Posts tagged with: agriculture

Blog author: sstanley
Wednesday, May 22, 2013
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2013-03-15T151625Z_1_CBRE92E16FW00_RTROPTP_3_USREPORT-US-USA-AGRICULTURE-MERRIGAN_JPG_475x310_q85Tim Burrack, vice chairman and board member of Truth About Trade & Technology, recently wrote a commentary for the Washington Times about the agriculture industry in the U.S. and how it is becoming more and more European. He says there is fear of a “growing bureaucracy that is smothering freedom and innovation.” Burrack goes on to explain that the U.S. Department of Agriculture has taken

an unfortunate step toward Europeanization when it delayed the approval of two crops that will help farmers control weeds and produce more food. The decision didn’t receive much immediate attention outside the agricultural press, but it sent a troubling signal about the future of farm technology that should concern all Americans.

Scientists have developed  crops that can resist two common herbicides, dicamba and 2,4-D. These herbicides have been in use in American farms since the 1950s. This advancement means weeds will be killed, but the desired plants will survive.  Despite the fact that innovations like this are making food cheaper and more abundant, some argue “that the introduction of these crops will lead to the overuse of the two herbicides.” Burrack goes on:

Farmers lose either way. The Agriculture Department’s bad decision means that these new crops won’t go on the market and be available to me and other farmers next year as planned. We will have to wait until 2015 at the earliest. This postponement may not sound like much, but it contributes to a disturbing trend. In the United States, it’s becoming harder and harder to introduce agricultural technologies.

America has led the world in boosting crop yields. Food is safer, more abundant and more affordable than ever before. Rather than cheering on our ingenuity, however, bureaucrats increasingly want to hold it back.

We need sensible, science-based regulations — not shifting sands and unpredictable decrees from bureaucrats who seem unmoved by the needs of farmers and consumers.

Europe already has traveled far down this fateful path. Its embrace of the “precautionary principle” has made it all but impossible to approve agricultural innovations, stifling the Continent’s biotech industry. European farmers envy Americans, who can plant genetically modified crops. The Agriculture Department’s decision on herbicide-resistant plants suggests that they may not be so envious in the future.

Burrack concludes with this:

Samuel Gregg this year published Becoming Europe, a book on economic and cultural trends in the United States. He urged Americans to reject Europeanization and embrace their freedom-loving heritage. He also quotes Alexis de Tocqueville, the 19th-century Frenchman who studied our country: ‘The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.’

So here is a message for the Agriculture Department’s bureaucrats: Waste no time in repairing your crop-protection fault.

Read Tim Burrack’s commentary,  Sowing the Seeds of Farm Failure.

 

Blog author: rnothstine
Thursday, July 19, 2012
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A Reuters article highlights the fact that U.S. Agricultural Secretary Tom Vilsack is praying for rain to help relieve droughts in the Midwest. The drought is having a significant impact on farmers and their crops. The negative affect will of course inevitably lead to higher food prices as the supply is cut. Experts say it could be the most severe dry spell since 1950.

The lack of rain and heat is really a simple reminder of our lack of control over the created order. Even with all of our technological advances and gadgets, we are still dependent on God. Sometimes it seems our culture and society has forgotten the source of life. Secretary Vilsack recognizes the need for prayer, and often times, governors, especially of farm states, will issue declarations for citizens to pray for rain.

God of course uses rain and droughts to get the attention of His people. The Old Testament is full of teaching on God’s use of droughts and rain to teach theology, obedience, judgment, and favor.

On the Ricky Skagg’s album Ancient Tones, there is a song titled “Give Us Rain.” Part of the lyrics to the tune certainly speak to us today,

Grandpa raised a family on a worn out cotton farm
Borrowed money on his word, he never did nobody harm
Sometimes he’d get discouraged when a dry spell came around
He’d go out in the cotton field and he’d kneel down on the ground

Give us rain on this dry old ground today
Give us rain, wash the troubled times away
I believe you’re faithful, I’m not meaning to complain
But Lord we sure could use a little rain
Lord we sure could use a little rain.

