The Bioethanol Binge

Fuel made from corn is expensive, inefficient—and undrinkable.

Aberdeen, South Dakota—“I’ve always wanted to know, can you drink what you guys make?,” I asked, sitting in Jim Lane’s office at the Advanced Bioenergy ethanol plant in Aberdeen, South Dakota. After all, ethanol plants ferment corn just like bourbon distilleries do. Lane smiled, pointed to a small jar of water-clear fluid on the table at which we were sitting, and said, “Open it up. Give it a smell.” I did. It felt like several layers of the cells lining my nostrils were being burned off. Lane smiled some more. The obvious answer was no. He explained that toxic stench in fuel ethanol emanates from fusel oil, a mixture of alcohols and fatty acids, which is used industrially to remove lacquer and enamel—that explains the eau de paint thinner—and is retained in fuel ethanol because it provides some extra energy. It also limits any temptation that a plant worker might have to take sip while on the job. In addition, to avoid paying beverage alcohol taxes the plant denatures its ethanol by adding two percent gasoline before shipping it.

Lane, a chemical engineer who is in charge of regulatory affairs at Advanced Bioenergy, generously agreed to give me a tour of the Aberdeen facility so that I could learn more about the process of producing fuel ethanol or bioethanol from corn. Last year, the country produced just over 11 billion gallons of bioethanol. In contrast, only about 1.2 billion gallons of ethanol were produced to drink in the form of wine, beer, and distilled spirits. The Energy Independence and Security Act of 2007 [PDF] mandates that the country will use 36 billion gallons of ethanol for fuel by 2022, which is equal to about a quarter of the 138 billion gallons of gasoline consumed domestically last year.

Upon arriving at the Advanced Bioenergy facility, a pleasant, familiar smell pervaded the environs of the Aberdeen plant. As I later learned, what I was smelling was distillers grains, a close cousin to the sweet cattle feed we used to get from the Southern States mill when I was a farm kid. Distillers grains is the term for what is left over after alcohol has been extracted. As Lane explained, roughly about one-third of the corn is starch (converted to sugar) that is fermented into ethanol; another third, mostly proteins, becomes feed; and the last third is carbon dioxide produced by fermentation and which is vented into the atmosphere. Lane hastened to explain that the facility’s carbon dioxide emissions were recycled carbon dioxide captured by corn plants and did not add to the greenhouse gas content of the atmosphere. The livestock feed is an additional revenue stream for the plant (currently $147 $47 per ton for wet and $120 per ton for dry distillers grains), but ethanol production always provides the larger share of the revenues.

The Aberdeen plant began as a small facility in 1992 producing just 3.5 million gallons annually. In 2008, the plant was expanded at a cost of about $100 million, and now produces about 50 million gallons of bioethanol per year. This is achieved by grinding up 51,000 bushels of corn (2.8 million pounds) per day 355 days per year for a total of more than 18 million bushels annually. Each bushel yields about 3 gallons of ethanol. The plant employs 45 full-time employees.

Lane gave me a thorough tour of the plant, showing me where the corn was ground up, softened using enzymes into a mash, and dosed with brewers yeast. We climbed up to peer into one of the fermentation tanks in which the yellowish mash appeared to be boiling furiously, but was actually bubbling away carbon dioxide. It generally takes about 50 hours for one of the giant tanks to finish fermentation. Lane showed me how alcohol was distilled and stored.

After the alcohol has been extracted, the distillers grains are processed through centrifuges which remove water containing some solubles. An evaporator reduces them to a syrup that can be added later to enhance the nutritional value of the distillers grains. The solids leave the centrifuge and are dried to produce, yes, dry distillers grains. Lane also showed me the labs in which samples from the fermentation tanks are constantly tested to make sure that they have not become infected with bacteria. If an infection occurs, the tanks are treated with penicillin.

Lane is an earnest believer in the benefits of ethanol and was eager to persuade me that ethanol was good for the country and the economy. Like many others whom I’ve met in the renewable fuels sector, he forcefully argued that ethanol helped free us from foreign oil, provided good jobs, boosted the economies of rural communities, and helped reduce our greenhouse gas emissions. When I asked Lane about the $6 billion in tax credits given to the ethanol industry by the federal government last year, he retorted that oil companies get subsidies too. In fact, The New York Times reported in July that the oil industry got $4 billion in tax breaks last year. Many of the tax breaks, however, are standard ones like deducting interest expenses that nearly every industry enjoys.

