Rethink agricultural subsidiesST. PAUL — Imagine standing at the gas pump. Which fuel do you choose? The cheaper options contain ethanol. Without thinking twice, you choose an ethanol blend; you might even see it as the environmentally mindful option.
By: Wouter Hammink, Agweek
ST. PAUL — Imagine standing at the gas pump. Which fuel do you choose? The cheaper options contain ethanol. Without thinking twice, you choose an ethanol blend; you might even see it as the environmentally mindful option.
Now imagine yourself standing in the dairy aisle at your local grocery store. The cost of a gallon of milk never has been so high. Though seemingly unrelated, the decisions you make at the pump directly affect the prices printed on your receipt at the grocery store. The influence of government-supported subsidies has altered the agricultural market in favor of risky industries and factory farms. This needs to be changed.
Growing up on a dairy farm, the impact of agricultural subsidies has always been a part of my life, whether I knew it or not. Ethanol subsidization was merely an afterthought when I was a child. However, since getting my driver’s license at 14, I began making the conscious decision to keep ethanol out of my gas tank.
The increasing presence of ethanol at the pump has drastically increased the demand and cost of corn. When the cost of feeding cows, pigs and other animals increases, the impact is offset to the producers and consumers of not only beef and pork, but also meat byproducts such as eggs, milk and cheese.
The ethanol industry was created and developed through a system of subsidies encouraging increased corn production.
Though ethanol production increased because of the government subsidies, the biofuel never has been proven to be any better for the environment in the long term than petroleum. In fact, compared with unblended gasoline, corn ethanol has been shown to have no positive benefits to the environment. Regardless, ethanol clearly has major effects on the price of a bushel of corn, as the ethanol industry in the United States requires more corn than the food industry. The prevalence of ethanol (both by market forces and by subsidies) can be directly attributed to about half of the increase in corn prices in 2009.
Views of ethanol are evolving, however. The ethanol industry is no longer subsidy-dependent, and the belief that corn ethanol is an environmentally friendly fuel is diminishing. Because of ethanol’s stability in the market and changing public opinion, Congress opted not to extend the subsidies given to corn ethanol producers in 2011. This is great news for Minnesota’s farmers, and opens the door for a radically different farm bill in 2012.
Competition in production
The success of my family’s farm, as well as Minnesota’s family farms, is hurt by government subsidies that favor corporate factory farms. Even in the face of increased competition from factory farms, international producers and nonfood agricultural production, Minnesota’s family farms are depicted as wealthy subsidy earners. This increased competition from large agribusinesses hurts Minnesota’s family farms more than it helps for two reasons: First, subsidies are more likely to help corporate or factory farms. Second, subsidies’ benefits are not reflected in grocery costs or even at the gas pump. Because of this, farm subsidies actually accomplish the opposite of what they intend.
Farm subsidies are intended to help both the consumer and farmer. Instead, America’s current agricultural subsidy system gives unfair advantages to commercial farms and agribusinesses and costs taxpayers more than $12 billion annually. Minnesota’s family farmers and concerned consumers require a new farm bill that eliminates the unfair subsidies costing both the farmer and the taxpayer.
The expiration of ethanol subsidies marks an opportunity for a larger subsidy reformation. The Food, Conservation, and Energy Act of 2008, more commonly known as the farm bill, expires in September. Congress has the chance to drastically alter the American agricultural system. The 2012 farm bill should reconsider its corn and feed subsidies, as well as eliminate the current preference for commercial factory farming. Minnesota’s farmers would benefit from a fairer and less regulated agricultural market. Consumers, meaning Minnesota’s taxpayers, would save billions not only in taxes, but also in grocery receipts.
Editor’s Note: Hammink is a student at Macalester College in St. Paul. This column originally appeared in the Worthington (Minn.) Daily Globe and on Minnesota 2020’s website, www.mn2020.org.