Trade, Jobs, and Political and Economic Disruption

Two podcasts I listen to often include EconTalk with Russ Roberts, and Masters in Business, with Barry Ritholtz. No one could have called the election based on these episodes, and none of the guests  made any projections about it specifically, but each of the these guests below discuss issues that could have been informative about what's been going on in the minds of the electorate. And why non-conventional candidates like Bernie Sanders and Donald Trump had so much appeal. They also question conventional wisdom about the distributional effects of comparative advantage and free trade.

In a past podcast, just over a year ago, Gary Shilling offers some interesting thoughts on trade:(paraphrasing not quoting).

Basically globalization has led to income polarization, with 8 years of zero to no real income growth for a segment of the population and this frustration has been expressed politically through Bernie Sanders and Donald Trump. With regard to Trump, when you strip away the blustering, he may actually be more like an old school centrist politician. When you take the impacts of globalization, the recession, and the slow recovery, conventional politicians don't know how to react. 

I think this is the kind of environment in which it was possible for the 'blue wall' on the electoral map to crumble.

More recently, Aswath Damodaran touches on this: (again paraphrasing)

Brexit should be a warning sign that we've lost perspective. In the aggregate, trade and globalization can be good for the country, but the 55 year old steel worker in Pennsylvania gets little consolation out of the fact that free trade is going to create more world wealth when he says where the heck am I going to get my paycheck next month. 

"We are paying a price for almost deliberate blindness in the financial capitals of the world to the kind of costs that are being created sometimes."

Again this echoes Shilling above. In his paper, "The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade", David Autor takes a very detailed look at these issues and investigates them empirically. David was guest this past year on EconTalk with Russ Roberts. Some highlights:

• one of the standard arguments for free trade and globalization is that it makes the pie bigger, and sometimes the story sounds like some people get larger slices than others, but everyone gets a bigger slice, so on the net everyone is better off. 
• Another way of thinking about this is that trade increases aggregate wealth, and this increase more than offsets the losses for those that are displaced in the labor force.
• Autor points out that yes, gains can offset losses, but the gains are going to different people
• Example: sure consumers gain by saving 5 cents on the broom they buy at Wal-Mart, and if you add up all of those nickels its more than the total losses for people whose lives are ruined.
• But this is little consolation to those whose lives are ruined, it takes years to find alternative opportunities and often at a fraction of the salary they earned before
• In the past, maybe these distributional effects were of less concern because trade largely reflected differences in comparative advantage across different types of manufacturing- for example maybe we would lose jobs manufacturing electronics but make up for it with other jobs building tractors-And balanced trade resulted
• In the past, skillsets were much more congruent across different industries with changing comparative advantages- i.e. it was not extremely difficult to move from manufacturing one good to another if your former job was displaced by trade
• More recently, with globalization, things changed. Instead of reallocating across sectors of manufacturing, countries like China just supplanted manufacturing on a much larger scale. And instead of paying for imports with different exports for which we had a comparative advantage we ran trade deficits (of course with surpluses in capital accounts)
• However, the kinds of investments being made with the new wealth created by global trade are in areas and sectors where skills are not congruent for many workers supplanted by the trade outcomes
• Ultimately we have experienced a sharp decline in demand for labor that has been contractionary

Hence this is the 'stagnation' in real wage growth that so many have been talking about. Could it also be why conventional stimulus and monetary policy has not really moved the needle in terms of economic growth? Is this because our comparative advantage is in services, technology, marketing, research, and engineering and these sectors are not soaking up the excess labor freed up when manufacturers shut down or relocate overseas?

The conventional wisdom has always been with trade, labor and resources that were once tied up in lower valued uses are reallocated to higher valued uses creating more wealth making everyone better off. But Autor is arguing that this just isn't happening or is taking too long. Maybe its the next generation or two that reaps the rewards. But not necessarily. If you've got a good gig and lose it, you may end up living in an area with bad schools, or may not have the resources to provide your children or the next generation with the education and training required to take advantage of the new economy jobs where the gains more than offset the losses from globalization. 

This also makes me wonder...supply side policies designed to promote economic growth and  aggregate wealth (under the terrible misnomer 'trickle down economics' ) might not work quite as well as they used to either given the structural environment depicted by Autor in his paper. But that probably goes the same for fiscal stimulus related to infrastructure. It might boost those sectors related to construction, but the traditional multiplier working its way through manufacturing and labor demand just likely won't work the way the Keynesians believed it would 30 years ago. 

So what is the answer? Surely a world with trade is in aggregate better than one without. Does this mean renegotiating NAFTA? Should we put the brakes on future globalization and phase in tariffs and trade restrictions and slowly fade them out so that sectors can readjust over a few generations? (things Donald Trump may seem in favor of) Or more aggressive and progressive policies called for  to provide a soft landing for those future displaced?  Some combination?  This gets to more spending on a number of programs, healthcare, and education. (things Hillary Clinton would have supported)

I'm not sure what the answer is after considering the incentive effects and the impacts for long term economic growth and development. Not to mention government spending. However, it was the lack of policy response to these questions that made this past election what it was. 

References:

"The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade," by David H. Autor, David Dorn, and Gordon H. Hanson. National Bureau of Economic Research Working Paper, January 2016.

Dannon Yogurt Called Out for Misleading Consumers

Recently on Agritalk (Nov 3), Michael Neuwirth, senior director of public relations with Dannon discussed their new campaign to ramp up offerings of non-gmo yogurt products.

From: Dannon's Contrasting GMO Message Fails to Convince USFRA

"In October, leaders from the American Farm Bureau Federation, American Soybean Association, American Sugarbeet Growers Association, National Corn Growers Association, National Milk Producers Federation, and U.S. Farmers and Ranchers Alliance signed a letter to Dannon, saying the company can’t claim it’s improving sustainability practices by turning to non-GMO ingredients."

With this decision, Dannon joins other snake oil marketers, including Cliff Bar and Chipotle, in their efforts to create market share misleading consumers and demeaning farmers.

Do Traders Produce Anything of Value?

For those that believe that traders and speculators produce 'nothing of value' the CME group has a very good short video clip showing quite the contrary.

HOW FOOD GOES FROM FARM TO MARKET


Elaine Kub puts it beautifully in her book Mastering the Grain Markets:

 "No other industry is so fundamentally tied to our human nature. It is creative in the truest sense of the word-by growing plants we create and sustain life. And no other industry ties the global population together so inescapably. All life on earth depends on agriculture, how well we distribute agriculture's products-how well we trade grain-determines how Earth's population gains access to its most fundamental needs."

See also: Mastering Metrics and Mastering the Grain Markets.

Science + Economics = Sound Policy

There has been a lot of controversy over the last year regarding IARC and their opinion of Glyohosate. Recently from Reuters, Exclusive: U.S. lawmakers to investigate funding of WHO cancer agency.  By Kate Kelland, Health and Science Correspondent:

"In a Sept. 26 letter to NIH director Francis Collins, Oversight Committee Chairman Jason Chaffetz describes IARC as having "a record of controversy, retractions, and inconsistencies" and asks why the NIH, which has a $33 billion annual budget, continues to fund it.
"IARC's standards and determinations for classifying substances as carcinogenic, and therefore cancer-causing, appear inconsistent with other scientific research, and have generated much controversy and alarm," Chaffetz wrote."