Currently, corn-based ethanol producers receive a tax credit of 45 cents per gallon. The tax credit offsets some of the production costs of bioethanol making it more competitive to gasoline. In July, boosters of corn ethanol were dismayed by a Congressional Budget Office (CBO) report [PDF] that found after adjusting for the difference in energy content between ethanol and gasoline plus adding in the amount of petroleum fuels burned to produce ethanol that actually the “the producers of ethanol made from corn receive 73 cents to provide an amount of biofuel with the energy equivalent to that in one gallon of gasoline.” The CBO further estimated that without the tax break bioethanol production would be about one-third lower than it is, which means that the “costs to taxpayers of using a biofuel to reduce gasoline consumption by one gallon are $1.78 for ethanol made from corn.” Historically, ethanol prices have generally been higher than gasoline prices [PDF], so ethanol has only been competitive with gasoline because of the tax subsidy.

And what about greenhouse gas reductions? The CBO cited life cycle calculations by the Argonne National Laboratory that found that a gallon of gasoline produces 12 kilograms of greenhouse gases whereas an energy equivalent amount of bioethanol produces 10 kilograms, about 20 percent less. So corn bioethanol would need to displace 424 gallons of gasoline in order to reduce greenhouse gas emissions by 1 metric ton. Multiplying this figure by the $1.78 cost to taxpayers of displacing one gallon of gasoline by bioethanol yields a cost of $754 to cut one metric ton of carbon dioxide. At the moment, carbon emission permits in the European market are going for just under $20 per metric ton.

In fact, whether or not producing corn ethanol actually reduces carbon emissions is still a hotly contested scientific question. Some researchers argue that land clearing to grow additional corn releases more carbon dioxide than bioethanol displaces by reducing the consumption of gasoline. Let's not forget the issue of how turning one-third of America’s corn crop into fuel impacts food prices, especially the prices of corn-fed beef and pork.

It’s past time for the ethanol industry (and all other energy supply industries) to stand on their own. Although this is probably a pipe dream, all energy subsidies should be ended and the market allowed to determine which fuels win. The ethanol tax credit expires at the end of this year. Congress should let it die.

Note: I am traveling back to the East Coast over the next couple of weeks from a summer in Montana spent working on a new book. Along the way I am visiting various energy production facilities. The goal of this circuitous trip is for me to get a better understanding of energy production and to geek out on technological marvels.

Ronald Bailey is Reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.

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  • John||

    Your take seems biased with all the facts on corn ethanol including a study released TODAY the by the USDA showing that corn ethanol has a net energy gain of 2.3 to 1. According to the EPA ethanol burns 52% cleaner than gasoline and is a carbon neutral because the carbon released in ethanol production is more than obsorbed back by future crops. To say we are not using 1/3 of our corn crop for feed is not true as 18lbs of every bushel used for ethanol production is fed back to livestock a Dried Distiller Grains.
    Corn ethanol prouducers do not receive tax credits. VEETC is actually a blenders credit that gives incentive to blenders of gasoline and ethanol. Not farmers, ethanol plants or agribusiness. Oil received over $70 billion over the past four years compared to corn ethanols $16 billion.

  • ||

    End subsidies to both. Problem solved.

  • PabloKoh||

    End wars that only serve to protect oil interests.

  • ||

    "Your take seems biased with all the facts on corn ethanol including a study released TODAY the by the USDA showing that corn ethanol has a net energy gain of 2.3 to 1."

    2.3 to 1? Last time that I checked, ethanol burned much less efficiently in internal combustion engines. Also, ethanol can't be pumped through pipelines like oil can, so it must be transported by truck, unless you happen to live near an ethanol refinery.

    "According to the EPA ethanol burns 52% cleaner than gasoline and is a carbon neutral because the carbon released in ethanol production is more than obsorbed back by future crops."

    Yes, the carbon given off by burning ethanol is the same carbon absorbed by the plant during its lifetime. However, there are carbon emissions given off during the transportation and distillation of ethanol that this can't account for. Environmentalists are often quick to point out that tree farms shouldn't count as forests because a tree farm doesn't provide the same benefits to an ecosystem as a natural forest. The same could be said about a corn farm that takes the place of unused land.

