Link Banana

The Financial Times confirms the good new (assuming of course, that you’re not invested in corn-based ethanol):

Six of the biggest publicly traded US ethanol producers have lost more than $8.7bn in market value since the peak of the boom in mid-2006 and the beginning of this month, according to an analysis by the Financial Times. The boom followed a 2005 law requiring refiners to mix billions of gallons of the biofuel with petrol.

(via Passport)

I love a good bit of Farm Bill outrage, so here’s The Economist:

If you measure the success of a pressure group by its ability to cram lousy policy through Congress, you might imagine that Big Oil or Wall Street would top the league: they are the lobbies most berated on the campaign trail. You would be wrong. If there were any doubt, the past few days should have confirmed that America’s farmers are the capital’s handout kings.

Consider their latest masterpiece, the 2007 farm bill that Congress this week delivered, several months late, to George Bush. Congress and the farmers have conspired to make an already unjust agricultural policy—a system that has subsidised the “farming” activities of such paupers as David Letterman and David Rockefeller—even worse. Through a complicated and overlapping system of government-sponsored insurance, counter-cyclical assistance, disaster aid and legacy payments tied to nothing, the five-year, $307 billion bill lavishes cash on wealthy farm households, the main restriction on collecting it being a means test that applies to couples making more than $1.5m a year. And even that can be avoided by employing a reasonably competent accountant.

If you want to understand the problem in one simple step, take a look at the graph attached to that article.

America’s entrenched some severely perverse incentives into the Farm Bill, Jack Hedin, a Minnesota farmer, details one that I’d not known about.

I’ve discovered that typically, a farmer who grows the forbidden fruits and vegetables on corn acreage not only has to give up his subsidy for the year on that acreage, he is also penalized the market value of the illicit crop, and runs the risk that those acres will be permanently ineligible for any subsidies in the future. (The penalties apply only to fruits and vegetables — if the farmer decides to grow another commodity crop, or even nothing at all, there’s no problem.)

Robert Strauss, who was a volunteer and country director, says yes:

In Cameroon, we had many volunteers sent to serve in the agriculture program whose only experience was puttering around in their mom and dad’s backyard during high school. I wrote to our headquarters in Washington to ask if anyone had considered how an American farmer would feel if a fresh-out-of-college Cameroonian with a liberal arts degree who had occasionally visited Grandma’s cassava plot were sent to Iowa to consult on pig-raising techniques learned in a three-month crash course. I’m pretty sure the American farmer would see it as a publicity stunt and a bunch of hooey, but I never heard back from headquarters.