media, the truth is often left on the editing floor.

    “Catfish” from China and Vietnam, are not actually catfish. They are also marketed as “Swai”, or just as “quality white fish” When you pen your fish around the sewage outlet from the city and fatten them on human (and other) waste, you have a significant cost advantage.

    I am not a fan of regulation, but since we let other countries do things we would never let our own folks do (thank goodness in this case), the catfish farmers (I am not one.) did me a huge favor by making it so I can more easily make sure my farm grown catfish does not come with a side of cadmium and shit.

    I find Veronique to often spin the information to make points. When Clinton does that we call them lies.

    1. “I am not a fan of regulation, but since we let other countries do things we would never let our own folks do (thank goodness in this case), the catfish farmers (I am not one.) did me a huge favor by making it so I can more easily make sure my farm grown catfish does not come with a side of cadmium and shit.”

      – I totally agree with you here!

  14. Corn ethanol has had an impact on catfish feed costs, but the competition from Vietnam was the major reason the industry has decreased by over one half in size.

  15. Corn ethanol has had an impact on catfish feed costs, but the competition from Vietnam was the major reason the industry has decreased by over one half in size.

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  17. How Government Cronies Redefined the Catfish
    An industry clamored for more regulation?because it had a financial interest in doing so

    There is nothing wrong with demanding more regulation because a financial interest would benefit from it.
    This is why we have “campaign contributions” during the election process. (And don’t you dare call them bribes!)
    It is only through crony capitalism can the politically connected make more money at their competitors expense, make more money for themselves and the politicians they gave their “campaign contributions” to.
    Such practices may seem unfair to the collective, but one must remember crony capitalism is one of the major reasons our ruling elites make so much money while in office. Without crony capitalism, our obvious betters would surely starve in the streets of DC, live under Key Bridge and would have to live off the land.
    So let us cease all this whining and sniveling about crony capitalism and the results it brings.
    Too many people depend and benefit from it.

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  19. It don’t like small catfish that I keep in my fish tank. This fish maybe eat all smaller fish.

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