But then it occurred to me that since Americans seem to think in terms of cost per month, maybe we could use this to encourage responsible government. When we have fully electronic voting, we can integrate some simple caclulators. Before voting, everyone inputs their income and how many deductions they have, and then it takes them to a ballot and they get to vote:

• Prescription drug benefit. Your cost: only $14.99 per month.
• War in Iraq. Your cost: only 49.73 per month
• Safe drinking water. Your cost: only $0.76 per month
• Corn subsidies. Your cost: only $2.23 per month. But wait! Rebate at the checkout on your food and fuel: $0.23 per month!

Congress and lately the courts have struck down a presidential line-item veto and perhaps rightly so. Perhaps with improved voting technology, however, we could create a line-item veto for the citizenry. The key would be to have all of the items tallied at the bottom. You want to help out those poor Iraqis and all those family farmers Archer Daniels Midlands, then go ahead and vote yes on all measures. Your cost: only $1543.29 per month!

At least 43 percent of ADM’s annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM’s corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30″ [2].

Subsidizing ethanol production was not only bad economic policy, until relatively recently ethanol production from corn was a net energy loser. In 1991, the Department of Energy estimated that it took 85,000 to 91,000 worth of BTUs in gasoline to produce a single gallon of ethanol, which contains the energy equivalent of 76,000 BTUs [2]. A 1994 report by the Congressional Research Service found that corn subsidies were not justified in terms of economics, tax policy, alternative fuel production or other environmental issues [2]. Production methods have improved in the last decade and many now peg the “return ratio” at 1.3 BTUs produced for each BTU burned, but some analysts believe that in actual practice, if all inputs in terms of diesel fuel for tractors, petroleum for fertilizer and pesticide, energy to fuel irrigation pumps and other inputs are included, that it is still a net energy loser (but that’s up for debate).

But let’s assume that there is a net gain. Shouldn’t we just start turning corn into ethanol and quit burning petroleum from the Mideast? In short, no. In 2002, the United States plants about 80 million acres of corn. Meeting one days’ oil requirement for the US requires about 2.8 million acres of corn, not counting the fuel lost in producing the ethanol. This means that if we quit eating corn, and it took no oil energy to actually produce ethanol and we turned it all over to fuel needs, we produce 28 days of fuel for the country [3, 6]. Make no mistake, ADM is doing us no favors by turning our corn into ethanol.

There are better alternatives to corn as a source of ethanol, such as Bush’s beloved switch grass (though the technology for that is a ways off) and willow trees harvvested on a three-year cycle. Making ethanol from willow is relatively complex but pilot plants are online and commercial plants are in the works in upstate New York where governor Pataki is putting up alternative energy money that actually might make sense [3, 4, 5]. One study found that 125 miles square of willow could provide the electricity output of 10 Candu nuclear reactors and all the petroleum needs for Canada. For that matter, better methods that would use agricultural residue such as corn stalks would also be a huge improvement, but we won’t see that for a while.

For the time being, though, ethanol production is primarily in the hands of ADM, which you might remember as the Enron of the 1990s – a huge and corrupt lobbyist. The oil companies have not, in recent history, been convicted of price fixing, but ADM paid the largest anti-trust fine ever because of its price fixing schemes in the 1990s. So we are turning our energy policy back to an Enron-like corporation. In addition, corn production requires relatively high quantities of water, which is running out in the West (see Marc Reisner, Cadillac Desert), and our fuel and food security are increasingly bound together and we are entrusting that to one of the least trustworthy corporations in America.

Over on the biodiesel side, there is no 500-pound gorilla skewing policy like ADM and corn-state senators do for ethanol, but the fact is there just isn’t anywhere close to enough soy and canola (and by the way, one of the major movers in the soy market is… ADM). The best option appears to be high-yield algae, which would only require 9.5 million acres to meet all current transportation needs. In other words, instead of 80 million acres to meet a few days of energy needs, with only 11% of that land, we could potentially produce enough to meet our current needs in transportation [7]. Meanwhile, there is very little government subsidy for algae production. It is, of course, merely coincidence that there is not major Big Algae Lobby.

What’s to do? Obviously, write to your representatives and senators and ask them to do something serious to protect America’s energy future, our water future and our economic future by abandoning subsidies to unsustainable and pork-barrel alternative energy programs.

