Regulation: hinderence, necessary evil, or political rhetoric?

[Masada]

Ethanol is not widely supported by environmentalists since it is not one of the cleaner or efficient technologies. Ethanol is promoted by both parties largely due to the disproportionate political power of the midwest (esp. Iowa) due to the way the presidential primaries are held.

Did you miss the part where I said this issue is politicized for votes???? I'm going to put this argument to rest real quick.

Just read the freaking ABSTRACT:

http://agecon.ucdavis.edu/people/fa.../Carter_Rausser_Smith_Ethanol_Paper_Sep18.pdf

It's scary asking you to guys to read something for yourselves, but I have no choice.

Read the abstract alone, it tells you all you need to know, and is enough to shut you up.

 

[Masada]

Now tell me the regulatory mandates are good for consumers. Experts estimate that because of the mandate alone, corn prices are inflated by 30%. That inflation in price caused millions of people worldwide to fall below the extreme poverty line because they couldn't afford food.

Now take a walk......

 

[Visbek]

Obama mandated a new regulation in 2009, that 40% of ALL corn production in the US go towards the production of corn based ethanol. Why?

Because he was continuing Bush 43's policies.

The Renewable Fuel Standard Program started in 2005 as part of Bush's energy policy. It was renewed and expanded in 2007. Obama has supported the policy, but he has not expanded it and did not "mandate any new regulation." E.g. Ethanol Industry Gets a Boost From Bush

Corn prices have gone up and down since then. They shot up in 2008 (which btw thrilled corn farmers and producers), fell, and went back up again in early 2011. None of which fits your timeline.

And of course, historically corn prices are very low, as yields have steadily increased (http://2.bp.blogspot.com/-8LwYwrVjb9c/TdUxSjw0DEI/AAAAAAAAPUc/QOvUH7yYpnA/s1600/cornprice.jpg).

Corn is the number one food ingredient in the world, and now 40% of ALL corn production isn't used for human consumption.

About 1/3 is used for livestock feed -- a highly inefficient use which, as I understand, is really not good for most livestock.

12% of the US corn crop is used for direct consumption, including junk food like corn syrup and chips.

And since yields are up, it seems somewhat unlikely that using corn for ethanol is truly taking food away from the poor.

For example, next time you are in the grocery store, stop and look at the price of hamburger meat. 4 years ago, it was $1.80/pound. Today, it's closer to $5/pound.

Actually, the price for beef in 2009 was around $1.20 per pound. In 2013, it's closer to $1.90 per pound. (Beef - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi)

As far as I can tell, there is no strong correlation between the price of beef and:
• corn production
• corn prices
• ethanol production
• ethanol production as a percentage of corn production

So, uh... Got another example? :mrgreen:


Now, I will say that along with a great deal of farm policy, this does show how government regulations can affect markets. There is also the issue of "regulatory capture," where the regulatory agency is unduly influenced by players in the field they are regulating. But what one person views as a loss, another person views as a win. Nor do these problems indicate that unregulated markets are always superior, or that regulation is always a negative.

 

[Masada]

From the report:

"Using modern time‐series
methods, we estimate that corn prices were about 30 percent greater between 2006
and 2011 than they would have been without the mandate"

"We also estimate the extent to which ethanol production
exacerbated the effects of the 2012 drought. We find that corn prices would have been
about 40 percent lower in 2012 were it not for the mandate. As a result, the impact of
US energy policy on global corn prices is considerable, particularly for the world’s poor"

"More land is now planted with corn than with any other crop in the United States.
In 2011, 40 percent of US corn was used to make ethanol slated to be blended with
gasoline, up from 14 percent in 2005. The federal government mandated this rapid growth
through the Renewable Fuel Standard (RFS), which requires a minimum annual quantity of
ethanol content in gasoline."

"Ethanol production causes diverts a substantial amount of grain out of the food
system. In 2011, the net loss to the food system from US corn‐ethanol production was
about 3.3 percent of global grain production.1 This volume of grain is substantial: it exceeds
total corn consumption in all of Africa and in all countries other than China"

"Ivanic, Martin, and Zaman (2011) estimate that when the World Bank’s foodprice
index jumped by approximately 30 percent in 2010, 44 million people were forced
below the extreme poverty line of US $1.25 per day"

You want me to continue, or are you going to read the report for yourself????

