Reason Magazine - Topics > Farm Subsidies

The World Food Crisis and Political Malthusianism

rbailey@reason.com (Ronald Bailey) — Tue, 08 Jul 2008 15:00:00 EDT

Riots have broken out in more than a dozen countries as prices of food staples have doubled and reserves declined to their lowest levels in a generation. The world food crisis is at the top of the agenda at the Group of Eight summit meeting in Japan this week.

Is Thomas Robert Malthus right after all, that human numbers have finally overwhelmed our ability to produce food, leading inevitably to mass starvation? In 1798, Malthus wrote An Essay on the Principle of Population, where he famously asserted that "population does invariably increase where there are the means of subsistence." As a consequence, some portion of mankind must forever be starving; and, further, efforts to aid the hungry will only lead to more misery, as those initially spared from famine bear too many children to feed with existing food supplies.

In subsequent editions Malthus softened his dismal conclusions and argued that "preventative checks" could avert overpopulation by reducing birth rates. Preventative checks included later marriage and abstinence, along with indulgence in "unnatural passions" and "irregular connections," by which Malthus meant prostitution, abortion, masturbation, and homosexuality.

Modern disciples of Malthus have stressed the dismal checks on population, e.g., war, pestilence, and famine. The most famous neo-Malthusian was Stanford University biologist Paul Ehrlich, author of The Population Bomb (1968), in which he declared that it was inevitable that hundreds of millions would die in the 1970s. Why inevitable? Because, as Ehrlich explained, "To ecologists who study animals, food and population often seem like sides of the same coin. If too many animals are devouring it, the food supply declines; too little food, the supply of animals declines... Homo sapiens is no exception to that rule, and at the moment it seems likely that food will be our limiting resource." Or more simply stated, the goal of all animals is to turn food into offspring.

In 2003, Duke University consultant Russell Hopfenberg restated this claim in an article called "Human Carrying Capacity Is Determined by Food Availability," published in the journal Population and Environment. Hopfenberg wrote, "[T]he problem of human population growth can be feasibly addressed only if it is recognized that increases in the population of the human species, like increases in the population of all other species, is a function of increases in food availability."

Ehrlich was wrong. A global famine did not occur in the 1970s, 1980s, or the 1990s. Instead, food became cheaper and more abundant than ever before, even as the world's population doubled. But what about now?

The price of staples like corn, wheat, and rice are escalating, indicating that demand is outstripping supplies. Why? Because of political and economic institutional failures, not overpopulation. First, let's deal with the claim that human population, like the populations of all other animals, expands as food supplies increase. On a global level that certainly looks plausible. As the amount of food increased over the last century, world population rose from 1.5 billion in 1900 to 6.6 billion today. Case closed?

Not so fast. Consider that countries with the highest food security are also the same countries with below replacement total fertility rates. If the availability of food was the chief determinant of birth rates, then one would expect Iowa farmers would spawn more kids than any group on the planet. Instead, it is countries in which food insecurity is greatest that have the highest total fertility rates. As an empirical fact, as people become wealthier and better fed, they tend to bear fewer children. Well-fed human beings can evidently override the genetic programming that drives other animals to turn more food into more offspring.

How much food is there right now? Enough to feed 10 billion vegetarians. One oft-heard argument is that increased Chinese prosperity is driving up meat consumption, which is diverting grain into livestock production. It takes about eight pounds of grain to produce one pound of beef, and 2.5 pounds of grain to produce a pound of chicken. It is true that Chinese meat consumption is soaring, but China has produced nearly all of the extra grain it needs to grow its burgeoning numbers of livestock. In fact, China remains a net exporter of grains. Chinese corn yields an average of 82 bushels per acre compared 150 bushels per acre in the United States. In other words, Chinese yields could nearly double using already existing technologies. In addition, crop biotech leader Monsanto predicts that corn yields will double to 300 bushels per acre by 2030.

So what is driving up global food prices? Joachim von Braun, Director General of the International Food Policy Research Institute (IFPRI), points to high oil prices which have "made agricultural production more expensive by raising the cost of mechanical cultivation, inputs like fertilizers and pesticides, and transportation of inputs and outputs."

In addition, biofuel mandates in the United States and Europe are diverting food into fuel and boosting the price of feedstock crops like corn. So, on the demand side, higher corn prices cause food consumers to shift to rice and wheat. On the supply side, higher corn prices cause farmers to reduce rice and wheat production in favor of corn. These shifts in demand and supply have tended to boost the price of rice and wheat and other crops. IFPRI estimates that increased biofuel demand accounts for 30 percent of the increase in weighted average grain prices.

In response to higher food prices, several major food-producing countries have instituted export bans on various agricultural commodities. Export controls shrink the size of the market and reduce domestic prices to farmers. Of course, reduced prices signal farmers to produce less. For example, China has banned rice and maize exports, and India has banned exports of rice and pulses. Argentina has raised export taxes on soybeans, maize, wheat, and beef, and Ethiopia and Tanzania have banned exports of major cereals. In addition, Benin, China, Malaysia, and Senegal have imposed price controls on some staples. Price controls are especially damaging because they strongly discourage farmers from increasing their production. IFPRI estimates that "the elimination of export bans will stabilize grain price fluctuations, reduce price levels by as much as 30 percent, and enhance the efficiency of agricultural production." Clearly eliminating subsidies for biofuel production in developed countries and export controls in developing countries would go a long way towards easing the world food crisis.

A longer-term problem is that decades of rising food security have led to cutbacks in both public and private agricultural research focused on boosting yields. Since 1980, rich donor countries have cut their support for agricultural research and development for poor countries from $6 billion to $2.8 billion. Other bad policies have contributed substantially to the current food crisis. For example, most governments in sub-Saharan Africa have underinvested in farm-to-market roads and in agricultural research, while also imposing high import taxes on fertilizer and modern high-yielding seed, price controls, and bans on genetically enhanced crops. Making the heroic assumption that if sub-Saharan governments "fulfill their commitments," IFPRI estimates that spending an additional $14 billion per year could boost African agricultural production by 7.5 percent annually through 2015.

Finally, the world food crisis could have the highly beneficial effect of jumpstarting the Doha round of World Trade Organization negotiations. High food prices could serve as the impetus for eliminating damaging food market distortions such as rich country farm subsidies and poor country protective tariffs.

