Thursday, April 10, 2014

Biofuels and American Energy


This morning I had the pleasure of attending the Biofuels & American Energy Policy Exclusive Panel, presented by The Hill and sponsored by Smarter Fuel Future, down here by the Capitol on behalf of the National Grange. Preceded by a breakfast spread of bagels, assorted shmears, and more pastries than the new Starbucks La Boulange can offer, I was thoroughly impressed by the turnout at the Hyatt Continental Room. The only things more diverse than the breakfast arrangement however, were those in attendance at the conference, ranging from agricultural and environmental policy analysts and advocates to public and private interests. And yet The Hill seemed to bring together a relatively biased panel sans representation from interests within the ethanol industry itself. Paul Bledsoe, President of Bledsoe & Associates and a veteran on key energy and environmental issues moderated the dialogue on the Renewable Fuel Standard (RFS) and US Biofuels Policy. Congressman Peter Welch (D-VT-01), a member of the House Committee on Energy and Commerce, headlined the first portion of the morning and participated in a one-on-one sit-down. Congressman Welch’s diplomatic and relatively apolitical brief of the issue gave way to the roundtable discussion, featuring Dominic Albino- Scholar, New England Complex Systems Institute; Scott Faber- Vice President of Government Relations, Environmental Working Group (EWG); Rob Green- Executive Director, National Council of Chain Restaurants (NCCR); and Michael McAdams- President of Advanced Biofuels Association. Questions and comments were consistently streamed throughout the morning through the live tweets trending on two plasma-screen TVs placed on opposite sides of the room, and can be found on Smarter Fuel Future’s twitter page here: https://twitter.com/SmarterFuels

The Renewable Fuel Standard (RFS):

Before diving into the panel discussion though, here’s a quick refresher on the Renewable Fuel Standard. Passed by Congress in 2005, the RFS authorizes the EPA to mandate that a minimum volume of biofuel be integrated into the nation’s gasoline supply. While most people who associate biofuels with corn would be correct, biofuels also include cellulosic crops and any living matter or biologically raw materials. Ethanol biofuel, for example, is most commonly used as E-10 and constitutes as a first-generation biofuel extracted from arable crops using conventional technology. However, panelist Michael McAdams explained, there are also second-generation biofuels which are high energy and dense, made from lignocellulose biomass such as woody crops and agricultural waste. The RFS is directed at first-generation biofuels and with the ultimate goal of requiring 36 billion gallons of biofuel integrated into the American fuel supply by 2022, the minimum mandate increases ever year.

The Crux:

Now to the meat, or should I say corn, of the argument. The entire discourse of the panel focused around one central theme. Should Congress repeal or reform the RFS mandate? A common consensus pretty much permeated the panel that maintaining the status quo was not a viable option for American Fuel and food prices. Instead, the first “absolute must” is to eliminate the mandate for corn based ethanol, and the second is to reform the law while leaving incentives for cleaner fuel in place. Delving into agricultural and environmental implications of the RFS, the underlying concern for all the panelists seemed to focus on the average consumer. This is probably because they are the most vastly affected population, although farmers and small businesses also deal with the brunt of the RFS economic implications. Rather than go through the perspectives and contributions of each individual on the panel and write a ten -page paper, I will just lay a foundation of the problem and bring up the key arguments that surfaced during the roundtable discussion.

CORN!

The entire problem with corn-based ethanol, and thus the RFS, stems from the fact that the corn supply is not infinite. There are currently 322 million acres of farmland in the US, 12.4% of which alone is needed to meet the RFS. In other words, by the time 2022 rolls around, approximately 27% of US farmland will have to be designated to produce enough biomass to meet the RFS. For every bushel of corn that is going towards biofuel, there is one less bushel of corn going into our stomachs, or the stomachs of the cows that we eat. Basic economic supply and demand theory holds that when there is a fixed supply of a commodity and an increase in demand, prices will rise. Therefore, the use of corn for biofuel drives up food prices at a rate higher than inflation for the average consumer shopping in the grocery store and for restaurants that need to buy food for their businesses. Prices also increase for farmers who need to purchase feed for their animals, further driving up food prices. PricewaterhouseCoopers (PWC) did some research for the NCCR on food and commodity costs, and found that prices increased by a total of $3.2 billion a year as a result of the RFS. This correlates to a 27% increase in corn prices and about an $18,000/year additional cost for individual restaurant locations as well.  Aside from price, here is some food for thought from a different perspective: there is a growing human population nearing 8 billion and millions of people starving that still needs to be fed.

