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October 2009 Archive for Economic Sense

RSS By: Matt Bogard, AgWeb.com

Matt's primary interest is in the biotech industry and ag policy.

Time to Change the (sustainable cotton) Sheets

Oct 29, 2009
 

By Matt Bogard

A recent AgWeb blog reader commented that they were watching the "Green Channel" on one of the satellite dish providers, and made the following observation:

"One program had a woman trying to 'help' an expectant couple on the purchase of the nursery items. She told them that cotton was the most pesticide used crop in the world...... and that crib sheets and blankets should not be of cotton but of organic material"

Not long ago, I watched an infomercial featuring Wal-Mart and then found the following on their website:

“So, we expanded our organic practice to include select bath, bed and baby products. From just these few orders in a limited number of stores, the Organic Exchange has informed us we will have saved 50,000 – 60,000 lbs of pesticides, herbicides and synthetic fertilizers and other chemicals from being used, and have become the largest single purchaser of 100% organic cotton products in the world.”

I cannot locate the page for the above quote anymore,  but I  found  the following reference to an article in Feedstuffs that verified that the 50,000 claim was posted on the Wal-Mart website, and was actually a revised figure down from 500,000 lbs of chemical reduction. 

And the following from Wal-Mart here:
 
“To grow a pound of cotton takes on average .1188 ounces of synthetic chemicals. So our purchase of 12 million pounds of transitional cotton will save over 89,000 pounds (over 40 tons) of synthetic chemicals from going into the earth.”
 

Well that’s great, but do consumers realize how many pounds of insecticide are saved every year from non-organic biotech Bt cotton?  

1.8 million fewer pounds of insecticide are applied each year as a result of biotech Bt cotton alone. According to research from USDA ERS from 1997-1998 glyphosate resistant technology in soybeans allowed for glyphosate herbicide to substitute for 7.2 million pounds of other chemicals that are more toxic and persistent in the environment (Note this was in the early stages of biotech prior to the widespread adoption that we see today so these numbers are likely much higher today).

I don’t have the data on hand for glyphosate resistant cotton, but the reduction in pesticides from Bt cotton alone dwarfs the reduction from organic mentioned above. We are comparing reductions of tens of thousands of pounds  with organic vs. hundreds of thousands and millions of pounds due to biotech. My numbers reflect active ingredient of pesticides, the Wal-Mart statements use a more ambiguous term ‘synthetic chemicals’- I’m not sure if they are talking active ingredient, or they may even be including packaging, fertilizer and fuel costs. That would imply even less actual pesticide reductions than even the 50,000-89,000 pounds.

In addition to Wal-Mart’s actions, we’ve also seen Kroger and Starbucks eliminate the use of milk produced from cows treated with biotech rBST. This is despite the research indicating its safety and environmental benefits. ( See got Green Milk).

The point to all of this is not to blast big retailers. They are part of the reason that agriculture employs 25% of the U.S. workforce.  If consumers desire local, organic or other food alternatives, that’s fine. The market should meet those needs- that’s what they are for. The problem starts when the media,  schools, and the Michael Pollan’s of the world attempt to proselytize us all to believe that modern agriculture is destroying the environment- when there is so much evidence to the contrary.

As big retailers join the band wagon, it won’t be long before a strong lobbying force is taking their religion to congress in an attempt to impose it on the rest of us through more regulations ( like fat taxes, banning antibiotics etc.).

So the next time you buy clothes or sheets look for the “Made from 100% Biotech Cotton” label. Wait, I don’t think there is one. It seems the textile and retail clothes industry is missing a huge opportunity to market their ‘greenness’!

References:

‘Will wal-Mart’s organic cotton save the planet?’ Avery, Dennis T., Avery, Alex A. Feedstuffs . June 19,2006 (reference link)

Agricultural Outlook /August 2000 USDA ERS: (link)

Purcell, J.P. & Perlak, F.J. (2004). Global impact of insect-resistant (bt) cotton. AgBioForum, 7(1&2), 27-30. Available on the World Wide Web: http://www.agbioforum.org.

 

Campus Sustainability Day

Oct 21, 2009
By Matt Bogard

Apparently, October 21st is Campus Sustainability Day, and is being celebrated on many campuses across the country. I wonder what's on the menu on your local college campus?  With all of the attacks on modern agriculture that we have seen lately through articles written in TIME Magazine, from authors like Michael Pollan, Meatless Mondays in school systems, and proposed soda taxes and 'Calorie Added Taxes' on foods containing high fructose corn syrup, that is an important question to consider.  A quick google search revelas that plans on one campus include a viewing of the documentary King Corn ( see the Daily Sundial).  Another campus is featuring 'environmentally sensitive dining options.' 

