Constrained Capitalism? Not

From the Guardian and you can find an article entitled "Arguments for Constrained Capitalism in Asia."

And we wonder where people get ideas, like ending our addiction to economic growth.

The article is very thought provoking, but I'm not sure the author truly understands economics, prices, or capitalism, or they are confusing their terms.

They advocate "constrained capitalism – which limits the use of natural resources and inhibits the behavior of consumers" and state that  "Governments need to tell their people that they can't have everything"

Prices, interest rates, profits, property rights, torts- all the things that make up a system of capitalism, by definition, work to limit the use of natural resources and constrain the behavior of consumers. They serve as reminders that we can't have everything and that our choices always involve trade offs. Often times, it is the intent of government policy to override these constraints, sending the false signal that yes you can have everything. (i.e. socially planned interest rates  and the excess that lead up to the financial crisis that reminded us, no you can't have everything and prices matter).  Prices reflect information related to scarcity and the knowledge and preferences of multitudes (billions) of individuals, and force each of us (consumers and businesses), with nearly every decision we make, to consider the impacts of our choices on others and the environment.  There are of course instances when we think that prices don't capture the full impact of our behavior  (externalities- see Hardin, Coase, Demsetz) but many times over the answer isn't less reliance on market forces, but more.  Paul Ehrlich and Jared Diamond have tried to make similar arguments related  to 'constrained capitalism'  and economic growth, but technological change and economic growth have undermined their claims time and time again. 

"investment in rural areas to improve sustainable farming methods and raise farming incomes."

This is one area, perhaps, where I agree, but modern agriculture in general (with GM foods, the application of genomics, proteomics, and pharmaceutical technologies in livestock production, GPS, modern intricate supply chains) is an example of an industry that has drastically reduced its environmental impact, mostly as a result of voluntary decisions by farmers on a global scale to adopt these practices.  Investment in these green technologies has paid off. How much of it is due to government sponsored R&D I'm not sure.

"He uses a telling fact: 2.2 billion Asians now have mobile phones, but far fewer have access to drinking water or toilets."

Access to potable water is perhaps one of the areas where increased reliance on markets and the price mechanism could offer the greatest improvement.

"The problem is not about needing more technology but about restructuring an economic system to meet human needs."

Economics and capitalism are all about meeting human needs. There are cases, where according to the article, it may seem that capitalism has not favored nations or peoples that are less than well off, but take the case of Egypt for example, or the many countries in Latin American.  As Hernando DeSoto has pointed out, they suffer from a lack of markets and capitalism as opposed to suffering from markets and capitalism. In a market system, if needs are not met, then competition drives profits down. If needs are met with great difficulty or under constraints of scarcity (as the article in the Guardian implies), then prices and profits will reflect that.

"There is no future unless we constrain human behaviour, how you do that is the question of our time"

That is the question of all time, and the subject of economics, which is the study of people's choices and how they are made compatible. Understanding economics and the nature of the price mechanism and spontaneous order provides the analytical framework for addressing so many of the concerns of this article.

 

References:

Science 13 December 1968:

Vol. 162 no. 3859 pp. 1243-1248

DOI: 10.1126/science.162.3859.1243

The Tragedy of the Commons

Garrett Hardin

The Problem of Social Cost

R. H. Coase

Journal of Law and Economics

Vol. 3, (Oct., 1960), pp. 1-44

Published by: The University of Chicago Press

Article Stable URL: http://www.jstor.org/stable/724810

Toward a Theory of Property Rights

Harold Demsetz

The American Economic Review, Vol. 57, No. 2, Papers and Proceedings of the Seventy-ninth

Annual Meeting of the American Economic Association. (May, 1967), pp. 347-359.

Facts for Ag Fact Friday

Today is Ag Fact Friday, so here are 10 facts about modern sustainable agricultrue.

Dairy & Livestock Production


#1 The carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. For every 1 million cows, the reduction in global warming potential from rBST supplemented cows is equivalent to removing 400K cars from the roadways or planting 300 million trees.

#2 Transportation accounts for at least 26% of total anthropogenic GHG emissions compared to roughly 5.8% for all of agriculture & less than 3% associated with livestock production in the U.S.

#3 The use of grain and pharmaceutical technology in beef production has resulted in a nearly 40 percent reduction in greenhouse gases (GHGs) per pound of beef compared to grass feeding.

#4 Bans on feed grade sub- therapeutic antibiotics in European countries lead to increased reliance on therapeutic antibiotics important to human health.

Crop Production

#5 Biotechnology improves insect biodiversity, crop plant diversity, and has lower levels of carcinogens than conventional and organic corn.

#6 The use of biotech Roundup resistant crops has led to reduced herbicide use and allowed roundup to replace other herbicides that were up to 17 times more toxic.

#7 Total decreases in carbon dioxide as a result of using biotech crops was equivalent to removing 6 million cars from the road in 2007. (that’s a lot more than the # of hybrid cars sold in 2007)

Modern Agriculture in General

#8 Rather than having a negative impact on climate change, intensive agriculture has actually has a mitigating effect on climate change with a reduction of 68 kgC (249 kgCO2e) emissions relative to 1961 technology.

#9 Small farms actually benefit more from subsidy programs than large scale farms, despite the relative shares of total subsidies paid. The impacts of subsidies on food choices have not contributed to the obesity epidemic.

#10 Local food production can actually be more energy intensive than modern efficient supply chains. On average, fuel use per cwt for local food production is about 2.18 gallons vs. .69 and 1.92 for intermediate and traditional supply chains for beef production.

References:

The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science,Capper, J. L., Cady, R. A., Bauman, D. E. 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781

San Diego Center for Molecular Agriculture: Foods from Genetically Modified Crops

A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates. Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva Science 8 June 2007: Vol. 316. no. 5830, pp. 1475 – 1477

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

Indirect Reduction of Ear Molds and Associated Mycotoxins in Bacillus thuringiensis Corn Under Controlled and Open Field Conditions: Utility and Limitations. Dowd, J. Economic Entomology. 93 1669-1679 2000.

"Why Spurning Biotech Food Has Become a Liability.'' Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.

Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000

GM crops: global socio-economic and environmental impacts 1996- 2007. Brookes & Barfoot PG Economics report

The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production. By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues.

Lessons from the Danish Ban on Feed Grade Antibiotics. Dermot J. Hayes and Helen H. Jenson. Choices 3Q. 2003. American Agricultural Economics Association.

Does Local Production Improve Environmental and Health Outcomes. Steven Sexton. Agricultural and Resource Economics Update, Vol 13 No 2 Nov/Dec 2009. University of California.

Communal Benefits of Transgenic Corn. Bruce E. Tabashnik Science 8 October 2010:Vol. 330. no. 6001, pp. 189 - 190DOI: 10.1126/science.1196864

Farm Subsidies and Obesity in the United States. Julian M. Alston, Daniel A. Sumner, and Stephen A. Vosti. Agricultural Resource Economics Update V. 11 no. Nov/Dec 007 U.C. Davis

Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057

Clearing the Air: Livestock's Contribution to Climate ChangeMaurice E. Pitesky*, Kimberly R. Stackhouse† and Frank M. MitloehnerAdvances in Agronomy Volume 103, 2009, Pages 1-40

Comparing the Structure, Size, and Performance of Local and Mainstream FoodSupply ChainsRobert P. King, Michael S. Hand, Gigi DiGiacomo,Kate Clancy, Miguel I. Gómez, Shermain D. Hardesty,Larry Lev, and Edward W. McLaughlin Economic Research Report Number 99 June 2010

The environmental impact of recombinant bovine somatotropin (rbST) use in dairy production Judith L. Capper,* Euridice Castañeda-Gutiérrez,*† Roger A. Cady,‡ and Dale E. Bauman* Proc Natl Acad Sci U S A. 2008 July 15; 105(28): 9668–9673

''Diversity of United States Hybrid Maize Germplasm as Revealed by Restriction Fragment Length Polymorphisms.'' Smith, J.S.C.; Smith, O.S.; Wright, S.; Wall, S.J.; and Walton, M. (1992) Crop Science 32: 598–604

USDA Report- Government Payments and the Farm Sector: Who Benefits and How Much?

http://www.ers.usda.gov/Briefing/FarmPolicy/gov-pay.htm

USDA Report-Farm Income and Costs: Farms Receiving Government Payments

http://www.ers.usda.gov/Briefing/FarmIncome/govtpaybyfarmtype.htm

EWG Headine: A Bailout for Corporate Agriculture?

