Corn Subsidies (and why they are a failure)

Here's the letter I sent to Sen. Amy Klobuchar

Dear Amy,

I understand that the people of Minnesota have an interest in corn production and specifically the continuance of corn subsidies. However, sometimes good government demands not simply representing local people's current interests but broader, informed interest.

Three reasons why corn subsidies are indefensible:

1. Directly inflate food prices for poorer countries
2. Make possible the continuance of an artificial market (feed corn) that has unforeseen effects
a. Inflates price of corn further
b. Increases the use of fossil fuels for fertilizer
c. Increases amount of avoidable animal suffering caused from unhealthy diet.
3. Ethanol does not actually create more energy

1. As I'm sure you know, subsidizing the price of corn has an effect on the global price for corn -- thus artificially inflating the price of corn for people in developing countries it: “A World Bank study has estimated that corn prices "rose by over 60 percent from 2005-07, largely because of the U.S. ethanol program" combined with market forces.” (http://www.foxnews.com/story/0,2933,353380,00.html)

2. Overlooked as a factor for the gigantic hike in price in the above article, is the fact that only at the artificially low price of corn that it can be used as a source of food for livestock. Steer are fed enormous amounts of this cheap corn instead of their natural diet of grass (this happens to be unhealthy for the steer and requires farmers to use many antibiotics because of the frequent illnesses that result and, despite the antibiotics, often leads to avoidable illnesses). Not only does the artificially created demand for animal feed drive the price of corn up further, it also creates a new demand for fossil fuels—Peter Singer’s book “The Way We Eat” estimates that it take a whopping 184 gallons of oil per steer to fertilize the corn that a cow eats before reaching slaughter weight (p. 63 - http://www.amazon.com/gp/reader/157954889X/ref=sib_dp_pop_sup?ie=UTF8&p=random#). Subsidizing ethanol production as a means to energy independence, then, has the unforeseen effect of creating a new market (feed corn) that demands the use of extra fossil fuels!

The worst part about all of this though is that
3. Ethanol has not been shown to create new energy:
---"David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent report that estimates that making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains." (http://www.slate.com/id/2122961/)

The concerns with removing the corn subsidy? Obviously, it will affect both small farmers and factory farmers negatively since they have been enjoying artificially high prices for their crops. Secondly, it will make our meat more expensive since the time it takes to raise a steer to slaughter weight will increase by some months. It’s not that these concerns are trivial, but just that they pale in comparison to the negative effects that occur in the world beyond the farmers of Minnesota because of the subsidy.

Narrowly-interested government that is popular is not equal to good government. Even though it would be a very unpopular move for you to oppose a corn subsidy since you are from Minnesota, your opposition would actually give the movement more credibility nationally for that very reason.

Sincerely,

Matt Flaherty