The current world food crisis is not the long predicted signal of Malthusian overpopulation. Instead, it is the result of political Malthusianism, that is, a series of government policy failures that are preventing farmers from growing the food demanded by the world's hungry billions.

Ronald Bailey is reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

Where in the World Can We Do the Most Good?

rbailey@reason.com (Ronald Bailey) — Mon, 26 May 2008 12:00:00 EDT

Copenhagen, May 25—The opening press conference for the Copenhagen Consensus Center's 2008 conference took place in one of the gilt-edged ballrooms at the Moltkes Palace. The action unfolded beneath a bas-relief depicting heroic Danish burghers in top hats carrying a banner supplemented by bas-reliefs on pilasters portraying such everyday tools as hammers, pliers, squares, and drawing compasses. The PowerPoint question displayed on the screen behind the head table of notables was, "Where can we do the most good for the world?" Danish Prime Minister Anders Fogh Rasmussen began, "The Copenhagen Consensus is a simple but powerful idea. The world faces a number of serious challenges. We only have limited means to solve them, so where do we start?"

That's the question that the Copenhagen Consensus Center conference for 2008 (CC08) will try to answer this week. The Copenhagen Consensus Center is the brainchild of "skeptical environmentalist" Bjorn Lomborg. Headquartered at the Copenhagen Business School, the CC08 is convening leading economic experts with the aim of ranking 10 of the world's biggest problems. The expert panel is supposed to figure out which ones should receive priority and which should be bumped further down the queue. To make the exercise concrete, the experts are notionally deciding what challenges should be allocated an "extra" $75 billion in foreign aid over the next four years.

Among the experts are Nobel Prize winners in economics Vernon Smith, Thomas Schelling, Douglass North, Robert Mundell, and Finn Kydland. Other expert panelists include economists Nancy Stokey from the University of Chicago, Jagdish Bhagwati from Columbia University, and Francois Bourguignon from the University of Paris. The experts are considering detailed reports by prominent international researchers regarding ten challenges, including air pollution, armed conflicts, diseases, education, global warming, malnutrition and hunger, sanitation and access to clean water, subsidies and trade barriers, terrorism, and women and development. In each area, the researchers define the problem, suggest options for solving the problem[*], and assign a benefit-to-cost ratio (BCR) to each solution. The higher the BCR, the more cost-effective the solution is.

Prime Minister Rasmussen concretized the value of the CC08 exercise by referring to the earlier version in 2004. He noted that in 2004, CC04 participants put controlling the HIV/AIDS epidemic in developing countries at the top of the list. Consequently, the Danish government began to devote a higher proportion of its overseas development aid to combating that disease, doubling the aid from $100 to $200 million per year by 2010.

Rasmussen got ahead of the 2008 deliberations a bit when he turned to the subject of climate change. He argued that the case for action is strong, and that the world needed to cut its greenhouse gas emissions. To address the problem, Rasmussen called for "a new Green industrial revolution and a new Green world economy." Interestingly, the 2004 Copenhagen Consensus report ranked measures to address climate change at the very bottom, finding that proposals for carbon taxes and implementing the Kyoto Protocol would have costs that "were likely to exceed the benefits."

Of course, the prime minister is likely making politic noises as he gears up to host the 2009 United Nations Climate Change Conference. At that meeting in Copenhagen, governments are expected to adopt a comprehensive new global warming treaty on climate change. Lomborg opposes stringent limits on greenhouse gas emissions as not being cost effective when it comes to helping poor people. At the end of the week, we'll see what the experts say this time.

Lomborg followed the prime minister, claiming that the Copenhagen Consensus is not about doing what's fashionable, but instead focuses on doing what's rational. He pointed out that politicians and activists often argue that we should solve all problems. But the fact is that in a world of scarce resources, a couple of big issues will get the bulk of the available resources. Trade-offs have to be made. When Lomborg is speaking of resources, he is basically talking about foreign development aid. What the Copenhagen Consensus hopes to do is help donors, both public and private, to spend their money is ways that solve the most urgent problems.

To illustrate how issues might be ranked, Lomborg cited some findings from a paper dealing with the challenge of disease. Spending $1 billion on controlling tuberculosis would save 1 million lives and result in estimated benefits of $30 billion for a benefit-cost ratio of 30 to 1. Spending $200 million on treating heart disease in poor countries (which accounts for 25 percent of deaths in those countries) with an inexpensive "polypill" combining aspirin and statins would produce $5 billion benefits implying a 25 to 1 benefit-cost ratio. And a $1 billion spent on malaria produces a benefit-cost ratio of 20 to 1.

During the question and answer period, I noted that the CC08 process looks to shower money on problems, but does not address many of the institutional impediments for making sure that the money would actually be spent effectively. In fact, I suggested, the reason poor countries are poor is because they do not have effective governance and economic institutions. Lomborg responded that of course institutions are important, but the Copenhagen Consensus was focusing chiefly on "what can money do to help." He pointed out that the Copenhagen Consensus conference in 2004 considered corruption as an issue, but couldn't figure out how spending money would be able to help fix that problem. Earlier Prime Minister Rasmussen correctly observed, "No problem has ever been solved only by throwing money at it. We must prioritize." Unfortunately, as New York University development economist William Easterly has documented, the West has thrown $2.3 trillion dollars in aid to poor countries during the past five decades without much to show for it.

Lomborg further suggested that institutional analysis could be implicit in deciding how to prioritize the challenges. For example, if the experts decide that corruption or lack of private property rights would get in the way of effectively deploying money to solve a specific problem, they could give it a lower priority.

The deliberations of the expert panel are private, but all of the research papers and respondents to them will present their work to a forum of 80 young people drawn from 37 different countries during the week. These presentations are public and I will be reporting on their findings in daily dispatches from Copenhagen.

Ronald Bailey is reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

Disclosure: Danish taxpayers are paying my travel expenses to attend CC08. There are no conditions placed upon my reporting.

For live webcasts from CC08, go here.

[*]: Corrected from an earlier version that, due to an editing error, implied only two options were suggested.