Previously I found an article published by the EWG regarding the role of women in agriculture, that I found somewhat misleading. Recently, I  ran across a piece by the EWG titled 'Government's Continued Bailout of Corporate Agriculture' which, in addition to the title, made some pretty bold and possibly misleading statements. I'm not saying this is intentional on the part of EWG, but these statements could easily be misinterpreted.

From 1995-2009 the largest and wealthiest top 10 percent of farm program recipients received 74 percent of all farm subsidies

This is true, but it could give the false perception that farm subsidies benefit large farms perhaps at the expense of smaller farms, but I addressed this before in another post Do Farm Subsidies Benefit the Largest Farms the Most?

It's true that many subsidies are tied to commodity production. As a result, those that grow more commodities (i.e. larger farms) will get more money from the government. As a result larger producers take in a larger share of all subsidies (especially those related to commodities). However, subsidies account for a much smaller percentage of income for large producers, and make up a much larger percentage of total income for medium or small producers.  

EWG  does admit that they favor subsidies going to smaller and midsize farms, where they have the biggest impact on operating budgets.  Another quote:


The vast majority of farm subsidies go to raw material for our industrialized food system, not the foods we actually eat. Even less money goes to support the production of the fruits and vegetables that are the foundation of a healthy diet.


This couldn't be further from the truth. It is true, as I discussed above, that most of the subsidies go to commodities, but it isn't true that they don't contribute to the production of foods that we actually eat. In fact, as Michael Pollan has brilliantly stated:

"What I keep finding in case after case, if you follow the food back to the farm — if you follow the nutrients, if you follow the carbon — you end up in a corn field in Iowa, over and over and over again." -Michael Pollan 

 As I've pointed out many times before, it is a miracle that modern sustainable agriculture can feed so many people in so many ways, with just a few common staple crops, and do it sustainably! 

The EWG quote also could give some people the perception that healthy supplements in our diets, like fruits and vegetables, are more expensive than processed foods containing corn and soybeans because corn and soybeans are subsidized more heavily than fruits and vegetables. Again, this couldn't be further than the truth. The agronomics, labor, risk, economies of scale, and capital costs associated with fruit and vegetable production make those crops much more expensive than commodities, and have a much larger role on their prices than subsidies.  Eliminating commodity programs would have an insignificant impact at the retail level, and the subsides required to make fruits and vegetables more affordable would dwarf what we are currently spending on commodties. 

Finally, while this corporate giveaway has gone on unabated, conservation continues to be shortchanged.

While this may be true, in terms of the allocation of funds, conservation and sustainability in terms of on the farm practices isn't shortchanged in the least. Market forces have overcome subsidy related distortions and led producers and agribusinesses to focus heavily on green technologies including herbicide and pest resistance, water use efficiency, fuel efficiency etc.  Again, all the practices that make modern agriculture, sustainable agriculture.

Text Mining Tweets About Factory Farms

On another blog last year I noted the how those in the agriculture industry were benefiting from the use of social media. (like the Yellow Tail and Pilot Travel incidences).  While social media has allowed farmers to organize and communicate about their industry, it also provides a rich data source for measuring sentiment or perceptions about their industry. Companies are finding that by mining text from web pages, comments, blogs, and social media, they can get measure consumer perceptions almost as well or better than they can through explicit surveys. These powerful analytics could be very beneficial to those in the ag industry or agvocacy groups.

After a week as SAS Gobal Forum, I've been pretty excited about some of the text mining presentations that I got to see.  After getting home I found a tweet from @imusicmash sharing a post from the Heuristic Andrew blog that shared text mining code from R.    (although SAS has some pretty powerful text mining tools, I don’t have access to them for personal blogging purposes)  Anyway, I thought I’d take a stab at mining tweets related to ‘factory farms’ using open source R.

I extracted about 2000 tweets containing the term ‘factory farms’ and produced the following cluster analysis on the text:

 This seems to give an idea about the content of conversations regarding ‘factory farms.’  Some of these appear to center around gmo foods and Monsanto. This already informs me of misperceptions about ‘factory farms’ and biotechnology. Should people tend to associate these terms when 98% of farms are family farms and most of them raise biotech corn and soybeans? 

It seems there are separate clusters of conversations, some related to Monsanto and gmo’s, others related to food and livestock production in general.

It also appears that the topic of ‘factory farms’ is often discussed by the #agchat group, and other food and animal related issues.

I also ran some correlations, or ‘word associations.’  Terms that tend to be used in association with ‘factory farms’ include hens, debeaked,suffering, cruelty,secretive, excess.  All of these terms tend to be related to livestock production, and seem to have negative sentment.  Words correlated with family farms are more neutral, hauled, Missouri, beans, peas, operated, battling.   Terms associated with ‘gmo’ include ban, irreversible, killing.  Interesting the term ‘sustainable’ brought up neutral terms. It doesn’t appear, at least from this sample, that sustainable agriculture is associated with biotechnology, at least in the context of tweets related to ‘factory farms.’  Again, to me this speaks more about misperceptions related to modern sustainable agriculture.

Of course, this is just a first jab at this, I’m no expert in text analytics, and I had to rely on my subjective interpretation to some extent. And, obviously, I have not discovered anything that most people in the ag industry don’t already know. However, more sophisticated analysis is possible and could be more revealing than the example I just gave. I truly believe that text analytics can be a powerful tool for the ag industry and agvocation in the future.

Gold, The Fed & Terrorism?

US Attorny Says Attempts To Use "Liberty Dollar" As Money Is Domestic Terrorism after Bernard Von Nothaus Found Guilty of Counterfeiting | CoinWeek

http://www.coinweek.com/news/featured-news/us-attorney-says-using-gold-as-money-is-terrorism-after-bernard-von-nothaus-found-guilty-of-counterfeiting/

Interesting comments- 'clear and present danger to economic stability' I thought the Fed had that covered- perhaps the housing crisis, current recession, and recent events in Wisconsin slipped the court's mind. 

'to challenge the legitimacy of our democratic form of government'- perhaps, but recall the diseases of democracy the founders warned us about in Federalist 10: 

"A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project"

Sent from my iPhone

Comment: Some Animals Are More Equal Than Others

My comments on the NYT Opinionator post:

I'm not an expert on animal welfare, and I'm not sure that the laws in Iowa or Florida make sense. It would make better sense to legally require anyone that is aware of abuse to report it. i.e. if you are more interested in taking the time to create and edit a video as opposed to immediately reporting abuse, that should be a chargeable offense. It should also call into question your priorities about animal welfare. Animal welfare aside, one tradeoff that people are not often willing to admit is that the touchy feely, sentimental, emotional agriculture that they may prefer (free range, natural, etc.) isn't necessarily the most efficient or sustainable. Modern production methods that utilize green pharmaceutical and biotech technologies and efficient supply chains have a much lower carbon foot print are much more sustainable than often given credit for. The bigger story of the improved sustainability of modern agriculture in the last 10-2- years often gets lost in the drama created by stories like these, that often appear to be 'pro-family farm' and 'pro-sustainability' but ultimately support practices that undermine long term sustainability and the practices of most family farms.

