Thursday, December 02, 2004

Commerce and Agriculture

On Monday, the President nominated Carlos Gutierrez, CEO of Kellogg, to be the next Secretary of Commerce. From all accounts, Mr. Gutierrez is a wonderful American success story and an exceptional businessman. He breaks a pattern of promoting from within and seems to have had few ostensible ties to Republican politics. My hope for our new Secretary is that he is an advocate of free trade and not particularly beholden to interests groups like the National Association of Manufacturers, who in my view look to the government way too often for trade protection. I'll watch his confirmation hearings with that in mind.

Today, the President nominated Mike Johanns, Governor of Nebraska, to be the Secretary of Agriculture. He is not an insider and also seems like a successful executive. My hope for our new Secretary is that he is up to the task in two key areas. First, I am concerned that we are not moving fast enough to identify and contain mad cow disease and otherwise protect the food supply from disease. A lot of the remedies (like more testing of the herds) would act like a tax on beef production. Not a popular policy for the governor of Nebraska. Second, I want all tariffs and other barriers to the import of sugar from other countries to be eliminated. These barriers are a giveaway to the corn industry, and they are, in my view, the reason why we are lagging in our development of ethanol as a renewable fuel source. We should be making it out of Brazilian sugar, not import-protected domestic corn, at a much more competitive price. Again, dropping these barriers would seem to be a tough sell for the governor of Nebraska. This particular endorsement doesn't make me too optimistic, but I'll reserve judgement until I see the new Secretary in action.

1 comment:

Anonymous said...

Some reputable ag economists argue that the price of corn syrup is no longer a function of the price of sugar because many purchasers (esp. commercial bakers) have figured out that corn syrup is superior to sugar for their purposes. Not clear this would have happened without artificially high sugar prices, but it did.

Regarding sugar versus corn as a feedstock for ethanol: does anyone know if California was successful in getting permission to import Brazilian ethanol to comply with their oxygenated fuel requirements?