This Is What Happens When No One Actually Reads the Bill

jwalker@reason.com (Jesse Walker) — Thu, 22 May 2008 10:22:00 EDT

More farm bill fun:

The House overwhelmingly rejected President Bush's veto Wednesday of a $290 billion farm bill, but what should have been a stinging defeat for the president became an embarrassment for Democrats.

Only hours before the House's 316-108 vote, Bush had vetoed the five-year measure, saying it was too expensive and gave too much money to wealthy farmers when farm incomes are high. The Senate then was expected to follow suit quickly.

Action stalled, however, after the discovery that Congress had omitted a 34-page section of the bill when lawmakers sent the massive measure to the White House.

That means Bush vetoed a different bill from the one Congress passed, raising questions that the eventual law would be unconstitutional. Republicans objected when Democrats proposed passing the missing section separately and sending that to Bush.

In order to avoid those potential problems, House Democrats hoped to pass the entire bill, again, on Thursday under expedited rules usually reserved for unopposed legislation. The Senate was expected to follow suit. The correct version would then be sent to Bush under a new bill number for another expected veto.

Lawmakers also will have to pass an extension of current farm law, which expires Friday.

This may be my favorite foulup since New York's electors voted for an imaginary presidential candidate called "John L. Kerry." Alas, the story will still almost certainly end with the bill enshrined as a law.

Because Really, My Tax Money Needs to Lock in the Windfall Historically High Price of Corn

matt.welch@reason.com (Matt Welch) — Wed, 21 May 2008 15:10:00 EDT

The Washington Post today finds even more kernels of (subsidized) corn in the moose-turd pie that is the $307 billion farm bill:

Since the amount of the subsidy for 2009 is tied to recent record prices, farmers could reap a windfall if prices drop suddenly.
"I don't think many people on the House side who voted for the farm bill realized there were $16 billion in potential higher costs in there," said Deputy Secretary of Agriculture Charles F. Conner. "The budget exposure is tremendous." [...]
The Agriculture Department estimates that subsidy payments to corn farmers alone could reach $10 billion a year if prices -- which have been $5 to $6 a bushel -- were to drop to $3.25 a bushel, a level seen as recently as last year. [...]
Republican Rep. Jeff Flake (Ariz.), a strong critic of the new farm bill, accused House and Senate negotiators of "unbelievable gall."
"I don't think any of us had a clue this was in there. It was simply dropped into the conference report," he said.

This gives me a rare opportunity to agree wholeheartedly with anti-libertarian New York Times columnist David Brooks: John Sidney McCain is a thousand times better on this than Barack Hussein Obama, and one of the principal virtues of the coming McCain presidency is the prospect of him just vetoing the crap out of lousy legislation produced by emboldened Democrats (who suffer from a singular lack of Jeff Flakes).

See Flake's reason.tv interviews here. Jacob Sullum on the "bipartisan folly of farm subsidies" here.

Something for Everybody: What Could Be Wrong?

jsullum@reason.com (Jacob Sullum) — Fri, 16 May 2008 12:11:00 EDT

The spectacle of the pork-laden farm bill sailing through both houses of Congress with veto-proof majorities is disgusting enough if you imagine that its supporters are simply political hacks doing what they think is necessary to stay in power. They are, of course, but they don't necessarily see it that way. Since politicians would not be politicians if they did not believe the public interest coincided with their own ambitions, they have a remarkable ability to see blatant pandering, logrolling, and vote buying as not only necessary but noble. Hence Barack Obama's bizarre claim that passing the favor-filled farm bill is a way of standing up to "the special interests." Or consider the response from Sen. Saxby Chambliss (R-Ga.), the ranking Republican on the Senate Agriculture Committee, to President Bush's veto threat:

Obviously, I have been very disappointed in the comments coming out of the White House. But we do have a strong vote in both the House and the Senate, and I think that shows you that in a complex piece of legislation like this, and it truly is because it touches so many different areas of so many different aspects of agriculture and food production, as well as nutrition and conservation and energy, that there is something in this bill for every member of the House and every member of the Senate.

If Congress passed legislation giving each representative and senator $1 million in taxpayer's money to spend as he saw fit, there would also be something in the bill for every member of the House and every member of the Senate. By Chambliss' logic, raiding the public treasury in this way would be clearly fair and justified. The scary thing is, I don't think he's faking it. He really is indignant about Bush's veto threat, because he really does believe that serving the public interest is a matter of doing favors for lots and lots of special interests.

The Bipartisan Folly of Farm Subsidies

jsullum@reason.com (Jacob Sullum) — Wed, 14 May 2008 07:00:00 EDT

"We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately," Barack Obama declared last November. It was a weird thing to say, since the farm bill, which subsidizes an arbitrarily chosen section of the economy at the expense of taxpayers and consumers in general, is special-interest legislation by definition.

The latest version, which President Bush has promised to veto, includes tax breaks for racehorse owners, "marketing aid" for fruit and vegetable growers, research funding for organic farmers, enhanced price supports for domestic sugar producers, increased subsidies for dairy farmers, a $170 million earmark for the salmon industry, and billions of dollars in automatic payments and "permanent disaster assistance" for corn, wheat, cotton, rice, and soybean growers. Take that, special interests!

Less than a month ago, the Associated Press reported that "it's not a good year for a farm bill," what with surging food prices, record farm income, a tight federal budget, and a resistant president unconcerned about getting re-elected. But in the logrolling culture of Washington, the solution to wasteful, unjustified spending is more wasteful, unjustified spending.

"This is truly bipartisan legislation," says Rep. Bob Goodlatte (R-Va.), the senior Republican on the House Agriculture Committee. "There was give-and-take on all sides."

Mostly take. In response to fruit and vegetable farmers who have long complained about payments for other crops, the five-year, $300 billion bill expands existing subsidies while paying off the produce growers. In response to food price inflation, the bill continues the price supports and ethanol subsidies that contribute to it while boosting spending on food stamps. It even manages to combine two kinds of farm folly in one program, requiring the government to protect domestic sugar producers by buying imported sugar and selling it at a loss to ethanol refiners.

The bill's supporters are bragging about a new rule that would bar payments to individual farmers earning more than $750,000 a year and couples earning more than $1.5 million. That modest change is expected to affect about 2,000 subsidy recipients, less than 1 percent of the total. But it highlights the extent to which agricultural subsidies are a welfare program for rich people.

