The following is a guest post from Scott Faber, Farm Bill campaign director for Environmental Defense. (Scott also has a blog.)
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Congress is in serious negotiations over the next version of the Farm Bill. The debate is fertile ground for food policy myths and misconceptions. Perhaps the best (or worst) example is that old chestnut that farm subsidies keep food prices low. Here's why that's just a myth.
Most of the corn and soybeans grown in America end up in either a pig (as pig food) or a pump (as biofuel). So if farm subsidies really lead to cheaper food, we're mostly talking about cheaper pork.
Noted agricultural economist Bruce Babcock took a look at what the subsidies mean for the price of pork (PDF). Turns out, removing the subsidies would indeed raise the price of pork -- by less than two cents a pound. That's because the cost of feeding the pig is just a fraction of the cost of processing and transporting the pork.
If that's not enough to convince you that subsidies aren't keeping our food prices down, there's another reason. As Babcock also points out, all corn and soybean payments that will be made over the next five years will be direct subsidy payments, completely "decoupled" from planting decisions.
That means corn and soybean farmers will get paid (almost $2.5 billion over the next five years) whether they grow corn or cassava. So much for the idea that subsidies guarantee a huge supply of corn, keeping prices down.
Back to the fact that most corn ends up in a pig or in a pump -- corn prices are rising, yes, mostly thanks to surging demand for biofuel. If we're serious about keeping corn prices low, here's what we should do: Expand the production of ethanol from crop wastes and prairie grasses -- taking the pressure off corn. Even better, that strategy would produce many more side benefits for the environment.
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Comments
View as Flat
NonprofitWatch Posted 3:24 pm
12 Jul 2007
However in regards to the Farm Bill, I don't find so laudable that apparently Walmart has opposed Country of Origin Labeling aka COOL.
See the below links from the Organic Consumers Association and Walmart Watch for more info:
http://www.democracyinaction.org/dia/organizationsORG/oca ...
and
http://walmartwatch.com/blog/archives/country_of_origin_l ...
As your group E.D. has an eco-partnership with Walmart, it would seem highly appropriate for you and E.D. to engage them on this matter.
Also, how do you feel about some type or global warming surcharge on foods related to distance that the foods have travelled or perhaps other factors? I've not given thought to how the funds generated could be used, but I imagine smarter people than I with expertise on agricultural and global warming matters might have some nifty ideas. In asking the above, I realize that E.D. has a strong free trade bias, as reflected by its support of NAFTA which some lefty critics blame for flooding Mexico with cheap U.S. corn, thereby displacing many Mexican farmers.
bernardo issel - http://www.NonprofitWatch.org -
bernardo (at) NonprofitWatch.org
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GreyFlcn Posted 9:04 pm
12 Jul 2007
"Instead we should use other biofuels, which use the same land, the same fertilizer, the same water, but aren't edible, and magically that will not affect food crops."
...
Selective myopiya I guess.
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justlou Posted 9:38 pm
12 Jul 2007
Scott, be careful of what you ask for.
Crop wastes? What is wasteful about crop residues that protect the soil from erosion? What is wasteful about crop wastes that add organic matter to the soil? Remove these wastes on many soils and what do you get? More silt, chemicals and nutrients in streams and rivers. And less organic matter that reduces soil productivity. So this is good?
And prairie grasses? Ok, I'll concede some benefits here. But, there will also be some environmental costs. These crops will be managed with herbicides and fertilizers. Removing all the top growth will eliminate the ability to manage these plantings with fire. So, you will be substituting herbicides to help control weeds. And there will be ample inputs of nitrogen to stimulate a lot of top growth. And you will be erasing a lot of wildlife habitat with each harvest. And you will probably be sacrificing more natural, diverse and self perpetuating natural ecosytems in the process of conversion to monoculture grasses. So, please tell me how this is good for the environment.
Green is often just another shade of brown. The problem remains that we have tanks to fill with liquid fuels. And the number of tanks is growing along with the mouths to feed.