    "To say we are not using 1/3 of our corn crop for feed is not true as 18lbs of every bushel used for ethanol production is fed back to livestock a Dried Distiller Grains."

    Of course, livestock are a much less efficient source of food than the corn would have been. Poor people often can't afford steak, and must subsist on the cheaper grains. You are taking a source of cheap food and turning a piece of it into feed for much more expensive food.

    "Oil received over $70 billion over the past four years compared to corn ethanols $16 billion."

    I'm sorry, but we get much, much, much higher levels of oil production per dollar of subsidy than we do with ethanol subsidies. Yes, fossil fuels often receive more subsidies OVERALL, but on a per unit of energy basis, they are much, much lower.

  • PabloKoh||

    Ethanol burns as efficiently as gasoline in a gasoline engine, it just has less energy per gallon. Ethanol burns more efficiently than gasoline in an ethanol specific engine. Ethanol can run 18:1 compression, hence the increase in efficiency. This can be easily accomplished by making a flex-fuel engine with VVT and high pressure turbo to increase actual cylinder compression (like SAAB has been producing in Sweden) to take advantage of the high octane properties of ethanol while still allowing the engine to detune to run on the mixture of various carcinogenic hydrocarbons assembled and labeled "gasoline" if desired by the owner.

  • PabloKoh||

    I also want to add we should be growing hemp for methanol today and (my non free market idea) of mandating complete alcohol fuel compatibility of all new cars.

  • ||

    I'm not saying that nobody should research these things, I'm simply trying to argue that mandated markets for unproven technology don't get us to a point where such technologies are viable any faster. I'm not even sure if that is true. I wish somebody would do a study to decide whether money is better spent on research for new fuel technologies or new infrastructure for technologies that haven't proven them self yet.

  • ||

    Link please? I've been trying to find information about what you are saying on google, and all that I could find was an article talking about how turbo charged E85 engines have greater horsepower than gasoline engines, but I have yet to find anything saying that such engines make ethanol as fuel efficient (as far as mpg is concerned) as gasoline.

    Also, how much does that engine cost?

  • ||

    John
    The blenders credit makes the price of ethanol more attractive which means that farmers benefit by selling lots more corn. The CBO study concludes that most of the value of the blenders credit is passed on to farmers.

  • ||

    Please provide a source to the USDA study, a 2.3 to 1 energy balance is higher than anything I have read to date.

    We also need to bear in mind the enormous amounts of water that are needed for ethanol production, billions of gallons in fact. In states like California, it makes no sense to produce ethanol for that reason. If ethanol is as advantageous as you claim, why does it need to be subsidized so heavily?

    The amount the government gains from taxing fossil fuels makes the tax breaks look minuscule by comparison, but we should end those subsidies as well. We also get ALOT more usable energy from subsidizing fossil fuels.

  • Chad||

    Ron, when are you going to quit using absurdly narrow definitions of "subsidy"?

    Your "four billion" is off by a couple order of magnitudes. Most of it is externalities, but much of it is also sweetheart royalty rates, free infrastructure and defense, and yes, direct tax credits.

  • Anorak||

    But, but, but, ending the subsidies will destroy the train industry!

  • Chad||

    Didn't you see TEH EXTERNALITIES!?

  • ||

    Once again, Chad, there is no objectivistic deity who decides the values and costs of everything. Value and cost simply exist within the minds of people exchanging and coveting. Are their externalities that should probably be accounted for? Probably, but I don't believe that the government has the ability to determine the value of such things, nor do I think of giving more money to government as a solution for externalities that aren't being taken into account. True, producers of fossil fuels get away with a lot, but this is usually due to government, not in spite of it. We can argue about the actual cost of such things all day.

    "free infrastructure and defense"

    I can't think of an industry or business that doesn't "benefit" from the roads that people drive on to get to places to shop and the police protection that prevents the shelves of every store from being wiped clean. (I put the word "benefits" in quotation marks because I personally don't believe that government roads and police protection are a benefit to people as a whole in all cases, but it is a "benefit" in the way that Chad means it.) Should we calculate that into the subsidies of ethanol and every other business in the nation too?

  • Chad||

    I can't think of an industry or business that doesn't "benefit" from the roads that people drive on to get to places to shop and the police protection that prevents the shelves of every store from being wiped clean.