Last summer Obama's presidential campaign boasted that the Illinois senator "expressed his support" for "reducing the number of multimillionaires who are eligible for farm bill subsidies." While that sounds better than Hillary Clinton's wholehearted endorsement of the farm bill, which the New York senator says will "help revitalize rural America" and "provide a safety net for our family farms," it's a pretty sad state of affairs when self-styled reformers aspire merely to reduce taxpayer-funded payments to multimillionaires.

Not all farmers are rich, but as a group they are better off than the people footing the bill for their subsidies, with a median income of $55,000 in 2006, compared to the national median of $48,000, and median wealth about five times the national median. Heritage Foundation analyst Brian Riedl notes that most subsidies "go to large commercial farms, which report an average income of $200,000 and a net worth of nearly $2 million."

Riedl estimates that farm subsidies cost Americans $25 billion a year in taxes and another $12 billion in higher food prices. According to a Cato Institute study, the opportunity cost of agricultural support during the last two decades (i.e., the amount we'd have if the money had been invested instead of squandered) is more than $1.7 trillion.

John McCain is the only one of the three remaining major-party presidential candidates who takes a stand against this regressive, market-distorting, trade-disrupting scam. The Arizona senator, who has long opposed agricultural subsidies, recently told voters (in Iowa, no less) that if he were president he'd veto the farm bill because "the subsidies are unnecessary."

By and large, though, Obama is right that farm subsidies "bring Republicans and Democrats together." It's the sort of unity that causes one to lose hope.

List: Fresh From the Farm

info@reason.com (Joel Salatin) — Thu, 08 May 2008 15:30:00 EDT

Joel Salatin is a self-proclaimed “Christian-conservative-libertarian-environmentalist-lunatic” and the proprietor of Polyface Farms in Charlottesville, Virginia, where he practices the kind of small-scale agriculture that baffles (and sometimes infuriates) regulators. He rose to national prominence with a cameo in Michael Pollan’s popular 2006 book The Omnivore’s Dilemma. In the spirit of his own recent book, Everything I Want to Do Is Illegal, we asked Salatin to list three things he would like to do on his land but can’t because of state and federal regulations.

1. Make and sell ready-to-eat foods on the farm: “Virginia just legalized homemade jams and jellies to sell. As ridiculous as that sounds, that’s a pretty important shot across the bow.”

2. Sell raw milk and other dairy products: “Officialdom believes that only pasteurized milk is safe. The fact that people have been drinking raw milk throughout human history, and still drink it all over the world and in 20-some states, means nothing to them.”

3. Sell custom-slaughtered meat by the piece: “My position is that if meat [slaughtered outside the normal factory processes] is OK for people to eat, give away, or feed their children—which indicates that it is not an inherently hazardous product—we should have freedom to also sell it. The restrictions are on the commerce of it. The attitude is: The only thing that is safe to eat is something with a government stamp on it, unless you get it free. Exchange money, and it’s somehow not safe.”

Beet on the Brat

matt.welch@reason.com (Matt Welch) — Tue, 06 May 2008 12:06:00 EDT

The good news? A boneheaded proposal in the lousy $300 billion-plus farm bill seems to be holding up its passage. The bad news? We live in a country where anyone within barfing distance of power thinks that what the U.S. sugar industry needs is more protection from the federal government. From the Wall Street Journal:

A proposal to sweeten government support for American sugar producers is emerging as a major sticking point between Congress and the White House in final negotiations on the farm bill.
The initiative is a priority for House Agriculture Committee Chairman Collin Peterson, a Democrat whose rural Minnesota district is among the nation's top producers of sugar beets. [...]
Rep. Peterson is proposing to increase what sugar farmers can borrow from the government, an amount that hasn't been raised in 20 years. He wants to lock in allotments for domestic producers at about 85% of the U.S. market.
He also proposes a mandate that sugar imports be used for ethanol production. The provision would shield the domestic industry from foreign competition, which has increased after a trade agreement with Mexico and several Central American countries. [...]
The sugar industry is lobbying strongly for Rep. Peterson's proposals. "It's been our No. 1 priority," said Phillip Hayes, a spokesman for the American Sugar Alliance, which represents domestic producers, processors and refiners. "We have an administration that seems more interested in supporting foreign producers, than producers right here in America."

Read reason's six great reasons to unilaterally dismantle all U.S. farm subsidies here.

UPDATE: Did you need a reason to hate Hillary Clinton more?

Hillary Clinton today said that Sen. John McCain was wrong to say yesterday that he would veto the 2008 farm bill as President, noting it would provide American family farms with priorities like permanent disaster relief, country of origin labeling, renewable energy advances and rural development broadband deployment. [...]
"Rural America is struggling in the face of skyrocketing energy prices, an economic downturn and rising food prices," Clinton said. "Saying no to the farm bill would be saying no to rural America." [...]
"This Farm Bill needs to move and the president needs to get out of the way so that we can start taking care of rural America."

Food Prices Up. Farm Bill... Also Up?

kmw@reason.com (Katherine Mangu-Ward) — Tue, 29 Apr 2008 12:42:00 EDT

Congress to self: "Hmmm... food prices are way up. People are freaking out about it. What's the best approach here? Think, Congress. Think!"

"Ah ha! $300 billion in price support and other farm subsidies!"

***

Oh well, I guess we should be grateful for the little things:

The proposed bill would ratchet down payments to wealthy individuals not directly involved in farming, perhaps setting a cap that would cut off benefits for those earning above $500,000 in nonfarm income.

More farm fun here.

Breadless Circuses

matt.welch@reason.com (Matt Welch) — Mon, 21 Apr 2008 18:10:00 EDT

Is there anything good that can come out of the sharp inflationary spike in the global price of basic food? Maybe, says the Washington Post's Jackson Diehl:

As prices for bread and rice soar, dictators are tottering.
Oddly, one of them is [Hugo] Chávez, who lost a constitutional referendum in December partly because of the combination of soaring food prices and shortages he has inflicted on Venezuela. Another is Robert Mugabe, who to his surprise lost a presidential election in Zimbabwe three weeks ago, though he has yet to admit it. According to the U.N. World Food Program, the government of North Korea faces another food crisis; bread prices explain in part why Pervez Musharraf lost control of Pakistan's government in February.
Then there is Egypt, where the link between food and freedom -- or the lack of it -- has never been clearer.