 

[Masada]

Because he was continuing Bush 43's policies.

The Renewable Fuel Standard Program started in 2005 as part of Bush's energy policy. It was renewed and expanded in 2007. Obama has supported the policy, but he has not expanded it and did not "mandate any new regulation." E.g. Ethanol Industry Gets a Boost From Bush

Corn prices have gone up and down since then. They shot up in 2008 (which btw thrilled corn farmers and producers), fell, and went back up again in early 2011. None of which fits your timeline.

And of course, historically corn prices are very low, as yields have steadily increased (http://2.bp.blogspot.com/-8LwYwrVjb9c/TdUxSjw0DEI/AAAAAAAAPUc/QOvUH7yYpnA/s1600/cornprice.jpg).



About 1/3 is used for livestock feed -- a highly inefficient use which, as I understand, is really not good for most livestock.

12% of the US corn crop is used for direct consumption, including junk food like corn syrup and chips.

And since yields are up, it seems somewhat unlikely that using corn for ethanol is truly taking food away from the poor.



Actually, the price for beef in 2009 was around $1.20 per pound. In 2013, it's closer to $1.90 per pound. (Beef - Daily Price - Commodity Prices - Price Charts, Data, and News - IndexMundi)

As far as I can tell, there is no strong correlation between the price of beef and:
• corn production
• corn prices
• ethanol production
• ethanol production as a percentage of corn production

So, uh... Got another example? :mrgreen:


Now, I will say that along with a great deal of farm policy, this does show how government regulations can affect markets. There is also the issue of "regulatory capture," where the regulatory agency is unduly influenced by players in the field they are regulating. But what one person views as a loss, another person views as a win. Nor do these problems indicate that unregulated markets are always superior, or that regulation is always a negative.

The price of beef in the grocery store isn't $1.90, that's what live cattle are going for per pound. Hamburger meat alone is around $5 per pound, and in 2009, it was about $1.80 per pound. You are confusing beef cattle market prices with actual cost of processed beef in the store which the consumer buys. Consumers don't buy beef cattle before they're slaughtered, feed lots do, which "finish" those cattle out with corn feed. It's good for human consumption, because it's the corn based feed which gives beef "marbeling" and fat, which consumers demand in their beef.

So, if corn prices are up, it costs feed lots more to "finish" them out, which in turn, gets passed on to the consumer at the grocery store through $5/lb hamburger meat.

Again, don't need another example, you simply need to understand the one I've provided.

 

[sangha]

Did you miss the part where I said this issue is politicized for votes????

What you said was that the ethanol subsidies were meant to appeal to "green energy donors". As HT points out, it's not the environmentalists they're appealing to; it's corn farmers in the midwest.

I'm going to put this argument to rest real quick.

Just read the freaking ABSTRACT:

http://agecon.ucdavis.edu/people/fa.../Carter_Rausser_Smith_Ethanol_Paper_Sep18.pdf

It's scary asking you to guys to read something for yourselves, but I have no choice.

Read the abstract alone, it tells you all you need to know, and is enough to shut you up.

You've put nothing to rest.

 

[sangha]

Now tell me the regulatory mandates are good for consumers. Experts estimate that because of the mandate alone, corn prices are inflated by 30%. That inflation in price caused millions of people worldwide to fall below the extreme poverty line because they couldn't afford food.

Now take a walk......

Our agricultural subsidies have benefited consumers by making food less expensive

And I just took a walk. Now, I'm going for a drive

 

[sangha]

So, if corn prices are up, it costs feed lots more to "finish" them out, which in turn, gets passed on to the consumer at the grocery store through $5/lb hamburger meat.

Again, don't need another example, you simply need to understand the one I've provided.

And if it weren't for the subsidies, the price of corn would be even higher.

 

[Hard Truth]

Did you miss the part where I said this issue is politicized for votes???? I'm going to put this argument to rest real quick.

Just read the freaking ABSTRACT:

http://agecon.ucdavis.edu/people/fa.../Carter_Rausser_Smith_Ethanol_Paper_Sep18.pdf



It's scary asking you to guys to read something for yourselves, but I have no choice.