Sources

1. Common Cause Urges and End to Corporate Welfare
2. Archer Daniels Midland: A Case Study In Corporate Welfare, by James Bovard of the Cato Institute.
3. Ethanol and sustainable development
4. Willows can be harvested in 3 years Wanted: Willow farmers Upstate, Tim Knauss, Syracuse Post Standard, June 9, 2006
5. GOVERNOR: CELLULOSIC ETHANOL HAS GREAT POTENTIAL IN NEW YORK STATE, May 8, 2006
6. World of Corn Production
7. Archer Daniel Midland: Price Fixer To The World, John Connor, April 1997.
8. Widescale Biodiesel Production from Algae

See also

• Assessing the Biofuels Option
• ETHANOL’S POTENTIAL: Looking Beyond Corn
• Biodiesel

The indirect subsidies are perhaps the most egregious. The most clear example is the fortune that the US government has spent and continues to spend to build dams and draw down aquifers to supply water to farmers who are growing the same crops that farmers get paid not to grow in other regions (this may have changed somewhat in actual execution since 1996, but fundamentally this practice still exists). These are some of our biggest public works projects and most make no sense economically and are environmentally disastrous, resulting in runoff that is actually toxic to crops downstream. Anyone who is not outraged about the damage these subsidies are doing to the environment and to everyone’s pocketbooks except a few lucky folks who benefit should read Mark Reisner’s classic Cadillac Desert: The American West and Its Disappearing Water.

Other indirect subsidies include efforts by corn-state senators to push requirements that Americans put ethanol in their gas tanks. This is pure pork barrel sold under the guise of decreasing dependence on foreign oil (and sometimes air quality issues). The truth is, for most of the history of these subsidies, the process was so inefficient that ethanol was not a break-even technology. In other words, it took more than one BTU of petroleum inputs to make one BTU worth of ethanol. The process has gotten more efficient, but some leading experts still assert that it is a net-loss process. If you count up all the petroleum inputs including pesticides, fertilizers, diesel to run tractors and ship the corn to distilleries and ethanol to market and so forth, it still takes more BTUs of petroleum than we get back out in BTUs of ethanol. Meanwhile, the ethanol is more expensive and takes money out of the pockets of US consumers. Why? Because corn-state senators want to foist this on all of us to prop up the corn and ethanol industries in their states.

Direct subsidies were, of course, eliminated by the Freedom to Farm Act of 1996. Well, of course NOT! That act actually replaced subsidies based on production with fixed amounts based on past subsidies, grandfathering in most recipients with the result that they now get paid whether they produce or not. By the year 2000, direct subsidies to farmers had tripled over 1996 levels to $22 billion. They are projected to reach $190 billion by 2012 [1].

What does this have to do with health? According to Barry Popkin, a professor of nutrition at the Carolina Population Center of the University of North Carolina at Chapel Hill, “We put maybe one-tenth of one percent of our dollar that we put into subsidizing and promoting foods through the Department of Agriculture into fruits and vegetables” [1]. And here we get back to my friend who can’t afford apples. The government heavily subsidizes corn and soybeans. Good healthy foods in themselves, but of course Americans don’t eat much corn and soy in their natural forms. They consume this mostly through high-fructose corn syrup (HFCS) in Coke, Mountain Dew and other junk food, and in high-fat tortilla chips. Recent studies have linked HFCS consumption to obesity, which of course is linked to diabetes, which has an enormous impact on our health care system. So in short, we pay double – once to sell cheap HFCS and once to fix up the diabetics after the fact. Europeans, by the way, aren’t much better, it’s just that they subsidize beet sugar to prop up their farmers[1].

With soy, since tofu is not exactly a nightly food on most dinner tables, most typical Americans eat it in the form of hydrogenated oils, a particularly unhealthy form of saturated fat[1]. Furthermore, what humans don’t eat goes to make cheap pork and beef. Not that beef is bad for you per se, but Americans eat too much meat and sugar, but not enough vegetables. Government subsidies encourage these unhealthy choices when they should be encouraging the opposite or at the very least encouraging nothing at all. In other words, agricultural subsidies might not be bad if we subsidized the right things, but we don’t. We subsidize precisely the unhealthy foods that are overly prevalent in the American diet. Even if you are a healthy eater, why should you pay the bill for this?

I don’t know what regular people like us can do except that old standby: contact your legislators (January 3, 2006, by the way, is National Write to Congress Day).

• Write to your sentaor
• Write to your representative

1. “The Fat of the Land: Do Agricultural Subsidies Foster Poor Health?”, Environmental Health Perspectives, Volume 112, Number 14, October 2004.