Category Archives: Economy

Pesticides more valuable than “any associated detriments”?

Pesticide use is not just bad, it’s getting rapidly worse, according to Carey Gillam writing in Scientific American:
The rapid adoption by U.S. farmers of genetically engineered corn, soybeans and cotton has promoted increased use of pesticides, an epidemic of herbicide-resistant weeds and more chemical residues in foods, according to a report issued Tuesday by health and environmental protection groups.

The groups said research showed that herbicide use grew by 383 million pounds from 1996 to 2008, with 46 percent of the total increase occurring in 2007 and 2008.

The report was released by nonprofits The Organic Center (TOC), the Union for Concerned Scientists (UCS) and the Center for Food Safety (CFS).

What’s the cause of this increased pesticide use?
The rise in herbicide use comes as U.S. farmers increasingly adopt corn, soy and cotton that have been engineered with traits that allow them to tolerate dousings of weed killer. The most popular of these are known as “Roundup Ready” for their ability to sustain treatments with Roundup herbicide and are developed and marketed by world seed industry leader Monsanto Co.

Monsanto rolled out the first biotech crop, Roundup Ready soybeans, in 1996.

Monsanto officials declined to comment on the report. But the Biotechnology Industry Organization, of which Monsanto is a member, said the popularity of herbicide-resistant crops showed their value outweighs any associated detriments.

Any associated detriments? Dead and mutated wildlife? Poisoned drinking water? Pesticides in school children? Cancer and asthma? Well, I suppose those are all economic externalities of no interest to the producers of these seeds and pesticides.

Ohio v. Big Ag: Issue 2

The Humane Society of the United States wants you to know:
Six Reasons to Vote NO on Ohio’s Issue 2

1. Issue 2 seeks to stop animal welfare improvements. Agribusiness interests are trying to change the Ohio constitution so they can continue cruel and inhumane practices on factory farms—confining animals in tiny cages and crates so small they can’t even turn around. Issue 2 proposes an industry-dominated power grab to protect the status quo: hens crammed into cages so tightly they can’t even spread their wings, breeding pigs confined in tiny barren crates and calves chained by their necks inside veal crates. We wouldn’t force our pets to live in filthy, cramped cages for their whole lives, and we shouldn’t force farm animals to either. All animals, including those raised for food, deserve humane treatment.

2. Issue 2 threatens our food safety and health. Factory farmers have put our health at risk by recklessly telling us that it’s okay to keep animals in overcrowded, inhumane conditions. Cramming tens of thousands of animals into tiny cages fosters the spread of animal diseases that may affect people. For example, the American Journal of Epidemiology reported that people who eat eggs from hens confined in cages are 250% more likely to contract Salmonella. The extreme confinement of animals is also a major factor in the emergence of diseases like H5N1 and H1N1 (bird and swine flu). Passing Issue 2 would be bad for animals—and bad for us.

The other four reasons are good, too.

Ah, capitalism run amuck! Big agribusiness is trying to take over an entire state by getting its citizens to legalize the worst aspects of factory farming. I don’t live in Ohio, but if this referendum succeeds there, it will show up in other states.

Drug War Backfires on Roundup

Boliviana Negra What happens when the U.S. pays the Bolivian government to spray Roundup on coca crops as part of the “War on Drugs”?
The effort has lead to coca growers cutting down national forests — where such spraying is often against the law — to produce their illicit crops. But Mother Nature may be rebelling against drug policy as well. coca plants appear to be either evolving on their own (or with the help of coca farmers’ active selection) — or they are possibly crossing with Roundup Ready crops already on the ground — to produce a glyphosate-resistant crop known as Boliviana negra.
This doesn’t make the Bolivian government or people happy, nor the U.S. government, but:
…drug growers who do have the new strain certainly don’t want the status quo to end, because currently the U.S. government is doing their weeding for free.
What to do?
When you put together the studies referenced above, which show that spraying glyphosate is harmful to humans and the environment and that it does not hamper the production of coca or weeds, the answer to almost everyone’s problems is eliminating Monsanto.
To the drug Roundup: just say no.

“We couldn’t do agriculture in Argentina”

Jude Webber and Hal Weitzman reported in The Financial Times on Argentina pressed to ban crop chemical:
A group of environmental lawyers has petitioned the Supreme Court to impose a six-month ban on the sale and use of glyphosate, which is the basis for many herbicides, including the US agribusiness giant Monsanto’s Roundup product.

A ban, if approved, would mean “we couldn’t do agriculture in Argentina”, said Guillermo Cal, executive director of CASAFE, Argentina’s association of fertiliser companies.

My, that’s rather apocalyptic!

