by Jayson Lusk
If you don’t believe me, ask Ingo Potrykus, who created something called golden rice back in 1999. This modified rice produces beta carotene, which the body converts to vitamin A. Potrykus engineered the crop to help the millions of poor people around the world who risk becoming blind due to vitamin A deficiency. But despite all evidence that his product is safe, Potrykus has been unable to get golden rice approved internationally because of regulatory hurdles. How many other products that could help millions are collecting dust on the shelves of universities and start-up biotech companies because the regulatory costs are prohibitive? The expense of regulation keeps out small players such as Potrykus and helps convey market power to the established agrochemical firms.
If you didn’t catch it, you read me right. Monsanto probably does have market power that conveys some control over the prices it sets for seeds and chemicals. So, yes, I know it’s shocking: Monsanto makes money from selling seeds and chemicals. Documentaries such as Food, Inc. show us fearful farmers who claim to have been wrongfully sued by Monsanto for saving and accidentally planting genetically modified seeds rather than buying new seeds from the company. I have no idea about the accuracy of these claims, and I’m certainly not going to defend all of Monsanto’s actions. It is true that Monsanto has sued some farmers (and in some cases won) for illegally planting the company’s patented technologies.
But why the producers of Food, Inc. find the protection of property rights so abhorrent defies explanation. I suppose they won’t press charges if I start selling bootlegged DVDs of their film out of the back of my truck at the farmers’ market. Apparently Michael Pollan wouldn’t have any problem with my photocopying The Omnivore’s Dilemma, replacing his name with mine, and selling it for $.99 online. No, I suspect these folks would be rightfully indignant if their hard work and copyrights were so blatantly trampled. Why the double standard when it comes to Monsanto? Why are they to be faulted for protecting patents that took millions of dollars and decades of research to secure?
Just look at millions of acres in the United States planted with GMOs, and the reality is that the vast majority of farmers willingly decide to buy these seeds and plant them. The food police with no stake in the game presume to know more than each farmer looking at his bottom line and deciding what to buy. Does Monsanto charge more for its seeds than would be the case if there were more competition? Probably. But don’t forget that Monsanto faces competition from rivals such as DuPont, Syngenta, Dow, and Bayer. If I could wave a magic wand, I would create more competition in the seed sector, but that doesn’t overturn the obvious fact that despite the higher prices, farmers still find it in their interest to plant biotech seeds. I haven’t yet read of Monsanto holding farmers at gunpoint, forcing them to adopt biotechnology—although it is amazing what conspiracy theories people will believe and circulate about Monsanto.
I’ve been in enough debates on this topic to know exactly what the anti-GMO foodie will say next: “Well, farmers don’t really have a choice, because if they don’t adopt biotech products, they can’t stay in business.” Bingo! That’s how capitalism is supposed to work. The market doesn’t reward us for producing what we want. It rewards us for supplying what consumers want. What’s the alternative?
I’m sure there were a bunch of blacksmiths and wagon makers in 1908 who cast suspicious eyes on the new Model Ts being driven around town. Are we really to believe that the world would be a better place if only the wagon wheel makers got their way and avoided the supposedly corrupting influences of sleazy market forces? Wagon wheel makers had a choice, as farmers do now. They can provide what consumers want or they can find another line of work. And despite whatever we read in opinion polls, when we watch what most consumers actually do with their wallets when shopping, we see that what they want is lower prices.
Let’s take a step back and ask how seriously can we take the claim that Monsanto is a drain on the system, sucking money away from farmers and consumers alike? The economic research shows all this to be nonsense. Farmers adopt biotech products because it makes them money and saves them time. Indeed, one would have to wonder if farmers were so stupid as not to understand their own interests, as virtually all major farm commodity organizations have lobbied on behalf of biotech. Consumers have benefited, too.
One study of the U.S. cotton industry found the biggest beneficiary of the advent of biotechnology was not Monsanto or the seed supplier, but U.S. farmers, who captured 59 percent of the benefits.9 Another study, by the USDA, found that the development of herbicide-resistant soybeans benefited U.S. farmers (who captured 20 percent of the benefits) and U.S. consumers (who captured about 6.4 percent of the benefits).10 Worldwide, the annual benefits from the creation and adoption of biotechnology are estimated at about $1.4 billion for cotton and $7 to $10 billion for soybeans and corn, and are projected to be more than $2 billion for rice. (No biotech rice is currently planted commercially.)11 None of these estimates takes into account the potential benefits of the risk reduction that is provided by insect-resistant biotech seeds. Not only are yields and farm returns generally higher with biotech varieties, but they also save labor and serve as a form of insurance against some farm risks.12
Perhaps in our world of billion-dollar bailouts, some skeptic can claim these gains are too small to justify the potential risks. The truth is that it is really hard to know what we give up if we halt the advance of science. I’ve already mentioned genetically modified rice that can produce vitamin A, but scientists are also developing varieties of soybeans and corn that can make their own fertilizer and produce healthier cooking oil for humans; grasses that cause cows to produce less methane, a major greenhouse gas; drought-tolerant plant varieties suited for arid regions; tomatoes that can last longer without spoiling; bananas that make vaccines; strains of cassava with added micronutrients that could help millions of impoverished Africans who rely on the crop as a staple; and innumerable other products that have more tangible benefits for the consumer than perhaps the falling food bills we’ve already enjoyed. So, don’t be fooled. Some biotech crops may be too risky and require prohibitions, but not seeing what benefits biotechnology has to offer may be the biggest risk of all. Just imagine all we would have missed had the first generation of Luddites decided that the world was “good enough” and halted all technological progress back in 1815.