Environmental Issues:

As if the panel’s slam on biofuels wasn’t enough from an agricultural perspective, their attack on environmental implications of ethanol fuel turns the knife a little deeper. Faber cited four, I repeat, four, major environmental mishaps that accompany mass biofuel production. The first deals with air quality problems—increases in corn ethanol to meet RFS standards increase emissions of particulate matter (which can cause asthma, emphysema, and even cancer), VOCs (Volatile Organic Compounds), and other green house gases. Second, he elaborated on the associated wetland and grassland destruction—from 2008 to 2012, over 23 million acres of land were destroyed to cultivate the corn necessary to meet RFS, releasing soil carbon and nitrous oxide (N2O) into the air. Third, this destruction of wetlands and grasslands leads to habitat loss and decimation of wildlife, and Faber used the duck population in the Midwest as an example. Lastly, Faber mentioned higher drinking water costs and threats to water quality. 


The Politics:

The RFS is a matter of both policy and politics where the debate is not partisan-oriented. Rather, the politics are divided along regional and economic lines in which agricultural and energy interests coalign. As Faber put it, “The current mandate is administered in a North Korea style that would even make Kim Jong-un blush.” It will be interesting to see how the prospect of upcoming midterm elections affects RFS reform and repeal.  It also would’ve been nice if Welch stayed for the rest of the panel to attest to some of these questions, especially seeing how the political issues and inefficiencies in congress are pointed at the energy and commerce committee. A response and a dialogue between the Welch and the panelists would have been interesting and perhaps provided more insight to the future of the politics of the issue.


The Punch:

Overall, the panel overwhelmingly decided that the tradeoffs exceed the benefits under the RFS and that the output does not show a return on the inputs, creating an energy deficit. The RFS policy was well-intended, but is outdated. In 2005, or in 2007 when the Energy Independence and Security Act was enacted for that matter, very few could have predicted the technological strides that would be made by 2014. In fact, Obama wasn’t even president yet when the RFS was instated. McAdams pointed out this jaw-dropping commentary: if CAFE standards were increased by 1 mile per gallon (mpg), no mandate-required ethanol would be needed. McAdams also pointed out that even though corn ethanol contributes to rising global green house gases, the biofuel is exempt from federal greenhouse gas requirements. Alternately, second-generation biofuels are cleaner for the air and yet must still reduce greenhouse gas emissions by 50% to 60%. The panelists were all pretty much one-sided and in agreement with each other for the most part, and the consensus favored the prospect of relying more heavily on second-generation biofuels and saving corn, well, as corn.

-Allison Paisner
National Grange Intern 

Tuesday, March 25, 2014

Celebrating National Ag Day


Get ready to break out the overalls and send thanks to farmers because today, March 25th, is National Ag Day! National Ag Day is extremely important, especially in the world we live in today, which is dominated by technology and fast-paced lifestyles. Although agriculture is not the main focus of the country, it is still essential for the economy and for everyone everywhere!

Agriculture is behind every piece of food you eat, the clothes you put on and even the crayons you used as a kid (or do still) to color with. The U.S. is the world’s largest producer and exporter of corn. The amount of the country’s crop exports has grown about 1.9% each year since 1990, and 2012 preliminary reports show that the agriculture sector is growing according to the USDA website. Despite all this, agriculture is often an overlooked sector. Too many young people go through primary and secondary education without acquiring any knowledge about agriculture.  The once agri-based country is getting out of touch with its roots and young people are growing up without knowing what agriculture is all about. That is where National Ag Day comes in. It is huge step to redressing the lack of recognition and knowledge of agriculture. 

