Should voluntary actions to improve water quality require a regulatory nudge?


Water quality is a huge problem in many parts of the world. People and animals need clean and uncontaminated water to live. But people also work in and live near enterprises that can create serious risks of contamination, so balancing our interests in producing with our interests in drinking safe water can be a challenge. For example, factories can discharge pollutants and chemicals into waterways, or they might incorrectly store waste resulting in eventual leaching into waterways and underground aquifers. Farms use fertilizers or other chemical inputs that drain into rivers and streams. Ranches and concentrated animal feeding operations produce a lot of animal manure that can contaminate water sources. How do we address these issues in a way that is fair to all stakeholders?

One way of doing this is educating relevant stakeholders and encouraging them to take voluntary actions to reduce their share of contaminants reaching water sources. An example is the Nutrient Reduction Strategy. This is an effort by 12 states, whose farms and businesses contribute to the problem of hypoxia in the Gulf of Mexico, to reduce contamination of the Mississippi/Atchafalaya River Basin (MARB). The US Environmental Protection Agency (EPA) coordinates the effort and encourages states to develop their own strategies “for implementing and developing load reductions,” according to the EPA’s website on the topic (here). This website also links to each state’s strategies and reports on their progress.

Important here is that the EPA “calls” for states to develop and implement nutrient reduction strategies, but it doesn’t require them to do so. In effect, this creates a classic prisoner’s dilemma. While all states recognize the importance of reducing contamination of the Mississippi River, the ideal is for 11 states to do this aggressively while the 12th state does it slowly, since regulations can be costly and unpopular. But if all states face this incentive, then the push for states to get the job done is weakened. So, sometimes a regulatory or legal nudge is needed to move all states to a cooperative outcome.

One way of doing this is to bring a lawsuit against a state that does not seem to be making the progress that one thinks it might otherwise have completed. This recently happened in Iowa. According to a Feedstuffs article, “Groups sue Iowa over water runoff. Suit alleges state of Iowa is failing to protect its waterways from farms.” The lawsuit states the following, as reported in the Feedstuffs article:

“The most recent ‘Iowa Nutrient Reduction Strategy Progress Report’ was released on March 7, 2019. The report acknowledges that adoption of the strategy’s agricultural best management practices was not making sufficient progress towards its nonpoint-source nutrient reduction goal. While annual progress continues in the implementation of these practices, early [Nutrient Reduction Strategy] efforts only scratch the surface of what is needed across the state to meet the nonpoint-source nutrient reduction. Progress has occurred, but not at the scale that would impact statewide water quality measures. Local water quality improvements may be realized in the short term where higher densities of conservation practices are in use, but the ability to detect early trends in measured water quality will vary from case to case. Statewide improvements affected by conservation practices will require a much greater degree of implementation than has occurred so far.”

However, lawsuits can be a double-edged sword. On the one hand, if successful they can push state legislatures to be more proactive in promulgating laws to reduce point and non-point water pollution. On the other hand, defending against lawsuits diverts government attention away from the very thing the lawsuit stresses. According to one farmer quoted in another news report of the Iowa lawsuit (here), “At a time when farmers are struggling financially from low commodity prices and also now from historic flooding, this lawsuit is a low blow. It will divert the state’s financial resources from implementing soil and water conservation practices, and also divert resources away from helping our farmers recover from the latest natural disaster.”

The ideal, of course, is for all of us to recognize the responsibilities we have to be mindful of the environment and our role in contaminating it. Stewardship is a good word here. Those who intensively use natural resources have a particular responsibility to be wise stewards over those resources and to be cognizant of how their actions affect others. Solving the prisoners dilemma is possible without formal laws and regulations, but it requires that everyone cooperative and share the burden.

Aldo Leopold’s Land Ethic

Aldo Leopold Leopold (1886–1948) was a trained forester and early environmental philosopher and ethicist. He taught at the University of Wisconsin, was director of the Audubon Society, and founded the Wilderness Society. He was born in 1886 and died 71 years ago this month (April) in 1948. A nice, brief biography produced by the Aldo Leopold Foundation is here.

a-sand-county-almanac-cover-insetRecently, I had students in my agricultural ethics course read his most famous essay, “The Land Ethic,” excerpted from his book, A Sand County Almanac, which was published a year after his death. In this essay, Leopold argues that we need to change the way we think about land and natural resources, especially how we value them. According to Leopold, the value of the land does not come merely or even largely from its productivity, profitability or commercial value. We must “quit thinking about decent land-use as solely an economic problem,” he writes. Rather, we should “regard the land as a biota, and its function as something broader.”