Whole thing, including intriguing stuff about Egypt's new "Facebook Party," here.

Then there's this:

Soaring food prices and global grain shortages are bringing new pressures on governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops.
In Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies have paid extra to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky. [...]
Even in Europe, where opposition to what the Europeans call Frankenfoods has been fiercest, some prominent government officials and business executives are calling for faster approvals of imports of genetically modified crops.

And finally, negotiators on Capitol Hill and in the White House have decided, given this unbelievably strong sellers' market, that the U.S. doesn't need to add to its cajillion-dollar deficit and generalized moral depravity by throwing another $286 billion at American farm companies over the next 10 years. Just kidding!

Goodbye Mike Johanns, Though We Hardly Knew You At All...

gillespie@reason.com (Nick Gillespie) — Thu, 20 Sep 2007 13:37:00 EDT

Stop the presses, at least if you're one of the six or seven last remaining farmers in America! Mike Johanns, who has been the secretary of Agriculture since 2004 (or is it since 1804?), is resigning his post.

Johanns, a former Nebraska governor, is expected to run for the Senate seat being vacated by Sen. Chuck Hagel (R-Neb.), who is retiring from politics.

Please, Secretary Johanns (and former Gov. Johanns and future God-Emperor of Dune Johanns), just shut down the department as you leave--as Clarence Thomas asked, in reason in 1987, "Why do you need a Department of Agriculture?"--

But if you're not going to do that, then at least take that fucking Power Panther, the Ag Dept.'s idiotic mascot, back to the Cornhusker State with you.

Or at the very, very least, kill a different type of publicly funded cougar: John Cougar Mellencamp, whose Hoosier relatives soaked Uncle Sam for over a million bucks in farm subsidies.

Congress Guarantees a Bumper Crop

info@reason.com (Liz Mair) — Thu, 09 Aug 2007 15:26:00 EDT

Last week, the House of Representatives passed the 2007 Farm Bill, a five-year “overhaul” of agricultural policy that House Speaker Nancy Pelosi (D-Calif.) lauded as representing “a new direction.” But as much as Democrats have heralded the bill’s supposed reforms, even the lightest reading shows that it represents more of the same—a flawed, wasteful approach to agricultural policy.

The House Farm Bill allocates $286 billion over five years to agricultural programs—that’s an even bigger price tag than the one attached to the bloated 2002 Farm Bill, which increased agriculture spending by 80 percent over 1996’s Freedom to Farm Act, itself a huge bill.

It continues the tradition of giving huge subsidies to wealthier farmers, though on a more limited basis than the 2002 Bill. Where the 2002 Bill dished out subsidies to farmers earning up to $2.5 million annually, this bill establishes an annual income threshold of $1 million, or $2 million if a husband and wife each claims subsidies. A slight improvement, at best.

President Bush, who signed the handout-happy 2002 bill that paved the way for this year’s extravagant spending, to his credit, asked for subsidies to be withheld from farmers earning more than $200,000 per year. That request was disregarded, apparently because the Democratic leadership wants to protect agriculture-heavy districts the party picked up in the 2006 election—those of Rep. Nancy Boyda (D-Kansas) and Rep. Zack Space (D-Ohio), for example.

The last thing taxpayers need is this type of wasteful, extravagant spending while already saddled with a massive budget deficit and enormous entitlement liabilities. Nor do we need tax increases—which reduce revenue flows in the long term—like those targeting multinationals with U.S. subsidiaries, also included in the bill.

Then there's the vast market interference that comes with enormous government subsidies and expansive farm programs. Sugar, the subject of a major subsidy program maintained under the 2007 House bill, costs twice as much in the U.S. as it does in the rest of the world.

Nor is it beneficial to perpetuate a system of reverse wealth distribution, by which those earning up to $2 million a year are the beneficiaries of de facto welfare payments, often funded by those earning a mere 5 percent of their annual income. The Environmental Working Group finds that the largest 10 percent of farm businesses have received 72 percent of farm subsidies in recent years. If this is a good idea, perhaps we should start cutting welfare checks to partners in big-time corporate law firms and millionaire plastic surgeons in Los Angeles, too.

Of course, agricultural subsidies also represent a constant sticking point when negotiating free trade agreements, and they tend to make the U.S. vulnerable to trade sanctions. That's bad news for consumers, who benefit from the reduction and elimination of tariffs on imported goods, and suffer from the continuing retaliation and re-retaliation when countries slap sanctions on other countries for rigging their markets. Subsidies also hurt farmers in the developing world looking to export goods to U.S. markets, where they could make decent money if only the system weren’t artificially rigged to benefit wealthy U.S. producers.

The real tragedy of the House version of the 2007 Farm Bill is that some legislators wanted to do more than pay lip service to a system that deals with farming as if we’re still stuck in the Great Depression. Rep. Ron Kind (D-Wis.) and Rep. Jeff Flake (R-Ariz.) pushed a plan to cut farm subsidies and introduce farm savings accounts, which farmers could use to cover losses when crop prices are low or yields are poor—a potential sea-change in agricultural policy.

Not only would their plan have dealt with the issue of farmers getting hammered should they be unable to harvest a healthy crop or should prices fall, but it would also have avoided the negative side effects that come with farm subsidies, not to mention have saved up to $55 billion over the next ten years. Yet despite all the positive and truly reformist aspects of this plan, it gained little traction in the House.

The Farm Bill next moves through the Senate, likely just after the August recess. Perhaps a vacation and some rest will help the upper chamber move U.S. farm policy out of the 1930s.

Liz Mair is a political columnist, commentator and consultant living in Arlington, VA. She writes daily at www.lizmair.com, and regularly for The New York Sun.

When Not Watering Your Lawn Is a Crime...

gillespie@reason.com (Nick Gillespie) — Thu, 09 Aug 2007 10:53:00 EDT

...only outlaws will not water--oh forget it.