National Ag Week

"What I keep finding in case after case, if you follow the food back to the farm — if you follow the nutrients, if you follow the carbon — you end up in a corn field in Iowa, over and over and over again." -Michael Pollan

Today is National Ag Day, and this is National Ag Week.  It is a good time to point out, as Pollan’s quote unintentionally draws attention to, the spectacular fact that we can feed so many people in so many ways with just corn (and a few other commodities).  With modern agriculture, using green technologies brought to market by companies like Monsanto and efficient supply chains created by companies like Cargill and ADM, family farmers  can do this  sustainably using  fewer toxic chemicals, less water, less energy, and with a lower carbon footprint,  at an affordable price.

Today, have your coke and fries, steak and beer, or soy milk and salad, or whatever, but keep in mind the local producer and the modern sustaianable agricultural infrastructure that made it possible. And don't forget, agriculture makes up almost 20% of our national work force!

Do Farm Subsidies Benefit the Largest Farms the Most?

Most people contend that farm subsidies should be eliminated because they benefit mostly larger farms vs. saving the family farm. It's true that many subsidies are tied to commodity production. As a result, those that grow more commodities (i.e. larger farms) will get more money from the government. As a result larger producers take in a larger share of all subsidies (especially those related to commodities). However, subsidies account for a much smaller percentage of income for large producers, and make up a much larger percentage of total income for medium or small producers.

                                                  Definitions:        Commercial farms:  >=  $250,000
                                                                             Farms with sales < $250,000 include
                                                                                 1) Intermediate farms: full time operators
                                                                                 2) Rural residence farms

As the chart above (from the USDA) shows, in 2008 farms earning less than $250,000 /yr recieved a much greater percentage of their income in the form of government payments, while subsidies only accounted for 4% of income for producers with the largest incomes. The chart below indicates that this relationship seems to hold across years for the last decade.

References:
USDA Report- Government Payments and the Farm Sector: Who Benefits and How Much?
http://www.ers.usda.gov/Briefing/FarmPolicy/gov-pay.htm

USDA Report-Farm Income and Costs: Farms Receiving Government Payments
http://www.ers.usda.gov/Briefing/FarmIncome/govtpaybyfarmtype.htm

Modern Sustainable Agriculture is Not Descriminating

Last week I commented about an Environmental Working Group article that seemed to give the impression that women were more likely to be involved in or play a larger role sustainable agriculture. As I concluded, modern sustainable agriculture is driven not by gender, but by markets and technology.

If we take a more global view, far from discriminating, modern sustainable agricultural technology has increased economic mobility for women and the poor, especially in developing countries. Read the following from GM Crops: Engines of Economic Mobility, written by a small widowed farmer in the Philipines:

"Access to biotechnology has transformed my life. The increased productivity allowed me, as a widow, to send my three sons to college. I doubt this would have been possible without GM seeds. Women may have gained the most, according to a new study by the University of Warwick in the United Kingdom. In India, cotton harvesting is traditionally a female activity. Since the introduction of GM cotton, women who pick in these fields have seen their income rise by 55 percent. “Overall, [GM] cotton enhances the quality of life of women through increasing income and reducing ‘femanual’ work,” said Arjunan Subramanian, a professor at Warwick. Men, for their part, spend less time spraying pesticides. This leaves them more available for family chores and activities."

See also: https://globalfarmernetwork.org/2010/08/gm-crops-engine-of-economic-mobility/  GM CROPS: ENGINE OF ECONOMIC MOBILITY

ROSALIE ELLASUSAUGUST 6, 2010

EWG Post Misleading About Modern Ag and Women

In a recent Corn Commentary post, Pam Johnson pointed to this article posted by the Environmental Working Group (EWG) addressing the role of women in agriculture. The EWG post is another example of an activist group, giving the impression of  being 'pro family farm' and 'pro sustainable agriculture' yet making statements and accusations that actually undermine the sustainable practices of most family farmers.

For example, here are some quotes from the article:

"Big Ag is big business – and big profits. And when anyone raises questions about the billions of tax dollars lavished on the largest industrial growers of corn, soybeans and other commodity crops or points out the harm that these perverse incentives do to the environment, Big Ag's lackeys lash out."

"More important, though, is how these women farm the land and conserve natural resources. The Organic Farming Research Foundation reports that 22 percent of organic farmers are women. They, and their fellow male organic farmers, follow practices that  conserve soil and biological diversity by rotating crops and avoiding synthetic fertilizers, pesticides, hormones and genetically-modified seed."

It almost has a sexist overtone, but we'll ignore that, and Pam Johnson did a great job taking on misconceptions about women in ag in her post. I am more interested in other topics.

Is it true that we are lavishing tax dollars on the largest industrial growers of corn and other commodities? Well it is certainly true, as Michael Pollan points out, that when ever he tries to follow food from the shelf back to its origin, he ends up in a corn field. It is in fact a miracle of science, and the market place, that we can feed the world in so many ways with just a few commodities- and do it sustainably!  The state of technology and market fundamentals determine this, not subsidies. In terms of incentives, subsidies do not promote the production of commodities over fruits and vegetables. The market fundamentals, costs, technology, labor inputs etc.  guarantee that those production decisions are distinct. (i.e.  the presence or absence of a loan deficiency payment is not going to incentivise you to retool for tomato production over corn or vice versa).  It is also true that many of our commodity programs are based on production and so larger producers will as a group get a larger share of the government's money, but as pointed out in a recent post at  the Truth in Food blog, this does not imply that subsidies promote large scale agriculture at the expense of smaller farms:

"The food ActiviSphere was quick to unanimously pat the Times on the back, bobbing their heads in agreement with the party line that farm subsidies distort the $2.8 trillion food system, encouraging "mainly large-scale farmers" to apparently slavishly plant (or not plant) regardless of what the market tells them.....while it's true the largest dollar amount of farm subsidies go to the largest farms (as you would expect, since subsidies are typically tied directly to production, and production is tied directly to gross sales), looking at the microeconomic effects of subsidies on individual farms should correctly lead you to an entirely different conclusion."

When it comes to impacts on marginal income,  the author provides data showing that subsidies make a bigger difference to the smaller producers, not the larger ones. Get rid of the subsidies, and corn is still king, and it is likely we'll see more consolidation vs. a well spring of smaller farms. And of course, the largest overlook in this is the fact that 98% of all farms are still family farms, an inconvenient truth that activists typically overlook. They have often tried to get around this by getting away from terms related to ownership and trying to focus on technologies used, but they then dig themselves another hole in terms of sustainability. Which brings us to another topic.

Are there perverse incentives that lead to production decisions that are harmful to the environment as the EWG article implies? On the contrary, modern production agriculture is one of those industries that make a prime example of 'the invisible green hand.' Individual family farmers have overwhelmingly adopted sustainable green technologies such as genetic modification or  growth enhancing pharmaceuticals. (reducing or eliminating the use of toxic chemicals,improving insect biodiversity, reducing food toxins, reducing erosion and groundwater pollution, reducing greenhouse gas emissions, reducing water and fossil fuel use)  This is done without overbearing direction given by government regulations and is invariant to incentives created by subsidies. Market incentives have led farmers, acting in their own self interest, to adopt these technologies producing environmental benefits for all. (for peer reviewed research related to the sustainability of modern agriculture see here, or see this fact filled video related to modern sustainable agriculture). If anything, incentives in the ag industry promote behavior that is better not worse for the environment.