And financially even worse:

Any ban on the use of glyphosate could have dire fiscal consequences: the already cash-strapped Argentine government relies heavily on tariffs levied on agricultural exports. It is expected to rake in some $5bn this year, although that is about half the previous year’s level after a longrunning conflict with farmers, a bitter drought and lower prices have slashed production of the country’s main cash crop, soya.
Or is it?
Mr Carrasco acknowledged there were “too many economic interests at stake” to ban glyphosate outright. But, he said, officials could start ring-fencing the problem by enforcing effective controls where crops are sprayed.
That would be a start. Working on other methods of weed and insect control would be even better.

The Financial Times does mention that there are Argentine studies that support Dr. Carrasco’s as-yet-unpublished study:

Research by other Argentine scientists and evidence from local campaigners has indicated a high incidence of birth defects and cancers in people living near crop-spraying areas. One study conducted by a doctor, Rodolfo Páramo, in the northern farming province of Santa Fé reported 12 malformations per 250 births, well above the normal rate.
Yet the Financial Times did not mention the numerous scientific studies in other countries that show similar results.

Monsanto is worldwide, after all.

Enlisting the Health Industry Against Big Food

Michale Pollan points out that if we actually get health care reform that removes terms like “recission” and “pre-existing condition” from health insurers’ playbook so that they can’t exclude artificially unhealthy people from their insurance pool, something else will change:
The moment these new rules take effect, health insurance companies will promptly discover they have a powerful interest in reducing rates of obesity and chronic diseases linked to diet. A patient with Type 2 diabetes incurs additional health care costs of more than $6,600 a year; over a lifetime, that can come to more than $400,000. Insurers will quickly figure out that every case of Type 2 diabetes they can prevent adds $400,000 to their bottom line. Suddenly, every can of soda or Happy Meal or chicken nugget on a school lunch menu will look like a threat to future profits.

When health insurers can no longer evade much of the cost of treating the collateral damage of the American diet, the movement to reform the food system — everything from farm policy to food marketing and school lunches — will acquire a powerful and wealthy ally, something it hasn’t really ever had before.

AGRIBUSINESS dominates the agriculture committees of Congress, and has swatted away most efforts at reform. But what happens when the health insurance industry realizes that our system of farm subsidies makes junk food cheap, and fresh produce dear, and thus contributes to obesity and Type 2 diabetes? It will promptly get involved in the fight over the farm bill — which is to say, the industry will begin buying seats on those agriculture committees and demanding that the next bill be written with the interests of the public health more firmly in mind.

In the same way much of the health insurance industry threw its weight behind the campaign against smoking, we can expect it to support, and perhaps even help pay for, public education efforts like New York City’s bold new ad campaign against drinking soda.

High fructose corn syrup treated like nicotine: it could happen.

Monsanto Seed Prices: Up 43%

monsanto_hughgrant.jpg
Monsanto CEO Hugh Grant
Bloomberg news reports:
By Jack Kaskey

Aug. 13 (Bloomberg) — Monsanto Co., the world’s largest seed maker, plans to charge as much as 42 percent more for new genetically modified seeds next year than older offerings because they increase farmers’ output.

Roundup Ready 2 Yield soybeans will cost farmers an average of $74 an acre in 2010, and original Roundup Ready soybeans will cost $52 an acre, St. Louis-based Monsanto said today in presentations on its Web site. SmartStax corn seeds, developed with Dow Chemical Co., will cost $130 an acre, 17 percent more than the YieldGard triple-stack seeds they will replace.

That’s quite a price hike! Why are they doing this?
The new seed boosts yields 5 percent to 10 percent compared with other products, partly by reducing the amount of land that must be planted with conventional corn to 5 percent from 20 percent, Monsanto said.

“They are in essence splitting the value of the extra yield 50-50,” Gulley said by telephone.

It will be interesting to see if farmers really do get such improved yields. If not, there’s a simpler possible reason for the price hike: now that Monsanto has gotten pretty near every farmer locked in to using its seed, it’s exercising its monopoly power and raising prices to increase its profit.

Meanwhile, is Monsanto splitting the costs of all the dead birds, frogs, house pets, and ill humans caused by their chemicals? Or the costs of the epidemic of obesity caused by the high fructose corn syrup that their corn is used for? Ah, no. Those would be what Bloomberg would call economic externalites, which is to say other peoples’ problems. Monsanto gets the profits; the rest of us get the problems.

Hm, maybe somebody should investigate.

-jsq

U.S. vs. Monsanto?

On August 7th, deputy assistant attorney general, antitrust division, Philip Weiser gave a speech in St. Louis, the hometown of Monsanto:
Over the last twenty years, changes in technology and the marketplace have revolutionized agriculture markets, producing some substantial efficiencies as well as concerns about concentration. Notably, farmers today increasingly turn to patented biotechnology that is used to produce seeds resistant to herbicides and insects, producing larger crop yields than ever before. At the same time, this technological revolution and accompanying market developments have facilitated the emergence of large firms that produce these products, along with challenges for new firms to enter this market.