While niche markets for local and organic food are emerging as one way to address the general public's concerns about sustainable food choices ( which has seen huge growth lately), how much does the general public know about the latest technological improvements that family farmers depend upon for their livelihood?  Many may not realize how sustainable these operations really are. We often get the idea from the media that our food industry has been taken over by industrial farms, but the numbers just don't support those notions. Family farms make up 98% of all farms in the U.S. and according to the USDA ERS (2007) non family corporations make up less than 1% of the total number of farms in the U.S. and have accounted for only 6-7% of farm product sales in every census since 1978.

How many people outside of the ag industry realize that family farms rely heavily on products like biotech Bt corn and glyphosate resistant corn and soybeans? A good review of the environmental benefits of biotechnology in crop production can be found  in  a report by PG Economics here. Nor can I forget the great strides made in the improved sustainability of milk and beef production through the use of improved pharmaceutical products and biotechnology. ( See Got (Green) Milk)

A reader recently asked  a good question, the answer to which relates to these issues:

"Swine flu, bird flu, mad cow, where does it end. My only qustion is whats going on in the livestock industry? It seems like its something all the time?"

I think what's going on largely has to do with the media, general ignorance of agricultural science, and to some degree antagonistic opinions related to free markets and agriculture, to the point where evidence is subordinated to emotional appeals. The fact that the media continues to use the term 'swine flu' in place of H1N1 to me is not only negligent, but reflects implicit contempt for the livestock industry, and whether intended or not, for family farmers. We continue to see publications with one sided support for things like soda taxes or politicians calling for policies  restricting antibiotic use in livestock. All despite the lack of scientific or economic evidence to support them. Cases for these policies are made by creating an image of  'industrial' farm strawmen to mask the fact that these policies will directly target the livelihoods of family farmers. The public remains uninformed ( taking opinion for fact like in the case of  TIME Magazine) and comes to the conclusion that all of these problems ( H1N1, obesity, antibiotic resistance,  climate change etc.) are the result of  'industrial agriculture' when nothing could be further from the truth.  

With a little better understanding at the farm gate level, I think many people will be surprised just how many sustainable food choices we really have! 

Additional Information:

Structure and Finances of U.S. Farms: Family Farm Report, 2007 USDA ERS

The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production
By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues.

Capper, J. L., Cady, R. A., Bauman, D. E. The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science, 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781

Politics and Science

Oct 10, 2009
In a past post I made note of the following quote from an issue of Nature Biotechnology:

"Obama is clearly a science buff, and is really, honestly, into knowing the facts, having them laid out, and then making the best choices that can be mustered," says a policy watcher who was close to the transition team but is outside the federal government. "It is a whole different approach compared to the 'How can we spin this information?' approach of the [Bush administration]. Back to 'honest-to-goodness' curiosity, which is, yes, incredibly refreshing."

Farmers, other business owners, and entrepreneurs, acting in their own self interest often promote the interests of society. Just think of the adoption of biotech crops as an example. This is often referred to as the 'invisible hand' or a 'spontaneous order' by economists. ( or often in the case of agriculture the 'invisible green hand') As a result, market decision makers are the one's that truly embrace science and make the best decisions based on an earnest effort to obtain all of the facts.

Most public choice economists will agree that like farmers, politicians also make decisions in their own self interest, typically maximizing their power and the influence of their ideology. The difference is that farmers have a vested interest in science. Yields and costs depend on it.

Politicians on the other hand have a strong incentive to pick and choose their science. If embracing evidence tends to increase their power and serve to further their political ideology then they take an 'honest to goodness curious' approach. If their policies and ideology flies in the face of decades of evidence, then they shift gears to 'how can we spin this information.'

Public choice economists will hold that this is not a matter of being a republican or democrat, or a conservative or liberal, moderate, or independent. It is inherently a funcion of government. It is naive to think that democracy, or an election that replaces one set of politicians and bureaucrats with another will usher in a new age of enlightenment.

We have seen this most recently with the bailouts and stimulus policies that rejected over 60 years of macroeconomic research. Further examples in agriculture involve the infatuation politicians have with 'fat taxes' on soda, despite little scientific evidence connecting soft drinks with obesity, and the research that indicates that to be effective, these taxes would have to be in the range of 1200%.

Most recently we have heard that despite having little evidence to support their case, our current politicians are wanting to restrict antibiotic use in livestock. It's politics not science.
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