Ever wonder why high-fructose corn syrup is on every food label you read? Why is that Coke you had in Nogales, Sonora, so much better than the one in Nogales, Arizona? And why the heck are so many people trying to stuff corn into their gas tanks? These head-spinning queries are related to something I call “”The Cult of Corn.””
Here in Arizona, it is difficult to appreciate how important corn is in national politics and global economics. To fully understand, we must travel exactly 1,400 miles to the northeast and the unlikely nexus of American industry and politics – Iowa.
It so happens that the Hawkeye State is home to the first primary in the presidential election cycle – and cornfields as far as the eye can see, with avid voters heavily invested in the production of the stuff. It can be argued that Iowa’s voters are the most influential in the world. Aside from making a Howard Dean-like blunder (remember that ear-piercing banshee cry?), failing to lavish farmers with promised benefits is a sure-fire way to lose momentum in Iowa and, inevitably, your party’s ticket. Respecting the Herculean power afforded to these average folks, presidential hopefuls actually keep their promises. Thus, corn enjoys the largest percentage of our staggering $19 billion farm support system, which trumps the amount of foreign aid doled out by the U.S. each year. Chew on that.
These subsidies have long been reviled by developing nations, unable to compete with the artificially low prices on the global market. Over the past few years, however, the situation has been flipped on its head. Now many citizens and food producers in poorer countries are finding that corn prices are too high, precluding their ability to purchase the commodity. Earlier this year, Mexican villages broke out into riots over the high price of corn and the prospect of having to import tortillas. The outcome is different, but the culprit is the same: politically driven market distortions exported by the U.S.
You see, failing to enact policies to ensure business for Iowa’s farmers is political suicide. So, when the gargantuan subsidies naturally caused overproduction and a drop in the price that farmers brought in for each ear, politicians took action. Following bad economics with downright scandal, they devised a diabolical and surreptitious plan to absorb the excess demand and inflate the price that farmers receive.
In the 1970s and ’80s, high-fructose corn syrup began replacing sugar in America’s processed food and drinks. Companies like Coca-Cola saw this substance as an adequate substitute for newly expensive sugar. The U.S. government had placed a restrictive tariff on imported sugar, making it cost twice as much as world market prices – all with the obsequious goal of making U.S. corn farmers happy. Because of this market meddling, Coke is produced with cheaper real sugar in almost every country in the world.
More recently, this unabashed collusion between industry and politics has manifested itself in the groundswell of support for ethanol. Ethanol is a biofuel that can be produced from almost any food product, but because of the “”Cult of Corn”” in the U.S. – well, you know the story. A recent provision in the energy bill requires the doubling of ethanol production over the next four years. Politicians are craftily touting this technology as a means to achieve a “”greener”” future, obviating our Arab oil binge.
Such claims appear disingenuous when we look at the facts about ethanol. Scientists estimate that ethanol from corn is one of the least efficient forms, requiring 29 percent more fossil fuel energy than the ethanol fuel itself actually contains, due to inputs such as tractors, fertilizer and processing plants necessary in the production of ethanol. Nevertheless, Iowan farmers have been given what they want – desire for their corn. Distilleries that produce biofuels now take up a fifth of the country’s corn supplies. This increase in demand has been so intense that prices have begun to rise worldwide. To the citizens of the developing world, these are not just interesting factoids. With corn too expensive, many may have to adopt less-healthy substitutes. Even some Americans are feeling the strain at the checkout line. When will this madness end?
If you aren’t enraged by now, you should be. The heavy hand of this market engineering belies the U.S.’ claim to be the poster child for free markets. This is a direct result of our absurd electoral system that promotes such blatant corruption. While the subsidies benefit a tiny percentage of the U.S., the massive bill is foisted on all taxpayers. A radical alteration to make the electoral system more representative of the U.S. populace would certainly hurt insular Iowan interests and the reigning “”Cult of Corn.”” However, that is a small price to pay for a more just and efficient global economy.
When presidential hopefuls make their trips to Iowa in the coming months, know what they really mean when they flaunt the supposedly clean, renewable aspects of ethanol – more corn demanded, high corn prices and happy Iowan voters. This upcoming campaign season, let the world know that out here in Arizona we can smell bullshit – even through all those ears!
Eric Reichenbacher is a senior majoring in economics and international studies. He can be reached at letters@wildcat.arizona.edu.
