Tuesday, April 22, 2008
The media has lately seized upon rising food prices. The story is simple: Congress mandated a huge increase in biofuels production, spurring competition for various crops, particularly corn. The New York Times has run a series of articles on the ill effects, which include famine in developing countries, less conservation as farmers plant corn rather than leave land fallow, and bankruptcy for producers in the dairy, chicken, pork, and beef sectors. Indeed, the sustained growth in certified organic land may even be reversed because farmers can achieve comparable profit margins if they stay conventional and forgo the bother and cost of certification.
I don’t agree with the general consternation—in fact, I think the corn shortage has some silver linings for the US and the world. The memory of the crisis cheerleaders is stupendously short. Only three summers ago, the mainstream had its knickers in a twist over a corn glut. The Times' story on this faux problem included this arresting picture of a rotting pile of corn the size of a football field, too large to cover with a tarp.
Why might high corn prices be good? First of all, the US has long used its cheap commodity crops to undercut foreign producers. In the worst instances, the US donates “free” grain on a flimsy pretext. For instance, grain farmers in Ethiopia can’t make a profit if their consumers receive “free” American corn donated to prevent “famine.” Our Midwestern breadbasket is also used to justify Neoliberal reforms—if developing countries can count on cheap grain imports, it makes no sense to develop a broad base of domestic agriculture. Instead, they pursue a comparative advantage via crops such as coffee or cacao, but dependence on fickle foreign markets ultimately increases an economy’s fragility. Without competition from US grain imports, foreign grain farmers will thrive, although the immediate shortages are tough.
While it's similarly difficult for farmers and ranchers who are driven out of business, Americans could use a dose of reality regarding their consumption of these products. Meat, milk, and cheese are unhealthy in a Western diet unless consumed in small portions, but pocketbook rather than nutritional arguments are most likely to be convincing. Furthermore, these sectors of agriculture are horribly inefficient—ruminants consume enormous amounts of grain, so if the number of bovines decreases, the pressure on the grain supply will gradually ease, causing prices to fall.
Meanwhile, the high price of corn provides a compelling reason to do away with the unnecessary and wasteful agricultural subsidies that encourage overproduction. As for the possible decline in organic certification and farmland conservation programs, this will be more than offset if price increases provide an incentive for Americans to eat more healthily overall. It makes ever more sense to eat locally and organically (whether certified or not) to escape the costs of transport and artificial fertilizers and pesticides.
Indeed, in my own research area—cattle ranching—the best way to avoid buying grain is to increase the amount of time an animal spends on pasture. While grass fed methods do nothing to better chances of “organic” certification in the eyes of the USDA, they make raising cattle less expensive and, if the cattle are rotated responsibly, they are better for the land than conventional methods. Moreover, the beef is healthier.
I do not want to leave the impression that I think the biofuels mandate was a good idea. The latest research shows that burning ethanol actually releases more greenhouse gases than burning gasoline. Is this actually surprising to anyone? You don’t need to be a chemist to figure out that carbon consumption of any type is going to release carbon dioxide as a byproduct, and anyone who has sat by a fire, whether fueled by wood or cornstalks, should know that the result is dirty. Greenhouse gas emissions won’t decrease unless we harness truly alternative power sources (wind and solar) for our engines or we truly forgo using them.
Similarly, the fact that Congress passed the biofuels bill is hardly surprising. Farm state Senators control agricultural policy, and the Farm Bill is all about paying farmers to produce crops we don’t need more of. They need to dispose of “corn gluts” to justify their payments, which is why the US donates so heavily to the World Hunger Program, and why High Fructose Corn Syrup, which sweetens nearly a quarter of the products sold by an average American supermarket, was invented. These Senators are remarkably effective because they support projects championed by non-agricultural Senators, as long as they get their way on the Farm bill.
Although corn prices are the highest they have been in decades, talk of reforming Farm Bill subsidies, which will be renewed this summer, has died almost entirely. The biggest opponent of the subsidies is (surprise!) President Bush, but since environmental groups refuse to work with him and the farm bill doesn’t have the cachet of illegal immigration in the red states, he’s unwilling to put his neck on the line by really fighting them.
Changes in supply are a natural feature of our economy, but coverage tends to focus on the negatives (the same goes for global warming). The winners will be those who can adapt the quickest to the higher prices of corn and other grains. In the meantime, observers should strive for a nuanced perspective of events in the hope that we can use the new pressures to achieve a more sustainable economy.
Posted by Andrew Riely at 12:22 PM