Reader Dennis Long sends along the Case of the Lawn-Watering Refusenik Grandmom of Orem, Utah:

A widow and grandma spent the morning in jail, arrested for refusing to give a policeman her name when he tried writing her a ticket for failing to water her yard. The woman hasn't watered her lawn in more than a year, and the condition of her yard violates an Orem zoning ordinance.
Tonight, the woman says she is traumatized and shocked that she was hauled to jail, just because she says she can't afford to water her lawn.
Betty Perry says, "I never thought they would ever do anything like that to a person that is 70 years old. I've never bothered anybody, I've never hurt anybody."

Sure, granny. You've been working that scam for years, we're sure. Would all the communitarians reading Hit & Run please explain to her exactly why she should go along to get along?

The story does have a happy ending. Especially for the cop who put her in the hoosegow, who got sent home and put on a paid administrative leave. Perry did get released from jail, too, but then returned to her house with that godawful lawn.

More here.

Like (Energy-Efficient) Lambs to the Slaughter

kmw@reason.com (Katherine Mangu-Ward) — Mon, 06 Aug 2007 13:23:00 EDT

The "food miles" concept was almost too good to be true--buying locally-grown food supported neighborhood merchants, preserved scenic farmland, required trips to quaint farmers markets, offered great dinner party bragging rights, and, perhaps most important, slowed global warming by saving all the fossil fuel required to fly produce and meat around the world. As it turns out, the last bit really is too good to be true:

Instead of measuring a product’s carbon footprint through food miles alone, the Lincoln University scientists expanded their equations to include other energy-consuming aspects of production — what economists call “factor inputs and externalities” — like water use, harvesting techniques, fertilizer outlays, renewable energy applications, means of transportation (and the kind of fuel used), the amount of carbon dioxide absorbed during photosynthesis, disposal of packaging, storage procedures and dozens of other cultivation inputs.
Incorporating these measurements into their assessments, scientists reached surprising conclusions. Most notably, they found that lamb raised on New Zealand’s clover-choked pastures and shipped 11,000 miles by boat to Britain produced 1,520 pounds of carbon dioxide emissions per ton while British lamb produced 6,280 pounds of carbon dioxide per ton, in part because poorer British pastures force farmers to use feed. In other words, it is four times more energy-efficient for Londoners to buy lamb imported from the other side of the world than to buy it from a producer in their backyard. Similar figures were found for dairy products and fruit.

Welfare for Agribusiness: A Quick Review

jwalker@reason.com (Jesse Walker) — Fri, 27 Jul 2007 08:27:00 EDT

Brian Riedl on farm subsidies:

[I]f subsidies were really designed to alleviate farmer poverty, then lawmakers could guarantee every full-time farmer an income of 185% of the federal poverty level ($38,203 for a family of four) for under $5 billion annually -- one-fifth the current cost of farm subsidies.

Instead, federal farm policies specifically bypass family farmers. Subsidies are paid per acre, so the largest (and most profitable) agribusinesses automatically receive the biggest checks. Consequently, commercial farmers -- who report an average annual income of $200,000 and a net worth of nearly $2 million -- collect the majority of farm subsidies. Fortune 500 companies, celebrity "hobby farmers" and even some members of Congress collect millions of dollars under this program.

These farm policies are more than merely ineffective -- they impose substantial harm. They cost Americans $25 billion in taxes and an additional $12 billion in higher food prices annually. Environmental damage results from farmers over-planting crops in order to maximize subsidies.

[Via Andrew Sullivan.]

Why the Democrats Suck (Farm Bill Folly Edition)

gillespie@reason.com (Nick Gillespie) — Wed, 25 Jul 2007 10:30:00 EDT

Didn't the Democrats say they were going to be fiscally responsible when they took over Congress?

The House of Representatives' Agriculture Committee recently passed its version of the farm bill and there's so much pork in here, you'd think you were in, well a pig slaughterhouse where even the doors, floors, and windows were made of pork and the cafeteria only served pork and even the coffee and the coffee cups themselves were made of pork. And that the folks working there were paid in money not just backed by but actually made from pork. What's especially disappointing regarding House Speaker Nancy Pelosi (D-Calif.) playing along is that a bunch of Bay Area activists were pushing for cuts to subsidies for various reasons (most of them no good, but a budget-cutting ally is a budget-cutting ally).

Here's some pork-laden excerpts from a report filed by reason contributing editor Carolyn Lochhead, who works out of the SF Chron's DC bureau:

House Speaker Nancy Pelosi signed off Friday on a five-year farm bill that would keep multibillion-dollar subsidies flowing to cotton, corn and a handful of other crops, deeply disappointing Bay Area food and environmental activists who had hoped that Congress might shift federal farm policy this year to combat obesity, air and water pollution and industrial farming.
Pelosi, a San Francisco Democrat, hailed as reform a bill that would grant subsidies to farmers earning up to $1 million -- five times more than the cap sought by the Bush administration -- while increasing actual payments to farmers. The bill comes during the most prosperous era American agriculture has seen in decades as crop prices and farm income approach or set record highs....
The bill...would add $1.6 billion for environmental and pest detection programs and research for California's fruit, nut and vegetable crops. It also would add money for farmers' markets and to provide more fresh produce in school lunch programs. Approval of the money is a breakthrough for the state's specialty crop industry, which receives no direct subsidies.
But the bill leaves the big commodity programs intact for cotton, corn, wheat, rice, soybeans and a handful of other crops that have been subsidized since the Dust Bowl in the 1930s.
Last year, farmers received more than $21 billion in crop subsidies. Average farm incomes are about 20 percent higher than the average U.S. household income.
The committee even threw in an export subsidy for tobacco.

Huzzah for democracy. As one conressman told Lochhead, the battle over the farm bill is just beginning and the version Pelosi has signed off on is unlikely to be that similar to what eventually passes. Expect the final bill coming out of the House to be even more bloated.

More here.

Night of the Farming Dead

kmw@reason.com (Katherine Mangu-Ward) — Tue, 24 Jul 2007 13:36:00 EDT

Sometimes these things just write themselves:

The U.S. Agriculture Department has been paying farm subsidies to thousands of people who are dead, in some cases for many years, say congressional investigators.

(Semi-literally) grisly details about what it's like on farms where the rooster crows not just at dawn, but the dawn of the dead.

A report by the Government Accountability Office says USDA paid $1.1 billion in subsidies to 172,801 dead people between 1999 through 2005. Forty percent of that money went to people who had been for at least three years, the report found.