National Ag Day was founded in 1973 and is organized by the Agriculture Council of America (ACA). The ACA is dedicated to “increasing the public’s awareness of agriculture’s role in modern society” (www.agday.org). Ag Day is a time to recognize and celebrate all that agriculture provides. There are too few people that really understand the contributions agriculture makes to society; Ag Day’s purpose is to change this. Each year farmers, agricultural associations, schools, government agencies and many, many others celebrate the day. It also encourages Americans to learn more about foods and fibers, and to consider a career in ag. The First National Agriculture Day was planned by the National Agri-Marketing Association and the American National CattleWomen. In 1979, the ACA coordinated the first National Ag Day celebrations in Washington, D.C., and they still do so today. There will be events in the nation’s capital from March 24-26; many of them are free of charge. Since then, the celebration has grown a lot and is present all across the country in schools, organizations, and organizations.  March 25th is not just the first day of spring, but it’s National Agriculture Day as well! Go out and spread the word to celebrate America’s farmers.

-Brittany Levine
National Grange Intern

Facts taken from: www.agday.org and www.usda.gov

Friday, March 21, 2014

Crop Insurance- Reassurance!


There’s been a lot of buzz recently about Obama’s 2015 Budget announced earlier this March, and the effect it will have on federal crop insurance for American farmers. Whereas the White House plans on reducing wasteful spending, apparently this means that the administration wants to cut $14.2 billion in excess crop insurance subsidies over the next ten years. And while this unavoidably sounds like bad news, let me take a few minutes to explain these reductions and why they may not be as bad as they sound.

The key here is that the effects of the 2015 Budget need to be taken into account in conjunction with the new farm bill that passed through Congress last month. According to a March 2014 Wall Street Journal Article, “2015 Budget: Obama Proposal Would Trim Crop Insurance Assistance,” the farm bill cut direct payment and countercyclical farm subsidies, alternately boosting government subsidized crop-insurance offerings (The link to the article can be found here: http://on.wsj.com/1nGS8Sv). CBO estimates that the savings reinvested into new subsidy programs is projected to increase crop insurance funding and disaster assistance programs by approximately $5.7 billion over the next few years. If anything, this push towards safety-net programs heightens the risk the government assumes in the agricultural industry because weather and growing seasons as well as market conditions will dictate the outflow of money from government to farmers. As a result, the biggest “losers” of the budget plan will be crop insurance company sellers, such as Wells Fargo & Co. and Ace Ltd. because they rely on discretionary spending. Here is the essential breakdown of the savings: $6.3 billion in savings by cutting 4% from policies that drive up crop insurance program costs, $4.2 billion by cutting crop insurance company profits from a 14% rate of return to 12%, and $3.8 billion over the next 10 years by cutting 3% from premium subsidies. The Environmental Working Group claims that this is $14.2 billion in actual savings, compared to the supposed savings designated in the farm bill (http://bit.ly/NxMCkf).

Only time will tell whether this reallocation of funding will work in giving farmers greater control over risk management of crops, rather than solely relying on direct payment handouts. Common themes the 2015 budget seem to be productivity and efficiency, which are noble goals. The question then becomes whether or not the implemented changes will actually achieve these goals. While I may not have convinced anyone that these net “trimmings” to crop insurance are positive (good luck to anyone who can argue that), for what my $.02 is worth, I don’t think that this is cause to panic nor is the situation is as dramatic as the numbers seem.  

 -Allison Paisner 
National Grange Intern 

Wednesday, March 5, 2014

It Just Doesn’t Make a Whole lot of Common Sense



Tennessee Congresswoman Marsha Blackburn, Vice Chair of the House Energy and Commerce Committee at the February 26th meeting about the proposed Medicaid Part D changes said, “It just doesn’t make a whole lot of common sense, Mr. Blum,” in response to Blum’s statements about the proposal.  During her five minutes of questioning, Blackburn spent the majority of the time bashing the new plan for Medicaid Part D.  To her, it did not make sense to alter a program that 95% of beneficiaries approved of, especially when the change would limit options and is projected to raise costs.  Currently, only 12% of the Medicaid budget is spent on Part D.  Mr. Blum is the principle administrative director of CFS and was the first panelist at the meeting; he was questioned for over two hours.

Blum claimed that although Part D has been extremely successful and has a high approval rating, there are still some “vulnerabilities” that need to be redressed.  According to him, the proposed changes will alleviate some of the main issues with the current program.  In Blum’s opinion, it will decrease prescriber fraud, help simplify the plan options (by decreasing from over thirty plans to less than four), make the plans less complex, and reduce taxpayer cost.  The new regulation will require more paperwork to be done by prescribers, and give beneficiaries a significantly smaller amount of plan options.  