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Ron Steenblik Posted 10:03 pm
12 Jul 2007
Otherwise, I agree with Bruce Babcock regarding the effect of past farm subsidies on the price of food. (He and his group at Iowa State is doing fantastic work, IMHO.) Some subsidies have kept raw commodity prices low, however, especially for exports. That is why developing countries have complained so loudly about, for example, subsidized U.S. cotton exports.
Just to underscore one other point. While production- or price-linked subsidies benefiting "program" commodities like corn and soybeans may have been sharply reduced by support for biofuels, the subsidies for biofuels themselves are set to soon eclipse even the highest levels of crop subsidies provided prior to 2006. But the bulk of those are and will be provided through tax credits -- i.e., the IRS and not the USDA -- and therefore do not show up in the numbers being debated in discussions of the Farm Bill.
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GreyFlcn Posted 10:50 pm
12 Jul 2007
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Sean Casten Posted 1:06 am
13 Jul 2007
That said, I'd urge all to read Michael Pollan's book The Omnivore's Dilemma for a great overview of where subsidies do become perverse. The larger point to keep in mind in this debate is not simply the cost of food, but whether there's an economic reason to be a farmer. There are serious consequences associated with the subsidization of corn and other crops when that causes overproduction and separation of nitrogen users (corn) from nitrogen producers (cows) by virtue of the fact that the subsidies make it cheaper to buy corn than to grow corn. Much of the discussion of corn fertilizer use is after all a direct result of the fact that we're dumping fossil-fuel derived fertilzer on the fields - which we wouldn't have to do nearly as much of if the cows occasionally got to crap in those same fields.
There are some really interesting connections that therefore get built between our desire to have low-intensity farming and local farms. If you can't make money growing corn, then you get big industrial, monoculture farms. This may be incompatible with cheap corn (per bushel), but to the extent that it simply shifts the cost to the user (rather than to income taxes, which ultimately pay for the farm bill subsidies), the result is going to be much more efficient food production. Which brings us back to larger issues of how subsidies skew economic behavior, to the detriment of the energy and environment.
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Delay And Deny Posted 1:51 am
13 Jul 2007
...to these people:
http://johnkerry-08.com/images/teresa_kerry.jpg
So they can poison us with corn syrup.
John Bailo
You Read It Here First
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Ron Steenblik Posted 2:37 am
13 Jul 2007
As I've noted elsewhere, you cannot compare corn and cellulosic as far as land impacts.
Pray tell, why not? First of all, cellulosic ethanol can be made from corn, and indeed several of the demonstration plants that are being built now will use the cob, or stover. So we could easily see much of future acreage for cellulosic plants looking little different from the current ones.
As I've quoted on several occasions, a major study by Iowa State University (including the same Bruce A. Babcock as mentioned above), recently concluded the following:
Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of corn-based ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.
So, in other words, to get farmers to grow switchgrass in the Corn Belt, you would have to bribe (i.e., subsidize) them. (A bill to do just that was proposed this spring by two Midwestern senators.) And the higher the pay-off to grow corn (e.g., starting with volumetric subsidies to ethanol that do not distinguish by feedstock, which is what the US has now), the bigger that bribe would have to be. It is fiscal lunacy.
As for fertilizer needs of grasses. Yes, they can grow well with a fraction of the fertilizer normally needed to get a good yield of corn. But to get HIGH yields, especially as soon as you start harvesting the biomass, let's not kid ourselves: you'll need to add fertilizer.
And, yes, I've read Michael Pollan's book (several of his books). It's very good.
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Sean Casten Posted 3:20 am
13 Jul 2007
You raise excellent points. Yes, if the crop is unchanged the fertilizer and land use impacts are the same. Also, I completely agree (and agree that too many ignore this point) that a farmer will grow the crop that pays the most money, and thus the cost of production must take into account competing acreage costs, not simply the raw costs of production. (I sometimes think that many USDA modelers ought to spend some time trying to wean Afghan poppy farmers off their own high-value cash crops before telling us how good it would be for farmers to switch to lower cost crops - so that they can send those price savings along to their customers.)