Nineteen percent went to individuals who had been dead for at least seven years.

In a case involving an Illinois farm, USDA made $400,000 in payments from 1999 through 2005 in the name of someone who died in 1995, the report said.

Check out reason's appropriately titled "Six Reasons to Kill Farm Subsidies" and much, much more on farm policy here.

Also, apparently there's a movie called Zombie Farm. Does the U.S.D.A. know something we don't? And are they in cahoots with Hollywood?

Via Mark Lambert

Keepin' 'Em Down on The Farm Via Subsidy

bdoherty@reason.com (Brian Doherty) — Fri, 20 Jul 2007 12:23:00 EDT

The New York Times reports (reg. may be required) on the new farm bill that just got through the House Agriculture Committee (full House should consider it next week). The bright side, for once: the bill "eliminate subsidies for farmers with more than $1 million in adjusted gross income."

And another shocking idea is apparently getting some traction for future farm bills: actually restricting federal farm aid to people who actually might be suffering some financial harm:

Critics of current programs, however, said the bill did not go far enough, especially given a steep rise in many crop prices in recent years, driven by demand for corn used in ethanol production. Many of these critics, and Democratic leaders, support replacing the subsidies, which are paid even in profitable years, with crop insurance and other safeguards against revenue losses.

Jonathan Rauch from reason in 2002 on farm bills past.

Problem: Subsidies. Solution: More Subsidies.

jsullum@reason.com (Jacob Sullum) — Mon, 09 Jul 2007 04:21:00 EDT

Fat fighters complain that agricultural subsidies encourage Americans to overeat by making junk food ingredients such as high-fructose corn syrup and partially hydrogenated soybean oil artificially cheap. "Meanwhile," notes The New York Times, "the lack of subsidies for fruits and vegetables makes them expensive by comparison." The obvious solution: more subsidies. "Some of the bills before Congress," the Times reports, "are aimed at helping growers of fruits and vegetables" by providing money for cultivation research and promoting farmers' markets, among other things.

How about leveling the playing field by eliminating subsidies? The prospects are not bright. There's wide agreement that "fixed direct payments," which farmers receive based on what they've grown in the past, even if they're growing nothing now, make little sense:

"You don't have to sit on a tractor seat, visit the tractor seat, you don't even have to be alive to get a fixed payment," said [Ken] Cook of the Environmental Working Group. "We have fixed payments to dead people all over the place. It's ridiculous."
Tom Buis, president of the National Farmers Union, the second largest organization for farmers in the country, said, "It is hard to defend direct payments."

But the proposed changes to the broader system of subsidies betray a lack of vision:

The Bush administration...wants to eliminate subsidy payments for farmers who have an adjusted gross income of more than $200,000 a year. And some in Congress want to limit subsidies entirely. House Speaker Nancy Pelosi has supported limits on subsidies in the past and some Congressional bills would prohibit any farmer from getting more than $200,000 a year in subsidies.

So the most radical suggestion is to "limit subsidies entirely"? It has almost the right sound to it.

Do'h Doha

bdoherty@reason.com (Brian Doherty) — Thu, 21 Jun 2007 18:31:00 EDT

Doha World Trade Organizaion talks at risk of collapse as Brazil and India walk out--they claim over U.S. and E.U's tight grip on continuing agriculture subsidies:

Brazilian Foreign Minister Celso Amorim and Indian Commerce Minister Kamal Nath...said talks derailed because the U.S. and the EU refused to improve their farm-aid offers. The numbers presented by the U.S. on domestic subsidies exceeded those demanded by the so-called G20 alliance of farm commodity- exporting nations while the EU's tariff-cut offers were insufficient, Amorim said.
..........
Nath said the U.S. offered to cap its overall spending on trade-distorting domestic support at $17 billion. As leaders of the G20, which also includes China and Argentina, India and Brazil are pushing for an annual U.S. spending limit of no more than $15 billion.
.......
The Bush administration now spends $10.8 billion a year on support payments that distort market prices to American farmers, Nath said. A ceiling of $17 billion would represent ``a 50 percent increase,'' he told journalists.

Jesse Walker on how intransigent foreigners are Americans' best friends when it comes to Doha.

Ron Bailey witnesses the collapse of WTO talks in Cancun back in 2003.

Previous Doha blogging here and here.

Six reasons from our February 2006 issue why we don't need international trade talks to do what's best for us--and the world--when it comes to trade and ag subsidies. That is, liberalize, and unilaterally.

End It, Don't Mend It

info@reason.com (Sallie James) — Mon, 21 May 2007 12:09:00 EDT

Congress is fundamentally a gathering of horse-traders, and the body always seems to find a way to put pork into its already-lavish spending bills. When recent reports revealed that the supplemental spending bills for Iraq contained funding for peanut storage and spinach growers, Congress finally caved—apparently that was a bridge too far. But that won’t be the last we hear from farm commodity groups this year.

The current farm bill, a multi-year spending program for commodity and rural programs, is due for renewal in September, and Secretary of Agriculture Mike Johanns is causing a stir by becoming the first ag head in recent memory to submit a draft proposal of his own.

Farm bills historically have been settled in back-room deals between members of Congress and commodity groups, with taxpayers, consumers and food processors left out of the loop until it was too late. The United States was founded on the idea of limited government, but somewhere along the line agriculture came to be seen as "special," and deserving of state programs and market interventions.

Even today, in a modern, globalized world, maintaining a degree of self-sufficiency in agricultural production in the name of national security is seen as a worthy goal, and no evidence to the contrary from the disastrous “self-sufficiency” programs in North Korea and Zimbabwe can persuade agro-evangelists of the follies of isolationist and interventionist farm policy. Apparently, markets work for everything except agriculture.

No government agency, no matter how well-funded and extravagantly staffed, can possibly have all the knowledge to manage markets efficiently; it is better that they get out of the business altogether. That’s easier said than done though, as anyone who has seen the powerful farm lobby in action can attest.

But a confluence of events this year—a Doha round of free trade agreements in need of a kick-start, budget pressures and renewed commitment to fiscal responsibility from the Democrats in Congress, and growing public awareness of the failures of farm programs—all point to the need for reform. The question is: with what do we replace the current expensive and outdated programs?

