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In Iran, there is a wide-spread belief that the USA throws extra wheat it produces into the ocean to keep the prices high.

The official website for the Iranian presidential office [Persian] quotes Mohammad Reza Rahimi, former First Vice President, in 2008 or 2009 as claiming that a country threw its wheat into the ocean to increase the international price. He doesn't name the country here, but because everyone has heard this story before, the US is the country that comes to mind.

This article [Persian] is from a less famous person that claims that the US throws wheat into the ocean.

So, my questions are:

  1. Does the US government or any US-based company currently destroy agricultural products to keep prices high?

  2. Did the US government or any US-based company destroy agricultural products to keep prices high at any point in history?

  3. Has the US government or any US-based company destroyed agricultural products in a large scale for any other reason that could have been falsely attributed to keeping the prices high?

Laurel
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Saman
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    I thought it was the EU (or some European organization) that did that, to deal with gluts of agricultural produce. – Andrew Grimm Jul 17 '13 at 01:41
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    The question will be rather difficult to refute. Asking if any US company has ever destroyed agricultural products over a period of 300+ years is hard to falsify. If the actual claim is that the US Government did it in 2008 or 2009 we have a better chance of addressing this. – Oddthinking Jul 17 '13 at 01:58
  • Your third question is even more open. The [Boston Tea Party](http://en.wikipedia.org/wiki/Boston_Tea_Party) could be attributed to smugglers of Dutch teas and legitimate tea importers not nominated on the Teas Act trying to maintain higher prices for their goods. – Oddthinking Jul 17 '13 at 02:01
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    I don't think there's ever been a deliberate US government policy to throw wheat in the ocean in the last 30 years. Mostly the opposite is true, the US produces more than it needs and then gives the extra away as aid or it gets exported. There is strategic and economic value in always being able to overproduce. But as mentioned it's kind of hard to prove that it's never happened, though I think it's never happened officially. – Mark Rogers Jul 17 '13 at 02:16
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    This question appears to be off-topic because it is too broad and has too many sub-parts to the question. – rjzii Jul 17 '13 at 03:45
  • @Oddthinking Thank you for the edit. You are right. The third question is too broad. By history, I meant recent history. Has this happened in the past 70 years? – Saman Jul 17 '13 at 06:49
  • @HamidH In the Netherlands Agriculture products are auctioned by Dutch Auction. When the reserve price isn't met the products will be destroyed. – Pieter B Jul 17 '13 at 06:56
  • @Pieter, have you a reference for that claim? – Oddthinking Jul 17 '13 at 08:06
  • @MarkRogers [overproduction leads to lower prices for the farmers](http://en.wikipedia.org/wiki/Supply_and_demand) which can lead to them running at a net loss. so the farmers themselves can agree amongst themselves to destroy some of their crops to get a higher price – ratchet freak Jul 17 '13 at 08:33
  • http://nl.wikipedia.org/wiki/Doordraaien (dutch) http://translate.google.nl/translate?sl=nl&tl=en&prev=_t&hl=nl&ie=UTF-8&u=http://www.volkskrant.nl/vk/nl/2844/Archief/archief/article/detail/390505/1995/10/05/Doordraaien-oogst-wordt-sterk-beperkt.dhtml – Pieter B Jul 17 '13 at 08:48
  • they aren't destroying produce, but many potato farmers are holding on to their crops because the price is so low right now. – Ryathal Jul 17 '13 at 12:18
  • @Andrew: I know the [CAP](http://ec.europa.eu/agriculture/policy-perspectives/policy-briefs/index_en.htm) of the EU (and/or it's predecessor) used to purchase surpluses and put them into [intervention storage](http://commonagpolicy.blogspot.co.uk/2006/01/grain-mountain-growing.html) but I've never heard of the EU dumping wheat at sea - that would be at odds with normal EU behaviour - the intervention stocks are (ostensibly at least) partly in case of food shortage - not just for stabilizing prices. – RedGrittyBrick Jul 17 '13 at 13:35
  • @ratchetfreak - Sure but the US government subsidizes our agro-business so that there is not as much incentive to destroy crops. But admittingly there is still a slight motive to do so there. – Mark Rogers Jul 17 '13 at 14:03
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    This is all interesting talk, but most of it belongs in chat, since it isn't helping to improve the question. –  Jul 17 '13 at 14:07
  • Voting to close. No one notable made the exact claim in the title. The three questions are too broad. – RedGrittyBrick Jul 17 '13 at 19:50
  • Famous, but fictional, literature depicting California farms destroying food during the Great Depression (1930s) as hungry migrant laborers watched: https://en.wikipedia.org/wiki/The_Grapes_of_Wrath – Paul Jul 18 '13 at 11:30
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    There was FDR's [AAA of 1933](https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act), but it was rather quickly ruled unconstitutional. Food was being destroyed, but no specific references to dumping grain into the ocean. – vartec Jul 25 '13 at 15:10
  • More likely, farmers are paid to *not* farm at all. This is called a subsidy and yes, it's explicit purpose is to control price. –  Apr 21 '16 at 07:05
  • There was a supreme court hearing on price controls recently (last couple of years or so) which mentioned something along the lines that the government can dispose of commodities but I think it was milk and/or corn they were talking about. I'll research it and get back with more details. – ventsyv Jan 13 '17 at 17:26
  • Allowing this question to be so broad (wheat, milk etc.) has made the answers orthogonal. It would be impossible to pick one as best, because one is talking about milk dumping (a well known practice a long time ago) while another managed to dig up the special circumstance for the story that opened the question. The question is just too broad. – Fizz Mar 25 '19 at 11:46
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    If anything is 'destroyed' it will be by dumping it on the fields and plowing under (or similar low costs measures), but not by transporting it to sea, thereby adding additional costs. –  Mar 25 '19 at 16:15

