Agricultural subsidies -- Welfare Kings
In this Op Ed, Jonah Goldberg levels some strong criticism toward current US agricultural policy. I post it here because of the strong influence that ag policy has on renewable energy policy. In particular, in Minnesota where the push to ethanol, produced from home grown crops, is so strong.
I don't think that the interconnection is fully understood but it certainly exists. It is also very complex and convoluted. One effect is what is sometimes called ag-driving-energy. This can be seen by the fact that the two leading sources of renewable liquid fuels are corn and soybeans...also two of the largest agricultural crops and also two of the heavily subsidized crops. Current US ag policy has been often criticized for its effect of reducing the varieties of crops grown by farmers. This affects energy in that it can result in a smaller established markets for those commodities of more interest for use in energy production; cellulosic biomass crops being the most significant.
Another impact is on the other side of the current successful liquid fuels production markets is that the farmers are seeing less of the benefit of increased demand for corn because of agricultural subsidies. For corn farmers, the largest form of subsidy is that of the loan guarentee. The way it works is that, for loans granted under this program, if crop prices are not above preset levels the government will kick in a portion of the difference to ensure that the farmers are able to avoid defaulting on their loans. Even if ethanol pushes corn prices above that preset level that portion of the increase necessary to cross the threshold needs to be ascribed as a benefit to tax payers not to the farmer.
I have not seen any good studies, yet, on the impact of agricultural policy on energy policy and vice versa. One good book that touches on many of the factors is 'Agriculture as a Producer and Consumer of Energy' with articles by Vern Eidman and Doug Tiffany at the University of Minnesota. I would love to hear if others have other takes on the issue or know of other good sources.