Tuesday, April 25, 2006

Choices Magazine: special segment on biofuels

For readers interested in U.S. food policy, here are some highlights of the new issue of Choices Magazine, published this week.

A series of articles on "Biofuels: Developing New Energy Sources from Agriculture," offers contributions from James Duffield, Keith Collins, Vernon Eidman, Paul Gallagher, James Fischer, Janine Finnell, Brian Lavoie, Roger Conway, and Marvin Duncan.
As recently as the early 1900s, energy sources around the world were mostly agriculturally derived and industrial products were primarily made from plant matter. Early motor fuels also came from agriculture — Henry Ford used ethanol in his original engine and Rudolf Diesel's engine could run on peanut oil. By 1920, petroleum emerged as the dominant energy source for transportation fuels and industrial products. For over 80 years, the United States and other industrialized countries have relied on petroleum as an economical and dependable source of energy. However, this reliance on petroleum is becoming a major issue as our domestic oil supplies shrink and our dependence on oil imports grows. The papers in this session will look at agriculture's current role as an energy producer and explore opportunities for agriculture as our Nation struggles to secure its energy future.
Dragan Miljkovic questions whether obesity is a public health problem that deserves government intervention, in "Obesity: Health and Food Policy Dilemma."
Even if the motives behind any potential government intervention in this matter may be most noble, it is clear that the entire economy would be greatly affected by these policies. And any government intervention will produce winners and losers with both net social gains and losses being plausible outcomes. For example, current guidelines recommend increased consumption of fruits, vegetables, fish, and whole grains, within the context of a diet whose overall calories have been moderately reduced. While this diet, if implemented on a large scale for a sustained period of time, is likely to benefit producers in these industries, reduced consumption of other foods such as meats, dairy, or sugar, to name a few, would force many producers out of business or greatly reduce their profit margins.
Given the recent interest in buying local, even to the extent of disparaging major organic retailers, Paul Patterson's report on "State-Grown Promotion Programs" is timely.
[E]xperience with state brands suggests that they may be effective in promoting the sale of some products. However, to be of economic benefit to producers, they must effectively differentiate the products, so that higher prices may be earned for these products. Producers will only enjoy an increase in profits when price rises. These price premiums are most likely to be achieved for differentiated, specialty products, whose production or reputation is uniquely tied to a particular state.