Archives for the 'Agriculture' Category
Using regulation to undo what regulation caused?
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Humane Society of the US just released another expose video on animal cruelty in the meat industry. They argue for more regulation so that the responsibility for downer cattle is firmly placed on someone’s shoulder.
Their ultimate goal is to eliminate factory farming, where cattle are raised one place, transported to a feedlot where they pack on a lot of weight, and then transported to a meat packing plant where they are finally slaughtered. It is meat production by bussing, and it is part of the reason why we have downer cattle, which HSUS are so concerned about.
HSUS, which is not related to your local Humane Society in any way, shape, or form, is arguing for more regulation. They want regulation that says who is responsible for downer cattle at the meat packing plant, at the auction houses, and anywhere else. No one seem to take care of them when the truck driver cannot hand off a walking animal to the next link in the chain that takes the cattle from the farmers pastures to your dinner table.
I propose that the regulation caused the factory farming in the first place. There are two reasons for why I make that argument:
1. Regulation cost money; small slaughterhouses cannot afford the excessive cost of following USDA’s detailed guidelines and reporting routines.
2. USDA has been pushing for larger slaughterhouses, because it cost them more to supervise small operations.
The number of meatpacking plants in the U.S. has reduced drastically from almost 2,500 in 1974, to about 900 today. This has in part been a result of the cost and efficiency of using new technology, but there is another component to the story, which is not told very often. Reason started telling the story with a brief list of how regulation prevents Virginia farmer Joel Salatin to do what he wants with the products from his farm. Salatin has published several books on how to make organic, local food systems profitable. His most recent book Everything I Want To Do Is Illegal: War Stories From the Local Food Front is a tale of how his battle with USDA.
Salatin also has impeccable credentials from the organic food movement, and food snob Michael Pollan’s recent book the Omnivore’s Dilemma featured several chapter of Salatin’s farming methods and thoughts on supplying food for people. Salatin has been trying to establish a slaughterhouse because he does not want to ship is cattle offsite for slaughter. The USDA will have nothing of it. USDA do not mind that he slaughters onsite, they do not mind that he gives away the beef he slaughtered on the farm, but they will not let him sell it.
Salatin tried to establish a slaughterhouse with an acquaintance. After much ado, the USDA finally issued the permits. Once the plant was in operation, the USDA pulled the inspector because he was not processing animals fast enough. I was not aware that the USDA’s mission was to increase productivity in individual slaughterhouses, they only have to verify that it is done right, and even that is something that other organizations seems to do better.
The other story I have about misguided regulation of the meat supply is a story from the New York Times. Animal rights activists are pushing to ban the slaughter of horses all together, and have already succeeded in doing so in Illinois and in Texas. The result is that horses are now transported all the way to Canada for slaughter. Regulation is causing more industrialized farming, instead of achieving the activists goals of a
Farm Bill veto would be richly deserved
Right after House-Senate conferees announced that they had reached agreement on a new farm bill yesterday, the U.S. Secretary of Agriculture said that President Bush would veto it because it didn’t reform wasteful farm programs, continued to provide subsidies to rich farmers, and still used some budget machinations to hide the costs.
Indeed, the boondoggle bill deserves a White House rejection for its almost $300 billion of farm programs that will be paid for by taxpayers and consumers. Farm bills, however, no matter how wasteful, have a way of surviving, and this legislation may be no exception, since it’s a case study of bipartisanship gone bad.
Besides the sugar provisions we’ve written about here and here, the biofuels programs’ grants and loan guarantees, plus moneys for R&D and “energy efficiency” projects, together with the extension of the tariff on imported ethanol, will continue to exacerbate the food vs. fuel program.
How ethanol producers see the world
From The Onion. (Yes, it’s ironic. )
Slow pace of corn planting — more pressures on prices
This year’s corn crop is being planted much later than normal because of cool, wet weather in the Corn Belt and other production areas, according to a Reuter’s story today. The slow planting has caused a jump in corn futures:
Corn futures at the Chicago Board of Trade surged as much as 4 percent on Tuesday, with an all-time high of $6.60-3/4 a bushel set by the July 2009 contract.
According to the U.S. Department of Agriculture’s weekly agriculture summary, the pace of planting is significantly slower this year:
Corn: Twenty-seven percent of the Nation’s corn crop was planted by week’s end, 18 and 32 points behind last year and the 5-year average, respectively. In the central Corn Belt, Ohio Valley, Tennessee Valley, and central Great Plains, producers gained momentum and were able to plant 20 percent or more of their crop between rain showers, but remained well behind normal in most areas. Elsewhere, farmers planted at a slower pace, awaiting warm, dry conditions to resume fieldwork. Progress was the farthest behind normal from Missouri and Illinois northward.