Alas, we don’t have to ask many of the poor farmers in Africa hypothetical questions about what they would give up. The food police have fought tooth and nail to keep the current technologies out of their hands. Content with their own food supply, many developed European countries are imposing their rich-country preferences on their poorer southern neighbors, and have thrown up roadblock after roadblock to biotechnology in Africa. As the political scientist Robert Paarlberg clearly shows in his book Starved for Science, published by Harvard University Press, organizations such as Greenpeace, Food First, and the International Federation of Organic Agriculture Movements have fought hard to keep biotechnology out of Africa.13 While rich farmers and consumers in the United States are enjoying the benefits of insect-resistant corn, these groups somehow find it morally justifiable to hinder Africans from developing and using drought-tolerant maize. Biotechnology is not a cure-all for Africa’s woes, agricultural or otherwise, but for the food police to deny Africans a poverty-fighting tool that we already have is absurd. It’s like telling a heart-attack victim he can’t have an aspirin because he might get a tummy ache.
For those food police brave enough to travel to St. Louis and into the territory of the Evil Empire, they might want to take a look at what sits across the street from Monsanto: the nonprofit Donald Danforth Plant Science Center. There you’ll find biotech research supported by the likes of the Bill and Melinda Gates Foundation improving the nutritional content and drought resistance of African staple crops such as cassava and sweet potatoes. The center is also developing algae and other plants that can produce biofuels, and working on a host of further developments one woul
d expect to excite even the least compassionate among us. But, no, the food police won’t have any of it.
In fact, this is all eerily reminiscent of the food progressives’ reaction to the green revolution. Nobel Peace Prize–winning scientist Norman Borlaug used research and technology to increase rice and cereal yields in developing countries such as India, Mexico, and Pakistan during the 1950s, ’60s, and ’70s. The effects were astounding. Wheat yields, for example, jumped more than 250 percent in developing countries from 1950 to 2000. And yet various environmental and international aid groups could not bring themselves to celebrate the fact that millions of people had been freed from starvation—all because the process involved monoculture agriculture, synthetic fertilizers, and technologies that also benefited agribusinesses. Borlaug’s response to the criticism is classic:
Some of the environmental lobbyists of the Western nations are the salt of the earth, but many of them are elitists. They’ve never experienced the physical sensation of hunger. They do their lobbying from comfortable office suites in Washington or Brussels … If they lived just one month amid the misery of the developing world, as I have for fifty years, they’d be crying out for tractors and fertilizer and irrigation canals and be outraged that fashionable elitists back home were trying to deny them these things.14
Perhaps we Americans can afford to give up a few comforts and pay more for more “naturally” grown food. But this return to nature is pure fantasy. Human interactions with nature have altered animals and vegetation in a way that our ancient ancestors could scarcely have imagined. The food elite’s vision of the world would return production agriculture to its state a hundred years ago, to a time when food was far less plentiful and those who did the backbreaking work of farming lived a meager existence. We might like to visit the Amish, but few are clamoring to convert.
THE FOLLIES OF FARM POLICY
Writing a letter to Obama, whom he ironically called “Farmer in Chief,” Michael Pollan cried, “Bad news: the food and agriculture policies you’ve inherited … are in shambles, and the need to address the problems they have caused is acute.” Pollan proceeded to lay out a buffet of prescriptions to resuscitate the farm sector. Compiling the fashionable demands of the food elite, the Obama administration was, among other things, to support food diversity, use federal policies to promote regional food economies across the world, utilize agricultural policy to impose environmental standards, revamp school-lunch programs, forgive loans to culinary students in exchange for government support, and renew the 1960s-era policies requiring government purchases of grain.1
Reading Pollan’s farm policy proposal, one is struck by the vision of an all-encompassing government that knows no bounds so long as its purpose is to provide us fashionable food. Lurking behind the compassion and glowing rhetoric is a deeper reality of food totalitarianism. It isn’t bad enough that the government does current farm policy poorly. It must do more, more, more.
Pollan isn’t alone in his unease with the present state of farm policy. I share it. We have a federal farm policy that is largely an anachronistic throwback to the past, surviving today mainly through the political power of the farm lobby. Where I part with Pollan and his fellow foodies is in their conclusion that “like so many government programs—what subsidies need is not the ax, but reform that moves them forward.”2 What makes the food police think the government will get it right this time? They like to talk about market failures but are apparently blind to the abundance of government failures. If the process is so corruptible by corporate interests and mega farms, as they claim it is, then Uncle Sam is incapable of working in our food interests, and all the preaching of hope and change is nothing more than smoke and mirrors.