    Ahh, the old "All shades of grey are equal" argument. Yes, every industry benefits from cops and roads and soldiers to some degree, but not the same degree. It is blitheringly obvious that a good portion of our infrastructure and defense are built precisely to coddle this particular industry.

    As is typical for a right-winger, you (and Ron) just ignore this factor, because it is hard to quantify. So does the unfree market.

  • ||

    "As is typical for a right-winger, you (and Ron) just ignore this factor, because it is hard to quantify."

    Seriously, motherfucker, eat a dick. You are such a fucking asshat. I've never ignored that factor. Get your head out of your ass.

    "Ahh, the old "All shades of grey are equal" argument."

    What shades of grey? All businesses that I know of utilize government infrastructure and police protection. I know of several streets in my city that would be wiped clean in seconds in the absence of such services. All international trade benefits from international protections that prevent cargo ships from being constantly raided.

    I'm not saying that the oil industry doesn't benefit from government protection in a lot of ways, especially in countries where militaristic governments seize property from its own citizens to produce oil. I've admitted time, and time, and time again that the oil industry has a high level of support, but on the basis of per unit of energy produced, the benefit is no higher, and in many cases much lower than the benefit received by alternative energies. Perhaps a seriously in depth analysis is required, but I'm still willing to bet that fossil fuel production is less subsidized per unit of energy produced than the alternatives that are known to be incredibly expensive.

    Deciding exactly how much each industry benefits from public infrastructure and protection is not just difficult to quantify, it is impossible to quantify. What is the value per person of the benefit received from US military protection in this country? Would you compare it to the wealth a person a would be able to acquire in this country in the complete absence of the US military? Is that even possible to quantify? Is that even the proper methodology to determine such things?

    And yes, the fossil fuel industry does benefit from a lot of infrastructure that was built previously and some alternatives might be more viable if they had that same infrastructure already in place, but old infrastructure is a sunk cost. You can't snap your fingers and radically alter the shape and design of physical infrastructure, because those are sunk costs on fixed capital. To paraphrase Mises, if humanity knew 200 years ago the shape and form of society today, they could have made a lot less mistakes in terms of the placement of towns, cities, factories, etc. However, they didn't have that foresight, so infrastructure is often built less than perfectly efficiently. Sure, some functions could be much more productive had fixed capital been utilized differently, but once infrastructure is arranged, it is a sunk cost. If the cost of changing the infrastructure is greater than the difference between the increased productivity to be brought about by a change in infrastructure and the productivity of the current utilization of fixed capital, than the superior option is to stick with the old infrastructure. (To calculate all of this properly, you must also account for time preference.)

    Basically, the "gasoline benefits from previous expenditures on infrastructure" argument, although technically true, doesn't support the idea that alternatives "deserve" more subsidy. I hope that I paraphrased Mises without butchering it too badly; I just woke up.

  • Chad||

    twelkge: How much do we spend on the military? If even 1% of that is directly tied to our dependance on oil, which I consider a wildly low estimate, one is already talking about a subsidy which dwarfs Ron's piddling $4 billion claim. In fact, while it might be impossible to pin an exact number, one can confindently assert that it has at least eleven digits, and perhaps an twelth. The fact is that if we weren't utterly dependant on a bunch of Really Bad People(tm) for a basic part of our economy, we wouldn't need to spend anywhere near as much on the military. Worse yet, these Really Bad People(tm) are what they are precisely *because* of the oil issue.

    Just spend a few minutes googling "oil industry subsidies". One could read all day.

    I do find it telling that you get all pissy about me pointing out that you are ignoring these costs: then you go on to claim that they are impossible to calculate, therefore you will ignore them. That's precisely my damned point. Your cost-benefit-analysis, convert-everything-to-cash thinking just doesn't work in the real world for precisely that reason.

  • ||

    "I do find it telling that you get all pissy about me pointing out that you are ignoring these costs:"

    No, I was pissy that you called me a "right winger." Only a fucking dumbshit would say something like that to a libertarian. Fucking dumbshit.

    "then you go on to claim that they are impossible to calculate, therefore you will ignore them."

    I have never ignored any part of the argument you dumb fucking moron. I dealt with each and every part of it. The externalities that you are talking about aren't merely difficult to calculate. They don't even work the way that you like to pretend they do. You twist reality itself to conform to your narrative. Like this:

    "How much do we spend on the military? If even 1% of that is directly tied to our dependance on oil, which I consider a wildly low estimate, one is already talking about a subsidy which dwarfs Ron's piddling $4 billion claim."

