Immigration and food prices

While it probably isn't the first thing you think about, it's not too hard to understand the logic here. A study commissioned by the American Farm Bureau reports that if immigration enforcement is stepped up, food prices will rise by 5-6% and the agricultural industry will lose about $60 billion. I guess it's really tough when you have to pay people the actual minimum wage! That seems like a big loss, though: surely the higher food prices aren't a total loss for the industry.

I was reading about how to fix the US food system the other day, and the first constructive thought I had was about the importance of prices. If there are no incentives for farmers to worry about fertilizers running off of their land and into the Bay (or the Gulf of Mexico, for that matter), they won't do it. If farmers don't pay the full cost of the damage that concentrated animal feeding operations do the environment and the people living nearby, they will certainly continue to do it, just like we continue to abuse parking that is underpriced. And when farmers are paid to produce corn for fuel instead of food, can you blame them when that's what they do?

While higher priced food is a bad thing for consumers, I think we need to accept that the current prices are too low for a number of reasons, including the poor conditions of life for many farm workers. (I'm not saying that the enforcement of immigration is key!) People deserve a decent wage for farm work, and right now they don't get it. It's pretty shocking to hear farmers complain about how farmers clog up the local emergency rooms, when it's their fault the workers lack insurance.

2014 Farm Bill

Past student Amanda Wayman wrote me an email saying, "A couple of days ago and again this morning I read that they've finally passed the new farm bill. I was just wondering if you've seen it and what you think about it? You should add your opinion of this to your blog!"

http://www.nytimes.com/2014/01/30/us/politics/house-approves-farm-bill-ending-2-year-impasse.html

http://www.nytimes.com/2014/02/08/us/politics/farm-bill.html?hpw&rref=us&_r=0

Go past the jump for my take on it....

Keystone XL supported

It's been a lot more common for people to rally against the pipeline than for it, but today we saw the latter. A bipartisan group of US Senators and others held a press conference supporting the pipeline, giving the same rationales we talked about in class.

Dominion Cove Point

   There are new plans to turn Dominion Cove Point, a liquefied natural gas import facility in southern Maryland that has not been in use since 2011, into an exporting facility.  In the Washington Post article An Energy Dilemma at Md.’s Cove Point, writer, Peter Galuszka, outlines both the costs and benefits of transforming this facility and using it as a natural gas export facility, including the 4,000 jobs it would create and the billions of dollars it would bring into the area.  In his opinion, the benefits outweigh the costs and he believes that converting Dominion Cove Point is a good idea (Galuszka, 2013).
   I, on the other hand, disagree with Galuszka.  Galuszka points out that Maryland recently spent $1.7 billion on offshore wind development (Galuszka, 2013, ph. 10).  This investment will bring the state closer to its goal, which the Baltimore Sun reports is to increase the amount of energy provided to the state from renewable sources to 25% by 2020 (Browner, 2013, p. 5). Converting the plant and promoting the use of natural gas would push Maryland in the opposite direction than it wishes to go, turning the almost $2 billion investment into a pointless waste of money.  Although the facility could bring in an estimated $59 million to the state government (Galuszka, 2013, ph.8), natural gas is a nonrenewable resource.  With the entire country tending towards renewable energy sources, the plant could once again become useless in a matter of decades, if not years, proving this to be another waste of investments.  I believe that if Maryland does wish to make its goal of running 25% of electricity off of renewable resources and promote a more sustainable future, it should not allow Cove Point to be converted into an export facility.

--Courtney Schallhorn

Go Go... GMO?

We don't see many people advocating for GMO's other than Monsanto shareholders, but a piece in the New York Times makes the case for more research into GMO wheat. The author notes that for corn and soybean growers, GMOs have reduced use of insecticides and helped them shift to less toxic herbicides. They have also been making more money than before, and we all want farmers to make a decent living! Finally the author argues that GMOs are safe, and that GMO technology may also protect the wheat crop against drought, disease, pests, and frost. I'll add that the more we can get from existing cropland, the less pressure there will be to convert wild lands. Is it time to consider supporting the technology?

Water in the West

Major, major resource issue: the droughts in California. While for many of you that seems so far away that it might as well be another country, that's my home. Why you should care: the price of food is about to go up because of it. As the California Department of Food & Ag puts it, "California’s agricultural abundance includes more than 400 commodities. The state produces nearly half of US-grown fruits, nuts and vegetables. Across the nation, US consumers regularly purchase several crops produced solely in California."

Most water in California comes from the snow that accumulates in the mountains on the California-Nevada border. This year the snowpack is around 12% of normal. That is bad. Think about all that means: crops won't get planted, livestock will be slaughtered early or shipped out (expensively) to places where they can be fed. Hopefully there is enough water to at least keep alive the trees and vines that produce 90% of the country's grapes, 80% of the world's almonds and 40% of the world's pistachios, even if they don't produce any fruit this year. 

Last quote: "California accounted for all or nearly all the national production of almonds, dates, figs, kiwifruit, olives, Clingstone peaches, pistachios, dried plums, raisins, and walnuts." So even if you aren't worried about whether the 38 million Californians are able to take showers, wash their cars, or water their lawns, hopefully you can see that this is a big deal!

Keystone update

We opened the class by talking about the Keystone XL pipeline, and a milestone was reached in the government's examination of that proposed project on Friday when the State department issued a report. Contrary to what I said in class, the report concludes that the pipeline will not affect how much oil is extracted from tar sands in Alberta.

If that's the case, then I personally don't see any reason to stop it. As you read in the article I handed out on the first day, the fight against the Keystone has been a boon to the environmental movement as people join up against the pipeline, for reasons logical or illogical. As an economist it seems to me that there are better ways people could use their energy to improve the environment (such as fighting for appropriate taxes and/ or cap and trade on industry emissions). Obviously I'm not a politician!