This is interesting. I think that critics are so tired of hearing that science is NOT on their side, they are desperate to (as Thomas Sowell has said) use the 'name and prestige of science to override other people's choices.' i.e they would like governments to ban or restrict glyphosate on the basis of their science.

And this is where economics comes into play. Economics is the study of people's choices and how they are made compatible, or the study of people's choices and the unintended consequences of those choices. So even if the IARC statements were based on rigorous science, the relevant question, at the margin, does not turn necessarily on whether glyphosate is carcinogenic, the question is how carcinogenic (or persistent in the environment or other environmental factors for that matter) is it in comparison to other chemistries or products that farmers would substitute in place of glyphosate and the consequences that follow.  Previous research has shown that the use of biotechnology has led to reductions in greenhouse gas emissions and that biotech trait adoption related to glyphosate (Roundup) has resulted in a substitution away from more toxic chemistries. So if even if we did take the IARC statements about glyphosate as gospel and acted on them, would it make sense from a health and environmental standpoint to discontinue its use and substitute with more toxic chemicals and farming practices that on a systems level be worse for our health and the environment?

In the case of glyphosate, it looks like both the science and economics are in favor of more...not less, or at least some optimal level. Economics can put science, good or bad, into a context relevant to the things we really care about. Unfortunately, many activists have an ax to grind that cuts counter to the principles they claim to be promoting. Economics can dull these sharp charades.

See also:

A Safer Food Future

More on how economic theory can help us determine which 'facts' are 'relevant'

References:

Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000

GM crops: global socio-economic and environmental impacts 1996- 2007. Brookes & Barfoot PG Economics report

Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS  June 29, 2010   vol. 107  no. 26  12052-12057

Sam Clovis, Blake Hurst, John Cochrane-Economic Growth, Regulatory Uncertainty, and Agriculture

In an AgWeb blog post I wrote back in 2009 (More Regulation for Global Agriculture ) where I quoted:

"We may well see increasing public control by human decision-makers over almost every detail of food production, marketing, and distribution." 

 I concluded:

"Hopefully, we won't have to waste a decade mired in stagnation while we rediscover the basic principles of individualism, freedom, and liberty that made this country so exceptional"

Fast forward almost 7 years later Sam Clovis (an advisor to Donald Trump for Agriculture) discussed a number of policies on Agritalk. A lot of details were discussed, but the most important thing relates to a general attitude Sam has in favor of less regulation.  Clovis intends that Trump will take this head on:
“Mr. Trump on day one of his presidency will impose a moratorium on rule-writing,” he says. “Then, each department will have 30 days on the rules that have been written over the past five years so we can have a look at them.”

Also related to this,Blake Hurst offers a nice anecdotal story titled 'Missouri Farmer Discusses  The Unbelievable Reality of Regulation' recently on AgWeb about Charlie and John, who own a small fertilizer plant and are farmers respectively and the challenges they face from over-regulation.

"Our present regulatory state can’t be believed if you haven’t been in the crosshairs of government bureaucrats. It can’t be parodied or made fun of, because no matter what “myth” we farmers might make up, the reality is even worse, and more strange. It’s past time to reform this system and rein in a government that seemingly knows no limits."

This is not just about agriculture, but nationally, when you look at income stagnation and consumer confidence and overall national growth its the same story. Recently, and timely, on EconTalk, Russ Roberts talks with John Cochrane about regulation and economic growth:

John: "if you think about the important issues of economic policy, economic growth is it. It just begins and ends at economic growth…..just nothing matters as much as reestablishing or improving on the traditional growth rates....it's not just more stuff: it's better stuff--better health, better environment, ability to pay off the government's debts, ability to pay for our social programs--really just everything hinges on economic growth…..people talk about the stagnation in middle class incomes and so forth. That's a phenomenon of the slowdown of growth"

And what is causing this slowdown- they discuss several possible theories, but most plausible is, you guessed it...regulation:

"My view is that we have creeping regulation sanding the gears. What's hard about this is every little market is screwed up. There isn't one big 'Aha,' we just need a stimulus program and we're all done. But if every little market is screwed up then the economy as a whole slows down.....To your question, there are plenty of measures that say the American economy is losing its dynamism. I think one new bank has been chartered since the passage of the Dodd-Frank Act, and that was designed to help Amish people. No new health insurers; in fact, lots of health insurers are disappearing. We are heading towards industries--banking and health insurance are heading toward a very European model: 3 or 4 very regulated"

And how many major players are we looking at in the Ag sector when it comes to seed and chemicals? About three depending on the pending deals we see on the table now.

Additional Comments and Links:

Its not just regulations themselves that are causing stagnation, but the uncertain environment they create

'Baysanto' and the Competitiveness of the Ag Sector

There is a nice post summing this up over at the Farmer Hayek blog:

It seems to me that the relationship between anti-trust legislation and regulation is an under-discussed issue in these cases. Agribusiness firms are heavily regulated by three of the most powerful regulators in the US: the FDA, the USDA, and the EPA. Many regulations function as fixed costs, implying that there are economies of scale in regulatory compliance. Thus, the greater the regulatory burden placed on firms in an industry, the greater the inducement to merge.

Similarly, from a 2003 issue of Regulation:

'In the end, EPA and the USDA regulatory policies place federal bureaucrats in the middle of virtually all field trials of gene-spliced plants, spelling disaster for small businesses and academic institutions whose scientists lack the resources to comply with burdensome, expensive, unnecessary regulation. The cost of field-testing gene-spliced plants is as much as 20-fold higher than for virtually identical plants crafted with older, less precise genetic techniques.' -Regulation, Summer 2003 

See also:
More details related to this from a 2010 post at EconomicSense - Monsanto Antitrust Case

Reference:
Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003

Gary Shilling, Bees, Glyphosate and Industrial Ag in NYT

Surprisingly, when listening to an older Bloomberg Masters in Business podcast,with Barry Ritholtz and Gary Shilling, in the 2nd half of the podcast they segway into a discussion on bees and colony collapse disorder....Gary discusses major causes....and its not pesticides.

The EPA finally concludes, glyphosate probably is not a cause of cancer.

Jayson Lusk discusses the environmental benefits of industrial agriculture....it looks like even the NYT readers might learn that modern agriculture is sustainable agriculture.

Shilling also gives some interesting thoughts about the macro economy and the impact of international trade and technological change on the job market, and takes on some of the theories of malaise related to secular stagnation (the idea that we have run out of new investment opportunities, everything useful has already been invented etc.) and other things.  

Science Literacy and GMO Perceptions (Study)

This certainly provides some evidence that an learning path associated with QR codes might be ideal for informing consumers without scaring them away.

 

From the Abstract:

 

"A survey experiment was designed to measure the effect of science and genetics literacy on consumer perception and acceptance of GMOs and GMF. A sample population of college students answered a questionnaire either before or after a 50-minute lecture about science and genetics concepts relevant to GMO development and cultivation....Comparison of pre-lecture and post-lecture responses revealed that science and genetics literacy had—at least—a short-term effect on student perception of GMOs, which led to increased desirability of GMF, including food containing transgenic and first-generation GMOs."