How about nothing? A commitment to phase out farm subsidies, “rural development” programs, and ad-hoc disaster payments is the best action Congress could take in September. They should couple this with repealing the permanent legislation that would allow agriculture programs to be reinstated in future. If Congress had to start from scratch every time the farm lobby wanted more taxpayer-funded largesse, they would have a harder time passing it.

Unfortunately the very political power that keeps farmers on the government payroll means that an outright and overnight end to farm programs is unlikely without "financial inducement." An up-front buyout of existing trade barriers and farm subsidies, based on (but less than) the present discounted value of seven years of expected payments—5 years representing the approximate tenure of a farm bill, plus two bonus years—might do the trick. Based on current spending projections, that could cost somewhere in the vicinity of $75 billion.

That’s a lot of money, even in Washington. But it is significantly less than the $1.7 trillion that a recent Cato Institute study estimated was lost to taxpayers and consumers over the last 20 years of farm programs. And if it would ensure permanent freedom for farmers, consumers and taxpayers, it would be a worthwhile investment indeed. It would compensate farmers for the likely fall in land values in some counties, and farmers could invest that money in their farms, purchase private insurance for tougher times, or acquire education and training to ease a transition out of farming altogether.

To be sure, not every farmer will continue farming after the change, just as not every shop owner is guaranteed a spot on Main Street next year, or even tomorrow. But many will, and it is unlikely that an open American economy will starve any time soon. American land and technology will ensure a competitive U.S. agricultural sector even without government assistance, as demonstrated by the majority of farmers who thrive without assistance from the government.

Farm programs, like all corporate welfare, involve taking money from people who have earned it and giving it to people who have not. There’s nothing exceptional about them.

Sallie James is a policy analyst at the Cato Institute’s Center for Trade Policy Studies and co-author of “Freeing the Farm: A Farm Bill for All Americans.”

Discuss this article online.

Hog Farmers and Hippies, Unite! You Have Nothing To Lose But Your Ethanol Subsidies!

gillespie@reason.com (Nick Gillespie) — Wed, 21 Mar 2007 10:21:00 EDT

Reader Val E. sends news of Businessweek's interesting take on "Ethanol's Growing List of Enemies," a crew that includes "ranchers and environmentalists, hog farmers and hippies, solar-power idealists and free-market pragmatists":

They have different reasons for opposing ethanol. But their common contentions are that the focus on corn-based ethanol has been too hasty, and the government's active involvement-through subsidies for ethanol refiners and high tariffs to keep out alternatives like ethanol made from sugar-is likely to lead to chaos in other sectors of the economy....
Economists argue that making ethanol from corn wouldn't make any sense without the government's help. The mix of federal and state subsidies to corn ethanol amounted to a conservative estimate of $5 billion to $7 billion in 2006, says [Doug] Koplow of Earth Track. A considerable chunk of that money comes from the 51¢ tax refund for each gallon of ethanol refiners blend with gasoline to make fuels that can power flexible-fuel cars.

Whole thing here.

Reason's Ron Bailey poured cold water (?) on Brazil's supposed sugar-cane-based ethanol miracle here and took on U.S. ethanol policy here.

Subsidy Creep

kmw@reason.com (Katherine Mangu-Ward) — Thu, 01 Mar 2007 14:16:00 EST

Not every American farmer relies on federal subsidies. Watermelon, potato, garlic, berry, and other produce farmers have stuck it out on their own and done well; their crops bring in $52 billion a year, about half the agricultural value of the United States. But increased foreign competition has them scared, so now they’re pleading for special treatment in the next agriculture bill. Among other favors, they want federal money for advertising overseas and land conservation.

Their main problem? Other farmers. Any help they might get is likely to come out of the same pot of money now given to growers of staple food. Corn and wheat farmers have enjoyed federal support since the Great Depression, and they aren’t anxious to hand a couple billion of “their” dollars to people who grow pansies, grapes, and lemons.

Producers contend they’re not looking for direct handouts, just some extra cash for marketing and research. After all, they say, everyone else gets a slice of the pie. In a November speech Secretary of Agriculture Mike Johanns agreed, arguing that produce growers should get the same treatment as corn and wheat farmers if our farm policy is to be “equitable, predictable and beyond challenge.”

Righting the Wrong of Cheaper Milk

jsullum@reason.com (Jacob Sullum) — Mon, 11 Dec 2006 14:44:00 EST

The Washington Post tells the sad but instructive tale of a dairy farmer who took advantage of a "loophole" in milk price regulations (for producers who bottle their own milk) to undersell his competitors. Consumers benefited from lower prices, and he made a nice profit. When members of Congress heard about this scam from other dairy farmers, who also happened to be campaign donors, they shut it down. Rep. Devin Nunes (R-Calif.), whose district is thick with dairy farms (including one founded by his grandfather), calls passage of the cartel-enforcing legislation a victory for "every dairy farmer in America except those who were gaming the system." Tellingly, Nunes makes no mention of consumers, who spend an extra $1.5 billion or so a year because of the government's milk marketing restrictions, according to Citizens Against Government Waste. He explains that "people out there were making millions of dollars a year off the backs of America's dairy farmers....That was a wrong that was finally righted."

[Thanks to Paul Davis for the link.]

Cows vs. Cars

kmw@reason.com (Katherine Mangu-Ward) — Mon, 27 Nov 2006 12:30:00 EST

California dairy farmers are getting screwed by corn ethanol, despite a record corn harvest again this year.

"The price took off about three or four months ago, and it hasn't stopped," said [rancher, George] Grossi, who uses about 25 tons of grain every two weeks to feed his herd of 200 cows. "It's because of all the new ethanol plants that are coming online."

The U.S. ethanol industry is booming, with more than 100 operating biorefineries and dozens more under construction, according to the National Corn Growers Association. Those refineries added about 5 billion gallons of fuel to the country's gasoline supply in 2006.

All this (state-mandated) demand for corn hasn't put a dent in federal price supports for the industry, of course. Don't fret, though:

"With lower energy intake, cows will produce less milk," [University of California at Davis dairy economist Bees] Butler said. "The milk supply will drop, the price of milk will rise, and the market will achieve equilibrium. It's almost magical."

Indeed.

More on corn ethanol and its discontents here and here.