I'd like to revisit a quote from the EWG article:

"They, and their fellow male organic farmers, follow practices that  conserve soil and biological diversity by rotating crops and avoiding synthetic fertilizers, pesticides, hormones and genetically-modified seed"

Bear in mind, that most modern family farmers employ crop rotation to better manage fertility, pests, and to combat issues related to resistance. It's great that organic producers implement these practices, but these practices are not unique to organic production. It is certainly true that organic standards restrict the use of synthetic chemicals, but do make allowances for many toxic chemicals (see here for a list from § 205.601  Synthetic substances allowed for use in organic crop production.) Alex Avery does a good job pointing this out in his articel 'Natures Toxic Tools.' I've already spoken about the improved sustainability from genetic modification and pharmaceutical technologies, but what is not made clear is the sci-fi type mutated plants that organic standards find perfectly acceptable.  As Pamela Ronald points out in her book Tomorrow's table: organic farming, genetics, and the future of food, mutation breeding involves exposing plants to radiation or chemicals to produce random mutations that hopefully produce better performing crops. Unlike the very precise and controlled methods used by Monsanto to create Roundup Ready Soybeans, mutation breeding is perfectly acceptable according to U.S. organic standards. Not something they seem proud of promoting. Secondly, organic producers, compared to their modern not-till counterparts, essentially rape and pillage the soil through tillage, destroying soil structure, increasing run off and groundwater pollution.

Comments on the Corn Commentary Blog:

"At EWG we value transparency: transparency in farm payments to the largest and wealthiest operations and transparency in the millions spent on marketing campaigns that are too often designed to mislead consumers."

 There are lots of reasons to consume organic food. Some people have nostalgic preferences for foods produced the old fashioned way. Others have preferences just about the way food is produced in general. I'm sure there are many environmental and non environment related benefits. I personally prefer to consumer certain organic products based solely on taste. I don't go around attacking people for their food choices, however, I don't hold back from teachable moments when others mischaracterize production agriculture or mislead consumers.  The point of my post is not to attack organic food, but to point out the lack of transparency and misleading implications that some promoters of organic employ to attack the sustainable efforts of most family farms. The EWG post seems to mischaracterize both modern agriculture and the role that women play it, and in this way seems quite misleading. I wonder if most actual organic producers really want the EWG and others out there using these divisive tactics to promote their products?

§ 205.601 Synthetic substances allowed for use in organic crop production

§ 205.601 Synthetic substances allowed for use in organic crop production.

Source: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=f1312ca30770a8e585290633a1216a75&rgn=div8&view=text&node=7:3.1.1.9.32.7.354.2&idno=7


In accordance with restrictions specified in this section, the following synthetic substances may be used in organic crop production: Provided, That, use of such substances do not contribute to contamination of crops, soil, or water. Substances allowed by this section, except disinfectants and sanitizers in paragraph (a) and those substances in paragraphs (c), (j), (k), and (l) of this section, may only be used when the provisions set forth in §205.206(a) through (d) prove insufficient to prevent or control the target pest.


(a) As algicide, disinfectants, and sanitizer, including irrigation system cleaning systems. (1) Alcohols. (i) Ethanol. (ii) Isopropanol.
(2) Chlorine materials— Except, That, residual chlorine levels in the water shall not exceed the maximum residual disinfectant limit under the Safe Drinking Water Act.
(i) Calcium hypochlorite. (ii) Chlorine dioxide. (iii) Sodium hypochlorite.
(3) Copper sulfate—for use as an algicide in aquatic rice systems, is limited to one application per field during any 24-month period. Application rates are limited to those which do not increase baseline soil test values for copper over a timeframe agreed upon by the producer and accredited certifying agent.
(4) Hydrogen peroxide.
(5) Ozone gas—for use as an irrigation system cleaner only.
(6) Peracetic acid—for use in disinfecting equipment, seed, and asexually propagated planting material.
(7) Soap-based algicide/demossers.
(b) As herbicides, weed barriers, as applicable.
(1) Herbicides, soap-based—for use in farmstead maintenance (roadways, ditches, right of ways, building perimeters) and ornamental crops.
(2) Mulches. (i) Newspaper or other recycled paper, without glossy or colored inks. (ii) Plastic mulch and covers (petroleum-based other than polyvinyl chloride (PVC)).
1 of 3 10/13/2010 11:32 AM
Electronic Code of Federal Regulations: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=bf13d03b61b52...
(c) As compost feedstocks—Newspapers or other recycled paper, without glossy or colored inks. (d) As animal repellents—Soaps, ammonium—for use as a large animal repellant only, no contact with soil or edible portion of crop. (e) As insecticides (including acaricides or mite control). (1) Ammonium carbonate—for use as bait in insect traps only, no direct contact with crop or soil. (2) Boric acid—structural pest control, no direct contact with organic food or crops.
(3) Copper sulfate—for use as tadpole shrimp control in aquatic rice production, is limited to one application per field during any 24-month period. Application rates are limited to levels which do not increase baseline soil test values for copper over a timeframe agreed upon by the producer and accredited certifying agent.
(4) Elemental sulfur. (5) Lime sulfur—including calcium polysulfide. (6) Oils, horticultural—narrow range oils as dormant, suffocating, and summer oils. (7) Soaps, insecticidal. (8) Sticky traps/barriers. (9) Sucrose octanoate esters (CAS #s—42922–74–7; 58064–47–4)—in accordance with approved labeling. (f) As insect management. Pheromones. (g) As rodenticides. (1) Sulfur dioxide—underground rodent control only (smoke bombs). (2) Vitamin D3. (h) As slug or snail bait. Ferric phosphate (CAS # 10045–86–0). (i) As plant disease control.
(1) Coppers, fixed—copper hydroxide, copper oxide, copper oxychloride, includes products exempted from EPA tolerance, Provided, That, copper-based materials must be used in a manner that minimizes accumulation in the soil and shall not be used as herbicides.
(2) Copper sulfate—Substance must be used in a manner that minimizes accumulation of copper in the soil. (3) Hydrated lime. (4) Hydrogen peroxide. (5) Lime sulfur.
(6) Oils, horticultural, narrow range oils as dormant, suffocating, and summer oils. (7) Peracetic acid—for use to control fire blight bacteria. (8) Potassium bicarbonate. (9) Elemental sulfur.
(10) Streptomycin, for fire blight control in apples and pears only.
(11) Tetracycline, for fire blight control only and for use only until October 21, 2012.
(j) As plant or soil amendments.
(1) Aquatic plant extracts (other than hydrolyzed)—Extraction process is limited to the use of potassium hydroxide or sodium hydroxide; solvent amount used is limited to that amount necessary for extraction.
(2) Elemental sulfur. (3) Humic acids—naturally occurring deposits, water and alkali extracts only.
2 of 3 10/13/2010 11:32 AM
Electronic Code of Federal Regulations: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=bf13d03b61b52...
(4) Lignin sulfonate—chelating agent, dust suppressant, floatation agent. (5) Magnesium sulfate—allowed with a documented soil deficiency.
(6) Micronutrients—not to be used as a defoliant, herbicide, or desiccant. Those made from nitrates or chlorides are not allowed. Soil deficiency must be documented by testing.
(i) Soluble boron products. (ii) Sulfates, carbonates, oxides, or silicates of zinc, copper, iron, manganese, molybdenum, selenium, and cobalt.
(7) Liquid fish products—can be pH adjusted with sulfuric, citric or phosphoric acid. The amount of acid used shall not exceed the minimum needed to lower the pH to 3.5.
(8) Vitamins, B1, C, and E.
(9) Sulfurous acid (CAS # 7782–99–2) for on-farm generation of substance utilizing 99% purity elemental sulfur per paragraph (j)(2) of this section.
(k) As plant growth regulators. Ethylene gas—for regulation of pineapple flowering. (l) As floating agents in postharvest handling. (1) Lignin sulfonate. (2) Sodium silicate—for tree fruit and fiber processing.
(m) As synthetic inert ingredients as classified by the Environmental Protection Agency (EPA), for use with nonsynthetic substances or synthetic substances listed in this section and used as an active pesticide ingredient in accordance with any limitations on the use of such substances.
(1) EPA List 4—Inerts of Minimal Concern.
(2) EPA List 3—Inerts of Unknown Toxicity allowed:
(i) Glycerine Oleate (Glycerol monooleate) (CAS #s 37220–82–9)—for use only until December 31, 2006.
(ii) Inerts used in passive pheromone dispensers.
(n) Seed preparations. Hydrogen chloride (CAS # 7647–01–0)—for delinting cotton seed for planting.
(o)–(z) [Reserved]
[65 FR 80637, Dec. 21, 2000, as amended at 68 FR 61992, Oct. 31, 2003; 71 FR 53302 Sept. 11, 2006; 72 FR 69572, Dec. 10, 2007; 75 FR 38696, July 6, 2010]