The Antitrust Division recently evaluated a series of mergers in the agriculture industry, obtaining relief to remedy identified anticompetitive concerns. In the market for cottonseeds, for example, the Antitrust Division required Monsanto and Delta & Pine Land to divest a significant seed company, multiple cottonseed lines, and other valuable assets before allowing them to proceed with their merger. Also, because DPL had had a license allowing it to “stack” a rival’s trait with a Monsanto trait, Monsanto was also required to amend certain terms in its current trait license agreements with other cottonseed companies to allow them, without penalty, to stack non-Monsanto traits with Monsanto traits. As a result, producers of genetically modified traits gained greater ability to work with these seed companies.(11) Going forward, the Division will continue to examine developments in the seed industry.

…For many farmers and consumer advocates, we understand that there are concerns regarding the levels of concentration in the seed industry — particularly for corn and soybeans. In studying this market, we will evaluate the emerging industry structure, explore whether new entrants are able to introduce innovations, and examine any practices that potentially threaten competition.

It’s easy to read that as a warning to Monsanto that DoJ has ruled before and may again. We’ll see if it’s all talk or if any action follows.

Monsanto Farm Bill: HR 2749

Here’s something that’s widely opposed by both the right and the left: the so-called “Food Safety Enhancement Act of 2009”. And for many of the same reasons, including:
  • HR 2749 would impose an annual registration fee of $500 on any “facility” that holds, processes, or manufactures food. Although “farms” are exempt, the agency has defined “farm” narrowly. And people making foods such as lacto-fermented vegetables, cheeses, or breads would be required to register and pay the fee, which could drive beginning and small producers out of business during difficult economic times.
  • empowers the Dept. of Health and Human Services to micro-manage the raising and harvesting of crops (you might have assumed that Congress would’ve handed the U.S. Dept of Agriculture this terrible power.)

Here’s how your representatives voted when this thing passed the House. The vote didn’t break down neatly by party lines. However, if you look at the cartogram, it looks like city Representatives tended to vote for it, while rural ones tended to vote against. Maybe some rural reps realized that this bill isn’t about safety: it’s about Monsanto and big argribusiness driving small farmers out of business. There’s still time to stop it in the Senate, or when it comes back to the House after being reconciled with whatever the Senate passes.

Cronkite on War on Drugs

Walter Cronkite died today. I’ll remember him by what he fought for:
It surely hasn’t made our streets safer. Instead, we have locked up literally millions of people…disproportionately people of color…who have caused little or no harm to others – wasting resources that could be used for counter-terrorism, reducing violent crime, or catching white-collar criminals.

With police wielding unprecedented powers to invade privacy, tap phones and conduct searches seemingly at random, our civil liberties are in a very precarious condition.

Hundreds of billions of dollars have been spent on this effort – with no one held accountable for its failure.

Amid the clichés of the drug war, our country has lost sight of the scientific facts. Amid the frantic rhetoric of our leaders, we’ve become blind to reality: The war on drugs, as it is currently fought, is too expensive, and too inhumane.

But nothing will change until someone has the courage to stand up and say what so many politicians privately know: The war on drugs has failed.

Modeling Innovation

Much current discussion of the ACES climate bill that passed the House is about whether it will really cost one postage stamp per person per day, or maybe two stamps. This is like arguing what microcomputers will be used for in 1980. I fondly recall a prediction that “We’ll never sell millions of them unless there’s one in every doorknob!” Well, look at your average hotel today: there’s one in every doorknob.

maintech_usa.png David Roberts posts on grist.org about Why we overestimate the costs of climate change legislation, 12:09 AM on 29 Jun 2009:

As for modeling innovation, that’s always been the Achilles heel of economic forecasting. In this piece, Eban Goodstein and Hart Hodges trace a history of cost overestimations around environmental regulation. Again and again, models have underestimated the pace of business and technological innovation.

Today’s modelers surely do all they can to incorporate innovation. (As Brad notes, the CBO tries.) But there are constraints to how precisely this can be done. In 1980, McKinsey reported to AT&T that mobile subscriptions would rise to 0.9 million by 2000. The real number turned out to be … 109 million. (This factoid is among many interesting tidbits in this presentation from Vinod Khosla.)

Vinod Khosla was one of the founders of Sun Microsystems, the company that mainstreamed computer workstations, has long been a venture capitalist, and has been investing successfully in renewable energy for years.

The little red square in the Nevada desert is all the area it would take to power the U.S. with solar panels. And that’s before further efficiency improvements. No reason it all has to be in Nevada, of course: Georgia has a lot of sun. Distributed is better than centralized.