Big Agriculture Illustrates Difficult Trade-offs
Big agriculture is in the news lately, offering some useful examples of the concepts of “trade-off” and “hidden costs.”
An obvious place to start is the noise about rising food prices and the role of ethanol production.
Some top international food scientists Tuesday recommended halting the use of food-based biofuels, such as ethanol, saying it would cut corn prices by 20 percent during a world food crisis.
But even as the scientists were calling for a moratorium, President Bush urged the opposite. He declared the United States should increase ethanol use because of national energy security and high gas prices.
The conflicting messages Tuesday highlighted the ongoing debate over food and fuel needs.
This isn’t a small matter. The press has been flooded with the latest bounty of bad news, food shortage hysteria. Contributing factors include a crippling drought in Australia, capped Argentinian exports (for domestic reasons), the usual miserable harvests in third world countries, burgeoning demand for food stocks, hording by big consumers fearful of supply gaps, upward price pressure from the ethanol business, and yes, upward price pressure from financial speculators who are looking for the next big score now that the debt markets have been brought to their knees.
This is truly a matter in which the various players have different and conflicting interests.
Agriculture is the political and economic backbone of most countries. In the US, it’s more political than it is economic, but it’s astonishing how many matters of “public interest” redound to big agriculture’s benefit. In the end, the answer invariably is to funnel money to big Ag to support production of the Big Five Crops: corn, cotton, rice, wheat, and soy. Writing about the 2007 Farm bill, Deirdre Fulton had this to say . . .
An extremely expensive piece of legislation — one that dictates how much food costs, what kinds of food we’re more likely to eat, and the viability of farming in America — is currently winding its way through Congress. The Farm Bill, which carries a price tag of more than $280-billion to be spent over the next five years, piles hundreds of millions of dollars in subsidies onto Midwestern and southeastern farmers, leaving Maine and other Northeastern states with the dregs at the bottom of the pork barrel — Maine ranks 43rd in the commodity-crop category of Farm Bill funding; all six New England states are in the bottom 10.
Nothing has changed since. In Washington, the answer to every question involving an incredibly wide range of questions is more corn. Aid to poor countries? Corn. Improve nutrition at home? Corn. Energy independence? Corn. Secure some votes come election time? Corn. Granted, it’s an amazingly versatile crop, but it’s not the answer to everything.
Specific to the ethanol craze, corn is particularly problematic notes blogger 4-Reasons Why.
1. As arable land gets converted for the production of biofuel crops, food prices have been on the rise. As noted in the Guardian, the cost of rice, maize and wheat have risen by 20%, 50% and 100%, respectively, over the past year. While biofuels can’t be held totally accountable for this, the conversion of food crops to biofuel crops only exacerbates any environmental influence.
2. It’s like the gold rush all over again. Governments are becoming blinded by the rush to biofuels and the apparent financial returns, even if it sacrifices the provision of basic needs. In Swaziland, where there is an acute food shortage, the government has allocated thousands of hectares to produce, and export, biofuels made from cassava – one of its staple crops.
3. There are growing arguments that the production of biofuels actually contributes more to greenhouse gases that the world’s reliance on oil. Proponents of biofuels have focused solely on CO2 emissions, while the contribution of nitrogen fertilizers (296 times as powerful as CO2) has largely been ignored. One Hand Clapping suggests that methane and nitrous oxide are not taking their share of the blame in inducing global warming.
4. As noted here, there are between 1.5 and 2.4 billion hectares of arable land on Earth. To replace the current consumption of transport oil, between 35% and 107% of all potential farmland would need to be dedicated to biofuel production. Imagine the impact on the environment and the world’s population if this were to happen!
Not mentioned in that list is all the energy required to create a liquid fuel from a bunch of seeds. When you add it all up and then factor in the fact that ethanol produces less energy per unit than does the same volume of oil-based fuel, and you presently need oil-based fuel to run all the equipment, it’s a very, very thin bet.
Many folks in the know say a far better answer is the use of Cellulosic Ethanol which is derived from plant wastes or switchgrass. These show a net energy content that is three to five times higher than corn based ethanol with much lower uses of fertilizers and about the same levels in production of greenhouse gasses. The biggest problem? It’s not corn and the big players like ADM don’t grow it.
The Hidden Costs of Factory Farming
Another good example of hidden costs comes from a new study published by the Pew Foundation. Here’s a snip from the Seattle Times . . .
The report, sponsored by the Pew Charitable Trusts and Johns Hopkins Bloomberg School of Public Health and released Tuesday, finds that the “economies of scale” long used to justify factory-farming practices are largely an illusion, perpetuated by a failure to account for associated costs.
Among those costs are human illnesses caused by drug-resistant bacteria associated with the rampant use of antibiotics on feedlots and the degradation of land, water and air quality caused by animal waste too intensely concentrated to be neutralized by natural processes.
This will be a tough fight but I can imagine progress being made. If we focus only on the cost of the product on the shelves, we come to one conclusion about factory farming. It’s good because it has driven prices down. It has also shifted huge costs to the environment and the overall health of the nation to someone else’s ledger. Taken together, it’s not such a good deal.
Tags: Ethanol, Ceullulosic Ethanol, Switchgrass, Big Five Crops, rising food prices, factory farming, Agriculture Subsidies, Farm Bill, Decision Making, Pew Foundation