    I consider every industry to be dependent on the military. It is completely illogical to argue that x percent of the military budget is going towards oil. It doesn't work like that. Pretty much every industry and business in this country benefits from the fact that they don't have to worry about insurgents wrecking distribution routes and seizing property.

    The Venezuelan government hates us. Chavez is in no way a puppet of the US, and he is in no way bowing down to military pressure when he sells us oil. The OPEC nations are under no threat to keep supplying us with oil. They sell us oil because excess oil is useless unless you sell it to somebody. That is how they make money and they know it. Would the market price of oil be lower in the absence of the US military? Maybe, but if you think about it, the US military, in the cases where it is being used to protect economic interests, is simply responding to violent threats with violence. If they are acting as police to protect property rights, then they are not "subsidizing" oil. They are only subsidizing oil if they remove property rights from people (not governments who obtained that property through force). Before you even try to estimate a "cost" or "value" you should at least make sure that you are using the proper methodology.

    My argument is not that the costs are impossible to know, so to hell with them. My point is that before you determine costs, you have to ask, "is this a real cost with an isolated cause?" and, "Am I using the proper methodology to determine this cost?"

    "Your cost-benefit-analysis, convert-everything-to-cash thinking just doesn't work"

    Except you are the main person doing this. Yes, I admit that I use cost-benefit analysis in the same way that a business would to determine how people will act, but I use known market prices, and I recognize that even a market price is not an objective valuation. Market prices themselves are historical datums of subjective opinions. I recognize that. You're the one who attempts to apply objective value to things that don't have an objective value from a "societal cost" viewpoint. There is no such thing as a "societal cost." There is no society, there are only individuals who act according to their interests. You have my entire philosophy backwards and then you call me a "right winger."

    "Just spend a few minutes googling "oil industry subsidies". One could read all day."

    Yeah, thanks to all of the Chad's out there who write that crap. There are very few scholarly articles.

  • ||

    Chad, do you drive a motor vehicle?

  • No Name Guy||

    All well and good John. Except the part about sucking billions of tax dollars to make the whole flipping thing "viable". And your defense - 70 vs 16 billion. Shit, that's like saying Pol Pot was only a minor mass killer compared to Stalin. Didn't your mom ever teach you - two wrongs don't make a right?

    Get rid of the mandate. No 45 cents a gallon (to whomever, it really doesn't matter).

    If ethanol makes sense, then let the market decide, not the fucktards in congress who might have a collective 5 neurons between all 535 of them.

    Oh - any yes John, in fact, a substantial fraction of the US corn crop is used on this boondoggle. Quibble all you want about the exact fraction (1/3, 1/4, 40%, 20%, what ever), either way, it's huge in the absolute sense. The loss to direct food is at least the ~1/3 that Mr. Bailey points out that is starch that is turned into alcohol. Those calories that would be available for direct consumption, either by man or beast, are instead blended into gasoline. And that does in fact drive up the cost of food world wide (as corn is a global commodity, much as oil, iron ore, bauxite, or good old FCOJ are).

    Reduce the supply of eating/feed corn by using a whole shit pot of it for fuel, price goes up. Econ 001.

  • ||

    That's why I think it'd be better to make ethanol (sans subsidies) out of something like algae or kudzu. We get a fuel alternative that doesn't drive up food prices across the board.

  • .||

    Reduce the supply of eating/feed corn by using a whole shit pot of it for fuel, price goes up. Econ 001.

    That damn road to Hell.

    Its like the DDT ban all over again in respect that millions of human beings from far away places will starve to death instead of dying of Malaria.

    Leftist believe we must reduce the population of third world countries. Corn ethanol is pure evil and should not be subsidized!

  • Bender||

    Fuel made from corn is expensive, inefficient—and undrinkable.

    Says you.

  • ||

    Is the corn that is grown to produce the ethanol subsidized? or just consumption corn?
    All imported ethanol has a 53 cent tariff tacked on.
    According to the EPA ethanol produces more NOX and VOCs.

  • A is Awesome||

    Electric powered cars all the way.

    And maybe some hydrogen after that.

  • No Name Guy||

    And where are those hydrogen wells?