We can’t say for certain what the lack of rain means, but we know that God can give us rain. We can use the reminder that we are a world dependent on God and His goodness for our life and sustenance.

In today’s Detroit News, Acton communications intern Elise Amyx offers a piece on farm subsidies. She looks at how Michigan Sen. Debbie Stabenow described this government support as “risk management protection” for farmers.

Stabenow, chairwoman of the Committee on Agriculture, Nutrition and Forestry, conceded to the soybean farmers that “it’s wonderful that farming is prosperous now.” But she pointed to droughts in the South and the floods in the Midwest as proof that “you still face the same risk that farmers have always to deal with.” Some agribusinesses get paid seven digits to not farm areas of their farm in the name of “risk management,” but what sort of business person doesn’t take risks?

There is no doubt that farming is a difficult, volatile business filled with risk and uncertainty, but so are many other industries that do not receive any government handouts. Too many farmers view the government as a savior, who will reduce risk, create certainty and save the day if something bad happens. This is a dangerously dependent position to be in, and it is morally problematic when it comes at the expense of everyone else.

The glaring injustices built into farm subsidy policies explain why so many on both the political right and left routinely describe them as immoral.

Read Elise Amyx’s “Farming subsidies often do more harm than good” in the Detroit News.

Gas prices are not the only thing on the rise. As of yesterday, corn is at its highest level in three years at $7.60 a bushel and prices are not predicated to go down anytime soon. The United States government anticipates a shortage despite farmers’ intent to plant 5 percent more acreage of corn this year, a shortage is still predicted.

Reuters also indicates that rising corn prices will continue:

U.S. corn prices will keep rising to new highs over the coming months, a new Reuters poll has found, as demand from ranchers and ethanol makers proves better able to withstand record costs than many thought.

The forecasts will compound inflation concerns as higher feed costs filter through to beef and chicken prices. Analysts also warned that anything less than perfect growing weather for the spring crop could push prices even higher as traders fear tight conditions will extend well into next year.

As the article later states, the chances of having a perfect growing season with no weather related problems are very slim.

Reuters also asserts that food prices rose by 14 percent over the past three months which can be attributed to the rising use of ethanol and the ranchers demand for feed for livestock: “The rally has sharpened the focus on two imponderables: the price point at which livestock ranchers or ethanol makers will begin to cut back use, relieving demand pressures; so far, traders say there’s little evidence of this happening yet.”

Perhaps the United States should learn from China’s mistake. An article in the New York Times describes how the biofuel sector does affect the food supply and price, and how China’s ethanol use resulted in higher food prices:

It can be tricky predicting how new demand from the biofuel sector will affect the supply and price of food. Sometimes, as with corn or cassava, direct competition between purchasers drives up the prices of biofuel ingredients. In other instances, shortages and price inflation occur because farmers who formerly grew crops like vegetables for consumption plant different crops that can be used for fuel.

China learned this the hard way nearly a decade ago when it set out to make bioethanol from corn, only to discover that the plan caused alarming shortages and a rise in food prices. In 2007 the government banned the use of grains to make biofuel.

However, the article later explains that China is now using cassava, instead of corn. China may have not entirely learned their lesson as cassava is still a food crop used predominately in Africa and also in China during food shortages.

The article by the New York Times adequately closes with a quote from Olivier Dubois, a bioenergy expert at the UN’s Food and Agriculture Organization that gets at the root of the food and fuel argument: “We have to move away from the thinking that producing an energy crop doesn’t compete with food,” he said. “It almost inevitably does.”

Previous blog posts on ethanol, rising food prices, and the moral issues of the two can be found here, here, here, and here.