If lower crop production occurs, higher prices could add to rising food costs.
And, of course, the increased use of corn for biofuels has exacerbated the rise. As the USDA noted in a May 2008 report:
The data suggest that while U.S. corn used for ethanol production had only a small effect on global markets in the 1980s and 1990s, the increase in U.S. ethanol production over the past 5 years and the related significant changes in the structure of the U.S. corn market have had a more pronounced impact on the world’s supply and demand balance for total coarse grains recently. Importantly, since the United States is the world’s largest corn exporter, some of the higher prices resulting from increased U.S. demand has spilled over onto world markets.
Re: Sugar and the farm bill
Hans–
Glad you posted about the bloated farm bill and how sugar is treated. A “Sweetheart Deal” – how right the Washington Post is in its editorial today blasting farm bill proposals that would make the U.S. sugar program an even sweeter deal for producers while consumers foot the bill.
The current sugar program – which has expired but has been extended with other 2002 farm programs — is a system of price supports, domestic production restrictions, and restrictions on sugar imports. The new bill would distort the market even further. It would raise the price supports for U.S. sugar cane and sugar beets, thus guaranteeing sugar producers twice the world price; provide domestic producers with 85 percent of the U.S. market, and protect them from competition by turning imported sugar into ethanol. The Sweetener Users — a coalition of food, beverage, and confectioners pushing for reform of the sugar program — estimates that the farm bill will cost consumers about $2 billion over five years.
That sweet deal is one that the Bush Administration doesn’t like and is one of the issues that may indeed provoke a presidential veto. The Administration thinks real reform of the programs was needed, and income caps for who can receive subsidies should be lowered. But farm programs, especially sugar, get heavy support from their lobbyists and from Congress. Add to that the fact that the majority of farm bill money goes for food stamps and nutrition programs – which almost guarantees that urban, suburban, and rural representatives also want the bill to pass.
In a period where farmers are making unprecedented profits, and consumers are feeling the pinch of higher food prices, it should be a time when real reform of farm programs would have a chance. But don’t count on it.
Job-Killing Sugar Quotas Continue, Milking Consumers
Say bye bye to more American manufacturing jobs. The Washington Post editorialized today about sugar import quotas and price supports contained in the bloated federal farm bill, which have ”driven some U.S. candy producers either out of business or overseas” by increasing U.S. sugar prices. It costs consumers a bundle in higher prices to benefit a handful of subsidized American sugar producers, while antagonizing and impoverishing poor countries in the Caribbean and Latin America. The President has criticized the bloated farm bill, but may not do anything to block it, given his weak political position and other priorities. In Reason, Ronald Bailey describes the many ways that the current farm bill wastes taxpayer money and takes from the poor to give to the rich. In the National Review, Fran Smith earlier wrote about “the outrageous U.S. sugar regime,” which has cost taxpayers billions to benefit “a small number of large sugar-cane and sugar-beet producers.”
Reality causing anti-biotech hegemony to waver
As reports of food prices going through the ceiling are trickling in, some of the countries that traditionally reject plants bred with molecular plant breeding methods (PMBs) are reconsidering.
Japan’s largest corn processor have started buying PMB corn for human consumption, although Japan have permitted PMBs for animal feed.
63,000 tons of PMB corn arrived in Seoul, South Korea on Thursday last week and officials said that they couldn’t get hold of enough non-PMB corn because the European’s are sweeping the small supply that exists off the market.
The trouble with getting hold of non-PMB crops has hurt inside Europe too, a corner stone factory that processed food oils in my hometown in Norway shut down in 2005, and EU official’s thinks that the rice in food prices might sway the European political opposition against PMBs, we can only hope and see…
EU not likely to settle PMB haggling in May either…
EU was supposed to have an authoritative discussion on plants bred with molecular plant breeding techniques (PMB’s) in May. The organization has been fined by the WTO for using PMB bans as a trade barrier but stubborn politicians are blackmailing each other with approvals and denials of various organisms, costing consumers and companies billions of Euros. According the story from Reuters, it does not seem that the May discussion will resolve any issues either…
Wealth is created one person at a time
Many people I know are passionate about eradicating poverty. Out of all the ailments that humans suffer from, poverty is one of the cruelest and dehumanizing situations that one can find one self in. Poverty is not defined by how many dollars you have to live on every day, it is not defined by what percentage of income you are below. Poverty is lack of options; it is that simple.
The problem with our political class today is that they build these amazing projects to help poor people, organizations like the UN, the Worldbank, and countless NGO’s create these projects that supposedly will help the people with the fewest options in the world. They are spending millions and millions of dollars and failing miserably.
