Agriculture Reference
In-Depth Information
does trend upwards during the 1970s, but the general trend is
no different between 1960 and 1972 than it was from the 1970s
forwards. If Butz did cause corn production and consumption to
rise from his sheer personality alone, it is hard to detect in data.
Again and again the conclusion is that subsidies adminis-
tered in the twentieth century only increased corn and soybean
production modestly. The reason is that the subsidies were
more complex than simply a fixed amount of money given for
each bushel of corn or soybeans harvested. Sometimes farmers
could only receive them if they agreed to limit the amount of
crop they produced. Other times the farmer received a higher
price because imports into the United States were restricted. In
a sense, saying the “subsidies” didn't do much is a bit deceiving
because there was rarely any program that could be described
simply as a subsidy.
Until ethanol, that is. Ethanol is a biofuel made from corn.
In the past, ethanol producers received a 45-cent subsidy for
every gallon of ethanol produced and were protected from
international competition by an ethanol tariff. Although these
subsidies and tariffs have been removed, the US government
still subsidizes ethanol indirectly by requiring a certain per-
centage of gasoline to be blended with “renewable” biofuels
like ethanol, and this percentage might rise in future years.
This is one subsidy that may have increased corn production.
Subsidies for ethanol have existed for over thirty years,
but they increased considerably in 2005, after which total
corn production rose and corn prices ascended to a new high.
Although the subsidies may have been given directly to the
ethanol producers, corn producers received a large share as
the price of corn was bid up. Though relatively little etha-
nol was produced in 2005, by 2011 more US corn was used
to produce ethanol than was fed to livestock (though some
of the ethanol by-products are then fed to livestock). Ethanol
subsidies appear to have influenced what farmers planted,
causing them to grow more corn, less soybeans, and raise less
livestock. This is not an outcome the food activists should
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