Read the abstract alone, it tells you all you need to know, and is enough to shut you up.

I only had time to skim the link, but I didn't see anything indicating that environmentalists or environmental activists are the ones currently pushing ethanol for fuel. Environmentalists should not be blamed for the ethanol nonsense, as was claimed in the post I responded to.

 

[ocean515]

You obviously googled it, and now think you're an expert in a field where you're clueless. For my business, it is REQUIRED

FDA Food Safety Modernization Act (FSMA)

This is just the latest is a series of actions the govt has taken to secure our food supply

LOL.

I owned a company for 25 years that manufactured food packaging. I'd be very careful with your assumptions.

My facilities were ISO certified, and had regular FDA, USDA, and even CDC inspections. In fact, even the DOT inspected because of the additives used in one food container material included butane. HACCP is a protocol, not a regulation.

I would think you would know that.

 

[head of joaquin]

Agriculture subsidies are a form of food insurance. They level out the good and bad years in agricultural production, which are given to large swings in production due both the market forces and unpredictable events like the weather and oil prices.

The goal is to help make sure we always have certain types of products within an acceptable price range. Without subsidies, we'd get a lot of inexpensive products in one year. Then, as marginal profits fall, farmers would shift production and then in subsequent years we'd get little or none of that product, and what we got would involve exorbitant prices. On the opposite end, if weather or other unpredictable events make production too costly, farmers might change production, and we wouldn't get that product in subsequent years. By product I mean important food like wheat, corn, fruits and vegetables.

So price supports allow farmers to continue to produce a product at an acceptable price. We don't get very low prices (since subsidies prop up prices), but on the other hand we don't get exorbitantly high prices or lack of production.

People want oranges every year -- they don't want really cheap oranges one year and the next no oranges, or oranges that cost $5 a piece. Agricultural subsidies make that possible.

Now, not all price supports are necessary or good, and not all types of agricultural production need to be supported. But that's a different question. Subsidies have worked -- America has had the most stable food supply of any nation in history over the past 70 years. While we need to rationalize subsidies, I don't want the GOP and conservative ideologues causing another fiasco with our food supply just like they did with our financial institutions. Why would anybody trust conservatives and their failed market evangelist policies?

 

[sangha]

LOL.

I owned a company for 25 years that manufactured food packaging. I'd be very careful with your assumptions.

My facilities were ISO certified, and had regular FDA, USDA, and even CDC inspections. In fact, even the DOT inspected because of the additives used in one food container material included butane. HACCP is a protocol, not a regulation.

I would think you would know that.

I am not assuming anything. You have amply demonstrated that you don't know what you're talking about

FSMA Proposed Rule for Preventive Controls for Human Food

The proposed hazard analysis and risk-based preventive control requirements are similar to Hazard Analysis and Critical Control Points (HACCP) systems, which were pioneered by the food industry and are required by FDA for juice and seafood.

Also, look at the table at the end. Look at the last entry

 

[Masada]

And if it weren't for the subsidies, the price of corn would be even higher.

I just posted a report that states the exact opposite. Apparantly you didn't bother reading any of it. So, I guess sangha's word for it is more accurate than their studies.....

Got it....

You are confusing "corn subsidies" with "ethanol subsidies". What you say would be true IF the government was subsidizing "corn" in general, or "corn" used for food production. They aren't doing that though.....The government is subsidizing ethanol production, in addition to enforcing a mandate which requires 40% of corn production be used for ethanol production.

Get it right first, and then we can move on....

 

[Dittohead not!]

And if it weren't for the subsidies, the price of corn would be even higher.

Let's say just for sake of argument that statement is correct.
What it means is that corn costs $X to produce, ship, and market.
Then, the consumer, who is most likely using the corn to feed cattle or chickens for market, is paying $X - the government subsidy, but the real cost is still $X.
What that means is that the taxpayer is paying a portion of the cost of corn, and therefore meat production.

Since the only money the government has to subsidize anything comes from the taxpayer, and since corn growers, meat producers, and consumers are all tax payers, who is saving money from subsidies?

You either pay it all to the grocer, or you pay some to the grocer and some to the government. The difference is that grocers tend to be more efficient than the government.

 

[sangha]

I just posted a report that states the exact opposite. Apparantly you didn't bother reading any of it. So, I guess sangha's word for it is more accurate than their studies.....