Modern Sustainable Agriculture Annotated Bibliography (updated)

We often hear that modern agricultural technologies (like biotechnology) primarily benefit farmers budgets and agribusiness' profit margins but provide little social benefit. On the contrary, in fact, 

positive benefits associated with the development of biotech crops include non-trivial decreases in greenhouse gas emissions equivalent to the removal of nearly 12 million cars from America's roads - this is roughly 50% of the number of new cars purchased annually. (Brookes & Barfoot, 2017). Additionally, we see benefits in terms of improved health and safety related to decreased levels of mycotoxins, reduced pesticide exposure, reduced groundwater pollution, and improved biodiversity to name some of the health and environmental benefits as well as social benefits related to gender equity.

In the livestock sector we've also seen incredible improvements in the health and environmental benefits related to beef. For instance, consider Brad Johnson's work at Texas Tech related to increasing marbling and healthy fats without increasing unhealthy backfat while also reducing time on feed. Or like the research in beef genetics and air quality and emissions at U.C. Davis.

It's not just theory. In 2007 compared to 1977 we were able to produce the same amount of beef using roughly 30% fewer cattle and 30% less land. Feed and and water usage were down between 15-20% with a 16% lower carbon footprint (Capper, 2007). All in all, based on full lifecycle analysis, U.S. beef consumption accounts for less than .5% of global greenhouse gas emissions.

Below is a review of some of the literature discussing the sustainability of modern agriculture.


The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science,Capper, J. L., Cady, R. A., Bauman, D. E. 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781

-reduced carbon footprint in dairy production
  
 "Antimicrobial Resistance: Implications for the Food System." Doyle et al., Institute of Food Technologists

Comprehensive Reviews in Food Science and Food Safety, Vol.5, Issue 3, 2006ter for Molecular

-safety of pharmaceutical technologies in food production in relation to antibiotic use in livestock

"Microbiological Quality of Ground Beef From Conventionally-Reared Cattle and "Raised without Antibiotics" Label Claims" Journal of Food Protection, July 2004,Vol 67 Issue 7 p. 1433-1437

-factors other than the sub therapeutic use of antibiotics in beef production contribute to antimicrobial resistant bacteria in ground beef

San Diego Center for Molecular Agriculture: Foods from Genetically Modified Crops ( pdf)

-summary of environmental and health benefits of biotechnology

''Hybrid Corn.'' Abelson, P.H. (1990) Science 249 (August 24): 837. -improved diversity of crops planted

Enterprise and Biodiversity: Do Market Forces Yield Diversity of Life? David Schap and Andrew T. Young Cato Journal, Vol. 19, No. 1  (Spring/Summer 1999)

-improved diversity of crops planted

A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates. Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva Science 8 June 2007: Vol. 316. no. 5830, pp. 1475 – 1477

-reduced impact on biodiversity

''Diversity of United States Hybrid Maize Germplasm as Revealed by Restriction Fragment Length Polymorphisms.'' Smith, J.S.C.; Smith, O.S.; Wright, S.; Wall, S.J.; and Walton, M. (1992) Crop Science 32: 598–604

-improved diversity of crops planted

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

-Improved safety and reduced carcinogens in biotech crops

Pellegrino, E., Bedini, S., Nuti, M. et al. Impact of genetically engineered maize on agronomic, environmental and toxicological traits: a meta-analysis of 21 years of field data. Sci Rep 8, 3113 (2018). https://doi.org/10.1038/s41598-018-21284-2

Increase in biotech corn yields vs conventional (~5-25%) and reduction in mycotoxins ~30%)

Indirect Reduction of Ear Molds and Associated Mycotoxins in Bacillus thuringiensis Corn Under Controlled and Open Field Conditions: Utility and Limitations. Dowd, J. Economic Entomology. 93 1669-1679 2000.

-Improved safety and reduced carcinogens in biotech crops

"Why Spurning Biotech Food Has Become a Liability.'' Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.

-Health and environmental benefits of biotechnology

Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000

-environmental benefits and reduced pesticide use of biotech crops

Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions

Graham Brookes & Peter Barfoot

GM Crops & Food Vol. 8 , Iss. 2,2017

Link: http://www.tandfonline.com/doi/full/10.1080/21645698.2017.1309490

-environmentalbenefits of biotech: reduced pollution, improved safety, reduced carbon footprint

Soil Fertility and Biodiversity in Organic Farming. Science 31 May 2002: Vol. 296. no. 5573, pp. 1694 – 1697 DOI: 10.1126/science.1071148

-20% lower yields in non-biotech organic foods

'Association of farm management practices with risk of Escherichia coli contamination in pre- harvest produce grown in Minnesota and Wisconsin.' International Journal of Food Microbiology Volume 120, Issue 3, 15 December 2007, Pages 296-302

-comparison of E.Coli risks and modern vs. organic food production methods, odds of contamination are 13x greater for organic production

The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production. By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues.

-Grain feeding combined with growth promotants also results in a nearly 40 percent reduction in greenhouse gases (GHGs) per pound of beef compared to grass feeding (excluding nitrous oxides), with growth promotants accounting for fully 25 percent of the emissions reductions- see also: Organic, Natural and Grass-Fed Beef: Profitability and constraints to Production in the Midwestern U.S. Nicolas Acevedo John D. Lawrence Margaret Smith August, 2006. Leopold Center for Sustainable Agriculture)

Lessons from the Danish Ban on Feed Grade Antibiotics. Dermot J. Hayes and Helen H. Jenson. Choices 3Q. 2003. American Agricultural Economics Association.

-Ban on feed grade sub- therapeutic antibiotics lead to increased reliance on therapeutic antibiotics important to human health.

Does Local Production Improve Environmental and Health Outcomes. Steven Sexton. Agricultural and Resource Economics Update, Vol 13 No 2 Nov/Dec 2009. University of California.

-local production offers no benefits to sustainability

UPDATES:


Communal Benefits of Transgenic Corn. Bruce E. Tabashnik  Science 8 October 2010:Vol. 330. no. 6001, pp. 189 - 190DOI: 10.1126/science.1196864

 "Bt corn planted near non-Bt corn can provide the unmodified plants with indirect protection from pests"

Areawide Suppression of European Corn Borer with Bt Maize Reaps Savings to Non-Bt Maize Growers. Science 8 October 2010:Vol. 330. no. 6001, pp. 222 - 225 DOI: 10.1126/science.1190242W. D. Hutchison,1,* E. C. Burkness,1 P. D. Mitchell,2 R. D. Moon,1 T. W. Leslie,3 S. J. Fleischer,4 M. Abrahamson,5 K. L. Hamilton,6 K. L. Steffey,7, M. E. Gray,7 R. L. Hellmich,8 L. V. Kaster,9 T. E. Hunt,10 R. J. Wright,11 K. Pecinovsky,12 T. L. Rabaey,13 B. R. Flood,14 E. S. Raun15,

"Cumulative benefits over 14 years are an estimated $3.2 billion for maize growers in Illinois, Minnesota, and Wisconsin, with more than $2.4 billion of this total accruing to non-Bt maize growers."


Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS  June 29, 2010   vol. 107  no. 26  12052-12057

-'industrial agriculture' aka family farms utilizing modern production technology have a mitigating effect on climate change

Clearing the Air: Livestock's Contribution to Climate ChangeMaurice E. Pitesky*, Kimberly R. Stackhouse† and Frank M. MitloehnerAdvances in Agronomy Volume 103, 2009, Pages 1-40

-transportation accounts for at least 26% of total anthropogenic GHG emissions compared to roughly 5.8% for all of agriculture & less than 3% associated with livestock production vs. 18% wrongly attributed to livestock by the FAO report 'Livestock's Long Shadow' Conclusion: intensified 'modern' livestock production is consistent with a long term sustainable production strategy

Large Agriculture Improves Rural Iowa Communities
http://www.soc.iastate.edu/newsletter/sapp.html

-"favorable effect of large-scale agriculture on quality of life in the 99 Iowa communities we studied"

Comparing the Structure, Size, and Performance of Local and Mainstream FoodSupply Chains
Robert P. King, Michael S. Hand, Gigi DiGiacomo,Kate Clancy, Miguel I. Gómez, Shermain D. Hardesty,Larry Lev, and Edward W. McLaughlin
Economic Research Report Number 99 June 2010
http://www.ers.usda.gov/Publications/ERR99/ERR99.pdf

-Study finds that fuel use per cwt for local food production was 2.18 gallons vs. .69 and 1.92 for intermediate and traditional supply chains for beef

The environmental impact of recombinant bovine somatotropin (rbST) use in dairy production Judith L. Capper,* Euridice Castañeda-Gutiérrez,*† Roger A. Cady,‡ and Dale E. Bauman* Proc Natl Acad Sci U S A. 2008 July 15; 105(28): 9668–9673

-rBST supplemented cattle lead to an 8%  reduction in cattle requirements vs a 25 % increase in organic cattle numbers to produce equivalent amounts of milk. For every 1 million cows, the reduction in GWP from rBST supplemented cows is equivalent to removing 400K cars from the roadways or planting 300 million trees

Smyth SJ. The human health benefits from GM crops. Plant Biotechnol J. 2020;18(4):887-888. doi:10.1111/pbi.13261

- Human health benefits, reduced applications, reduced pesticide poisonings in developing countries

Impacts of Biotechnology on Gender Equity:

Social and Economic Effects of Genetically Engineered Crops (National Academies of Science, 2016).

Below are some highlights from this research:

• Women comprise a significant proportion of agricultural related labor in developing countries (~43%)
• Women in developing countries face significant challenges related to access to education, information, credit, inputs, assets, extension services, and land 

The adoption of biotechnology in developing countries has had some mitigating effects:

• In India biotechnology adoption (Bt cotton) resulted in increased work hours and income for women (Subramanian and Qaim, 2010)
• Reduced exposure and freeing women from spraying toxic chemicals and related labor (Bennett et al., 2003; Zambrano et al., 2013; Zambrano et al., 2012; Smale et al., 2012)
• Increased importance of women in decision making within households (Yorobe and Smale, 2012; Zambrano et al., 2013; Rickson et al., 2006

References:

National Academies of Sciences, Engineering, and Medicine; Division on Earth and Life Studies; Board on Agriculture and Natural Resources; Committee on Genetically Engineered Crops: Past Experience and Future Prospects. Genetically Engineered Crops: Experiences and Prospects. Washington (DC): National Academies Press (US); 2016 May 17. 6, Social and Economic Effects of Genetically Engineered Crops. Available from: https://www.ncbi.nlm.nih.gov/books/NBK424536/

Graham Brookes & Peter Barfoot (2017) Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions, GM Crops & Food, 8:2, 117-147, DOI: 10.1080/21645698.2017.1309490

Bennett R, Buthelezi TJ, Ismael Y, Morse S. Bt cotton, pesticides, labour and health: A case study of smallholder farmers in the Makhathini Flats, Republic of South Africa. Outlook on Agriculture. 2003;32:123–128.

Kouser, S., Qaim, M., Impact of Bt cotton on pesticide poisoning in smallholder agriculture: A panel data analysis,Ecol. Econ. (2011), doi:10.1016/j.ecolecon.2011.06.008

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

Rickson ST, Rickson RE, Burch D. Women and sustainable agriculture. In: Bock BB, Shortall S, editors. Rural Gender Relations: Issues and Case Studies. Wallingford, UK: CABI Publishing; 2006. pp. 119–135.

Smale M, Zambrano P, Paz-Ybarnegaray R, Fernández-Montaño W. A case of resistance: Herbicide-tolerant soybeans in Bolivia. AgBioForum. 2012;15:191–205.

Subramanian A, Qaim M. The impact of Bt cotton on poor households in rural India. Journal of Development Studies. 2010;46:295–311

Yorobe JM Jr, Smale M. Impacts of Bt maize on smallholder income in the Phillipines. AgBioForum. 2012;15:152–162

Zambrano P, Smale M, Maldonado JH, Mendoza SL. Unweaving the threads: The experiences of female farmers with biotech cotton in Colombia. AgBioForum. 2012;15:125–137.

Zambrano P, Lobnibe I, Cabanilla DB, Maldonado JH, Falck-Zepeda J. Hiding in the plain sight: Women and GM crop adoption. Paper presented at the 17th ICABR Conference: Innovation and Policy for the Bioeconomy, June 18–21. Ravello, Italy: 2013.

Manufacturing On The Rise

From: http://mobile.boston.com/art/67/bostonglobe/editorial_opinion/oped/articles/2011/02/06/made_in_the_usa/?p=3

"Americans make more "stuff'' than any other nation on earth, and by a wide margin. According to the United Nations' comprehensive database of international economic data, America's manufacturing output in 2009 (expressed in constant 2005 dollars) was $2.15 trillion. That surpassed China's output of $1.48 trillion by nearly 46 percent. China's industries may be booming, but the United States still accounted for 20 percent of the world's manufacturing output in 2009 — only a hair below its 1990 share of 21 percent"

"A vast amount of "stuff'' is still made in the USA, albeit not the inexpensive consumer goods that fill the shelves in Target or Walgreens. American factories make fighter jets and air conditioners, automobiles and pharmaceuticals, industrial lathes and semiconductors. Not the sort of things on your weekly shopping list."

Job Creation & The Knowledge Problem

"  It's hard to object to  feel-good terms like "infrastructure" or "green" initiatives, but in a world of scarcity and choice, some spending is likely to be more beneficial, or at least less wasteful (Can you say Cash for Clunkers?), than another alternative. Do we choose bridges and overpasses instead of a high-speed rail network, restoring government buildings, more day-care centers and homes for senior citizens, or some elected official's pet project to placate his or her political base of support? Or perhaps shore up our human capital infrastructure—education, health—or address environmental concerns?  In a world of finite resources, "Let's do them all" is simply not an option."

From: http://www.chicagolife.net/content/politics/JOBS_JOBS_JOBS

This does a good job describing the 'knowledge problem' plaguing stimulus & job creation. This is not an issue with market prices.  Prices reflect tradeoffs based on the knowledge and specific preferences of millions of individuals, coordinate that information & provide  incentives to act on it. (taking into account the multivariate array of alternatives, interactions, and consequences of each choice or action taken) Planned job creation & stimulus must rely on the relatively minute pool of knowledge at the disposal of a few voters, politicians, experts, or administrators, in the face of adverse incentive structures. 

  This doesn't mean to me that 'stimulus' spending has a zero multiplier. It means that it won't produce results that will allow us to get the most out of our scarce resources. 