    Oh yeah...hydrogen isn't a primary source of energy, merely a means to store it (like a battery).

  • ||

    Electric cars are inferior to IC cars and are overpriced. Even with subsidies electric car market share is expected to be less that 2% worldwide by 2020. The US has no domestic supply of rare earth materials or lithium, we are trading one dependency for others.

  • Fred Flintstone||

    Batteries filled with toxic chemicals? No way, foot powered cars are the new holy grail of green transportation.

  • Pat Reynolds||

    Gravity-sensible skitter-carts are the only choice for responsible beings.

  • ||

    I feel Ron's katzenjammer-
    21 Billion Gallons?

    It would take almost an ounce of vermouth to turn that much into a satisfactory martini.

  • ||

    One issue that is never brought up in these silly debates is the effect of the gasohol production on the stabilization of rural economies.

    Prior to the gasohol buildup in the 80's and extending back in time through the 20th and into the late 19th century, rural agriculture-based economies in the US were capital-poor and thus highly exposed to the vageries of the commodities market.

    If corn was high and you had a lot of corn to sell, you did well. If you guessed wrong and planted beans that year, you were hurting. If corn was high because of a bad crop, and you were in that group, you did bad.

    Small towns and family farms could not stay in the game given the need to bank so much during the random good years that they could never invest in building up their businesses. They also had to deal with years (sometimes several years in a row) of corn prices that were below cost of production.

    By having the stable demand for corn that comes from the gasohol market, we get stabilization of corn prices in a range that is above cost of production. Farmers (and the little towns that depend on them) are now able to generate a largely predictable income. With local capital levels increasing, rural America is getting incrementally better off.

  • No Name Guy||

    At the cost of screwing everyone else. Sorry Charlie.

    Agriculture is like any other business. Succeed or fail, they should do so on their own. Where's the subsidy to keep Starbucks and all the independent drive through espresso stands in business while the price of milk and coffee spike? Hmmmm? Oh yeah, there isn't one, since they're expected to be savvy businessmen who succeed or fail of their own accord.

    Besides, with futures markets, a farmer with a bit of savvy will pre-sell his next years corn crop (or at least a portion of it) this year if the prices are high, locking in a good return.

  • ||

    The stabilization of rural economies is a true form of social justice. For the duration of the 20th century and even more so in the late 19th, cheap food kept urban centers governable. Food made cheap on the backs of rural people who were stuck selling $3 corn for $2.50 and hoping for a better year next year.

    With biofuels forming a secondary market, these people can finally sell a product for a stable price.

    How about if your Starbucks example had to make the day's supply of coffee and then sell it for what ever the market would pay? How long would they want to sell $2.50 a pound coffee for $1 a pound or less?

  • ||

    You are still pretending that small farmers are owed a job. I'm sorry, but if you are in a business that is fundamentally unstable and flawed, that is your own fault. Larger farming operations make sense, and small farmers should look for other employment. If you are subsidizing the food production anyway, you cant exactly cheer about the benefits of "cheap" food. Rural USA became a lot more stable once people diversified into other occupations.

    Part of the reason that farming was so precarious of an occupation at times is that the bulk of farm goods often came from subsistence farmers who would produce what they and their neighbors needed and sold the rest. Since they often met their needs on the farm, they didn't necessarily need high profits from the sale of the surplus to sustain them. The sale of the surplus was often just a bonus. Also, farming is most precarious when there are too many farmers driving down the price of farm goods. The excess farmers should quit and find other jobs so the best farmers can utilize their land as part of larger operations.

  • ||

    "How about if your Starbucks example had to make the day's supply of coffee and then sell it for what ever the market would pay? How long would they want to sell $2.50 a pound coffee for $1 a pound or less?"

    All businesses face this possibility. All entrepreneurs are speculators. Nobody wants it to happen, but luckily, the general trend is that gains usually compensate for losses.

  • ||

    "You are still pretending that small farmers are owed a job. I'm sorry, but if you are in a business that is fundamentally unstable and flawed, that is your own fault. Larger farming operations make sense, and small farmers should look for other employment. If you are subsidizing the food production anyway, you cant exactly cheer about the benefits of "cheap" food. Rural USA became a lot more stable once people diversified into other occupations."

    There are few if any "other occupations" to diversify into.