Blog author: lglinzak
Wednesday, March 9, 2011
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A big report is due out tomorrow which may have a positive or negative impact on economies across the globe. These numbers are not coming from the New York Stock Exchange, NASDAQ, the Tokyo Stock Exchange, the London Stock Exchange, or any other stock exchange; they are actually coming from a report being released by the U.S. Agriculture Department (USDA). It will talk about the role the U.S. will play in preventing or reducing the effects of a global food shortage.

There have been many pundits warning about a global food crisis resulting in a substantial increase in food prices. Shoppers are already experiencing the effects of higher food prices, with wheat prices up 80 percent from a year ago and U.S. retail food prices expecting to climb about 4 percent this year.

And prices are not expected to come down any time in the near future. The Ogallala Aquifer in the U.S. is depleting, and without a way to replenish itself, experts are wondering if the U.S. is on the verge of seeing another dust bowl. Texas’ wheat crop is also predicted to not meet harvesting expectations as 56 percent of its crop is rated in poor to very poor conditions by the USDA with dry weather persisting. Furthermore, an article published in Foreign Policy articulates many variables contributing to the increase in food prices and the potential food crisis which include population increase, arable lands depleting, the increasing demand for water for numerous uses, and urban sprawl. The industry is left with a lot of factors to compete with while trying to keep prices as low as possible.

It is important to note that the developed world is not immune from the adverse effects of a potential food crisis. Karen Ward, senior global economist at the worldwide bank HSBC, explains slow wage growth and use of food crops in alternative fuels are going to result in problems for those living in developed countries. While speaking on Jeff Randall Live, Ward also warned the UK may be subject to the food riots similar to those that occurred in other countries:

“Even in the developed world I think we have very, very low wage growth, so people aren’t getting more in their pay packet to compensate them for food and energy, and I think we could see social unrest certainly in parts of the developed world and the UK as well.”

She went on to highlight the link between high food prices and the escalating cost of crude oil.

“More and more we are seeing that some of these foodstuffs are actually substitutes for energy itself, particularly biofuels. So I think the energy markets are a significant contributor to these food price gains.”

While farmers are continuing to produce bigger crops, the U.S. is expected to see a 4 percent increase in the area planted along with a harvest record for corn of 13.73 billion bushels, it still may not be enough. However, corn is on such high demand due to the increase of the ethanol industry in the U.S., and current rising oil prices are even further contributing to the demand for ethanol. As a result, the 10 percent increase that is projected in the corn harvest will only add to reserves in the U.S. by five days, and by the time the fall harvest begins, the USDA predicts the U.S to only have enough corn left to satisfy the country’s appetite for 18 days.

Whether there is a food crisis of 2011 or not does not avoid the much needed ethical debate involving the use of crops. As I discussed in an earlier post, the U.S. is mandated to continue to increase its ethanol production, and with biofuels increasing the demand on crops and ever increasing population that demands food, priorities need to be evaluated and questions need to be raised. Shall more emphasis be placed on crops being harvested for food consumption or fuel usage?

Are the Old Continent’s farmers showing that they have a real entrepreneurial spirit and serving as role models of courage and innovation during the Great Recession? Surely not all of them, but there are some inspiring examples to be found in Central and Southern Europe.

This is somewhat surprising as Europe’s agricultural sector is usually among the most traditional, least open to market innovation and product flexibility, and heavily reliant on EU funding to keep the sector competitive. Alas, European leadership in international food trade has been slowly whittled down in the last 3-4 decades.

Some European farmers, however, are resilient and are pulling rabbits out of hats these days by risking and investing heavily to implement creative new forms of business on their farms – many of which had been on the brink of failure.

It is primarily the French and Italians who are showing their true entrepreneurial spirit and vocation to agriculture. They appear to be some of the most tenacious and creative. Just like the Michigan dairy farmer, Brad Morgan, the protagonist of Acton’s documentary The Call of the Entrepreneur, these farmers have turned to undervalued and completely overlooked assets to build lucrative profit-making ventures that often double and triple their old incomes. They have begun reshaping the way their traditional industry operates, and at a time when Europe has lost its competitive edge to cheaper food suppliers from Africa and South America.

