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The Corn Conundrum Sidebar: Farmers Just Can't Win 

click to enlarge REUTERS/Henry Romero
  • REUTERS/Henry Romero

 

High oil prices and hefty government subsidies of corn have fostered a surge in the use of corn-based ethanol. Corn prices are higher than they’ve been in 10 years and farmers are rushing to replace other crops with the golden kernels. This “nirvana” for corn producers, as C. Ford Runge and Benjamin Senauer point out, may eventually end up starving people in developing countries. Chronogram asked Cliff Bradley, an expert on biofuels and sustainable energy who leads product development for Montana Microbial Products, to add commentary to Runge and Senauer’s article. Bradley is also a member of the Montana-based Alternative Energy Resource Organization (AERO), a group promoting sustainable agriculture, renewable energy and conservation, environmental quality, and community self-reliance.

As a member of AERO’s energy task force, Bradley recently helped to complete the group’s Energy Blueprint for Montana. Recommendations in the blueprint begin with the recognition that “all energy sources, in particular petroleum and coal, receive taxpayer subsidies in many direct and indirect forms. As taxpayers, we should have the choice of subsidizing the energy supplies we want and penalizing or taxing those that are not sustainable.” In this article’s two sidebars, Bradley comments on of the price of corn raising food prices and the issue of biofuels and global hunger.

—Lorna Tychostup, Senior Editor


Despite the dire predictions of this article, I think $4-per-bushel corn is a good thing. For the first time in decades the price of corn and other grains are above production cost for an extended time and farmers might, with good weather, finally make a decent living this year.

Farmers just can’t win. For more than 30 years, politicians and agribusiness companies promised to raise the price of corn and increase farm income. From “food as a weapon” in the 1970s to the “freedom to farm” farm bill, the WTO, and global free markets, the price of corn stayed stuck at $2.50 a bushel, thousands of farmers went out of business, rural economies declined, and towns died. It took a boom in ethanol, creating domestic demand largely independent of ADM and Cargill, to finally get the price up to where farmers can make a living. Never mind that even at $4 per bushel the corn in a box of corn flakes still costs less to produce than the box itself, you would think that the world was coming to an end for US consumers.

What might be coming to an end if corn prices stay high is the huge subsidy enjoyed by a small group of big grain companies and meat packers. Government payments keep grain farmers hanging on by their fingernails, while the global grain companies and a handful of meat packers and poultry companies have an endless supply of corn (and wheat) at below production cost.

Ethanol from corn will not replace US gasoline consumption; nothing will save SUVs with 25-gallon gas tanks. Above all we need efficiency. We need new biofuels feedstocks; cellulose is coming fast. We also need to foster diversity in ownership of biofuels. ADM is expanding their ethanol production but much of the recent boom in ethanol and biodiesel is new smaller companies and farmer-owned co-ops or LLCs. Diverse and local ownership will sustain rural economies. Plug-in hybrid electric cars running on ethanol and biodiesel-fueled light rail might save farmers and our transportation systems, if not the planet.

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