Article: Can Science and Genetics Literacy Affect Student Perception of Genetically Modified Organisms? Gerardo H. Nunez, Alisson P. Kovaleski, Bruno Casamali, and Rebecca L. Darnell

University of Florida

 

See also:  

 

An Econometric and Game Theoretic Analysis of Producer and Consumer Preferences Toward Agricultural Biotechnology

 

Perceptions of GMO Foods: An Hypothetical Application of SEM

Will new GMO labeling law stir a revolution....or an opportunity for fact driven revelation?

A recent NYT piece is titled: G.M.O. Labeling Law Could Stir a Revolution

The main thesis I think is driven by this question:

Has the argument that food production processes are as important as ingredients begun to make sense to policy makers?

Maybe it has. This is exactly why we need to be careful about the learning path that these QR codes provide consumers. Because the truth is the author might have a point here, and snake oil food marketers (i.e. Cliff Bar and Chipotle) will exploit this if they can.

On another note I can't help but comment on the following commentary in the article:

Another problem is that by simplifying the growing of almost unimaginably large tracts of crops, especially corn and soybeans, G.M.O.s have become an indispensable crutch for the fertilizer- and pesticide-dependent monoculture that is wrecking our land and water and generating the execrable excess of corn- and soy-based junk food that is sickening our population and decreasing our life spans.

I'd direct interested readers here. 

One thing these QR codes have the ability to do is clear up misconceptions and hyperbole like this that tend to keep creeping up.

See also: Big Data + Genomics not = Your Grandparent's Monoculture

Great Insight on Food Policy and Reform

Jayson Lusk has a very good summary of probably one of the best pieces I have read about the politics of food policy in a long long time. Very well written.

Read more:

The Politics of Food Reform Has Disappeared From the Democratic Agenda - by James McWilliams (Pacific Standard)

Link

Also in the article we find:

"If there is to be any hope of bringing agriculture back to the plate of national politics, we need to move beyond the dichotomies that frame our current debates. We need a new set of organizing principles. A starting point might be to shift our thinking away from how food is produced to something more fundamental: What is it that we’re even producing? The United States grows a handful of staple crops — mostly corn and soy — to feed a handful of animal species — mostly chickens and cows. What if we could re-claim those resources to pursue a diversity of food production — mostly plants — in a way that focused on nutritional rather than caloric density? "

The author does use the word *might* but there are a lot of trade-offs that go unrecognized with this line of argument....like the fact that grain is a complement in a much more complex food production process turning inedible plants into high quality protein that we other wise would not have were it not for raising the grains....i.e. feeding them to livestock. Sure we could have some form of grass finished food production but the environmental costs would be much higher leading to less sustainable sources of protein.

See also:

Telegram: Beef, It's What's for Dinner

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

Summer Roundup....CRISPR, Ford Trucks, and Cliff Bars

 ICYMI some recent posts from AgEconSense from this summer:

Are Farm Subsidies Making Us Fat? How the Left and Right View Food Subsidies

CRISPR Applications in Agriculture vs The End of GMOs?

Freedom is the miles I’m rollin’ on….not if you can’t meet emissions  standards

Chipotle, Cliff Bar and Snake Oil Marketing Tactics

Left vs Right Differences in Preferences for Regulation and Food Labels

Are Farm Subsidies Making us Fat....

There is a big difference between when those on the left criticize farm subsidies vs those on the right. Coming from the left, its not the subsidies they dislike, so much as subsidies for politically incorrect agriculture. In fact, many times in the same argument they will turn around and advocate for more subsidies for politically correct agriculture (local, organic, etc.) For the left, a criticism of farm subsidies is more often an underlying criticism of modern agriculture. From the right arguments are more about efficiency and distortions. The irritating thing is sometimes some on the right might get a little lazy and sloppy in their thinking about subsidies and take up some of the same specious arguments made by the left...helping the cause for more regulation, higher prices, and fewer choices for consumers.

Any way, along these lines there was almost what I would call a hit piece in the NYT recently drumming up a connection between farm subsidies and obesity. Its more like sci-fi than anything science based. They are basically extrapolating some meaningless correlations until they turn into a giant industrial ag monster. Worse, its like a bad sequel, because we see this spurious connection creeping up time to time in the popular media.  Following the typical script its not the subsidies in general that they don't like....in fact some of the authors interviewed advocate for subsidies for 'politically correct' foods. Its the connection to politically incorrect industrial agriculture that is the emphasis here. This isn't really a critique of subsidies so much as a critique of modern agriculture itself.

From the NYT: How the Government Supports Your Junk Food Habit

"While the study does not prove cause and effect, its authors say that this strong association is consistent with other research showing that diets that are higher in subsidized foods tend to be poorer quality and more harmful to health."

“This tells us that the factors that influence the prices of our foods are an additional factor,” said Ed Gregg, chief of the epidemiology and statistics branch in the C.D.C.’s Division of Diabetes Translation. “We’re hoping that this information reaches policy makers and the people who influence how subsidies work.”

The causal chain of events they are suggesting just completely breaks down. The factors that influence prices…i.e. farm policies…have way too small of an effect on the retail prices consumers pay. And consumers just aren’t sensitive enough to these prices to respond by consuming more. That’s at least what the science tells us…and I hope that information reaches policy makers.

Economist Jayson Lusk knocks it out the the park. He addresses the science behind these specious connections  (and links to a number of related research articles) and includes some of his work in the area:

"There are actual lots of people who know how much farm subsidies contribute to food consumption, and they're called agricultural economists (in fact, McMillian goes on to then cite two prominent food and agricultural economists on the issue: Parke Wilde and David Just)…..In the model I used for the forthcoming paper I wrote on the distributional impacts of crop insurance subsidies, I find that the complete removal of crop insurance subsidies to farmers would only increase the price of cereal and bakery products by 0.09% and increase the price of meat by 0.5%, and would also increase the price of fruits ad vegetables by 0.7%.  So, while these policies may be inefficient, regressive, and promote regulatory over-reach, their effects on food prices are tiny, and depending on which policy we're talking about, could push prices and consumption up or down. " 

Here are 3 more big questions that might serve as trailers for future sci-fi NYT ag hit pieces:

1) Do farm subsidies encourage farmers to plant biotech or GMO seeds?

2) If subsidies drive the production of commodities and most of these are GMO,  aren’t we indirectly subsidizing GMOs?

3) Do farm subsidies largely prop up wealthy farmers vs. helping small farmers thrive in a volatile, competitive global and corporate dominated marketplace?

For answers to these questions (and a big spoiler alert to anti-ag activists) see:  http://ageconomist.blogspot.com/2015/04/whats-big-deal-about-farm-subsidies.html

CRISPR Technology and Agriculture

A nice article related to CRISPR technology and an application with waxy corn in a recent DTN article:

https://www.dtnpf.com/agriculture/web/ag/news/article/2016/06/17/gene-editing-comes-agriculture 

The article gives a nice description of how CRISPR works as a gene editing technique, and the current and prospective regulatory environment surrounding it.

This is really interesting given the recent Vermont GMO labeling requirements, and the national ramifications. How will consumers perceive this newer technology? It has always been the case that recombinant DNA or transgenic approaches were much more precise than random wide genetic crosses, but this technology is much more like a very controlled within genome manipulation. Organic and conventional methods may use radiation or mutagenic chemical agents to create desirable within genome changes, but this technology is much more specific and targeted. We know exactly what we are wanting to achieve or what pathways or genes we want to target vs. blasting a genome with radiation or chemicals hoping for the best. Foodies, activists, and snake oil marketers will be hard pressed to criticize and demonize this technology in the face of what is going on in the natrural, conventional and organic space.I have heard John Phipps mention several times on the AgriTalk Friday free-for-all  discussions that this technology will make the GMO labeling dilemma irrelevant and it might.