    Small farms are preferable in areas where land is fragile. Family farms tend to take better care of the land and this results in less erosion, etc.

    It is cost-effective to keep these people in place due to the long term costs of large scale agribusiness (pollution control, higher environmental impact, etc).

  • ||

    "There are few if any "other occupations" to diversify into."

    Wow. I'm speechless. What a steaming pile of nonsense.

    "Small farms are preferable in areas where land is fragile. Family farms tend to take better care of the land and this results in less erosion, etc."

    That is debatable. A big farm will have more resources and lower costs due to economies of scale. They are just as conscientious about the state of their land as small farmers. Can you point to any research that backs up this statement.

  • ||

    http://capreform.eu/does-farm-.....-outcomes/

    Here is a link to a good debate on the subject. I agree that we could discuss the environmental effects of farming till we are all blue in the face, but focusing on the size of farms is not necessarily the best way to implement policy. I mainly take umbrage with your viewpoint that small, rural farmers deserve a permanent job.

  • ||

    "Small farms are preferable in areas where land is fragile. Family farms tend to take better care of the land and this results in less erosion, etc."

    That sound like a load of generalities there, care to cite any empirical evidence? Farmers are not "owed" job security any more than I am. Sink or swim based on your own productivity.

  • ||

    No shit Sherlock.Anyone who had payed attention to biofuels knows corn is the least efficient.But those farmers with their huge subsidies...{WELFARE}want to keep it coming.

    Hemp it the plant we should be growing.Grows like a weed ,dont need pesticides and there is no waste..none.

  • ||

    That's hippie talk, Daniel Quinn!

  • ||

    Henry Ford didnt think so.

  • ||

    BRM said,

    Small farms are preferable in areas where land is fragile. Family farms tend to take better care of the land and this results in less erosion, etc.

    Could not be more wrong. Ranches of any size are preferable to farms of any size where the land is fragile.

    But idiot programs like ethanol subsidies make ranching less profitable and drive conversion of fragile prairies to mono culture crop production.

  • Mark in Texas||

    I would suggest that people examine the concept of a Giffen good.

    Giffen goods are unusual in that they violate ordinary supply and demand in that when the price of them goes up, people spend a larger share of their income on them. The classic example during the 19th century was potatoes. When the price of potatoes went up, poor people bought less bread, meat, vegetables and shoes for the kids.

    I suggest that gasoline is today a Giffen good. Several years ago when the price of gasoline spiked, people had to choose between paying their mortgage and filling their gas tank to drive to work, they chose to pay more for gasoline and triggered the collapse of the financial system house of cards.

    Right now, we cannot substitute anything for gasoline. If every car sold in the US could use alcohol as well as gasoline, we could substitute which ever fuel was cheapest and we would have a true market for motor fuels.

    I would be very happy to see that political trade of ending corn ethanol subsidies for Flex-Fuel mandates.

  • ||

    Ron:

    On your travels, you may want to stop at a gas station (in Iowa, NE or MN) that sells varying blends of ethanol (i.e., E50, E65, E75, E85). You will notice that, as the percentage of etoh increases there is a linear decrease in the price at the pump, compared to the baseline regular gasoline (E10). That should give you an idea as to where the VEETC tax incentive goes.

  • ||

    End the subsidies.

    Few, if any of us, can be experts in agriculture, chemistry, oil, engineering, and all the other fields needed to correctly evaluate the relative merits of the fuels. However, if prices weren't distorted by subsides, we wouldn't need to be experts. Prices would contain the distilled form of all that information – the bottom line for each.

    Hi Mark in TX - As the price of gasoline rose, people drove less and demand decreased. Those that needed gasoline more did not reduce their use and paid the increased price. This isn’t a bug – it is a feature! Heh heh. The problem comes in when government prevents the market from responding with increased supply or alternatives. If Giffen goods exist they are due to government interference in the market.

    I’m cool with flex-fuel vehicles, the survivalist in me wants a vehicle that can run on anything, but I don’t like the idea of mandates. Why trade one market distortion (subsidies) for another (mandates)? :)

  • LoboSolo||

    Methanol is the way to go. It's already being produced more cheaply than gasoline on a per BTU basis ... without subsidies!

    Additionaly, methanol can be made out of almost any kind of organic material.

  • ||

    Methanol is all well and good but the libs will try to thwart it because it is not clean burning.

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