Washington Insider -- Thursday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Continuing Government Subsidization of Fossil Fuels Hinders Development of Renewables

Globally, the fossil fuels industry is receiving $550 billion a year in subsidies and those government supports are holding back investment in cleaner forms of energy, the International Energy Agency said this week in its annual World Energy Outlook. In fact, the Paris-based agency said the oil, coal and gas industries received more than four times the $120 billion paid out in incentives for renewables such as wind, solar and biofuels.

In spite of the great imbalance in government supports, renewable use in electricity generation is on the rise and will account for almost half the global increase in generation by 2040, according to the report. It said about 7,200 gigawatts of generating capacity needs to be built in that period to keep pace with rising demand and to replace aging power plants.

Globally, wind power will take more than a third of the growth in clean power; hydropower accounts for about 30 percent, and solar 18%. Wind may produce 20% of Europe's electricity by 2040, and solar power could take 37% of summer peak demand in Japan, IEA said.

Companies in the fossil fuel supply chain are well entrenched and can be expected to lobby vigorously to retain their subsidy advantage over renewable energy competitors.

***

Brazil Begins Shipping Pork to U.S. Customers

Aurora Alimentos this week became the first Brazilian processor to export pork to the United States, with an initial 25-metric-ton shipment going to Florida's Port Everglades and a second 25-MT shipment scheduled next month to an unnamed customer.

At first glance, the sales would seem counterintuitive since the United States is the world's third-largest pork producer and leading pork exporter. However, it also is the seventh largest market for imported pork, and because of that, Aurora is optimistic for continuing sales to the United States and is aiming to export 50 to 100 MT per month to the United States in the future.

According to USDA data, total annual U.S. pork use is just over 8.7 million MT, with imports comprising just 408,233 MT of that. An additional 1,200 MT of imports each year from Brazil are unlikely to disrupt the U.S. market, but meat imports from any South American country can be expected to raise disease concerns among U.S. livestock producers.

***

Washington Insider: What Could Bittman Mean?

The New York Times published an op ed piece on Wednesday by its food columnist Mark Bittman, in which he takes a very strange, likely indefensible position. He says he has debunked the idea that "... we need to grow more food on a large scale so we can feed the nine billion, the anticipated global population by 2050."

The discussion is of interest because many of those who advocate for "better" food for the world's population often find themselves embarrassed by questions of how the world can provide the type of foods they advocate to meet future needs: organic and ideally produced by, low-tech farmers. The answer, of course, is that it will be difficult even with the best technologies available, let alone without them.

Well, Bittman has an answer, probably not one that will take the heat off the foodies, but an answer nevertheless. He basically changes the subject.

The column asks readers to believe that the answer to coming pressure on the food supply is not to produce more, but to eliminate poverty so the hungry can pay what it takes to buy enough to eat.

"The difference between you and the hungry" he asserts, "is not production levels; it's money. There are no hungry people with money." He's wrong, of course — short supplies mean high prices, and more pain for low income families, but he ignores that.

The argument basically boils down to the villainy of the "virtually unregulated food system that is geared toward making money rather than feeding people."

So, the problem is not the lack of food, it is the need to eliminate poverty.

The column leverages this assertion to conclude that boosting yields does nothing for the poor — that we should forget worrying about how we will feed the world and concentrate helping people recognize that the industrial model of food production is "neither inevitable nor desirable."

We can learn this "… from people who still have a real relationship with the land and are focused on quality rather than yield," he writes. That is, farming made more intelligent and less rapacious.

Well, this view notwithstanding, yields and production quantities matter a lot. The United States not only produces more food than almost anybody, but does so more efficiently so that we spend far less of our disposable income on food than others do. This provides an effective income boost that allows Americans to spend more on the rest of life, including education, health, leisure and the rest.

So, we have an internal contradiction by the Times writer. Food productivity — or the lack thereof — converts almost directly to income, especially for the poor. And when it grows, it works against poverty as Bittman wants to do. So, he swims against the tide when he fights against the importance of productivity, given its very important role in achieving his own income goal.

Overall, efforts to separate productivity from income effects have long been seen as pretty unconvincing and should be questioned closely when they are argued, Washington Insider believes.

---

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products, on the News Menu on Farm Dayta, and on the News and Analysis Menu of DTN's newest Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com.

If you have questions for DTN Washington Insider, please email edit@telventdtn.com

(GH/CZ)

Copyright 2014 DTN/The Progressive Farmer. All rights reserved.