Even though the cost for the program has decreased over the past few years and there are extremely high approval rates, the Obama administration feels a need to adjust Medicaid Part D.  Consequently, it is extremely likely that the cost for beneficiaries will increase while the amount of care/treatment received they need will decrease.   Blackburn was on to something: there really isn’t much logic with this proposal.  Why fix something already regulated that is not working with new regulations?  Adding additional regulations that will make life harder and put more work on the physicians is not the solution, but rather, they should improve the regulations already in place.  Why drastically alter a program that has extremely high approval rating? Very few governmental programs have only five percent dissatisfaction rate. Phrases were thrown out such as “if its not broke, don’t fix it,” and it’s okay to hit the tire even if working, but not when your foot comes back and it hits you.

The overwhelming success of Medicaid Part D along with the high satisfaction does not mean that we should not look at it to fix some of the issues that many seniors are unaware of, but this proposal is not the answer.  As the Congresswoman from North Carolina, my home state, pointed out, 7.4 million out of 7.9 of the state’s seniors will be effected by the change, a change that they do not want.  The majority of the 7.4 million in my home state will be effected negatively.  One of the biggest drawbacks of the plan is that there will be fewer options.  Although having a vast amount of choices can be confusing for seniors at times, choice in plans provides more positives than negatives.  The proposal practically gives no choice to the beneficiaries.  

Not only are there logical issues present with the Medicaid Part D proposal, but legal as well.  Almost every congressman pointed out that it would violate the Noninterference Clause, which restricts government from negotiating between private parties.  Under the proposal, the CRS would be able to communicate and negotiate with manufacturers and pharmacies, which they justified under their “new interpretation” of clause.  As expected this received scrutiny from many of the congressmen present.  

Not one of the committee members present was in favor of the proposal.  And it makes sense.  The hearing brought up points that made it appear that the new proposal would not help, but actually hurt beneficiaries and physicians, especially those in rural areas. Congresswoman Blackburn hit the nail on the head: this proposal doesn't make the least bit of common sense. 

-Brittany Levine
National Grange Intern

Wednesday, February 19, 2014

Made in Rural America

Nope, I’m not referring to Budweiser or Whoopi Goldberg movies. I’m referring to Obama’s newest initiative aimed at enhancing rural businesses competitiveness abroad. On Friday February 7th, 2014, the same day Obama signed the Farm Bill into law, he also announced a new program in which the White House Office of the Press Secretary immediately released a fact sheet entitled “Opportunity For All: Establishing a New “Made In Rural America” Export and Investment Initiative.” The fact sheet can be found here: http://www.whitehouse.gov/the-press-office/2014/02/07/fact-sheet-opportunity-all-establishing-new-made-rural-america-export-an.

Among the seven main commitments provisioned in the initiative, to be carried out over a span of nine months and overseen by the White House Rural Council, the ultimate goal is to “help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad.” Obama plans on achieving this goal by establishing valuable connections and teaching relevant business skills. In other words, if this initiative is done right, it can actually accomplish something productive and substantially beneficial for the nation. The highlights of the initiative include five “Made in Rural America” regional conferences offering rural leaders and businesses viable resources available to expand exports, an “Investing in Rural America” networking conference, training sessions in all 50 states for local USDA Rural Development Staff to teach necessary tools to help counsel on and connect businesses to export opportunities, and promotion of rural-produced goods across the Administration.

So what is the relevance of “Made in Rural America?” Let me put it into terms of an everyday situation: does it ever feel like you can reach for an article of clothing, or really anything off the shelf at a retail or electronic store for that matter, and predict that the tag will read: Made in China? Not that this is necessarily a bad thing, but I feel this way a lot. I think Obama feels the same way, as the tangible result of this initiative would be to see an increase in rural America’s sales abroad, with more products labeled “Made in the USA” (http://farmfutures.com/story-white-house-introduces-made-rural-america-initiative-0-108494). While these efforts to export abroad probably won’t dilute the number of “Made in China” products we see on our shelves, hopefully the US will be able to surpass its 2013 record for agricultural exports marked at $144.1 billion. And even though we wouldn’t normally associate “Made in China” products with agriculture (seeing as most of the products labeled such are electronic or retail), I think there is merit in calling for increased exports of rural American products. These products most notably include wheat, rice, coarse grains, oilseeds, cotton, and tobacco (http://www.ers.usda.gov/topics/international-markets-trade/us-agricultural-trade/exports.aspx#.Uvj-mP1Q2MM). Back to my original example, although we may not see a change in the number of imported products here in the US, other countries will most certainly notice an increase in American-made products when they go reaching for products on their store shelves.

