Terry D. Etherton
There was a great article in the Wall Street Journal “Let’s Restart the Green Revolution” (see below) that addressed the issue of regulation-induced stagnation. Regulation-induced stagnation is a term that refers to growing regulatory (federal government) oversight for approval of genetically enhanced crops and livestock, and how this slows down the process to approve a new GM crop or animal. The delay consequently adds greatly to the cost of getting a new ag biotech product through the regulatory approval “pipeline”. The review process is important because approval is required before commercial sales of an ag biotech product can occur.
My concern about regulatory stagnation is not an indictment of the need for evaluating new ag biotech products. The review process is critically important to assure efficacy of the new ag biotech product, and to determine that there is no increased risk (safety or environmental). However, we have a looming need to increase the pace of developing innovative ways to feed a growing population in the world… the last thing we need are regulatory obstacles or politics to slow down the scientific review process. The recent USDA World Agriculture Supply and Demand Report that projected ending U.S. corn stocks for 2010/11 will be at 15-year low (only 675 million bushels or an 18-day supply) is a telling sign of how close the current food system is to a situation where production of cereal grains is less than demand!
Consider what might happen if we have several years in a row where food supplies are less than societal needs?
Given this, the last thing we need is a more regulation-induced stagnation!
Enjoy the article by Mr. Jenkins.
Let’s Restart the Green Revolution
By Holman W. Jenkins
Wall Street Journal
February 2, 2011
Food prices are up, and output and productivity is falling behind. Not enough attention is being placed on regulation-induced stagnation.
The U.N.’s food price index has hit an all-time high. Food price hikes are widely understood to be a trigger of Egyptian upheavals in a country that imports a large share of its grain. Some blame Ben Bernanke. Some blame the Chinese for gobbling up too much of the world’s resources. Not enough attention is focused on the forces of stagnation loose in our world. Agricultural output has been falling behind population growth for almost two decades, and so has productivity.
In a small way, consider the Obama Agriculture Department’s decision last week to throw up its hands and finally permit the planting of bio-engineered alfalfa.
Alfalfa is the country’s fourth biggest crop. Roundup Ready soybeans and corn, modified to resist the weedkiller glyphosate (known by the trade name Roundup), have been in the market for a decade. Roundup Ready alfalfa raised no new issues, and yet in 2007 a court found a wholly new excuse to block planting. The USDA hadn’t produced an “environmental impact statement” to consider the economic impact on “organic” alfalfa growers.
To be sure, these growers were about to be inconvenienced. The bio-engineered trait would likely turn up in their crops. The standard of genetic purity they need to meet to satisfy their health-food customers would become that much harder.
But organic alfalfa represents about 1% of the market. Functionally, it is not different from bio-engineered alfalfa. Only the label is different. “Organic” alfalfa is fed to “organic” cows so consumers can splurge on milk that says “organic” on the label.
Shoppers have every right to indulge themselves in this fashion, and farmers to make a buck meeting their need. But should other farmers be stopped from planting a new seed just because it would complicate their niche marketing strategy? When the gauze of environmental correctness is peeled away, the battle here isn’t about much more than keeping organic alfalfa (also known as hay) cheap so organic dairy operators will be less tempted to substitute another feed.
A similar lawsuit threatens to halt planting of Roundup Ready sugar beets, which account for nearly half of U.S. sugar production. Perhaps the best answer, brutal as it might seem, was offered by a beet farmer in Oregon. He told NPR that since the engineered beet had been found to be safe, if a neighboring farmer has “organic” customers who prefer to believe otherwise, “it would be in his interest to educate them.”
It’s too bad when change upsets somebody’s livelihood, but these lawsuits seek to award organic farmers a civil right not to have their high-end, advertising-created market segment disturbed by industrial progress. Tom Vilsack, the Obama agriculture secretary, twisted and turned for weeks trying to reconcile the interests of organic and mass-market alfalfa farmers. In the end, he gave up and made the right decision: The organic farmers will have to adjust to a reality that has shifted a little bit against them.
The world needs more such decisions.
When some hear the word “regulation,” they imagine government rushing to the defense of consumers. In the real world, government serves up regulation to those who ask for it, which usually means organized interests seeking to block a competitive threat. This insight, by the way, originated with the left, with historians who went back and reconstructed how railroads in the U.S. concocted federal regulation to protect themselves from price competition. We should also notice that an astonishingly large part of the world has experienced an astonishing degree of stagnation for an astonishingly long time for exactly such reasons.
Greece has destabilized the entire European monetary system because its government borrowed more than it could afford. But the flipside is an economy that can’t afford its debts because it has been buried under anticompetitive rules, guilds and monopolistic privileges that make enterprise all but illegal.
A few hundred miles to the south, Egyptian protestors clamor for “freedom” when American television reporters are present. But “food” has been the chant across North Africa since before the beginning of the year, in Algeria, where several protestors were killed, and in Tunisia where an autocrat chose to make his exit.
These upheavals got their start in a telling way. A street vendor in central Tunisia set himself afire as a protest after being harassed by police for trying to make a living selling vegetables without a permit. The nature of the modern regulatory state everywhere is to be hard on those trying to do anything new. In this way at least, the quaking North African regimes have been thoroughly modern.