Making matters worse has been the total evaporation of their once abundant workforce. In France, for example, rural industry employees currently make up a mere 3% of the nation’s workers, when it once boasted over 40% at the turn of the last century (cf. August 2010 Time article “How to Save Rural France”). And figures for those farmers who have registered as operating “professional” establishments in France’s campagne have dropped from 2,000,000 to 350,000 in the last fifty years. As noted out in a 2006 Acton commentary (“French ‘Security’ and Economic Reality”), this is not at all surprising: the vast majority of France’s youth dream of careers as civil servants, or want to secure life-long union protected contracts, and furthermore claim to generally dislike or distrust free market economics.

A final blow to European farming may come in a few years when the industry’s most heavily relied upon system of public subsidy – the Common Agricultural Policy – is set to undergo reform in 2013. And no one is quite certain what the consequences may be, as EU finance officials nudge the sector to become more competitive and market orientated.

Just what are they doing?


While some major industries in France, like auto manufacturing, have received generous public subsidies to remain competitive, French farmers are beginning to rely on their entrepreneurial spirit and genuine vocation to agriculture to turn their sector around.

They are achieving this by doing exactly what entrepreneurs are called to do: take risks through investment and creatively diversify their business offerings to customers.

For example, entrepreneurial farmers in the southern Ile-de-France grain producing region have utilized the bucolic beauty of their wavy golden fields and soft rolling hillsides to create profit-making ventures. The same beauty that inspired France’s great impressionnistes, now lures thousands of international vacationers to their prime holiday centers built out of once dilapidated grain storage facilities with glorious hill-top views.

It is these same farmers who are using abandoned wheat and barley fields as horse riding tracks. They are converting their dusty old barns into equestrian club houses. Others, like Rabourdin farms in Brie, have added premium beer making facilities to their production portfolios and now attract thousands to their own micro brew facilities and connoisseurs can order their products on-line.

While interviewed for the same Time article, agricultural entrepreneur Bernadette Porchelu said that for her Basque-country farm to succeed “it required a lot of work and investment.”

“But now,” she says, “We are hustling to keep up with the demand and have more than doubled our income. When we first decided to make this move, everyone said we’d fail. Today I wonder how most farms will survive if they don’t undertake similar diversification –which may be why some of our visitors include fellow farmers asking us how we made it work.”

It’s not just the French

One of Italy’s leading agricultural entrepreneurs hailing from Rome, Annibale Gozzi, says that while France is making headlines with its creative agrotourism, Italy is not lagging too far behind.

He says that “neither can Italian farms keep up with fierce international competition in food production…Manual farm labor in other parts of the world is ten times cheaper than in Italy and we simply cannot compete even with our tremendous advances farming methods and technology.”

“We too have been forced to try different things and strive for the full integration of our products, services and assets.”

Those farms that are most successful, like Gozzi’s own agrotourism south of Rome, Villa Germaine, are the ones that have become full-scale “multi-function” operations in addition to producing traditional agriculture.

Referring to his own agriculture establishment as an example, Gozzi says he has risked huge amounts of capital to maximize his farm’s business to include “integrative products and services” such as farming courses, horse riding, premium viticulture and olive oil production, tuffa cave wine and cheese tasting facilities, as well as a full-service hotel and restaurant. His establishment now even regularly hosts business luncheons and wedding receptions with lavish menus featuring his own fresh meat and produce.

He says he does this with dedication and pride, a dream to “do a first-class job for what I love”. Gozzi’s thriving business at Villa Germaine not only has allowed him to maximize his farm’s assets and profits, but truly exemplifies what it means to combine entrepreneurial spirit and tradition all in the same business.

He adds that Italians are catching on to but this type of inventiveness, “but it is still much more appreciated by foreigners and France is clearly leading the way.”