Leopold was particularly critical of conservation education. He complained that the problem with conservation education was not about volume but rather its content. Leopold wrote, “as I understand it, the content is substantially this: obey the law, vote right, join some organizations, and practice what conservation is profitable on your own land; the government will do the rest.”

I asked my students who have taken conservation, land management and agroforestry courses about their content. While efforts have been made to incorporate principles of sustainability in lectures and readings, my students reported that the underlying messages are still largely governed by economics. As an economist I should be comfortable with this, but as an ethicist I am troubled that after nearly three-quarters of a century, we still have not learned Leopold’s lesson that economic motives must be moderated and self-restrained. We should talk and teach more about stewardship and obligation and less about commodity production and narrow economic self-interest. “Obligations have no meaning without conscience,” according to Leopold, “and the problem we face is the extension of the social conscience from people to land.”

Leopold’s essay is insightful for many reasons. One of my favorite quotes is his commentary about ethics. He says,

An ethic, ecologically, is a limitation on freedom of action in the struggle for existence. … All ethics so far evolved rest upon a single premise: that the individual is a member of a community of interdependent parts. His instincts prompt him to compete for his place in that community, but his ethics prompt him also to co-operate (perhaps in order that there may be a place to compete for).

I don’t think we appreciate how interconnected we are–to each other and to the world around us. My actions affect not only me but also my family, neighbors, coworkers and others in society. But Leopold encourages us also to consider how our actions and attitudes affect the land as well. “The land ethic,” he writes, “simply enlarges the boundaries of the community to include soils, water, plants, and animals, or collectively: the land.”

If you still subscribe to a narrow economic self-interest, then consider the fact that if we fail to continue to appreciate and respect the land and our environment, then when they go we will go as well.

Another excellent issue of Agriculture and Human Values

AHV_10460According to InCites Journal Citation Reports, the 2017 Impact Factor for Agriculture and Human Values is 2.568. The Impact Factor is calculated as the ratio of the number of citations to articles published in the journal in the previous two years to the total number of articles published in those years. The five year Impact Factor for the journal is 3.348. The Impact Factor has increased every year since 2012.

Another issue of Agriculture and Human Values (volume 25, issue 3) has been released online and in print. Here is a summary of the articles it contains: O’Keeffe evaluates how the deregulation of Australia’s wheat export market and the resulting focus on maximizing wheat prices affected wheat growing farmers. Cairns and Johnston discuss concerns and paradoxes of how parents, particularly mothers, teach their children about meat-eating and where their food comes from. Pétursson provides an ethnographic study of an organic food store in Iceland in order to understand how interactions between consumers and producers promotes trust and the consumption of organic food. Hoey and Sponseller explore the perspectives and motivations of key individuals within alternative food networks in Michigan. Saulters, Hendrickson and Chaddad interview social entrepreneurs within the alternative food system in order to understand how they perceive notions of fairness. Gheller examines the public debates regarding large-scale land acquisitions in Canada. Tiraieyari and Krauss study the motivations of Malaysian university students to participate in a voluntary urban agricultural program. Mercado, Hjortsø and Honig examine the challenges to small rural producers in the Bolivian Altiplan of complying with public food safety regulations. Theis et al. examine differences between men and women in the rights to use, control, profit from and sell irrigation technologies in smallholder households in Africa. Cafer and Rikoon assess the effectiveness of extension and other government programs for promoting agricultural innovations and improving smallholder livelihoods in Ethiopia. Tavenner and Crane examine gender differences in the marketing of milk by Western Kenyan smallholder farming households. Grey and Newman assess the interrelationships among food sovereignty, the culinary cultures of Indigenous Peoples and liberal multiculturalism through case studies in Canada and Peru. There are also seven book reviews in this issue.

My new book is out

Ethical tensions imageMy new book, Ethical Tensions from New Technology: The Case of Agricultural Biotechnology, has just been released. As stated in the back-cover blurb: The introduction of new technologies can be controversial, especially when they create ethical tensions as well as winners and losers among stakeholders and interest groups. While ethical tensions resulting from the genetic modification of crops and plants and their supportive gene technologies have been apparent for decades, persistent challenges remain. This book explores the contemporary nature, type, extent and implications of ethical tensions resulting from agricultural biotechnology specifically and technology generally. There are four main arenas of ethical tensions: public opinion, policy and regulation, technology as solutions to problems, and older versus new technologies. Contributions focus on one or more of these arenas by identifying the ethical tensions technology creates and articulating emerging fault lines and, where possible, viable solutions.