While I am no fan of farm subsidies, I am at least honest enough to tell you that most of what we’re told about them cannot withstand scrutiny. Farm policy is like an old leaky faucet. It’s annoying and a bit costly but, in the end, relatively benign. By all means, fix the faucet, but don’t tell me it’s a flood requiring a new en suite! If the food police cannot accurately diagnose the consequences of current policies, we should shudder at their prescriptions for the future. We have a bunch of journalists, chefs, and cookbook authors playing armchair economist without having apparently mastered Econ 101.
One of the constant refrains is that farm policies make food “too cheap.” Pollan tells us that because of fossil fuel use and farm subsidies, “[c]heap food is food dishonestly priced.”3 Modern food production supposedly causes environmental and health externalities and cheapening food serves only to increase the costs borne by third parties. Bittman writes, “Direct subsidies to farmers for crops like corn … and soybeans … keep the prices of many unhealthful foods and beverages artificially low.”4 The food elite seem to think that all farm policies serve to lower the price of corn, soybeans, rice, and wheat. Wrong.
Are farmers such dolts as to advocate policies that primarily lower the prices they get paid? Ethanol policies, for example, are hated in many quarters precisely because they increase corn prices rather than decrease them—and with dubious environmental benefits. Some of the food police know this. One of their compatriots notes, “Diversion of food to biofuel has contributed to an uncontrolled price rise.”5 Strange, I thought farm policy was keeping corn prices too low, not too high.
What about the roughly thirty million acres of farmland that, through the federal Conservation Reserve Program, farmers are paid not to farm? Or the government programs such as food stamps that pay people to eat more food? By far the largest budgetary outlays of the Farm Bill (about seventy cents out every dollar spent) go toward food-assistance programs such as food stamps and school lunches.6 These programs drive the price of food up, not down. I’m not denying that some farm policies (such as spending on agricultural research) lower food prices, but there is such a dizzying mix of farm programs and supports that for the food police to say conclusively that farm policies unilaterally lower food prices and make them “too cheap” is misleading at best and outright dishonest at worst.
Even the farm commodity programs for corn, soybeans, wheat, and rice that are held in utmost contempt by the food elite have questionable effects on retail food prices. To avoid violating international rules that could provoke retaliatory trade barriers, the U.S. government has increasingly converted farm subsidies to so-called decoupled or direct payments, which are unrelated to the current volume a farmer produces (a trend that might be reversed in future farm bills). With these decoupled payments, the farmers simply get a check from the government that has nothing to do with the amount of corn or wheat or cotton they’ve planted that year. While these decoupled payments likely grow farmers’ bank accounts, they at least let supply and demand function and, as a result, have only small effects on crop prices.7
Even the countercyclical payments that go to farmers when prices fall below a price floor have been found to have an effect “on production [that] appears to be negligible.”8 Another recent study determined that “U.S. farm policy, for the most part, has not made food commodities significantly cheaper and has not had a significant effect on caloric consumption.”9 The research shows that completely eliminating U.S. farm commodity programs is likely to have only a small impact on crop prices and production, and could even increase prices for some commodities such as wheat and corn while increasing the production of beef and pork.10 That’s right: getting rid of all current farm programs might increase meat production—you know, the sinful process rejected by environmentalists and animal welfare activists alike.
When it all shakes out, what if government policies increase the volume of food produced and, on the net, lower food prices? There are benefits of overproduction. After all, it is much riskier to have too little food than too much. According to the UN Food and Agriculture Organization, there are more than a billion starving people in the world today.11 Those concerned about equity should be happy to reduce the price of a necessity for the poor and starving. Moreover, there are
positive externalities associated with knowing the cashier, the mechanic, and drivers on the street are well fed and free from worrying about their next meal.
What about us relatively rich folk who can afford to pay more? Even we need to ask what we would get in exchange for the higher prices desired by Pollan and others. A serious defender of the externality argument would have to do the hard work of actually trying to calculate the size of the third-party costs (both positive and negative) rather than run around claiming the sky is falling. In actuality, the food police use the jargon of economics to give an ideological agenda the appearance of real science.
Simply screaming that an externality exists is not proof that something should be done. After all, Nobel Prize-winning economist Ronald Coase taught us that when Farmer Jones’s cows trample Sally’s field, there is a clear incentive for Sally to negotiate with Jones rather than run to Uncle Sam. Moreover, it is not as though Farmer Jones is an uncaring louse. He is keenly interested in the quality of the land he leaves his children and in their ability to earn a future living. Even beyond his family, Mother Nature has instilled in him and all of us the guilt, compassion, and empathy that cause us to treat our neighbors more benevolently than wielders of textbook definitions of externalities claim.