It probably won't happen, but given the merger mania currently going on in agriculure, what if some company decided to acquire Monsanto and declare it was ending all GMO R&D in the pipeline? Wouldn't they appear to be saving the day to some activists? When really, they are just restructuring with a focus on CRISPR mediated products. A direction we could be going anyway. I have my doubts about this simply because it would seem that CRISPR could also make transgenic manipulations easier as well and there is certainly a lot of value to be gleaned from this.

Regardless, whether we are talking about finely textured beef, growth promotants, biotechnology etc. no matter how much safer, sustainable, profitable, or healthy, activists and rent seeking niche marketers will find some issue to drum up consumer ignorance and fear to promote sales of their products or policies.

Freedom is the miles I'm rollin' on.....not if you can't meet GHG standards

People think about the importance of certain freedoms, like freedom of speech or the right to bear arms. But one freedom we might think less about is the freedom to travel...to move from place to place at will..to work...to enjoy life. Its in many ways the essence of the pursuit of happiness. Unfortunately overzealous regulations are indirectly taxing this important freedom, and it is showing up in the price of new trucks and SUVs.

From:

http://www.agweb.com/mobile/article/ford-f-150-has-big-problem-after-overhaul--blmg/

"Ford Motor Co. executives spared no expense in overhauling the crown jewel of their empire, the F-150. They gave the truck a new aluminum body, smaller turbocharged engines and a lighter and stronger steel frame -- all with an eye to appease U.S. regulators demanding cleaner vehicles. The initiative took six years and cost Ford more than $1 billion."

“Not meeting the standards is not really an option, especially on your most profitable product,’’ said Gopal Duleep, president of H-D Systems, a Washington research company. “On fuel economy, the regulators allow you to pay a fine if you fall short. But on greenhouse gas, they don’t. You either meet the standard or they shut you down.’’

"The new technologies save fuel but add thousands in consumer costs…Between 2011 and May 2016, the average price of full-size pickups jumped 24 percent -- almost triple the pace for all new vehicles -- to $41,606, according to J.D. Power & Associates."

These costs are outrageous. How are middle and working class Americans supposed to afford these kinds of increases? Even if you buy used, more people turning to less expensive older vehicles likely will translate in to increased demand and higher prices in those markets as well.

Adding insult to injury, these regulations are NOT science based. At best they are political feathers in bureaucratic hats, at worst they are based on pseudo-scientific quasi-religious claims about the impacts of emissions on climate change. These regulations and costs are way out of proportion to any scientific consensus on climate change. It is way too weak to offer much guidance on actions, or very precise estimates of actual risks/benefits. ( see here, here, and here).

There are too many margins and too many market based and technological possibilities to use such a blunt and REGRESSIVE regulatory apparatus to address climate change.

See also: Hybrid Corn vs Hybrid Cars

Snake Oil Sustainability-Marketing Agenda Driving People Away from Sustainable Farming Practices

 In the old west, 'snake oil' salesmen would sell these elixars claiming that they universally will 'cure what ails you.' In today's world of modern science and medicine, for the most part, these tactics no longer work. Except maybe in the world of sustainable food. Its becoming more and more common for food companies to slap some label on their food like 'natural', 'organic', 'GMO-free', 'no antibiotics', 'hormone free' etc. and claim either explicitly or implicitly that these foods universally will cure what's ailing the planet or are healthier and safer with little or no scientific evidence to support the claims. Because, just like the snake oil salesmen of the old west, its about perception and fear and emotion vs. science and truth. You would think that truth in advertising laws and such would squelch this kind of unethical marketing practice, but in fact Vermont's recent GMO food labeling initiative is helping to almost institutionalize and catalyze this even more, making it more confusing for consumers and difficult to really know and understand what is in their food and the technology and production practices that are behind it.

Chipotle has its own history of these 'sustainability snake oil' marketing tactics with their past video releases. Now apparently Cliff Bar is playing the same game.

From: http://www.agweb.com/article/krotz-foul-mouthed-mr-seed-sells-with-scares-naa-agweb-guest-editor/

“Food companies are using junk science driving people away from sustainable practices like GMOs to manipulate consumers for the sole purpose of market gain.”

I think the above is a telling statement, and broadly reflects a number of marketing and legislative campaigns many of us are familiar with....think Chipotle and Vermont's GMO labeling laws. I watched the video mentioned in the AgWeb story above (produced or funded by Clif Bar Family Foundation), and even if it weren't junk sci-fi, its pretty vulgar and offensive in its own right.

It is a shame, similar to the Chipotle burritos, at $5+ per box even, Cliff Bars are really good. And actually healthy. What I can't understand, when you have a really good product like this, why resort to such unethical and misleading marketing practices?

In a sense, when it comes to marketing tactics, this makes Chipotle and Cliff Bar among others truly the snake oil salesmen of the sustainable food movement. And tragically unnecessarily so. Even more tragically, like in the old west, instead of having consumers seek out science based solutions and treatments to their ailments, they buy the fake product. Similarly, these snake oil sustainable food marketing practices are driving consumers away from modern science based green technologies that truly offer remedies to the many environmental challenges we face in feeding a future growing population.

(image:Carol M. Highsmith - This image is available from the United States Library of Congress's Prints and Photographs division under the digital ID highsm.28650.)


See also: Consumers have a right to know!

Farmers and Ranchers May Sue to Stop Clean Water Regulation of Ordinary Farmland

Its almost folklore, the story about farmers being targeted and sued by Monsanto over trivial cross pollination events. In reality, only the most deliberate and egregious violations have ever been taken to court. However, if we are really concerned about predatory litigation practices, we find the EPA/US Army Corps of Engineers taking legal actions that could lead to imposing fines up to $37,000 per day on farmers found in violation of a tangling web of regulations related to clean water rules. The tide may be turning.

 From: http://www.fb.org/newsroom/news_article/441/

United States Army Corps of Engineers v. Hawkes Co., Inc.

"A unanimous Supreme Court today ruled landowners may challenge the federal government whenever the Army Corps of Engineers tries improperly to regulate land with regulations designed to protect water....Today's decision removes a huge roadblock that has prevented landowners from obtaining relief from the courts when the Corps illegally claims their land is federally regulated water"

More details of an interesting case where one farmer sued the EPA and won:

http://www.agweb.com/article/how-one-wyoming-rancher-fought-the-epa-and-won-naa-anna-lisa-laca/ 

About three months later, the Johnsons received an administrative order in the mail threatening a fine of $37,500 per day over the completed project. The agency wanted the Johnsons to rip out the stock pond, hire a consultant to revise a new plan, and submit it within ten days. “I knew the minute that I got the administrative order it was wrong,” Johnson says. “I told my wife we aren’t going to do this. It would have costs us $50,000 to $70,000 to do what they wanted us to do, going through a consultant and all the hoops to rip the pond out.” The Johnsons decided to fight back and in the end, they won.

You can also get more details with an interview with Andy Johnson on Agritalk  (May 19):

http://www.agweb.com/agritalk-podcast/

Do Preferences for Regulation or Labeling of Biotech Foods Differ Across Political Spectrums?