However, I would argue that this vantage point is too narrow. Our ag system right now grows sugar and protein in various flavors. If you can make ethanol from cellulosics, you suddenly create markets for crops that are not rich in sugar or protein (OK, cellulose is just a chain of sugar molecules, but not in an economically valuable form). And generally speaking, once you expand into these crops, you can start looking at much more marginal farmland and much less fertilizer intensivity. I'm out of date on the research, but if memory serves, Bruce Dale at U. Michigan has done lots of interesting work on this subject and shown that you actually end up with much less carbon- (e.g., fertilizer) intensive land use, and to so growing woodier crops that leave a lot more carbon in the soil. Folks I trust (but have not verified the math) tell me that plausible scenarios show this transition leading to substantially more soil carbon. Oak Ridge has done work showing that lots of the land currently in the conservation reserve land (for reasons that have to do with soil replenishment from soil-depleting crops) could be justifiably harvested for woodier materials - switchgrass, poplar, etc. - because they are (a) better for the soil, thus requiring less CRP and (b) don't compete with other food crops, thereby avoiding the Taliban poppy grower problem.
Have I answered your question?
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justlou Posted 5:10 am
13 Jul 2007
Sean, do you think that farms will get smaller if farmers make more money? If anything, this drive up in corn prices and profitability is going to advance the trend toward larger farms. Farm prices and land rents, already overvalued as a result of subsidies, have shot up as the price of corn doubled in the past year. So, profitability is going to favor the small guy? It might have kept more farmers on the land in the past, but it will only fuel the growth of the big farmer now.
The production of cellulosics will demand huge investments on the farm, means of transport to the factory and in the factory itself. Farmers will not do this without massive inputs of public subsidies and loans. It will not only have to compete with corn but it will have to be substantially more profitable to defray the huge initial investment costs. Plus, growing cellulosics will be a huge opportunity cost to many growers who will find that their management, production and harvesting compete with their existing farm operations and crops for time, capital, land and infrastructure. None of this will likely have any impact on the price of corn for probably 20 more years.
And no, Sean, I don't think you answered Ron's questions nor addressed my points about the environmental impacts of cellulosics.
We approach an age where we will be unable to sustain the current levels of land management by man. To put more land under production requiring inputs of fossil fuel energy and other finite resources is just adding more fuel to the fire.
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Ron Steenblik Posted 5:26 am
13 Jul 2007
Thanks, Sean. I agree with most of what you wrote.
But as for "spare" CRP land, it does not usually occur in the nice, contiguous catchment areas that would be needed to grow a lot of material for the size of plant needed to exploit economies of scale. It is typically land that is less fertile, or near waterways, and often has value for wildlife (a value that is diminished if a monoculture is grown and harvested frequently).
Consider the map of Iowa at the right. (Again, courtesy of Iowa State University's Center for Agricultural and Rural Development (CARD).) The black dots are CRP land. Only the south-central area is dense enough to grow a substantial amount of biomass within a 60-mile radius. Perhaps Iowa is not representative. But it does show that one has to consider the pattern and not just the total acreage under CRP contracts.
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Sean Casten Posted 5:36 am
13 Jul 2007
All agricultural markets are prone to overproduction and price collapse because demand (bellies) are finite, while supply (harvests) are flexible. Absent any government intervention, big seasonal harvests will therefore cause prices to spiral down and farmers to bankrupt themselves as they keep trying to overproduce to make it up on the volume, driving prices down further still.
FDR put price checks in place that created a strike price for a given crop (say, corn) at the beginning of the growing season and then gave farmers the right either to sell at the market price come harvest time, or to take a loan from the government at the strike price, collateralized by their corn, which now went into silage. This ensured that in a boom year, the price had a floor and the market supply of corn was constrained. Less food got to market, at the expense of less farmer bankruptcy.