Why they really do it

Vastly increasing revenue has been a driving factor for the survival of European farmers – especially knowing their major public financial support may dramatically change in a few years’ time and as their industry is being swept away by international competition.

Even if Europe’s few remaining die-hards simply had more public financing, it doesn’t mean they would come out on top. It has not worked for decades and surely it does not provide the answer to their future.

Rather, we must follow the lead of those real entrepreneurs who in the toughest economic times are true to their vocation and come up with ingenious solutions to their sector’s woes. If there is a future at all, they are providing viable alternatives. And to do so, they must not only be highly creative. They must also be willing to take risks –a courageous attitude undertaken by those who genuinely live out a vocation and exhibit a real passion for their trade.

(This article is the first of a regular monthly series dedicated to entrepreneurship in Europe.)

Blog author: kschmiesing
Wednesday, October 8, 2008
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There’s an interesting clip on YouTube of a discussion about the world food situation between, primarily, author Michal Pollan and Monsanto CEO Hugh Grant.

Pollan is a champion of the “slow food” movement, which is, to simplify, associated more generally with trends such as whole foods, farmers markets (“localvores”), organic food production, etc. (The participation of otherwise fiscal and cultural conservatives in what is often presented as a left-leaning movement is a phenomenon that gave rise to the term “crunchy cons.”)

A variety of observations might be made on the exchange, but I’ll focus on one. All the discussants underemphasize the role of free human action in the market. World hunger, they seem to assume, is a problem “we” need to solve, whether that be by research, technological dispersion, food distribution, or changing agricultural practices. Pollan’s suggestion that food production and distribution must be a “public” (i.e., government) enterprise is surely wrongheaded–the worst famines in history been the result of government interference or government failure (war, anarchy), not market failure–but Grant, too, apparently views big agricultural business as playing a kind of orchestrating role in steering food production in the right direction.

By all means, let’s continue research, let’s share knowledge with African farmers, and let’s create partnerships between corporations and non-profit entities. But the task of supplying the world’s food needs in the future will not be accomplished by the management of the economy by CEO’s, NGO directors, or heads of state. It will be accomplished if the market is permitted freely to convey information about supply and demand, if production and distribution are not thwarted by corrupt governments and military strife, and if obstacles to participation in the world market are removed.

Alarums raised about impending food shortages have been proven wrong again and again. They will this time, too, as long as the market’s incentives are not tampered with. The world can feed itself, if it is allowed to do so.

The new farm bill may be one of the most shameless displays of government largesse ever, even more so when you consider who will most benefit from the pork. Citizens Against Government Waste called it “The most farcical farm bill in history.” The Economist dubbed it “Harvest of Disgrace.” The Wall Street Journal opines, “If farm prices stay high, consumers face higher grocery bills and farmers get rich. If farm prices fall, taxpayers kick in the difference and farmers still get rich.” The most pressing concern is that billions of dollars in subsidies will be going to the wealthiest agribusiness corporations in the country.

President Bush vetoed the bill, saying the “Legislation is too expensive and would send too much government money to wealthy farmers.” He wanted a subsidy cap on farms with a gross income of more than $200,000. Senator McCain also urged the President to veto the bill. Despite this warning, many Congressional Republicans joined with Democrats to override the veto. The Wall Street Journal declared:

House Republicans are equally as complicit, despite their claims of having found fiscal religion after 2006. About half of them voted to override a Republican President. GOP leaders refused to whip against the bill, and two of them – Roy Blunt of Missouri and Adam Putnam of Florida – even voted for it. These are the same House Republicans who last week unveiled their new slogan, “The Change You Deserve.”

As food prices soar, it’s plain wrong to transfer large sums of taxpayer money to enrich already wealthy corporate farms. Citizens Against Government Waste also declared of the bill:

It continues to dole out $5.2 billion annually in direct payments to individuals (many of whom are no longer farming) without any regard to prices or income. These direct payments, 60 percent of which go to the wealthiest 10 percent of recipients, were created in 1996 and were supposed to phase out by 2002.