Got it....

You are confusing "corn subsidies" with "ethanol subsidies". What you say would be true IF the government was subsidizing "corn" in general, or "corn" used for food production. They aren't doing that though.....The government is subsidizing ethanol production, in addition to enforcing a mandate which requires 40% of corn production be used for ethanol production.

Get it right first, and then we can move on....

I'm not buying your dishonest sophistries. The subsidies are going to corn growers. They are corn subsidies.

 

[Masada]

Our agricultural subsidies have benefited consumers by making food less expensive

And I just took a walk. Now, I'm going for a drive

Food IS NOT less expensive....you fail.

Read the freakin report.......

I've cited just ONE specific example, hamburger meat. Today, the price is around $5/lb. In 2009, it was around $1.80/lb.

Now, is $5/lb more or less expensive than $1.80/lb???????

You don't even know what the hell you're talking about.

 

[Masada]

I'm not buying your dishonest sophistries. The subsidies are going to corn growers. They are corn subsidies.

No, they are going to ethanol producers son.....

READ THE DAMN REPORT!!!!!!

 

[sangha]

Let's say just for sake of argument that statement is correct.
What it means is that corn costs $X to produce, ship, and market.
Then, the consumer, who is most likely using the corn to feed cattle or chickens for market, is paying $X - the government subsidy, but the real cost is still $X.
What that means is that the taxpayer is paying a portion of the cost of corn, and therefore meat production.

Since the only money the government has to subsidize anything comes from the taxpayer, and since corn growers, meat producers, and consumers are all tax payers, who is saving money from subsidies?

You either pay it all to the grocer, or you pay some to the grocer and some to the government. The difference is that grocers tend to be more efficient than the government.

If it weren't for the subsidies, the farmers would not survive the ups and downs of the market. Fewer farmers means that over the long run, corn would cost more because there'd be less corn grown.

Your argument assumes a stable market where farmers could get by year after year. However, without the govt support, the market would not be stable.

 

[sangha]

Food IS NOT less expensive....you fail.

Read the freakin report.......

I've cited just ONE specific example, hamburger meat. Today, the price is around $5/lb. In 2009, it was around $1.80/lb.

Now, is $5/lb more or less expensive than $1.80/lb???????

You don't even know what the hell you're talking about.

The stats show that, as a portion of income, food cost less than it did before the govt began heavily subsidizing food production.

 

[sangha]

No, they are going to ethanol producers son.....

and growers of corn

 

[Masada]

I only had time to skim the link, but I didn't see anything indicating that environmentalists or environmental activists are the ones currently pushing ethanol for fuel. Environmentalists should not be blamed for the ethanol nonsense, as was claimed in the post I responded to.

Environmentalists don't push the production of biofuels????? What planet do you live on?

Who was it that accused the oil companies of undermining biofuel technology? Hmmm, ya, it was liberals and the environmentalists. Or did you forget?

 

[Masada]

The stats show that, as a portion of income, food cost less than it did before the govt began heavily subsidizing food production.

What stats???? Sangha stats?

Did you read the part of the report that said because the price of corn went up 30% in a year, it forced 44 million people below the extreme povety line????

That's a real stat, not something I just come here and spout off like you do.....

 

[Dittohead not!]

Environmentalists don't push the production of biofuels????? What planet do you live on?

Who was it that accused the oil companies of undermining biofuel technology? Hmmm, ya, it was liberals and the environmentalists. Or did you forget?

Environmentalists don't push the production of ethanol. Ethanol production costs more energy than it produces.

 

[sangha]

Environmentalists don't push the production of biofuels????? What planet do you live on?

Who was it that accused the oil companies of undermining biofuel technology? Hmmm, ya, it was liberals and the environmentalists. Or did you forget?

Dishonest whines about bio-fuels won't distract from your mistake in claiming that environmentalists are the ones supporting ethanol

 

[sangha]

What stats???? Sangha stats?

Did you read the part of the report that said because the price of corn went up 30% in a year, it forced 44 million people below the extreme povety line????y

That's a real stat, not something I just come here and spout off like you do.....

Prices going up in one year is cherry picking. I referred to historical stats

We also pay less relative to other nations