Jayson Lusk has an interesting post on his blog related to an article in the Journal of Agricultural and Resource Economics finding an interesting relationship between left leaning voters and their willingness to support GMO labeling initiatives:

“One distinction, which I think is missing, is the greater willingness of those on the left to regulate on economic issues, such as GMOs, than those on the right. Stated differently, there are questions of science: what are the risks of climate change or eating GMOs. And then there are more normative questions: given said risk, what should we do about it? Even if the left and the right agreed on the level of risk, I don’t think we should expect agreement on political action.”

In other words there might be different thresholds for the level of risk required to support a given policy interventions across the political spectrum. I go into some deeper dives about states of knowledge and risk perceptions in relation to this at economic sense - see Left vs Right Science vs Risk vs Propensity to Regulate.

Consumers have a right to know!

Advocates of GMO labels like to stand behind the claim that consumers have a right to know what is in their food. But I ask, if we are going to put a label on foods with biotech/GMO ingredients, then what kind of label are we going to put on conventional and non-GMO foods?

Most research indicates that non-biotech foods pose nearly identical if not other more certain risks. In fact biotech ('GMO' if you must) crops actually reduce some of these risks. What about exposure to chemical weed killers? Roundup Ready biotech crops have lead to a substitution away from much more toxic and environmentally persistent chemistries toward much safer options. Biotech corn with the Bt trait actually reduces the ear mold toxin fumonisin which is known to be carcinogenic and related to throat cancer. The Bt trait in general has greatly reduced or eliminated the use of many very toxic chemical pesticides.

Researchers in the journal of Ecological Economics have found that "Bt cotton has reduced pesticide applications by 50%, with the largest reductions of 70% occurring in the most toxic types of chemicals." And that " Bt cotton now helps to avoid several million cases of pesticide poisoning in India every year."

In the journal Nature Biotechnology, Henry Miller and Gregory Conko go so far as to say that companies that purposefully exclude biotech ingredients could be liable for increasing consumers exposure to these types of risks.

This is a case where government interventions that require labeling could actually do more harm than good. Labels help consumers concerned about fat and sodium make healthy choices, however sensational 'GMO' labels could be misguiding and lead consumers  to actually make choices that are either worse for them, the health of producers, or the environment.

Consumers certainly have a right to know about what's in their food. They also have a right to not be misguided by the improper application of food labels. Our farmers and educators are in the best position to inform consumers about the very specific and complicated processes and technologies involved in food production as opposed to some blunt uninformative term on a label that could easily be manipulated for political ends or sensationalized by media.

References:

Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.

Indirect Reduction of Ear Molds and Associated Mycotoxins in Bacillus thuringiensis Corn Under Controlled and Open Field Conditions: Utility and Limitations. Dowd, J. Economic Entomology. 93 1669-1679 2000.

"Why Spurning Biotech Food Has Become a Liability.'' Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.

Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000

Note: this article is a modified version of an original article I published in 2013:

http://www.agweb.com/mobile/theagricultureletter/home/blog/economic_sense_190/consumers_have_a_right_to_know/?BloggerId=189

GMO Labels and Information Transparency

Recently there was a tweet by @mem_somerville with a snapshot from a letter from Senator Elizabeth Warren regarding GMO labeling legislation:

@Smj4334 Here's what I got from @SenWarren. Sent something months ago, you can imagine it didn't align with this.


This particular quote got me: "Markets work best when they are transparent, and I believe that consumers will be best served by a national, mandatory labeling standard."

I agree certain issues related to state by state labeling initiatives might well be addressed by a national standard, but transparency isn't one of them. I had written some time ago about how these labels are political by nature, and their purpose is not to inform, but actually capitalize on information asymmetry. This was in regard to initiatives that failed in California, but the issue is still the same:

"If informing consumers were the primary goal, then there are much more effectivet ways to do so, (vs labeling)....If it alarms otherwise apathetic consumers, are they really going to invest the time researching the safety of biotech foods  to close the information gap or are they going to turn to the unqualified opinions of celebrities and activists?  I would bet that the special interests are counting on consumers weighing heavily the opinions of celebrities and conspiracy theorists, and therefore letting the information asymmetries associated with biotech direct them to their own products.  In this way, Prop 37 is specially designed by special interests to take advantage of information asymmetries and exploit the fears of the public in an effort to drive market share or punish companies that they have philosophical or political issues with."

Monsanto CEO Hugh Grant on Here and Now

Nice interview: http://hereandnow.wbur.org/2016/03/30/monsanto-ceo-hugh-grant

I particularly appreciated the commentary related to the convergence of big data and genomics:

What’s the next step for Monsanto? What will you be building next?

“We were a chemical business that became a biotech and biology business that morphed into a seed business. I think the main transition as you look forward is the application of data. It takes about 40 decisions, from right around now until harvest in August or September, the grower takes about 40 decisions to produce a crop. Some of those decisions are highly technified, and others it’s because of what his mom and dad did or what he hears in the coffee shop or what he read in a magazine. So we’ve been populating those 40 decisions with data and I think by improving the quality of decisions, you increase the yield. I think the transition for Monsanto is increasingly in the next 10 years becoming a solutions-driven company, and coalescing the biology, the more accurate application of chemistry and the much smarter use of data. You know, these big green John Deere combines are streaming data off the field, one yard at a time, and it’s how you use that biological data and apply it back to the field to help growers with better insights, I think that’s going to be the next piece.”


Do you ever envision a pesticide-free Monsanto?

"If I think about the next 30 or 40 years, I think through the use of data we’ll be applying these chemistries much more accurately and we’ll be applying them earlier, so applying them before diseases really take a hold in these crops or bugs are tearing these crops apart, so I think we’ll be more prophylactic, we’ll be more accurate and our selection of these chemistries will be a lot more discriminating. That’s kind of my vision of the future as through the use of data and bringing biology and science together, we’ll get much smarter about how we use these things, a bit like how the vision works for personalized medicine.” 

See Also:
Big Data + Genomics is not your grandparent's monoculture
Big Data: Causality and Local Expertise Are Key in Agronomic Applications 
Agritalk Discussion of Biotechnology, Big Data, and Genomics on Seed Choice

Livestock and climate change: Fact and Fiction

Very nice article related to livestock production and climate change.

http://blogs.ucdavis.edu/egghead/2016/04/27/livestock-and-climate-change-facts-and-fiction/

 It is interesting that so many people are quick to shame climate change skeptics, based on a so called consensus about climate change, but throw science under the bus when it comes to actual policy. In essence, science is thinly veiled behind a very weak consensus to start with.

"While there is scientific consensus regarding the relative importance of fossil fuel use, anti animal-agriculture advocates portray the idea that livestock is to blame for a lion’s share of the contributions to total GHG emissions...The argument suggests the solution of limiting meat consumption, starting with “Meatless Mondays,” to show a significant impact on total emissions.....(however)...If all U.S. Americans practiced Meatless Mondays, we would reduce the U.S. national GHG emissions by 0.6 percent."

The article contains lots of data related to the impact of animal agriculture on GHG emissions with some very good infographics and discusses the importance of technology, efficiency, and intensification.

See also: Doing Nothing: A science based policy prescription for climate mitigation
               Climate Change, Matt Ridley, and Fat Tails
               Food Miles and Local Beef

Who's Cheating Who?...look on the menu...its local....no its organic....its sustainable...no its a super-scam!