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Here is some evidence regarding the practice of destroying agricultural commodities in order to control the price.

In the hearings before the U.S. Senate Subcommittee on Labor during the 91st session of congress, on the topic of senate bills 8 and 1808, occurring on April 16, 17, May 6, 16, and June 18, 1969, Harry Graham, from the National Farmers Organization addressed the subcommittee:

Mr. Graham: Two things were done with the milk. One is: it was diverted. Where it was fluid milk, it was diverted into manufacturing plants; and the other was, it was dumped.

Senator Bellmon: Dumped; you mean down the sewer?

Mr. Graham: Yes. Well, most farmers don't have sewers. It was dumped somewhere on the farm, generally, although there was some dumping in the cities, where there were sewers.

Senator Bellmon: Do you feel that Congress should write legislation that encourages, or allows, farmers to band together and destroy food in that way in order to get a better price?

Mr. Graham: I don't see why not. [...]

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I did not find information about wheat, but I found this link which talks about cherries:

US Government Orders Farmers To Destroy 30 Million Pounds Of Their Own Crop

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“The food pantry shelves are bare, people going hungry, and here we are dumping millions of pounds of cherries on the ground,” Michigan cherry grower Rob Manigold said of the 2009 incident. That was the same year farmer Leonard Ligon dumped 72,000 pounds of tart cherries along a road outside Traverse City, Michigan, to protest US Department of Agriculture (USDA) regulations on his state’s cherries.

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The regulations on tart cherries were set up during the Great Depression of the 1930s in an attempt to protect farmers. The idea was to keep crops off the market and drive prices up. Nowadays some farmers complain that the regulations make cherry farming unprofitable.

...

Erel Segal-Halevi
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Wheat from the United States that was given as a gift to India was dumped into the ocean:

According to Parliamentary Debates: Official Report, Volume 133, Issue 12

a) Out of 1444 tonnes. of gift wheat unloaded by an American Vessel at Beypore, a minor port in Kerala, in April, 1984; 1353 tonnes of wheat has been dumped into the sea upto 25 March, 1985 and further action to dump 91 tonnes of wheat is progress. This wheat was dumped into the sea because the Health Inspector had certified it as unfit for human consumption and recommended its destruction.
(b) This wheat was donated by the United States for free distribution by Catholic Relief Services in India under the Indo-US Agreement.
(c) As this wheat was unfit for human consumption and fit for destruction, its value should be treated as nil.

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The Catholic Relief Services employed a contractor, but the labourers were not allowed to handle the cargo at Beypore or at rail-head. The port labourers who handled the cargo at the time of landing, did not allow any outside labour to handle the cargo, and the labourers at West-Hill - Rail Head would not allow outside labourers to handle the cargo there. The Contractor, therefore, withdrew. Calicut customs were not in favour of movement by road to Cochin under custon, bond for want of sufficientt staff to accompany the trucks. The cargo had become a health hazard and the Health Inspector issued a . certificate on 15 November 1984, declaring the entire cargo of 1444 tonnes to be unfit for human consumption and recommended its destruction.

The article also explains that before going to Beypore: "It was brought Bombay on 6 April, 1984 when there was a general strike at many ports "

So, the gift wheat, was brought from the United States, but due to strike and labor disputes and red tape, it was not unloaded and became unfit for consumption and was dumped in the ocean.

DavePhD
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