The US Government Just Spent $40 Million On Pistachios. Here's Why

On May 13, the United States Department of Agriculture (USDA) announced the largest seafood purchase made in its history. However, amongst the $159.4 million spent on American food producers, the largest recipient is not a type of seafood but pistachios, with a whopping $40 million, or 40%, of the total payout.

Why the government has spent so much on pistachios is not readily apparent. In the announcement, Agriculture Secretary Tom Vilsack explained that "U.S. fisheries and the American seafood industry were dealt a heavy blow [by COVID-19]" and that the bought foods will help food banks and nonprofits dedicated to fighting food insecurity. Now, pistachios are really good for you, but the fact that the second-highest payment is $25 million for Gulf of Mexico and South Atlantic Wild-Caught Shrimp raises the question of whether they are so good as to warrant a $15 million difference.

Noticing this, Modern Farmer reached out to the USDA asking why they have allocated such an eyebrow-raising sum. As of writing, the spokesperson for the department merely replied to them that the USDA "proactively monitors market conditions to determine what products and volumes to purchase under the authority of Section 32." Section 32 refers to Section 32 of the Agricultural Adjustments Act which allocates $500,000,000 to purchase agricultural commodities.

Trying to see the pistachio problem

In August 2020, after months of lobbying, pistachio farmers finally managed to qualify for the USDA's Coronavirus Food Assistance Program. Initially, reported, they were left off because they did not suffer a significant enough price decline between January 15 and April 15. However, Western Farm Press' coverage of the pistachio industry at the end of July sounded rosy. They estimated their harvest would yield 1.2 billion pounds of pistachios and despite a somewhat worrying percentage of pistachios not developing nuts, shipment numbers held over from last year.

This, then, does not sound like an industry imperiled. But in June 2020, Business Standard gives a good reason as to what precipitated the pistachio's issues. Namely, with the extended lockdowns and decreased amount of traveling, pistachios were not being bought in the same numbers as before the pandemic. The reason the pandemic should affect pistachios is that some of their most prevalent uses are in hotels, marriages, and other eventful spaces as a side treat. Hotels, catered weddings, and events, in general, are the very types of venues that we have ceased to go to. So, while some pistachio farmers may have been fine in July 2020, by now they may feel more of the strain. And, considering how FarmProgress pegged their value to the California economy at $3.6 billion in 2018, the USDA has enough of an incentive to pay $40 million.