Biotech Alfalfa: Who May Harm Who

From Drovers/Cattle Network "Using Property Rights Is A Trick Against Biotech Crops"

"Some politicians wrap themselves in the flag to justify their positions, and then there is Secretary of Agriculture Tom Vilsack appealing to farmers and ranchers' belief in "private property rights" to justify limiting biotech crop production"

Great article with a lot of great points. For the sake of this discussion, lets view biotech contamination of organic crops as 'pollution.' (despite the evidence that the risks are slight)

Traditionally when it comes to environmental pollution, the general philosophy was that 'the polluter pays'. A factory polluting the air or water should pay for the damages that are caused. In a much simpler case, if you build a house next to me and you don't like the smell of livestock waste coming from my property, the traditional philosophy would hold that you could have the government stop my operation. (or in this case, the biotech alfalfa grower pays for genetic contamination of organic alfalfa)

The economist Ronald Coase brought additional insight to this issue. 

1) yes it is true that my operation is harming you via air pollution. (odor)
2) however, in stopping me via government or legal intervention ( or taxing my waste production) you are harming me.

Coase says that the issue is that nonone owns the air that surrounds my livestock operation and your home. There then follows a dispute over how the air should be used- to absorb livestock odor, or to provide a scent free atmosphere in your back yard. Whenever the cost of one's behavior is not factored into a price at which a choice can be valued, I can harm you without compensating you for it. ( i.e. an externality exists)

However, if I own rights to the air, then I can choose to pollute the air. If you own rights to the air, then you can prevent me from polluting it. If noone owns the air, then it is first come first served or winner takes all.

That is not the end of the story though. What Coase emphasizes is that if I own the rights to pollute, you can pay me to limit my pollution i.e. buy those rights from me. I can then use the proceeds to alter my livestock nutrition, genetics, and management to reduce the odor my operation is causing. On the other hand, if you own the rights to pollute I can purchase those rights from you, or invest in technology that will allow me to continue my operation without violating your rights. I will do which ever is most optimal. This can be accomplished without major government regulation, or the arbitrary imposition of a tax.

The assignment of property rights and the potential for bargaining results in behavior that is changed or altered to account for the negative impact our choices have on others. This is the essence of what is known as the 'Coase Theorem"

However, if transaction costs are high, then bargaining may not take place. In that case, Coase emphasizes that any assignmnet of property rights should be based on which party can bear the externality at the lowest cost. Transaction costs can change based on changes in technology, which can also change how we define property rights. (for example, the technology that allows us to monitor CO2 emissions is what makes the concept of cap and trade possible).

How might this apply in the context of biotech alfalfa?  According to the Coase Theorem, it shouldn't matter who is assigned the rights in this case (giving the biotech producer the right to pollute, or giving the organic producer the right to stop neighbors from planting biotech). Both parties could bargain ahead of time to determine the optimal mix of biotech/organic production. Transaction costs should not be any higher than any normal land rental agreement.  Alternatively, one producer or the other could purchase insurance that would pay an indemnity in the event of contamination. (who would have to pay the premiums would depend on who has the right to pollute etc.) However, monitoring and enforcement costs could be high in terms of determining genetic contamination.

Another option would be a regulatory approach, limiting planting options for biotech producers.  This is what the Drovers article is critical of Tom Vilsack for. You could say it is enforcing property rights, but  only in a very arbitrary way, and unnecessary.

The agriculture industry offers some of the greatest examples of how technological advances and market forces lead to self correcting or internalization of externalities.  The adoption of biotechnology has led to reduced groundwater pollution, increased biodiversity, and reduced greenhouse gas emissions. All of which has occured in absence of taxes or government regulations. In the case of biotech alfalfa, a technological advancement that would trump legal or regulatory remedies would be use of 'terminator' gene technology.  Of course, that takes the power and prestige away from regulators, and empowers  property owners and market forces. In any case, what the Coase Theorem tells us is that there is no case for arbitrarily giving organic growers a trump card over those that want to use biotech alfalfa. The principle of polluter pays is not always optimal.

Editorial: The Only Way to Go Green

The only way to truly go green is to efficiently allocate our resources. The economic definition of efficiency is getting the most out of our scarce resources. Sustainability is essentially dynamic efficeincy, getting the most our of our scarce resources over time. Decisions about allocating scarce resources must be based on the best information we have, using the best technology available. Market prices serve this role in information coordination and resource allocation. However, as we see in the editorial below, our ability to sustainably feed the world is often limited by institutional constraints on market forces:

 

From: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=560009&p=2

 

"Warnings of a global food shortage are cropping up in the news. This should not be happening in 2011. But while our technologies have advanced, our politics are still prehistoric....Man cannot control the weather. But famine today is as much man-made as it is a force of nature."

 

"Zimbabwe, for instance, was once considered the breadbasket of Africa. It exported wheat, corn and sugar cane across the continent and beyond. But the country's agriculture industry has been destroyed by a Marxist government that has seized privately owned farms in the name of "land reform."

 

"Friends of the Earth publicly asked governments in the hungry African countries of Ghana and Sierra Leone to recall U.S. food aid that contained genetically modified rice. Zambian President Levy Mwanawasa set the wrong tone in 2002 when he called the food offered to his famished nation "poison" and "intrinsically dangerous."

 

"Given that we have the technology to grow larger crops on smaller parcels and fly fresh food around the world to where it's needed in a matter of hours, the obstructionism is inexcusable. We need policymakers who are as advanced as today's technology."

Huffington Post: How The Federal Reserve Bought The Economics Profession

This is an older article but still interesting: From the Huffington Post

A lot if interesting statements in the article, and I believe they get this correct:
 

"In the field of economics, the chairman remains a much-heralded figure, lauded for reaction to a crisis generated, in the first place, by the Fed itself. Congress is even considering legislation to greatly expand the powers of the Fed to systemically regulate the financial industry."

Not so much this:

"Paul Krugman, in Sunday's New York Times magazine, did his own autopsy of economics, asking "How Did Economists Get It So Wrong?" Krugman concludes that "[e]conomics, as a field, got in trouble because economists were seduced by the vision of a perfect, frictionless market system." So who seduced them? The Fed did it."

I have a hard time believing that the Fed promotes or believes in a frictionless market system. If so, it certainly doesn't practice what it preaches.  Perhaps this belief is conditional on the their mandate for the social planning of money and interest.  But the housing crisis is a demonstration of just how 'frictionless' markets are given these interventions. If anything, what was missed was the consequences and frictions created by departures from market based information coordination and resource allocation.  (Fear the Boom and Bust)

Feeding the 9 Billion: Rational Optimism

From 'The Rational Optimist: How Prosperity Evolves'

"Bad harvests in Russia and Australia, combined with rising oil prices, have begun to cause shortages, export bans and even riots. Does starvation loom?No"


"A few years ago environmentalists argued that fertiliser would soon run short, because it is made using natural gas, a fossil fuel. But the discovery of how to extract abundant shale gas has turned that argument on its head: there are probably many decades' worth of natural gas now available to make fertilizer."


"There are high-tech changes afoot too. Maize and rice that have been genetically modified to resist pests and use less water, soybeans with better amino acid balance for pig food, wheat that can resist rust - all these are coming. Benighted Europe may reject these GM crops for superstitious reasons but surely not for long. The environmental benefits alone are now stark: GM crops can be pest resistant without the use of sprays that kill harmless insect bystanders."

"For all these reasons food production will probably continue to rise faster than population in the decades ahead...so long as trade is free and innovation flourishes, by 2050 it is easily possible that we can feed nine billion people with more and better food from less land."

There Will Be Fuel or Drill Baby Drill?

In a basic principles of economics class, students will learn that as resources become scarce, their prices rise to reflect this scarcity.(absent government intervention and price manipulation). In response to these incentives, efforts are made to find alternatives or to economize on those scarce resources. Often times, technological change augments the process. (as a result of these price incentives, profit signals, and incentivised R&D investments). As a result, the prices of most natural resources over time have either declined or stayed about the same. What we can take from this is that natural resource constraints have not been a limiting factor to sustainable economic growth. These recent articles form the New York Times are a reflection of that finding, as it relates to fossil fuels.

