This
spring, the Iowa legislature passed new subsidies for each gas
station that features 85-percent ethanol fuel - 25 cents for each
gallon sold in 2006, 2007, and 2008, and then smaller amounts through
2020. Governor Tom Vilsack signed the bill, House File 2754, on May
30.
The reasons offered are straightforward. Corn is a resource we have. Why import oil from far away? Plus, this helps farmers market their corn at a better price.
I would like to put these ideas in a broader context, hoping to better understand what is happening around us here in the heartland.
Economist Ken Meter has assembled data from Agricultural Census and the Bureau of Economic Analysis for many counties around the nation to characterize the nature of commodity agriculture. For the eight-county area around Black Hawk County in Iowa, we have about 8,500 farmers who mostly raise corn and beans and some livestock. On the average, from 1999 to 2003, these farms sold $1.08 billion worth of crops every year. But, they spent $1.14 billion every year to produce it. A loss of $62 million, every year , from 1999 to 2003. Most other counties in Iowa are doing worse, even as we see images of record harvest, etc. (Meter has not analyzed the Quad Cities area.)
During the same period, the Black Hawk County-area farms received $173 million per year in federal government crop subsidies for corn and beans. In Iowa's First Congressional District, which includes the Iowa Quad Cities, corn subsidies for those five years averaged $134 million a year. In Illinois' 17th Congressional District, corn subsidies averaged $112 million a year from 1999 to 2003.
It's a long story, but by every measure, rural communities are declining, and these huge subsidies have not helped, because these are not community-building subsidies; these are commodity-exporting subsidies for specific crops.
Commodity agriculture is acre-based. It requires acres, grain elevators, fuels, and chemicals. A Casey's and a bar are what is left in many rural towns. But a human community requires churches, schools, health clinics, and civic organizations that are all people-based, and "modern agriculture" has no place for them. Most of the subsidies end up in more seeds, chemicals, and machinery from the same companies that these farms sell their crops to. A sort of company town with its token currency.
And not surprisingly, these companies heavily shape the federal farm policies that bring them the wealth. This is not something grain farmers alone can change. They are simply trying to make a living in an unfair system they have little control over.
In addition to this economy of loss, we are seeing soil loss and degradation as a result of harsh farming practices encouraged by federal crop subsidies. We are seeing corn fertilizer and corn pesticides in our drinking waters.
Now, to top it off, there was a bipartisan rush by Iowa state legislators to make the matter worse: Let's subsidize ethanol even more. (For more information on House File 2754, visit http://www.eere.energy.gov/consumer/news_detail.cfm/news_id=10055.)
And here is the four headed monster: a quadruple gravy train of ethanol subsidies. First, you have the huge federal corn subsidies that mask an economy of loss I described above. Then you have the federal subsidies - presently 51 cents per gallon - to blenders of ethanol. The third head of the monster is all the tax dollars the Iowa Department of Economic Development is handing out to build the ethanol plants. The fourth head is the one that makes ethanol blends cheaper at the gas station: state subsidies to ethanol retailers.
Think how better we could spend those millions of dollars in subsidies toward revitalizing our rural communities. And now the multinational grain merchants want the taxpayers to pay for an ethanol pump at every gas station. A pump that, to me, signifies the monster is winning. A pump that really reflects the soil-eroding, nitrate-leaking, money-losing, community-ruining "farm" policies of the past 50 years.
I have not even mentioned that by some analyses, ethanol is a net energy loser. Even by promoters' most optimistic analysis, it barely makes enough energy to make up for all the fossil energy burned to produce it. (See sidebar.) Meanwhile farmers pay for high fuel and energy costs on the farm!
Just like coal-mining towns, questioning the company policies is not cool, and after a while people begin to internalize it and believe it. Corn and ethanol are sacred, and few lawmakers would want to appear nonsupportive.
Things do not have to be this way. There are better ways of doing things, and many farmers and others are trying, but we need to help encourage good policies and practices. We, as ordinary citizens, as eaters, have a stake in this and must weigh in.
Creating Agriculture ThatBuilds Community and Wealth
So, the 8,500 farms in the eight-county Black Hawk County area lose $62 million every year growing corn and beans while receiving federal crop subsidies of $173 million. Meanwhile, the residents of that area spend nearly $535 million every year buying food. Most of these dollars leave the region and the state ("value-leaving"). This explains the paradox of "so much agriculture, so little food" we see around us. In other words, our dinner table is disconnected from the fields around us.
The fields are farmed for an export economy shaped by crop subsidies and unfair prices set by distant corporations. With a sea of cheapened corn, cheapened ethanol fits well into this picture.
We should not have to go down this road further. We can create a more enduring food, agriculture, and energy economy for our region. I will suggest alternative policies and practices that deal with the two claims of ethanol promoters: "helping the farmer" and producing significant energy from farms.
Let's look at what we have going for us: knowledgeable, skilled farmers; the best soils in the world; community-minded people; sunshine; and excellent rainfall. How can we guard these assets and build on them?
First, we already know how to farm without damaging the soil or polluting our waters. Raising grain crops in a four- or five-year crop rotation and grass-based livestock production have numerous benefits: fewer purchased inputs, less fuel, fewer or no pesticides, better soils, better yields, more resistance to pest and disease, better water quality, and better income. Numerous farmers all over the nation are demonstrating this by living it. Iowa State University research has proved it. There is solid data here to create good public policy.
In other words, we already know how to farm so that agriculture will not be a threat to soils and water. Yet, none of these well-proved practices is encouraged by current crop subsidies, except the Conservation Security Program, which has been on the chopping block.
In a smart and inspiring move, Woodbury County, Iowa, beginning in 2006, offers its own tax-rebate program for farms that diversify into four-year crop rotation and organic production as an economic-development strategy. It is the first county in the nation to enact local farm policies that treat agricultural land as wealth-generating rather than money-losing.
Another much-needed strategy is to expand local/regional markets for local farm products. Farmers I know do not want favors, just fair markets. We know people in the Black Hawk County region spend more than $500 million on food every year, and we need to develop new markets, processing, and distribution infrastructure to capture this huge leak of financial capital. This would reconnect our plate to their fields, our grocery expenditures to their livelihood.
Now imagine if only $1 million per year of that $173 million crop subsidy for the eight-county area were invested in strengthening the local and regional food economy. We would see more truck farms, more orchards, more canneries and creameries, more bakeries, and more processing facilities, all meeting primarily local/regional food needs. We have lots of work to do to accomplish these.
Why are state and local officials not investing in the above strategies "to help the farmer"? Why are they stuck on corn and "pharm" crops, neither of which are doing any good for us? Well, you should ask them.
And in terms of farms being a source of energy generation, yes, it is critical that farms meet most of their own energy needs and perhaps some for the immediate local area (electricity from wind and sun, wood and other biomass for heat, etc.) We need programs that assist farms in making a transition in that direction and in strong energy conservation.
But to say that our farmlands will provide an endless supply of energy for our wasteful driving habit is simply not possible. There is nothing "renewable" about it. It will take us back to more of what we already have: soil degradation, corn weed killers, and nitrate in our waters. Our elected officials owe it to us to be smarter, see a broader picture, and not fall for the pie-in-the-sky "biofuels," ignoring all that we already know.
Kamyar Enshayan is an agricultural engineer who works at University of Northern Iowa. He can be reached at (319) 273-7575 or (kamyar.enshayan@uni.edu).