40 years later, Nixon got rid of the collateral piece of this policy, but kept the strike price. Thus, when there is a boom in corn production, a farmer can now sell at the government strike price, but can sell as much as they want. None goes into silage and the market is flooded with cheap corn. Good news: lots of food at low prices. Bad news: massive economic dislocation
To understand the bad news, and how this gets to the link to monoculture, consider a beef farmer before and after Nixon's change. Since the corn farmer makes a profit on his corn, the price for corn will exceed the farmers cost of production. If you're raising cattle, it is cheaper for you to set some of your land aside to raise corn for your cattle than it is to buy marked-up corn from a neighboring, corn-only farmer. After Nixon's change, we find ourselves in a situation where the price of corn is set by the strike price independent of production costs, and you can therefore buy corn for less than it costs to grow it. Presto, monoculture. The beef farmer, with no incentive to grow corn on his lot becomes a beef specialist. The corn farmer, who's revenue no longer correlates to his costs sees no benefit from cow fertilizer and becomes a corn specialist. And so now - still heavily quoting Pollan, we have taken no problems and created two. The corn farm now needs fertilizer, which is made from natural gas, so corn now becomes much more carbon-intensive (since they no longer get cow manure on their field). Meanwhile, the beef farmer has massive nitrogen run off problems because he doesn't have crops to use the nitrogen.
There is a deep truth here about the distortative power of subsidies. Hope that explains my first point. Will respond to your second separately.
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Sean Casten Posted 5:42 am
13 Jul 2007
Marginal farm land is cheaper to grow crops on, and since cellulosics can be grown on more marginal land, one does not need to presume that the farmer calculus is "corn or cellulosics". The ultimate test is profits/acre, and if your acreage requires lots more fertilizer for corn than the average, it may well be in your economic interest to grow cellulosics. As an aside, a friend who converted his big, corn-only farm to a more integrated organic farm told me that this profit/acre test was what drove him to make the switch. (He gets less productivity per acre than he used to, but spends even less, and as he put it to me "the only number that matters is the number that sticks in my pocket".)
Re: environmental impacts of cellulosics, simply recognize that if fertilizer and water use per harvested BTU decrease (as they certainly do from corn to cellulosics), the environmental consequences fall as well. Ditto for retained soil carbon, etc.
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justlou Posted 6:17 am
13 Jul 2007
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Ron Steenblik Posted 6:43 am
13 Jul 2007
Well said, justlou. Ethanol plants are essentially refineries in the middle of farmland.
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alevin Posted 2:34 am
14 Jul 2007
The low impact on the price of pork may have to do with the distribution channel for meat - most of the markup happens after the animal is slaughtered. The main benefits of the subsidies are the oligopoly of food processors. The top four companies controlled 84% of beef processing, 59% of hog processing, 59% of chicken processing, 81% of corn, 81% of soybeans. The processors are able to pay farmers less than what it costs to produce food, and the government makes up the rest in subsidy.
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gmunger Posted 5:55 am
14 Jul 2007
Also, I wonder if we might be overestimating the costs of production for cellulosic biomass production. The crop becomes mainly perennial, rather than an annual, such as corn. This seems to me like it would be inherently more efficient, requiring less tillage, less fertilizer, less irrigation, less manipulation in general. Heck, it could even be more or less a mix of native plants.
Thoughts?
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gmunger Posted 5:58 am
14 Jul 2007
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Ron Steenblik Posted 6:49 am
14 Jul 2007
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caniscandida Posted 7:59 am
14 Jul 2007
Chickens are our cousins!
So are other sensitive animals!
Enough is enough!
No more factory farms!
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Ron Steenblik Posted 3:57 pm
14 Jul 2007
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GreyFlcn Posted 4:20 pm
14 Jul 2007
Agrofuels: Towards a reality check in nine key areas
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Whiskerfish Posted 2:01 am
15 Jul 2007
a cow can emulate a natural grazer to some extent, and not trash the ecosystem too badly. well-managed cattle ranches support a lot of wild species.
driving a tractor thru a field to cut grass for a biofuel factory compacts the soil and kills loads of critters - a major impact.