Megan McArdle had a really nice piece on Bloomberg late last week titled "Dining out on empty virtue." Here's a snippet:

"An exhaustive investigation by a Tampa Bay Times food critic reveals just how little of the food advertised as organic, locally sourced, non-GMO fare actually fits that description….Consumers don’t really want to buy farm-to-table food. What they want to buy is the moral satisfaction of farm-to-table food….yes, those restaurateurs are cheating their customers out of something, but it’s hard to say exactly what. People walked out of those meals happier than they would have been if they’d been told they were eating regular food. Forcing restaurants to be more honest about their provenance might help some small farmers at the margin, but since Americans don’t really seem to be willing to pay a lot extra for local sourcing, it’s hard to say how many. Meanwhile, more honest menu labeling would deprive diners of an artificial, but nonetheless pleasant-tasting, feeling of virtue."

But, of course, even if all of these restaurateurs were perfectly honest, and consumers were willing to fork over whatever the cost I would still question the integrity of this...if virtuous eating is really the goal. After all, is there any evidence that they are really getting much bang for their buck when it comes to a lower carbon footprint or reduced chemical inputs? GMO free is among the worst offenders when it comes to this.  And modern food supply chains, made possible by companies such as Cargill, ADM, and retailers like Wal-Mart, have not only allowed us to get foods cheaper than we can produce ourselves or source locally, but may have also helped to reduce our impact on the environment.

See Also:
I, Chicken
The Oregon GMO Ban-Who is Harming Who?
The Economics of Local Food

How bad, really, is meat eating? — via Jayson Lusk

Jayson Lusk has a nice post: How bad, really, is eating meat. He takes some EPA based carbon footprint/externality/social cost calculations and applies them to the price of meat. Basically the value of the impact of meat on the climate amounts to a few cents per serving. 

You don't have to be a climate change denier to deny the embellished drama of most climate change policy advocates....beef is not that bad when it comes to carbon footprint and it's getting better....and remember the numbers are not as good for local/grass finished/hormone free vs. conventional but I would say still have an overall low impact b/c that market is small.

See also: Doing Nothing: A science based policy prescription for climate mitigation

Some thoughts and references related to a $15 minimum wage

 Despite a large literature finding negative impacts of minimum wage increases on employment opportunities for low skilled workers, a few studies have found minimum effects. For a list of annotated references see:  Do Minimum Wages Cause Unemployment).

While some of the studies finding no negative impacts use very rigorous experimental designs, they are still not perfect. There are a lot of margins that impact an employer's response to labor costs, and cutting jobs is only one among many of possible impacts. We can't always measure the relevant variables or outcomes that matter. Many of these impacts are in fact long term as well.

A very good post regarding this as well as the issue of survivorship bias can be found here:

 http://blog.independent.org/2016/04/03/beware-survivorship-bias/

"Many of the effects of increasing the legal minimum wage, for example, take the form of actions that never occurred and hence cannot be observed, for example, jobs that were never created because at the higher minimum wage entrepreneurs did not consider the formation of certain types of new firms or the creation of certain types of new jobs to be worthwhile.
In short, in gaining a solid understanding of economic events, we must beware of survivorship bias and never fail to consider the unseen as well as the seen consequences of government interventions in the market. A corollary is that we must not fool ourselves into the naïve positivist belief that only countable data deserve consideration in scientific work. The seen and the unseen, the counted and the uncounted—all are proper raw materials for the serious and properly trained student of economic and social life."

 It is also interesting, in some of these states I have heard that there are some built in safety valves. For example, provisions that back off on the planned wage increases if detrimental effects become evident. It is interesting that politicians are aware that these kinds of wage increases are drastic and unprecedented, and these safeguards indicate they at least are cognizant of the evidence and plain common sense that indicates this could be bad. Actually, maybe that's a positive in terms of moving in the right direction of economic literacy?  Unfortunately, this will only be based on short term and obvious measures like unemployment rates. Really bad outcomes like reductions in job training and job creation won't show up. The hidden costs won't get counted.

Some politicians have publicly stated that despite the economics, the arguments for these policies are morally compelling.  But why not put their money where there mouth is if they truly believe that? If they truly believe that people are entitled to a minimum standard of living they could just as well legislate an income supplement or negative income tax equivalent to achieve this.

There is simply no way to argue that those that benefit from these policies 'gain' more than those that lose their jobs, or never get the opportunity to begin with because the new business that would otherwise employ them never opens as a result.

While some politicians want to make it illegal for the poor inner city kid to advance their career potential working for $7.50 an hour at McDonalds,  it will remain perfectly legal for the rich kid in the suburbs to take the unpaid summer internship with the investment bank at $0/hr. That's how regressive progressive policies will ensure the poor get poorer and the rich get richer. But if you are in the class warfare business its a great way to generate repeat customers (voters) and garner support from the affluent progressive parents of those interns. Not a bad gig huh?

Do consumers have a 'right to know' about Intacta soybeans?

The title says it all: Sales Surge for Monsanto's Intacta Soybeans.

"Monsanto Co.’s new Intacta soybeans are not only killing bugs on Brazilian farms. They’re crushing demand for insecticides made by competitors DuPont Co. and FMC Corp......Soybean growers in northern Brazil who normally make six to 10 insecticide applications a season require only one or two sprays with Intacta crops.

I see two take aways from this, and I am not sure which one is bigger.

First, beyond AgWeb where's the press? If any other company had introduced a technology like this you would think the media would be all over it. The same people marching against Monsanto would be jumping for joy that a new green technology was putting the hurt on chemical companies.

The other story is that this is proof in point that biotechnology can reduce the use of toxic pesticides, hence its designation as a green technology (by me at least). So that means if the forced political speech laws of Vermont become law of the land, and they scare people away from GMO foods, or companies defensively substitute away, we're increasing our carbon footprint and supporting use of more toxic chemistries all in one fell swoop. I guess that's OK for some. (of course pesticide residues probably are not a big deal regardless but its the cost savings, reduced exposure, and reduced emissions on the farmscape that are impacted most).

Of course, given the scant media coverage, consumers won't know the difference. WOW so much for RIGHT TO KNOW as a justification for GMO labels.

See also: California Proposition 37: Capitalizing on Information Asymmetry and Government Regulation to Corner the Market on Sustainable Food

A Safer Food Future Envisioned in Consumer Reports

I recently read one of the more intriguing pieces of agricultural/food journalism probably since the 2009  article in Time magazine titled "Getting Real about the High Price of Cheap Food" (See Time for TIME to Get Real). It was a recent piece in Consumer Reports, "A Safer Food Future, Now."  I will admit, and to Consumer Reports credit, it is stated up front that this piece was meant to be a controversial piece, as part of a "series of provocative opinion essays by leading thinkers on urgent consumer issues." I just hope they feature a later piece with  some science based perspective to counterbalance this one.

Here are some short comments on a few of the the more provacative ideas you'll run across in the article:

One of the usual suspects, antibiotics is brought up with the irrelevant canard about "three-quarters of the anti­biotics sold in this country being routinely fed to healthy poultry and livestock at factory farms."

