Friday, April 29, 2016

Monsanto CEO Hugh Grant on Here and Now

Nice interview:

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.

 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

Wednesday, April 20, 2016

Who's Cheating Who?...look on the menu...its its organic....its 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

Friday, April 15, 2016

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:

"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 na├»ve 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?

Friday, April 8, 2016

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

Friday, April 1, 2016

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.