As an edited book, I have solicited contributions from scholars all over the world. Here is the table of contents:

Introduction: Ethical tensions and new technology: An overview in the context of agricultural biotechnology
Part 1: Public opinion and interest
1: Ethical tensions from a “science alone” approach in communicating GE science to consumers, by Jane Kolodinsky (University of Vermont)
2: Against the (GM) grain: ethical tensions and agro-biotechnology activism in the United States, Bradley Martin Jones (Washington University in St. Louis)
3: The use and abuse of the term GMO in the “common weal rhetoric” against the application of modern biotechnology in agriculture, by Philipp Aerni (University of Zurich)
4: Collaborating with the enemy? A view from Down Under on GM research partnerships, by Rachel A. Ankeny (University of Adelaide), Heather J. Bray (University of Adelaide) and Kelly A. McKinley (University of Adelaide)
Part 2: Policy and regulation
5: Three models of public opinion and public interest for agricultural biotechnology: precautionary, conventional, and accommodative, by Duane Windsor (Rice University)
6: Genetically modified organisms in food: ethical tensions and the labeling initiative, by Debra M. Strauss (Fairfield University)
7: Ethical tensions in regulation of agricultural biotechnology and its impact on policy outcomes: evidences from the U.S. and India, by Deepthi E. Kolady (South Dakota State University) and Shivendra Kumar Srivastava (ICAR-National Institute of Agricultural Economics and Policy Research)
Part 3: Technological fix criticism
8: Technological pragmatism: navigating the ethical tensions created by agricultural biotechnology, by Dane Scott (University of Montana)
9: Absolute hogwash: assemblage and the new breed of animal biotechnology, by Katie M. MacDonald (University of Guelph)
Part 4: New versus old technology
10: Nature-identical outcomes, artificial processes: governance of CRISPR/Cas genome editing as an ethical challenge, by Frauke Pirscher (Martin Luther University Halle-Wittenberg), Bartosz Bartkowski (UFZ – Helmholtz Centre for Environmental Research), Insa Theesfeld (Martin Luther University Halle-Wittenberg) and Johannes Timaeus (University of Kassel)
11: New technology, cognitive bias and ethical tensions in entrepreneurial commercialization: the case of CRISPR, by Desmond Ng (Texas A&M University) and Harvey S. James, Jr. (University of Missouri)
Part 5: Mediating ethical tensions
12: New technology, ethical tensions and the mediating role of translational research, by Corinne Valdivia (University of Missouri), Harvey S. James, Jr. (University of Missouri) and Roberto Quiroz (International Potato Center)

Don’t wait to order your copy from the publisher (here), Amazon (here) or wherever fine books are sold.

When is it fair to say a small business is not one?

A recent program review by the US government’s Office of Inspector General focused on loans by the Small Business Administration made to poultry farmers. The report concluded that poultry farmers do not meet the regularly requirements of a small business and therefore are no longer eligible for small business loans. A nice article in Modern Farmer entitled “Should a poultry farm be considered a small business?” discusses this report.

In the US, most poultry growers have contracts with chicken companies, like Tyson and Pilgrim’s Pride, to raise chicks until they have grown large enough for slaughtering. These companies are known as “integrators” because so much of the poultry growing and processing operation is owned and controlled by the company (i.e., integrated into one business enterprise). The integrators own the chicks that poultry farmers raise; they determine the quality and quantity of chicks poultry farmers receive; they provide the chicken feed and dictate the operating procedures that poultry farmers must use in feeding and raising the chicks; they mandate the size and shape of the buildings poultry farmers grow the chicks in and can require growers to make changes in buildings at the grower’s expense; they can conduct surprise inspections of poultry farmer operations. Poultry farmers provide the labor in raising the chickens.

One reason why the Office of Inspector General concluded that poultry farmers were not small businesses is that they are “affiliated” with chicken companies and thus are not truly independent businesses. An entity is “affiliated” with a business operation when the business “controls or has the power to control the other” entity. According to the report, “integrators exercised comprehensive control over the growers through a series of contractual mandates and restrictions, management agreements, operating procedures, oversight, inspections, and market controls that overcame practically all of the grower’s ability to operate their businesses independent of integrator mandates.”

According to the report, 76 percent of all agricultural loans by the Small Business Administration in 2016 went to poultry farmers. The average size of loans in 2016 was $1.4 million.