 Then there is this statement:

"The spread of GMO crops has greatly increased the sale of glyphosate, now the most widely used pesticide in America. Studies have found glyphosate in the raindrops, drinking water, and air of the Midwest. Last year the World Health Organization declared that glyphosate was “probably carcinogenic to humans.”

Not sure why this is necessarily a negative. We know that glyhphosate has encouraged less use of more toxic chemistries, as well as lead to less carbon emissions. And other traits completely replace toxic pesticides altogether. And the WHO's characterization....well maybe CR should get in touch with Andrew Kniss do discuss more on that.

They cite that more than 90 percent of Americans support GMO labeling -"so that consumers can choose whether to buy them." The ninety percent figure is widely cited, but we also know 80% support labels on food containing DNA as funny as that is. Regardless, we know that GMO labels are political speech wordsmith-ed by special interests, designed to reduce information and choice. Consumers may want one thing but get another.

Then there are comparisons of wages of migrant farm workers to hedge fund owners (I'm not sure how you could justify this comparison in terms of the marginal product of labor).

Government policies that subsidize junk foods? - Whatever.

The article does end on a postive note that I certainly could stand behind:

"I feel confident that a food system appropriate for the 21st century is gradually emerging. It will be regional, diverse, kinder to livestock, less dependent on pesticides, more respectful of the environment, and far more compassionate."

Yes. Its called Modern Sustainable Agriculture.

The Supreme Court and the Chains of the Constitution

Milton Freidman said:

"The ballot box produces conformity without unanimity; the marketplace, unanimity without conformity"- Free to Choose

and as Don Boudreaux writes:

"The dispersion of knowledge and experience is one of the most important reasons for relying on free markets. Politicians and bureaucrats, despite their pretenses, know next to nothing about the all-important details of the economic affairs that they regulate. This reality means that government regulation is the displacement of expertise by ignorance."-  http://triblive.com/mobile/9979317-96/affairs-ignorant-economics

 All of the statements above are testaments for why democracy, if left unchecked, can be just as detrimental to a society as so called unrestrained or unregulated markets. Perhaps more so than the critics of capitalism would ever imagine or be willing to admit.

There is a lot of contention about whether we should nominate a new justice now, or wait until after the next election.  Much of this has to do with the fact that the supreme court has not played a very effective role acting as a brake slowing the pace of unrestrained democracy. The effect is that many micro level personal decisions in our lives are becoming subject to the votes, opinions and interpretations made by these justices. The stakes are high for a lot of reasons.

In Judicial Activism Reconsidered, Economist Thomas Sowell describes our Constitution:

“The federal Constitution is "the supreme law of the land," not because it is more moral than state constitutions or state or federal legislative enactments, but because it represents a larger and more enduring majority.107 Minorities receive their constitutional rights from that enduring majority to which transient majorities bow, not from whatever abstract moral rights are imagined to exist as a brooding omnipresence in the sky.”

Once we start making heroic ‘modern’ interpretations of words in the constitution like ‘general welfare’ or ‘regulate commerce,’ the constitution is weakened, and minorities are forced to give power over to whatever transient majority prevails at the time. The short term gain from being able to bypass the amendment process (which requires obtaining the consent of the governed) via the courts or legislative process comes at a long term cost to our liberty and national well being. Every step we take away from the limited role of government defined by the specifically enumerated powers of the Constitution, we concentrate more power and wealth in our central government. This increases the incentives for large corporations and special interests to influence our lawmakers, and provides the means for ever more concentration of power and transfer of power away from the people. This outcome is what game theorists refer to as a prisoner's dilemma, (a nash equilibrium) and the solution or means of escape was proposed by our founders: a binding Constitution that limits the power of all players.

“in questions of power then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the constitution” —Thomas Jefferson

We've broken the chains, and so these nominations have become a much bigger deal than they need be, or our founders envisioned them to be....and we will continue to send lawyers and lobbyists to Washington, offer up our candidates to the highest bidder, and freak out over court appointments all the while proposing band-aid fixes like campaign finance reform or new parliamentary rules and procedures around nomination processes. It's democracy out of control.

For some deeper dives into these issues see: Public Choice Theory for Agvocates

Can Science or Evidence Change Your Mind?

I was recently listening to an EconTalk podcast with Russ Roberts and Adam Ozimek, about why economists change their minds or don't and the impact or role of evidence.  In general it is hard to find good examples of people changing their minds about ideologically firm beliefs in the face of strong contradicting evidence.  Outside of the specifics of issues related to microeconomic theory (like the impacts of minimum wages on unemployment) or macroeconomics (are fiscal stimulus policies effective?) one example of a couple a couple of fairly well known people that have changed their minds in this regard include Mark Lynas and Bill Nye the Science Guy.

"There is an equivalent level of scientific consensus on both issues, I realized, that climate change is real and genetically modified foods are safe. I could not defend the expert consensus on one issue while opposing it on the other." - Mark Lynas, How I Got Converted to GMO Food, NYT April 24,2015

http://www.nytimes.com/2015/04/25/opinion/sunday/how-i-got-converted-to-gmo-food.html?_r=0 

“I went to Monsanto,” Nye said, “and I spent a lot of time with the scientists there, and I have revised my outlook, and I’m very excited about telling the world. When you’re in love, you want to tell the world.” - Proof he’s the Science Guy: Bill Nye is changing his mind about GMOs by Washington Post March 3, 2015

https://www.washingtonpost.com/news/energy-environment/wp/2015/03/03/proof-hes-the-science-guy-bill-nye-is-changing-his-mind-about-gmos/ 

On a personal note, rather than change my mind about issues related to economics/markets/prices I find that the evidence has made me less dogmatic, and more skeptical or borderline agnostic. Despite Leamer's influence, and the credibility revolution, I find issues like what Andrew Gelman refers to as the garden of forking paths and researcher degrees of freedom  weigh pretty heavily on my mind, no matter how solid the identification strategy or methodology as presented in a polished 'study' or paper.  

Climatarians

 I recently caught the February 4th Agritalk podcast with Mike Adams, and heard Jeff Stier and Julie Kelly discussing their article in National Review about 'climatarians.'

 "climatarian (n.) A diet whose primary goal is to reverse climate change. This includes eating locally produced food (to reduce energy spent in transportation), choosing pork and poultry instead of beef and lamb (to limit gas emissions), and using every part of ingredients (apple cores, cheese rinds, etc.) to limit food waste."

http://www.nationalreview.com/article/429966/climatarians-crusade-stop-eating-meat-save-planet

 Climatarians "want every meal to be a political statement on topics such as farm workers’ rights or the carbon footprint of your family’s dinner." I think that's been true for a lot of anti-agribusiness and anti-family farm activists for a long time, as well as the mantra of a number of foodies that know little about modern agricultural technology and production.

They go on to discuss a lot of important issues related to meat and cancer, as well as the resource intensity of organic production systems, as well as the implications of the Carnegie Mellon study that indicate that a climatarian influenced diet might actually be worse for the environment than one containing more meat. Of course, science is not central to the dogma of a climatarianist agenda, as the article states: "Regardless of science to the contrary, these activists promote the organic, local, non-GMO diet as the most eco-friendly." 

For a deeper dive on some related issues see:

The Cult of Statistical Significance...or...no bacon is not really as bad or worse than cigarettes!  

