Smart Stuff From the Comments

From a reader named Paul Kilmartin, in response to Steve Sexton’s post “The Inefficiency of Local Food”:

Well, if we’re going to think like economists, then lets talk about how we got here. The food distribution network cannot thrive as it does now without the massive public works program called the Interstate Highway system, which subsidizes distant food movement. Large, “efficient” agribusiness is as much a result of farm subsidies leading to consolidation, and the percentage of crop land dedicated to corn is a function of ethanol policy. Furthermore, FDA policies prohibit or discourage the farming and production of items people want, such as hemp and unpasteurized milk.

On top of that, misinformation of the USDA has driven the public to choose grains over protein and fat, driving the obesity, diabetes, and heart disease rates higher, which shifts resources to those with government-granted monopoly rights to market pharmaceuticals to treat those diseases.

So, in the absence of all these price distortions, would local food be at such a disadvantage? I contend not. So those liberals who want more local food should dismantle the nanny state and public works programs that made pseudo food so much more profitable.

Who cares to argue with Paul?

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  1. Eric M. Jones. says:

    “The food distribution network cannot thrive as it does now without the massive public works program called the Interstate Highway system, which subsidizes distant food movement.”

    That’s not why that famous Democrat Liberal Eisenhower pushed through the interstate highway system.

    Besides, a lot of food moves by rail.

    Dube–Did you lose a bet? WTF?

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  2. Alex says:

    More seriously, I think the main complaint here is that a number of factors combine to give ‘big food’ a price advantage over local food, right? Local food either can’t or won’t produce products on a scale where they can take advantage of subsidies, USDA nutrition suggestions, etc. But if these conditions didn’t exist, local food would still have issues compared to big food if sold at the same price. For example, people in colder climates could say goodbye to fruit. And, if the article on wikipedia is accurate, people in the Eastern US could say goodbye to (cow) milk, unpasteurized or not. Big food benefits not only from scale but also from offering greater options.

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  3. Cor Aquilonis says:

    I have a couple quibbles with the article. First, I’m grew up in Indiana, a major corn and soy producing state, so a lot of this is from direct, personal observation.*

    1) The interstate highway system is not such a big deal for bulk corn transport. Usually, corn harvest goes along local rural roads and state roads to a corn elevator. There it is dried/graded/whatever and then loaded on to dry bulk rail cars. Most bulk corn I’ve seen moved goes by rail. The bulk corn I’ve seen travel by truck were over state roads from nearby farms/elevators to nearby refineries.

    2) Corn syrup refineries take in bulk corn by rail and also ship the syrup by rail. You can see for yourself by Google mapping “Tate and Lyle, Lafayette, IN.” Notice the huge rail yards. (BTW, yes, there are two locations.) Tate and Lyle manufacture corn syrup. They do take delivery by truck, but again, primarily from nearby locations.

    3) Regarding ethanol: the bulk grain is also delivered primarily by rail. Every ethanol plant I’ve seen has a rail spur for delivery and are usually near an existing elevator. Most ethanol production I’ve seen is not a heavy user of the interstate highway system, mostly rail and state roads.

    4) Farm subsidies promote farm consolidation, but economics or farming is more powerful. Increasing the size of the operation has increased the efficiency, with less idle time for machinery and better use of labor, and more capital to secure financing. This is a big deal competition-wise.

    I have more concerns, but I also have work to get back to. Just judging from the misunderstandings I perceive from the first paragraph, I don’t have high hopes for the veracity of the rest of the post.

    * I’m assured that since this is anecdotal, and is thus not at all useful for anyone else to use as a source of information or understanding. Nevertheless, I will press on.

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    • EP says:

      I think his point about corn was more related to government policy driving its production. The highways are related to the long distance distribution of ready to eat food.

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  4. Christopher says:

    First, is the poster seriously contending we should “dismantle” the interstate highway system? I don’t think that notion is on the fast track to anywhere, anytime soon.
    And thus the argument that local food is disadvantaged because “big” retailers use the “big” highway system is like me saying if only I was 7 feet tall, I could play in the NBA too. So therefore we ought to somehow cut those bigger athletes down to a reasonable size, however that should be done. Sorry, but wishes and buts aren’t candies and nuts, even during Christmas.

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  5. Becky says:

    “This year, the US will harvest approximately 12.5 million bushels of corn. More than 42% will be used to feed livestock in the US, another 40% will be used to produce government mandated ethanol fuel, 2% will be used for food products, and 16% is exported to other countries.”

    Main Points:
    – Ethanol subsidize cost American taxpayers $6 billion per year
    – Food is about 10% of Americans’ disposable income, but 40% to 60% in developing nations. A large increase in the world-wide cost of corn increases food costs and poverty – the main cause of starvation.
    – Increased food costs have caused riots and government destabilization in Tunisia and other countries
    – The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 was enough to feed 330 million people for one year at average world consumption levels
    – The amount of grain needed to fill the tank of an SUV with ethanol just once can feed one person for an entire year
    ***** Producing ethanol uses MORE energy than is created – while driving costs higher*****
    – E-85 ethanol is corrosive to the seals and fuel systems of most of our existing engines
    – Ethanol has about 30 percent less energy per gallon than gasoline. That means the fuel economy of a vehicle running on E-85 will be about that much less than a comparable vehicle running on gasoline.
    – Our current ethanol production represents only 3.5 percent of our gasoline consumption — yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World.

    That article doesn’t even mention the huge quantities of water required for corn irrigation when or where there isn’t enough rainfall.

    About grains vs. meats – there’s all kinds of proof that limiting carbs and allowing protein and fat results in healthier body weight, better blood lipids and better controlled appetite.

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    • Graham Peterson says:

      This is a point worth making again and again. Ethanol is a disaster, and a real testament to how much of agri-subsidies are designed solely to maintain rents of constituents and corresponding politicians.

      That said, it’s worth remembering that urbanization and scaled food production started trending long before federal subsidies were large enough to severely impact food prices. Even today, lamentable as subsidies are ethically, they cannot dominate prices in a food industry that’s reasonably contestable.

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  6. Travis says:

    While I agree with some of the assertions, for example, corn subsidies, ethanol production, and similar factors are poor both economically as well as environmentally, the argument conflates too many things.

    For example, if “those liberals” were to “dismantle the nanny state public works programs” would that include merely dismantling farm subsidies, or dismantling the interstate highway system as well?

    Pseudo food is a blight, no doubt. And the cycle of overproduction of corn to fuel CAFO’s, create ethanol, and refine into corn suryp, is a huge threat. And the fact that the agribusiness crops are almost all farm subsidy crops is also a huge factor in making them “economically efficient.”

    Another factor would be that the USDA essentially is constantly allowing agribusiness to run the agency, when it comes to testing of new plants and animals, as well as restricting non-agribusiness methods of farming.

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  7. abqhudson says:

    No argument from me.

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  8. iljitsch says:

    Wow, 40% of corn is used for fuel? That’s insane. Photosynthesis is rather inefficient at about 3 to 6%. Even ignoring harvesting, non-corn parts of the plant, transport and converting to fuel, internal combustion engines run at 20% efficiency. So that’s no more than about 1% energy efficiency total. With solar cells (6 – 20%) and electric motors (80%) you’d be able to reach 5% efficiency easily (again, ignoring transport and storage, but these are also 80% efficient for electricity). And you can put those solar cells in places where corn won’t grow.

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