In this sense, I do have to give some credit where credit is due to the Administration for choosing to focus on the education and networking of work that is required for increasing exports. This means that, ideally, not only will exports increase, but the tools garnered during the process will be valuable skills that continue to be employed in the future as well. However, there is a huge difference between saying that something will be done and actually fulfilling it to fruition, especially considering that “Made in Rural America” was announced not even a week ago.  It’s easy to announce a program with seven provisions that call for commitment to action. The hard part, and the next step, is to see them through. You gave yourself nine months, Obama. On your mark, get set, go!

-Allison Paisner

National Grange Intern

Thursday, January 30, 2014

Miracle of Miracles… Farm Bill Passes House

Well, this is definitely something to get excited about! After two years of stalling, disagreement, failure, and plenty of  “back to the drawing board” moments, the House finally passed a new five-year Farm Bill on Wednesday, January 29th. Whereas the vote was relatively bipartisan, the bill is still subject to a vote in the Senate and must be signed by the President. Luckily, according to a Washington Post article, prospects for this bill are looking high. The article and more information about the 2014 Farm Bill can be found here: http://www.washingtonpost.com/politics/federal_government/house-to-vote-on-final-farm-bill-food-stamp-cuts/2014/01/29/4a3d8b60-88bf-11e3-a760-a86415d0944d_story.html.

But, before we all start holding hands and singing hallelujah, let’s take a quick glance at some of the major changes this bill entails. The buzzword that is getting both parties worked up seems to be SNAP, better known as the food stamp program. Democrats are afraid that too much is being cut, and Republicans don’t think the program’s cuts are steep enough. To be fair though, something on the hill was accomplished that we don’t get to hear about too often: compromise. Spending cuts were rearranged and funds were reallocated, moving cuts in food stamps to financing food banks and reconfiguring international food aid program funds. Ultimately this version of the Farm Bill is expected to generate $16.6 billion in savings over the next ten years. Forget the fact that the bill authorizes nearly $1 trillion in spending…

And yet, one underrated provision of the bill that I found to be particularly saucy is the measure that eliminates direct payments to farmers and ultimately transforms the farming safety net. A type of subsidy that is paid to farmers whether or not they grow their crops, direct payments add up to about $5 billion worth of spending every year. Essentially, direct payments are based on the number of acres of farmland owned rather than their crop. No fear, however, because to compensate for these cuts the Farm Bill will significantly add to government-subsidized crop insurance. While major GM crops like corn, soybeans, wheat, rice, and cotton will continue to be heavily subsidized, this means that farmers are going to start relying more on “politically defensible insurance programs.” In other words, only farmers who actually farm will receive the subsidy, which makes sense to me. Factoring in the effects of precipitation and weather as indicators is a more practical and effective foundation for determining crop insurance eligibility.

All things considered, at the end of the day the House did achieve what a majority of fed-up Americans have been asking for: something. A Farm Bill approved, members of the House can now take a second to pat themselves on the back for this one temporary feat (assuming all goes well in the Senate and on the President’s desk), and move on to the next item on their to-do list. Two years and one government shutdown later and the nation may be one step closer to passing a Farm Bill. With Congress going at this rate, this gives just enough time for the House to start working on the next one!

-Allison Paisner

National Grange Intern

Tuesday, January 14, 2014

I guess beggars can be choosers.

One of my professional New Year’s resolutions is to pay more attention to my blog. The kayos of 2013 proved more time consuming than I expected and unfortunately my blog suffered for it. Nonetheless, I am dedicated to writing more in 2014.