Hybrid Corn vs Hybrid Cars

Religiosity, Beef, and the Environment 

Modern Sustainable Agriculture

The Twisted Economics of Local Food

The Economics of Local Food

How Big Data and Genomics are Crushing the Myth of Monoculture

From: Multi-hybrid corn planter trials in Corn and Soybean Digest (link):

"If multi-cultivar planters gain significant market share in coming years, farmers could see a big shift in the corn hybrids and soybean varieties available to plant in unique field environments, says Jason Webster, Beck’s Hybrids research agronomist…….“We may have customized hybrids for certain soils that never would have been released in the past,” he says."

This is in line with what I have said before (see Big Data + Genomics ≠ Your Grandparent's Monoculture):

"the disruptions of new technology, big data and genomics (applications like FieldScripts, ACRES, MyJohnDeere or the new concept Kinze planters that switch hybrids on the go etc.) will require the market to continue to offer a range of choices in seeds and genetics to tailor to each producer's circumstances of time and place. There are numerous margins that growers look at when optimizing their seed choices and it will require a number of firms and seed choices to meet these needs as the industry's focus moves from the farm and field level to the data gathered by the row foot with each pass over the field."

The convergence if big data and genomics is driving more diversity into every seed in every field across every acre. 

Memories of Jack

This past week I lost a long time teacher and mentor. I just wanted to take a moment for a post on this new blog to talk a little about memories of Jack. I started working for him around 14 or 15 years old and he had a lot to teach me. After college I moved away and set out on my own career path, but after a bachelor's degree and 54 hours of graduate study, I can say with certainty that there were valuable principles, lessons, and experiences I gleaned form working with Jack that I could have never learned in school. While I'm still paying on my educational debt, I'll never be able to price or repay the debt of gratitude I have having had the opportunity to work for him and learn the valuable things I learned.

I started working for him as he was winding down his CASE IH farm equipment dealership, helping him on his farm  (dairy, beef, and alfalfa hay) and propane business, as well as maintenance and construction projects associated with his son's rental properties and several houses he was involved in building. Jack was a WWI veteran and at this time he was in his 70's and that was 20 years ago; it never struck me how old he was to speak of his agelessness. Lots of fun filled after school and summer adventures.

Here are a few quotes (they may not be originally his own but I associate them with him)  and experiences:

• The first time helping him in the hay field, he would not let me start until I could demonstrate tying a square knott
• "a fool and his money soon part" 
• "behind the 'at'" he would say if I ever asked "where is it at" - not even my English teacher taught me that.... 
• Lessons on  work ethic, the labor markets, regulation, and entrepreneurship that made economics course work come naturally appealing later in college, I probably could not have learned more from Hayek himself.
• There is so much more to compensation than what can be quoted in an 'hourly' rate.
• "a cat can't catch mice in mittens"
• "don't butcher me up"- anytime I got a little reckless driving any number of things I probably should have had a license to operate
• Two people can put up a lot of alfalfa hay. 
• You can paint a 10,000 gallon propane tank with a 2" brush. 
• "if half the decisions in life you make are correct, you'll do OK"
• How to drive anything from a forklift, tractor, bobtail propane truck, to an eighteen wheeler.
• How to use sand to move an 18 wheeler up a 6% grade covered in snow and ice
• Cutting power lines with a bolt cutter from a forklift and living to tell about it
• He told me a story once about one of his top tractor mechanics. When folks came into the shop and started loitering and distracting to work, he started stepping on their feet so they knew it was time to move on. That might be a great tip these days in the distracting open floor plan office spaces of corporate America
• Taking a short cut down mainstreet while pulling a manure spreader on Halloween night is not a good idea.
• Even on the most frustrating days, and after I may have made the worst of mistakes, I never saw the man get angry....but he never let a teachable moment go to waste

There are things that I have left out I'm sure. This is a working list...I'm sure it will grow. In Atlas Shrugged Ayn Rand wrote "All work is an act of philosophy." That is something I can fully appreciate after my years working for and with Jack.

How Chipotle Can Have Their Food with Integrity and Eat it Too

This article from The Wall Street Journal sums things up pretty well I think, A Chipotle Education.

“In other words, Mr. Ells promises to bring his restaurants into the 20th century. One reason large chains dice foodstuffs in a central kitchen is to avoid contamination. And while Chipotle derides “factory farming”—last year the company put out a comedy series about the “utterly unsustainable world of industrial agriculture”—such economies of scale exist to deliver safer food at a lower price....Chipotle’s anti-GMO and locavore advertising has been part of a commercial strategy to differentiate from competitors and make a buck. Perhaps no longer: On Tuesday the stock tumbled below $500 for the first time since May 2014, with the price down about 25% for the year. Sales are expected to drop precipitously this quarter. The market is a brutal teacher when customers and investors realize a company isn’t practicing what it preaches.”

-The Wall Street Journal, Dec 22, 2015

I also recommend Jayson Lusk's take on this:

"Marketing aside, there is a real trade-off to be made between selling "clean", fresh, food sourced from small-local vendors and food safety.  There are likely some taste benefits with fresh, unfrozen food and there is nothing inherently wrong with being willing to pay a bit more for wares from smaller more local providers.  But, choosing these options may make ensuring food safety a bit more challenging." 

I think there is a possible way out for Chipotle. As suggested in the WSJ article, rebrand with a PR campaign promising to bring Chipotle into the 21st century, with a commitment to strict food safety standards (maybe talk about some high tech apps that help better manage food sources,safety, food handling etc. to address the recent issues) but also embracing modern food supply chains and technologies including GMOs. Maintain a commitment to 'local' food sources where possible, but make this very much a specialty offering brought to market under only the strictest standards. Or instead, maybe redirect the 'local' aspect of food through community investments and promotions of local producers and sponsorship of farmers markets etc. vs actually incorporating them into their direct supply chain. Or, highlight key suppliers and their practices, concentrate on the people vs. the geography. McDonald's is doing something like this, but Chipotle could really get the message out there. Maybe in the future, the beef or lettuce in your Chipotle burrito won't come from the farm a mile down the road, but emphasize the real people behind the food, and note, they are 'local' to someone somewhere.

Finally, issue a statement indicating the change in direction:

We at Chipotle have undergone exhaustive research and investment in order to make our products better, safer, and more sustainable than ever before. After consulting with our customers, suppliers, and leading scientists, we are revamping our supply chains and product technologies in ways like never before. etc..

They can go on to explain perhaps how incorporation of GMOs will lead to reduced emissions and pesticide use and improve biodiversity, how optimized animal feeding operations maximize animal welfare and minimize air quality issues etc. They can be as specific or nuanced as need be, there are plenty of PR people to figure it out. But the improved perceptions, cost savings from supply chain improvements etc. might even give Chipotle the opportunity to offer something better at an even lower price!

There are plenty of producers, industry experts, researchers, and agvocates out there that might be willing to help, if only, instead of demonizing the industry that supports it, Chipotle open mindedly embraces it with a spirit of genuine integrity. 

Of course this is all somewhat tongue-in-cheek, but I think the unfolding of events at Chipotle should give other food products and services firms a little pause about how they want to front their product in the face of the science and economics involved. Acknowledging these trade offs certainly could provide some insight to truly sustainable strategies going forward.

See also: 
The Economics of Local Food
I, Chicken
Greg Page on EconTalk: Channeling Hayek on Food and Agriculture
Religiosity, Beef, and the Environment
Modern Sustainable Agriculture