A rightist calls for repeal, a leftist looks back on land reform
Wow, did ethanol subsidies ever backfire; will GMOs, too?
Are GMOs a horn of plenty? Another heavy-handed idea, ethanol, is a disaster, pushing up land rent in the States and food prices abroad. We trim, blend, and append four 2008 articles: (1) Montville: Ordinance vote puts spotlight on small town by Tux Turkel, Morning Sentinel, April13; (2) Farm costs eat profits for struggling Michigan farmers by Jennifer Youssef of The Detroit News, April 26; (3) The Corner re: ethanol by Iain Murray, author of A Really Inconvenient Truth, at National Review Online, April 26; and (4) The Hidden Battle to Control the World’s Food Supply by Amy Goodman, Democracy Now!, on AlterNet April 19. Her interviewee, Raj Patel has worked for the World Bank, the World Trade Organization, the United Nations, and has just come out with Stuffed and Starved. Turkel: At their annual town meeting, voters in Montville Maine passed a binding ordinance banning the cultivation of genetically engineered crops. The town of 1,000 residents, which has no school, no store, not even a post office, is the first American community outside California to do this.
Genetically modified organisms, or GMOs, refer to plants, animals or microorganisms that are transformed by genetic engineering to make it more resistant to drought or disease, and thereby, if all goes well, increase harvests and avoid famines. But genetic engineering — like DDT, thalidimide, leaded gasoline, and nuclear power in the past — may have unintended, harmful consequences to people, animals, and plants.
JJS: A more basic reform than banning the controversial is to transform limited liability. Presently, anyone who puts worker, consumer, or nature at risk gets the same exoneration as someone who does not impose risk. Instead of charging a mere filing fee for corporate charters, we could charge according to the amount of risk imposed. That would help shift the burden of proof from victim to perpetrator; you wouldn’t have to prove you’ve been sickened, the corporation would have to prove that their alterations of nature for profit are safe.
Meanwhile, GMOs have not yet swollen harvests enough to replace the crops displaced by ethanol subsidies, another questionable idea.
Youssef: In 2005, wheat fetched $2.50 a bushel; in 2008, $4. This year, a large portion of Michigan’s 2008 corn crop already has been sold at prices in the $3-to-$4-a-bushel range, nowhere near the $6 to $13 it’s going for now. The growing use of corn-based ethanol for fuel spurs farmers to divert more of their land to corn. That has reduced the supply of other crops, pushing the prices of corn, soybeans, wheat, rice, and other crops to record highs.
* The price of nitrogen fertilizer is about $880 per ton, compared to $375 per ton just two years ago.
* Fuel has gone from $1.35 two years ago, to $2.50 last year to $3.70.
* Repair costs for farm equipment have risen 50% to 70% due to higher steel costs.
* Landlords have raised land rent for tenant farmers.
The greater income is in many cases turning out to be just enough to cover skyrocketing overhead. Farmers are just handling more money.
Murray: There are several factors that have led to the absurdity of us sacrificing food for fuel, and agribusiness rent-seeking is certainly one of them. Environmentalists made it inevitable that corn ethanol would be the first answer picked by politicians. Our national security friends helped them, ignoring the free marketeers’ complaints that increasing hunger was not exactly a stabilizing policy. Let’s do find ways of reducing energy prices, and gas tax holidays probably arent the best ways to do that. But far more important would be to repeal the ethanol mandate.
JJS: On the spending side, lets do end subsidies to the well-connected and instead pay citizens a dividend from recovered natural rents, which would go much further in countrysides where the cost of living is much lower. On the collecting side, if were to tax, lets make sure that taxes dont burden useful effort but instead recover the socially generated values of sites, resources, ecosystems, and EM spectrum. A half century ago in Latin America, a democratic leader tried to take a step in that direction.
Patel: Imagine an hourglass; at the top are millions of farmers who grow food, at the bottom are billions of consumers, and in the middle are a handful of corporations — it’s usually four corporations controlling more than 50% of the market. In tea, for example, one company, Unilever, controls 90% of the market. In that position, you’re able to drive prices down for farmers. Already, farmers and farm workers are the poorest people on the planet.
Then you’re processing the food so that what we end up with is rich in salts, fats, and sugars, tends to make us want to buy more, and makes us obese. In the past, it used to be that the people who were overweight were rich and the people who were hungry were poor. Today, hunger and obesity are both signs that people are unable to control their diets.
In Guatemala, a democratically elected president wanted to institute a basic fair system of taxation; Jacobo Guzman Arbenz wanted to tax the land at a fair market value. Rather than allow that, the United Fruit Company called its friends in the CIA, who instigated a coup. As a result, there was a bloody civil war for forty years; 200,000 people died.
JJS: Large landowners who kill poor peasants in Brazil, Africa, India, and elsewhere, operate from the same assumptions as do even well-meaning homeowners who intend to sell out the family home or homestead for a fat profit. When progressive landowners oppose or fail to support the land tax, they give tacit approval and reinforce the same mindset of selfish claims on land that ultimately lead to murder. The just way to get money from land is not to sell or lease but to share a region’s natural values with a region’s residents.
More voices must make clear that land is a common heritage and her value is for us to share. Once we live by that understanding, then smaller organic farmers can compete with others and grow healthy food for empowered consumers. The former poor, empowered in part by receiving their fair share of natural rents, could afford to eat well.
Jeffery J. Smith runs the Forum on Geonomics.
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