The Grameen Foundation, with their micro loans and micro utility systems has understood that wealth is created at the individual level. If you help people get credit, so they can do the investments needed to expand their livelihood, their lives will change. Grameen got the Nobel Prize in 2007 for this insight.
Someone else who has understood this is a guy named Paul Polak. After years of being a psychologist, he found that alleviating financial troubles had a profound effect on alleviating their mental illnesses. A trip to Bangladesh inspired him to start up International Development Enterprises, a non-profit that helps adapt modern farming technologies to small rural farms and helps build micro economies and local markets.
In the last 25 years, Paul Polak has helped individuals in the poorest rural communities around the world increase their income by $200 million. No government-to-government program can claim such a success. Polak wrote about his work and his method in a book called Out of Poverty, that was published recently, and you can also learn more about his work by listening to the NPR interview with him.
Drill for Oil to Save the Environment
In the Washington Post, Robert Samuelson’s column “Start Drilling“ points out that ethanol production is far worse for the environment than drilling for oil in Alaska’s Arctic tundra, yet Congress promotes ethanol subsidies to reduce our reliance on foreign oil, even as it blocks drilling in the Arctic and ”the Atlantic and Pacific coasts” that would do far more to reduce our reliance on foreign oil. “What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity,” he writes.
A news story today in the Post describes how ethanol production is devouring our food supply, even though a study shows that “greenhouse-gas emissions from corn and even cellulosic ethanol ‘exceed or match those from fossil fuels and therefore produce no greenhouse benefits.’ By encouraging an expansion of acreage, the study added, the use of U.S. cropland for ethanol could make climate conditions dramatically worse. And the runoff from increased use of fertilizers on expanded acreage would compound damage to waterways all the way to the Gulf of Mexico.”
In the American Spectator, Iain Murray notes that ethanol production has caused “food shortages and massive increases in food prices around the world. There have been food riots in Indonesia, Mexico, Egypt, and most recently, Haiti — where the poor have been reduced to eating cakes made with bleach and are on the verge of bringing the government down. Even in America, some grocery stores have begun to institute a form of rationing. Meanwhile, massive tracts of rainforest are being cleared in Indonesia to produce biodiesel, threatening the orangutan and other magnificent animals with extinction. In Brazil, the growth of sugar cultivation for ethanol is forcing food producers into the Amazon.”
By contrast, one of the Audubon Society’s chief bird sanctuaries (the Paul J. Rainey Wildlife Refuge in Louisiana), has 37 oil wells on site, and has produced natural gas for 50 years without harming the environment. Drilling for oil hasn’t harmed the birds a bit. But ethanol production causes environmental destruction, mass hunger, starvation, and rioting worldwide.
Disclosure: like many Americans, I have a retirement plan (both a 401(K) and an IRA). Like most retirement plans, it contains mutual funds. And most of those mutual funds own some stock in oil companies. So when politicians demand that the government impose a “windfall profits tax” on oil companies, what they are really trying to do is take money from my retirement plan — and your retirement plan, too, if you have one. That’s not going to encourage exploration for new sources of oil, or reduce our dependence on foreign oil.
The Rhetorical Impact of the Global Warming Bandwagon
Cellulosic ethanol—derived from wood scraps and other forms of inedible plant mass– may or may not turn out to be a real technological breakthrough. On the one hand, it could reduce the ruinous impacts of grain-based ethanol on food prices. On the other hand, the extensive set of federal mandates and subsidies for cellulosic ethanol is not a good omen—good technologies rarely need federal help, and the existence of federal aid is often a tip-off that a new technology is a loser.
But here’s another question: if cellulosic ethanol does take off, what impact would that have on the clichés we use? Would we have to scrap the old saying about separating the wheat from the chaff, and instead talk about separating the chaff from the wheat?
Farm Bill reform? Don’t bet on it.
The 2007 Farm Bill, which has been in conference for months as conferees struggled with the threat of an Administration veto over budget-busting funding and lack of real reform, supposedly had a breakthrough last Friday. In an April 25, 2008 statement on the Senate Agriculture Committee’s website, Senator Tom Harkin (D-IA), committee chairman said:
. . . the core farm bill utilizing the $10 billion above baseline has been worked out among key farm bill negotiators. Specific details and funding will still have to be worked out and are all subject to ratification by the full conference committee.
Harkin had scheduled a meeting this evening of the conference committee members to reach final agreement on support programs and their funding. But that meeting was postponed until Tuesday.
According to the Detroit Free Press, negotiators hammered out an agreement to bring the Farm Bill within budget constraints:
A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7-billion package of tax breaks to be included in the bill, and on how to finance the overall package.
The outline includes an $861 million increase for nutrition programs, partially paid for by slashing crop subsidies by $400 million and cutting a program to pay farmers for ruined crops by $250 million.
