Tuesday, July 31, 2012


It's hard to over-estimate the impact that grain crops have on the US economy.  Foodstuffs, the grain crop, particularly corn, wheat, and soybeans make up a large portion of the row crops planted in the US and their economic impact flows into myriad smaller economies.  Sugar, plastics, animal feed, we consume feed grains both directly and indirectly. 

And, we're in a drought.  Grain supplies, especially corn, are down right now due purely to a lack of rain.  One anonymous wise man once said "Man - despite his artistic pretensions, his sophistication, and his many accomplishments - owes his existence to a six inch layer of topsoil and the fact that it rains." 

Over the past several years, we've seen corn, a vital food crop, diverted into fuel.  Ethanol, the bane of small engines and gasoline mileage in larger vehicles, is made primarily from corn in the US.  This is based on federal regulation and the Environmental Protection Agency, who oversees such nonsense.  Renewable fuels is their big push these days and they're diverting a bigger percentage of our food and feed crop into ethanol than ever before.

But now, we're in a drought, facing a corn shortage.  If the EPA were to undo the regulations and allow corn to follow the market, they'd be undoing a signature Democratic policy initiative.  They'd be throwing thousands of ethanol workers out of work, idling ethanol plants built with government subsidies, and washing our investment down the drain.  By sticking to their regulations, they're running the danger of further crippling our economy by forcing higher prices and inefficiencies in the marketplace.  It's a damned if you do, and a damned if you don't dilemma.

Such is the nature of government regulation.  They can't be all-seeing, all-wise technocrats and most times, they get it wrong.  God little cares what government does and His will can be capricious at times.  He has suffered us with a drought, not the first in the history of Man. Now, we're being threatened by our own policies, the unintended consequences of what seemed to be a good idea.  It wasn't.

I don't believe that the government should be in the agriculture business, neither to subsidize farmers nor to dictate production.  If growing corn is a good idea, the market will absorb it.  If growing corn is a bad idea, the market will show us.  If making ethanol is a good idea, the market will support that too.  Man has been making alcohol for a lot of years and the market seems to support that.  Some of that alcohol is made from corn.  That's a good thing, and I drink corn whiskey occasionally.  Those producers don't seem to be needing subsidies.

Ethanol producers shouldn't need subsidies and the government should not dictate where our grain crops are allocated.  Let them float on the market and we'll be fine.  But, as it stands right now, we're burning our food crops and that simply doesn't make any sense.


Gerry N said...

One way to alleviate this idiocy would be to defund the EPA, then allow it to wither on the vine.

Gerry N.

Red Tornado said...

Much agree, PawPaw. Well said.