In one of this week’s Acton Commentaries, Ray Nothstine and I juxtapose a static, sedentary dependence on government subsidies with a dynamic, entrepreneurial spirit of innovation.

The impetus for this short piece was an article that originally appeared in the Grand Rapids Press (linked in the commentary). I have two things to say about these stories and then I want to add some further reflections on the world of agricultures subsidies.

First, I found the article’s “hook” to be quite shoddy and lame. The blatant attempt to “shock” the reader into a reaction of disgust that a billionaire like Dick DeVos, yes, “that Dick DeVos,” got a whopping “$6,000 in federal farm subsidies from 2003 to 2005.” That’s roughly $2k a year for three years.

Unsurprisingly, DeVos’ spokesperson didn’t know anything about it. It’s ludicrous to think that a guy with as much on his plate as Dick DeVos would have any time for what is essentially pocket change for a billionaire. Does the fact that DeVos got a subsidy even though he campaigned on eliminating government waste make him a hypocrite?

Judge for yourself, but I think these payments say more about the government’s inefficiency and waste than they do about DeVos’ integrity. People of all income brackets pay tax professionals to maximize their returns. For the very wealthy, it’s simply a process that’s on a bigger scale, that’s much more thorough, and with many more loopholes than when you or I go to H&R Block. The more diversified your holdings, the more likely there are a plethora of tax breaks for you to exploit. The breathless lede to this story was simply off-putting to me, especially given the rather clear political undertones of the insinuations.

“Simplify, man.”

What’s the real lesson? As a recycling hippie once told The Simpsons‘ Principal Skinner in a quite different context, “Simplify, man.” Simplify the tax code and eliminate all these special interest loopholes.

But the complaint about the story’s hook is really a minor quibble compared to my second point. In a companion piece, Lisa Rose Starner, executive director at Blandford Nature Center and Mixed Greens says that farm subsidies are essentially about “social justice.” That’s right, subsidies are about social justice. They’re about the social injustice of subsidizing a product so that people from poorer nations around the world, who would like to do more than simply engage in subsistence farming, can’t compete in a global marketplace because prices are artificially deflated. So, our subsidies are feeding the rich at the expense of the poor in more ways than one.

Of course, the pat response is that other nations are subsidizing too, so our subsidies are just leveling the playing field. To be sure, the world of agricultural business is a complex one, as many of the commenters on our piece point out. Direct farm subsidies are just one thin slice of the government’s intervention into agriculture. Perhaps they’re the most obvious, but they may also not be the most insidious. As one astute reader wrote to me, “The web of market interference in ag is broad and complex.”

Simplify, man.

Update: The Detroit News ran a version of the original piece here.

Blog author: jballor
Tuesday, August 14, 2007
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To hear the NYT tell it (and Sojourners, for that matter), the family farm is facing severe threats. With no small degree of dramatic flourish, the NYT editorial linked above concludes:

For the past 75 years, America’s system of farm subsidies has unfortunately driven farming toward such concentration, and there’s no sign that the next farm bill will change that. The difference this time is that American farming is poised on the brink of true industrialization, creating a landscape driven by energy production and what is now called “biorefining.” What we may be witnessing is the beginning of the tragic moment in which the ownership of America’s farmland passes from the farmer to the industrial giants of energy and agricultural production.

If federal subsidies for corporate agribusiness is a threat to the family farm, then so is extensive FDA regulation of homegrown products and the morass of complex zoning regulations, telling people what they can sell, when they can sell, it and where they can sell it.

As my colleague Kevin Schmiesing wonders within a similar context, is the problem that the government just doesn’t quite have the right approach nailed down yet, or that the unintended consequences of government intervention into the market (in various ways) inevitably will screw things up (because, perhaps, special interests, whether corporate or individual, will always have an undue influence in the formation of policy)?