Whiskerfish
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gmunger Posted 2:11 am
15 Jul 2007
a cow can emulate a natural grazer to some extent, and not trash the ecosystem too badly. well-managed cattle ranches support a lot of wild species.
driving a tractor thru a field to cut grass for a biofuel factory compacts the soil and kills loads of critters - a major impact.
All true. But shouldn't the relevant comparison here be between harvesting cellulosic biomass from pasture and growing and harvesting corn for ethanol production?
Also keep in mind that I was also considering a mix of grazing and "harvest". Think about converting a substantial amount of land currently in corn production back to a grass-based agriculture. That, to me, is a happy thought. Have you ever visited the US Midwest? It is the Great Corn Desert.
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gmunger Posted 2:20 am
15 Jul 2007
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Karen Lee Orr Posted 2:44 am
15 Jul 2007
The Organic Consumers Association website provides a summary of the study's arguments here:
http://www.infoshop.org/inews/article.php?story=200707100 ...
The Organic Consumers website has good articles every day. Some are by Grist writers.
Here's one from Organic Consumers that's a bit off topic but I present it because of the fine expression, "a furrier in bamboo clothing."
It's Too Easy Being Green: How Food Greenwashing Feeds Profits not Preservation
http://www.organicconsumers.org/articles/article_6007.cfm ...
And also off topic ~
Livestock Antibiotics Can Be Absorbed by Vegetables from the Soil
http://www.organicconsumers.org/articles/article_6032.cfm ...
Back on task:
The St. Petersburg Times carried the following article today:
Ethanol use sends food prices up, up, up
The tab for the increasing use of ethanol blends is creating a ripple effect felt in the grocery checkout line.
http://www.sptimes.com/2007/07/15/Business/Ethanol_use_se ...
It will be interesting to see how the presidential candidates react to this information now that it's being published in the big newspapers.
The St. Pete Times, by the way, has been a relentless and enthusiastic cheerleader for biofuel in their business pages and blog, "The Fueling Station."
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Ron Steenblik Posted 3:57 am
15 Jul 2007
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gmunger Posted 4:04 am
15 Jul 2007
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GreyFlcn Posted 5:34 pm
15 Jul 2007
No, it really isn't.
What really matters is use of arable land, and fresh water resources.
Next, apparently what no-till saves in CO2, it more than compensates with increased N2O emissions. So the concept of harvesting making much of a difference is pretty meaningless.
Then you have the limitations of photosynthesis itself. You're looking at 3-6% solar effeciency, with a theoretical maximum of 11%.
Considering solar thermal is 30-50% effecient, thats peanuts.
Followed by the conversion effeciency.
So far the conversion effeciency for cellulosic via enzyme processing, or via acid processing is worse than if we just stuck with corn ethanol.
So the last thing left is some sort of a synthetic processing, like Fischer Tropsch.
Catch being once you start making it so that they can effeciently use biocoal, whats stopping them from using fossil coal?
All in all, there is no magic solution with biofuels.
And frankly, unless we have that magic solution inhand, we should NOT be pushing biofuels in the blind hope that they will quickly change to being sustainable.
What we have right now is Electrics, CNG, and Diesel. BioFuels have yet to prove that they are beneficial (much less, that they aren't more of a threat than oil and coal combined)
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Delay And Deny Posted 2:48 am
16 Jul 2007
The real problem is we need more sprawl and lower density, so that we can regain the days of the local butcher and baker.
Fresh food, produced locally, by independent farmers is the answer to our health woes.
John Bailo
You Read It Here First
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Ron Steenblik Posted 5:39 am
16 Jul 2007
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GreyFlcn Posted 7:41 am
16 Jul 2007
I should say that Algae might have potential.
But thats mainly because it doesn't use much water, it doesn't need arable land, and it doesn't need any particular level of sunlight
(i.e. Growing it in the tropics is no different as growing it elsewhere)
So yeah, thats the only reason I see that biofuels aren't just written off as a complete waste of time, money, and attention to better solutions.
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