In March 2008 during conference negotiations, the U.S. Department of Agriculture Secretary Ed Schafer had issued a statement noting that the President would veto the bill if it exceeded spending limits and did not include reform measures. As the statement noted:
Unfortunately, the Farm Bills that passed the House and the Senate last year failed to address the issues of reform and instead raised taxes on the American people. Recent proposals from the Senate are looking around the $10 billion level for new spending of our farm programs, and we’ve outlined a path from the Administration to get there.
But at a time when we are enjoying a booming farm economy with record commodity prices, record farm income, record exports, it’s simply unacceptable to provide spending that increases the size and scope of government while increasing taxes to the people who pay for it.
But expect more legerdemain in the budgeting. And don’t expect real reforms of farm support programs. Take the sugar program – a system of price supports, restrictions on domestic supply and of imports. According to AgWeb.com, the new sugar program would do the following:
– Sugar: The bill would raise the sugar loan rate three-quarters of a cent beginning in 2010, and changes the overall allotment quota to be a minimum of 85 percent of domestic consumption (previously was a set amount). It also includes a sugar-to-ethanol program.
More on Deadly Ethanol Subsidies
Nate Beeler has an an excellent editorial cartoon, “Food for Thought,” that captures the deadly and costly consequences of ethanol subsidies, in today’s Washington Examiner. Many go hungry because of the greed of a few. We wrote earlier about how ethanol subsidies are causing hunger and starvation worldwide. Rioting and violent protests have occurred in many countries, including Mexico, Pakistan, Egypt, Indonesia, Haiti, El Salvador, Bangladesh, Burkina Faso, Ivory Coast, Cameroon, Senegal, Ethiopia, Mauritania, Madagascar, and the Philippines. Ethanol subsidies are also contributing to environmental destruction.
Global Food Crisis: “A Silent Tsunami”
“Sharply rising food prices” “have sparked riots around the world and threaten U.N.-backed feeding programs for 20 million children, the top U.N. food official said Tuesday.” The news story that reported this quoted the British Prime Minister as saying that “25,000 people a day are dying of conditions linked to hunger,”"with one child dying every five seconds from hunger-related causes.” Food riots have recently occurred in Haiti, “Bangladesh, Burkina Faso, Ivory Coast, Cameroon, Egypt, Indonesia and Senegal,” as well as Ethiopia, Mauritania, Madagascar, the Philippines, Pakistan, and Mexico.
The story doesn’t explore the role of ethanol subsidies in causing starvation, although it notes that “the diversion of some crops to produce biofuels” is contributing to rising food prices, and that “the increasing use of crops to produce biofuels has been criticized as contributing to food shortages.”
Finance ministers in the Third World are now calling for an end to ethanol subsidies. South Africa’s finance minister calls them “criminal.” India’s finance minister declared that “in a world where there is hunger and poverty, there is no policy justification for diverting food crops towards bio-fuels. Converting food into fuel is neither good policy for the poor nor for the environment.” Ethanol subsidies are terrible for the environment.
Food Crisis Round Up
As food prices soars to new heights, researchers at Texas A&M makes a potentially revolutionary discovery. They discover a plant gene for saline tolerance in Arabidopsis. Arabidopsis is the trusty old model organism for plant scientists, and this discovery will help us produce new plants using molecular plant breeding methods (PMB’s), if the environmentalists will let us.
Although some of our current ailments are based on ill conceived ethanol mandates, subsidies that skew the food markets, and increased consumption in India and China, a recent op ed in the Telegraph joins a more and more unified Brittish demand for adopting PMB’s. The op ed also points the finger in the direction of OPEC, and the hypocrisy of leaders like Hugo Chavez. Chavez is supposedly a champion of the poor, but the high oil prices caused by the cartel’s price fixing are part of the problem with the rise in the cost of food.
Parts of the Arab world are harvesting the riches from the price fixing, it is important to remember that not all countries in the Arab world have oil. The region is balancing on a precarious edge between civil unrest and political chaos by choosing either of the options available to alleviate the situation.
Zimbabwe is again looking at starvation, not only due to the food prices, but also due to new bouts of drought. Last time they faced this situation, about 6 years ago, the government in Zimbabwe refused to accept aid shipments of maize because the grains came from PMB’s. This is the same corn that Americans eat every day. Luckily the starving population would not stand for this decision, spurred on by jet-setting environmental activists from Europe and USA. They raided the food containers, so the grain eventually got the people it was intended for, but what will the misguided leaders in Zimbabwe do this time around?
On the good news side, Ethopia opened up its first commodity exchange last week, which will lower the transaction cost for several major commodities in the country. Hopefully that will help Ethiopian farmers and consumers with lower cost for important foodstuffs.
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