If a poultry grower defaults on a small business loan, it is very difficult for the lender to recover losses through, for instance, the sale of business assets. The reason is that the value of grower facilities is strongly tied to the production contracts that growers make with integrators. If the integrator cancels a particular grower’s contract, the grower usually has no option but to exit the business. In most rural areas where poultry farming occurs, there is only one integrator with whom a grower can contract. The program review report notes “substantial loss in the value of a grower’s facility without the integrator contract.” Economists would say the salvage value of poultry barns is very low. I guess an interesting question to consider is why a lender would make a loan to a poultry grower if the risk of default is closely tied to integrator behavior and the salvage value of assets backing the loan is low. Loans guaranteed by the US government is a reasonable answer.

My colleague, Mary Hendrickson, and I have written about the unfairness of the poultry contracting and growing system. In a paper published in 2016 (here), we show how the relative dependency of poultry growers combined with a lack of contractual and other safeguards create an unfair system for them.

Is it fair to poultry growers that the Small Business Administration will not recognize them as small businesses? As stated in the Modern Farmer article, “There is an argument to be made that by not helping poultry farmers get loans, the SBA would be hurting poultry farmers.” Thus, I can see how poultry growers might assert that the change in designation–if upheld after further government review–is unfair to them. If growers can no longer expect to obtain small business loans, then a claim of unfairness might make sense. Dr. Hendrickson and I, along with two doctoral students, have a new paper, where we not only assess the validity of unfairness claims by poultry growers, but also provide a framework explaining why a violation of expectations is important when assessing claims of unfairness.

In the long-run, however, the change in designation of poultry growers might be a good thing. One could argue, as noted in Modern Farmer, that the ability of growers to obtain small business loans “is currently propping up a wildly damaging system.” If it becomes more difficult or even impossible for growers to obtain such loans, then maybe that will push the system to change more in favor of poultry growers.

What does it mean when corporations are as economically powerful as governments?

In 2016, a non-governmental organization by the name of Global Justice Now, based out of the UK, produced a report listing the largest governments and corporations by revenue. Their report stated that the “10 biggest corporations make more money than most countries in the world combined and that 69 of top 100 economic entities are corporations not countries.” The complete listing of governments and corporations is here.

An article in the Journal of Economic Perspectives by Luigi Zingales of the University of Chicago provides the following commentary about corporations that rival the size of governments:

In some cases, these large corporations had private security forces that rivaled the best secret services, public relations offices that dwarfed a US presidential campaign headquarters, more lawyers than the US Justice Department, and enough money to capture (through campaign donations, lobbying, and even explicit bribes) a majority of the elected representatives. The only powers these large corporations missed were the power to wage war and the legal power of detaining people, although their political influence was sufficiently large that many would argue that, at least in certain settings, large corporations can exercise those powers by proxy.

The 2015 list produced by Global Justice Now consisted of 26 governments and 24 corporations in the top 50. Walmart was number 10, ahead of Spain, Australia and the Netherlands. I’ve updated the list for 2016 (see below). Walmart is now number 9 on the list, and there are 26 corporations in the top 50 in terms of revenue.

What does it mean when corporations are as large and economically powerful as governments? Is this a good thing? Governments can coerce people, while companies grow by persuading people to buy their products, unless businesses use their economic power and resulting political influence to suppress competition—a common practice in both the developed and developing world. But are governments a more effective and appropriate steward over the vast wealth they control than corporations? Politicians and government bureaucrats are not likely more altruistic or caring of people than business executives and managers. (This reminds me of an excellent interchange between the late Milton Friedman, a Nobel Prize winning economist and academic at the University of Chicago, and talk show host Phil Donahue about the relative greed of people in business and government, here). Perhaps the more important question is whether appropriate checks and balances remain between business and government when businesses rival the size and economic power of governments. I don’t know. I’m just asking questions.

Here is the ranking of governments and corporations by revenue in 2016. Data on government revenue (not GDP) from the CIA World Factbook for 2016 and on business revenue from the Fortune Global 500 list.