Naturally, I’ve decided to begin my 2014 blog-writing campaign with something controversial that’s sure to anger at least some of our members. On Monday, the Thomas Reuters Foundation released an article entitled, “Rural food needs may spur Kenya to review GM ban.” The article focuses on the Kenyan government’s debate on whether or not to allow genetically modified foods to be grown or imported in Kenya. The article can be found here: http://www.trust.org/item/20140113123624-yc1sr.

From 2009 to 2012, Kenya’s National Biosafety Authority (NBA) allowed humanitarian charities to distribute genetically modified products as food aid to Kenyans in need. However, in November of 2012, the government banned GM foods following the publication of a study in the Food and Chemical Toxicology Journal that claimed to have found cancerous tumors in mice that had been fed GM maize. The study, conducted by a French scientist named Gilles-Eric Seralini, was later retracted by the journal in 2013. Nonetheless, for all practical purposes, the sale, distribution and CONSUMPTION of GM products in Kenya remains illegal.

Before I begin ranting about how nonsensical and oppressive this is, let’s take a quick look at American/Kenyan relations…just for kicks. In recent years, U.S. foreign assistance to Kenya has averaged around $1 billion a year, and the country routinely ranks among the top ten U.S. aid recipients globally. U.S. assistance was estimated at over $900 million in FY2011, including over $200 million in food and other humanitarian aid, and over $700 million in FY2012. The State Department has requested $564 million in non-emergency aid for FY2014, which does NOT include food aid. In other words, we’ve more than tried to help. 

So as a thank you for our generosity, the Kenyan government made it exponentially harder and more expensive to feed thousands of their starving citizens. This whole situation reminds me of an incident that my fiancĂ© and I experienced last year. We were sitting in Five Guys, guiltlessly chowing down on greasy fast food when we noticed a homeless man begging on the sidewalk across the street. If you’ve ever been to Five Guys, you know that they give you a mountain of fries that no average human being could possibly consume on their own. So we decided to give the homeless guy our leftover bag of fries. When we approached him and handed him the bag, he opened it, looked inside, handed it back to me and said; “I don’t eat fries.” Ummmmmmm excuse me? I was stunned and just a little agitated to say the least. This guy, who claimed hunger via a cardboard sign, would rather beg for money from complete strangers than accept a bag of fresh, warm fries. I guess no good deed goes unpunished. The same appears to be true with the Kenyan government.

The United States gives them nearly $1 billion a year in aid, expecting virtually nothing in return, so the people of that country don’t starve to death- something that occurs there regularly- only to have them turn around and say; “We don’t eat genetically modified food.” And make no mistake, this anti-GMO sentiment is one permeated by the Kenyan government, not its people. Over 3.8 million Kenyans are chronically malnourished, while over 15 million struggle with hunger on a regular basis. Those fortunate enough to find food will, on average, spend roughly 50% of their income on it. For reference sake, Americans spend less than 10% of their annual income on food.

Now, to be fair, I cannot claim with 100% certainty that genetically modified products don’t carry some potential negative ramifications for the future. However, I can claim two things with 100% certainty. First, there has yet to be a study conducted by a credible source that shows GM products are unsafe for human consumption. Even the study upon which the Kenyan government based its decision to ban GM products was later retracted by the publisher. Stanford University, a traditionally left leaning institution, conducted a thorough study on the benefits of organic foods versus conventional and even they determined that there weren’t any; organic produce contained the same amount of vitamins and minerals as produce grown conventionally. The second thing I know with certainty is that starvation and malnourishment absolutely WILL kill you.

Do we really believe that these poor starving people are preoccupied with whether or not their food is genetically modified? Of course they’re not! Such worries and concerns are a luxury enjoyed only by spoiled Americans and other industrialized nations who don’t worry about running out of food. We often see those sad commercials air in between football plays as we sit in our la-z-boys grubbing on cheeseburgers and beer, but it’s still not something prevalent in our daily lives. After all, to quote Daniel Tosh, “survivor” is a game in this country (no wonder the rest of the world hates us.) Nonetheless, Americans have a vested interest in ensuring that people all over the globe have access to a healthy and plentiful food supply. We don’t tolerate human suffering and we do what we can to help those in need. It’s just too bad that carrying out this mission is made increasingly difficult by irrational and dominating governments that care more about staying politically trendy than feeding their own people. 


-Grace Boatright

National Grange Legislative Director