There Will Be Fuel: NYT

"The same high prices that inspired dire fear in the first place helped to resolve them. High oil and gas prices produced a wave of investment and drilling, and technological innovation has unlocked oceans of new resources. Oil and gas from ocean bottoms, the Arctic and shale rock fields are quickly replacing tired fields in places like Mexico, Alaska and the North Sea...."The technology producing these resources has absolutely made the difference," Mr. Odum said. "It's the same with the Arctic, with the shale oil, all over the world. Technology is the key...."When you add it up," Mr. Morse noted, "you get something that very closely approximates energy independence."


Economic Optimism: NYT

"It's true that the real price of oil is slightly higher now than it was in 2005, and it's always possible that oil prices will spike again in the future. But the overall energy situation today looks a lot like a Cornucopian feast, as my colleagues Matt Wald and Cliff Krauss have recently reported. Giant new oil fields have been discovered off the coasts of Africa and Brazil. The new oil sandsprojects in Canada now supply more oil to the United States than Saudi Arabia does. Oil production in the United States increased last year, and the Department of Energy projects further increases over the next two decades.........You can always make news with doomsday predictions, but you can usually make money betting against them. "

The Energy Future Ain't What it Used to Be: NYT

"The price of natural gas and electricity will be low over the next quarter-century, and crude oil will become more expensive but not radically so, the Energy Department predicted on Thursday, in a report that contradicts widely held notions. And even without a national global warming law, American carbon dioxide emissions will not inexorably set new records; they will stay below the rate of 2005 for the next 15 years because of economic forces, the forecast said. "

A Guide to Sustainable Agriculture

Office Sustainability Committee

Below is my attempt to create an animation that depicts a back and forth discussion between two people with two very different perspectives on sustainable food production. I have to compliment xtranormal.com for making this possible. If you can type, you can make movies.

"ose"gate: Five Misperceptions About HFCS

I was having a conversation with someone recently about Sara Lee replacing their High Fructose Corn Syrup ingredient with ‘High Fructose’ table/cane/beet sugar, and they coined the phrase “ose” gate. I thought that summed it up well.

So what is the “ose” gate? It is a combination of misunderstandings/misperceptions/misinformation that are plainly scandalous. 

The Sugar Switcheroo

First it is the ‘sugar switcheroo.' Unfortunately, many people confuse the compound fructose with high fructose corn syrup (HFCS). Even worse, because it is “high fructose” corn syrup, they think that it is a sweetener that is really high in fructose compared to others. The undeniable truth is the fructose levels in HFCS are not that different from table sugar. Its 55%. But sugar is also 50% fructose. So, if fructose is bad, then HFCS and regular sugar are equally bad on the grand scheme of things. It is all in a name. If we are comparing sweeteners based on fructose content, we could just as easily call table sugar “High Fructose” table sugar- or ‘HFTS.’ The scandalous part is that food marketers are catering to this ignorance by advertising that they have removed HFCS from their foods and switched it with sugar. It makes no tangible difference in terms of fructose content or calories, and consumers are being duped by the old ‘switcheroo.’

Big Fat Lies

So, if it makes no tangible difference in fructose content, or calories, then it likely will make no difference on obesity rates. That brings us to the ‘big fat lies’ myth. In the media and on social media folks often like to claim that the massive use of HFCS is leading to obesity, but advocating that we replace it with HFTS (my new acronym). It makes no sense, but anti-agricultural activists and politicians are making hay with it. (1) Besides that, according to USDA data, the most abundant sweeteners in American's diets is not HFCS but HFTS (2) (both are about equal but HFTS as aways had the lead). Simply switching one for the other isn't expected to have any impact on obesity rates (1). The goal should be healthier eating not subbing in and out different types of sugar.

The Subsidy Scape Goat

Then there are the attacks on farm programs, which sometimes comes from both democrats and republicans. Those on the left don’t like the idea of subsidizing politically incorrect (i.e. modern) farming practices (more on this later) and some from the right like to point out unintended consequences of government policies. The misconception is that subsidies lead to more corn production and cheaper HFCS and then cheaper high calorie foods- that lead to obesity. (I’ve already addressed obesity). Research from UC Davis blows this myth out of the water. If we get rid of all corn subsidies the impact on corn production would not be large enough to have a major impact on retail prices or consumption (they estimated the impact on would decrease consumption by at most .2%) (3) Subsidies , which amount to less than ½ of 1% of our federal budget become a scape goat for all of our problems. Absolutely our trade and tariff policies favor HFCS but that is a different matter altogether. 

The Dilemma of the Omnivore's Dilemma

Next, there is the dilemma of the Omnivore’s Dilemma:

“If you eat industrially, you are made of corn. It holds together your McNuggets, it sweetens your soda pop, it fattens your meat, it is everywhere. It is fed to us in many forms, because it is cheap- a dollar buys you 875 calories in soda pop but only 170 in fruit juice. A McDonalds meal was analyzed as almost entirely corn."-Michael Pollan Omnivore's Dilemma (4)

The fact that modern family farmers are able to feed the world in so many different ways and do it cheaply should be acknowledged as a miracle. We are talking about first world problems here in terms of having a safe abundant food supply unprecedented when compared to any other time in history. That doesn't preclude making healthier food choices, but it's certainly not an indictment of HFCS in comparison to any other sweetener. 

Anti-Capitalist Propaganda

Finally, there is the myth that HFCS is the product of industrial agriculture and industrial farms, which are unsustainable and are having a negative impact on our environment. These beliefs have made modern family farming practices politically incorrect, or socially irresponsible in the minds of many consumers and politicians. According to USDA data, 98% of all farms in the U.S. are family farms and they account for 85% of all production.(5) Large family farms are more diversified (5) and benefit the community according to recent research at Iowa State(6). In terms of sustainability, the technology used on modern family farms has led to drastic reductions in greenhouse gases, decreased soil erosion, decreased groundwater pollution, improved water use efficiency, and has increased wildlife diversity and food safety. (7). Ultimately the attacks on HFCS are leveled at capitalism, technological advancement, and market innovations that allow us to provide the safest most sustainable food in the history of the world.  Policy proposals suggested to curb HFCS consumption could only make a central planner's dream come true including: 

a) reducing the hours retailers are open

b) controlling the location of retail markets

c) tightening the licensing requirements on vending machines in schools and workplaces

d) designating an age limit on who can buy the fructose

e) doubling of the price through taxation.

So, there you have it -  5 ‘sweet’ scams  or misperceptions that define what I am calling"ose"gate:

1) The Sugar Switcheroo 
2) Big Fat Lies 
3) The Subsidy Scape Goat 
4) The Dilemma of the Omnivore’s Dilemma
5) Anti-Capitalist Propaganda

References:

1 Adolescent beverage habits and changes in weight over time: findings from Project EAT1,2,3Am J Clin Nutr (October 28, 2009). doi:10.3945/ajcn.2009.27573
Nutrition July-August 2007, Volume 23, Issues 7-8, Pages 557-563 "Is sugar-sweetened beverage consumption associated with increased fatness in children?"
2 http://www.ers.usda.gov/Briefing/Sugar/data/table49.xls
3 Farm Subsidies and Obesity in the United States
Julian M. Alston, Daniel A. Sumner, and Stephen A. Vosti
Agricultural Resource Economics Update
V. 11 no. Nov/Dec 007
U.C. Davis
4 http://www.treehugger.com/files/2007/01/food_fight_is_c.php
5 Structure and Finances of U.S. Farms: Family Farm Report, 2007 Edition / EIB-24 Economic Research Service/USDA
6 Large Agriculture Improves Rural Iowa Communities
http://www.soc.iastate.edu/newsletter/sapp.html
7 Matt Bogard. "Sustainable Agriculture Bibliography" 2010 Available at: http://works.bepress.com/matt_bogard/6