Rank Type Name Revenue, $billion
1 Government United States 3,363.0
2 Government China 2,300.0
3 Government Japan 1,696.0
4 Government Germany 1,523.0
5 Government France 1,308.0
6 Government United Kingdom 996.3
7 Government Italy 842.5
8 Government Canada 594.7
9 Corporation Walmart (US) 485.9
10 Government Spain 461.3
11 Government Australia 420.5
12 Government Netherlands 340.8
13 Corporation State Grid (China) 315.2
14 Government Brazil 311.9
15 Government South Korea 297.3
16 Government India 273.3
17 Corporation Sinopec Group (China) 267.5
18 Corporation China National Petroleum (China) 262.6
19 Corporation Toyota (Japan) 254.7
20 Government Sweden 248.3
21 Corporation Volkswagen Group (Germany) 240.3
22 Corporation Royal Dutch Shell (Netherlands) 240.0
23 Government Belgium 232.3
24 Government Mexico 224.3
25 Corporation Berkshire Hathaway (US) 223.6
26 Government Switzerland 215.9
27 Corporation Apple (US) 215.6
28 Corporation Exxon Mobil (US) 205.0
29 Government Norway 199.8
30 Corporation McKesson (US) 198.5
31 Government Austria 187.3
32 Corporation BP (UK) 186.6
33 Government Russia 186.5
34 Corporation United Health (US) 184.8
35 Corporation CVS Health (US) 177.5
36 Corporation Samsung Electronics (South Korea) 174.0
37 Corporation Glencore (Switzerland) 173.9
38 Corporation Daimler (Germany) 169.5
39 Corporation General Motors (US) 166.4
40 Corporation AT&T (US) 163.8
41 Government Denmark 156.9
42 Corporation Exor (Italy) 154.9
43 Corporation Ford Motor (US) 151.8
44 Government Saudi Arabia 149.7
45 Corporation Industrial & Commercial Bank of China (China) 147.7
46 Government Turkey 146.4
47 Corporation AXA (France) 143.7
48 Corporation Amazon (US) 136.0
49 Corporation Foxconn (Taiwan) 135.1
50 Corporation China Construction Bank (China) 135.0

When should we erect statues of prominent public figures?

The violence in Charlottesville, Virginia, centers on a proposal by the city council to remove a statue of Robert E. Lee, the leading general of the Confederate Army during the U.S. Civil War. One of many news articles about the statue and the controversy over its removal is here. Some groups approve of the plan to remove the statue. Some groups oppose the plan to remove the statue. Some group oppose the groups approving or opposing the plan. It’s a real mess.

Rpbert E Lee statue

But the situation in Charlottesville is not just messy and ugly. It is also complicated by persistent and unresolved problems of racial prejudice and discrimination that exist in the country. Therefore, it is not surprising that the question of the statue removal has resulted in arguments fueled more by emotion than by reason.

I don’t pretend to have an answer to these problems. But I would like to revisit the plan to remove the Confederate general’s statue. Is removing the statue the right thing to do? The answer to this question depends on understanding why we erect statues of prominent public figures and when it is necessary to remove them.

I can think of two reasons why we erect statues of or monuments to public figures. One is to honor the person and the other is to honor the cause supported by them. For instance, placing the faces of George Washington, Thomas Jefferson, Abraham Lincoln and Theodore Roosevelt at Mount Rushmore would be appropriate because by most standards these men were honorable and the causes they promoted were as well. In saying this we need not approve of all aspects of their lives. But if we can respect persons and want to acknowledge and remember the causes they advanced, then a statue or monument would be appropriate.

What would we say about a statue of Adolf Hitler in Berlin? Well, if we erect statues to honor the person and their cause, then a statue of Hitler would fail on both counts. No reasonable person can argue that Hitler was a good person and that the causes he advanced were honorable. If we want to ensure that we don’t forget our history, then museums, well-written history books, etc, can accomplish this without the need for a statue.

But what if a person was good and honorable but the cause they advanced was not desirable? Of course, we can consider the other possibility, too. What about a statue to someone who was neither good nor honorable but who supported, promoted or advanced a worthy cause? Would we erect a statue to this person? I’m supposing that we would not. So if we won’t erect a statue for someone who is not honorable but who advanced a worthy cause, is it appropriate to erect or maintain a statue for someone who is honorable but who advanced an undesirable cause? I think this question points to why the issue of the removal of Robert E. Lee’s statue is controversial. There may be things we want to acknowledge, remember and emulate about General Lee as a person, but is the cause he fought to uphold—a political and economic system based on slavery—one of them?

Regardless of how we feel about the statue of Robert E. Lee in Charlottesville, Virginia, we need to agree in principle on the conditions that warrant the creation and maintenance of statues of prominent public figures. Once we have decided on this we can determine whether it is appropriate or not to remove a statue. If statues should exist when these two conditions are met—for honorable persons whose works and ideals promoted socially-desirable outcomes—then the answer to question of what to do about the statue in Charlottesville becomes clearer.

If we can’t agree on general conditions or principles for erecting and maintaining statues of prominent figures in public spaces, then debates about the removal of some will degenerate into claims that all statues and monuments will eventually be removed, an outcome that is neither healthy nor desirable for society.