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Congress, in helping farmers, deals John Barleycorn a blow—What revenge will Barleycorn exact?

Here is my offering along the lines of my class’s recent essay assignment.  The main assignment was to write an essay, much like my blog posts here, commenting on some news item using analysis we have developed in class.   

As you know, Congress has offered subsidies for ethanol production, in an attempt to become less reliant on foreign sources of energy.  Those subsidies, along with high gasoline prices, have caused the price of corn (the main crop used for ethanol)  to shoot up.  This article from USA Today (that appeared in the Arizona Republic) conveys one of the most unfortunate, and I would add, disastrous, side effects of high corn prices.   

With higher corn prices, the opportunity costs of growing other grain crops have gone up.  One of the crops that farmers have found easy to switch away from in order to grow corn has been barley.  This may not sound too bad if you are only thinking about putting barley in a soup.  However, think about what the biggest use of barley happens to be—making barley malt, the main ingredient in beer.  As a result, beer prices are expected to rise about 9% or so. 

In early English (and Scottish) folksongs and the poetry of Robert Burns, John Barleycorn is the personification of this great grain, a grain, after malting, that is used to make both beer and Scotch.  In fact the rock band, Traffic, title one of their albums and songs, “John Barleycorn must die” (you can see and hear Traffic perform the song on Youtube). See this article about John Barleycorn in Wikipedia.

In the songs, various people, especially those with addictions to drink, do their best to kill John Barleycorn.  In many versions of the song, people do indeed kill John Barleycorn.  However, Barelycorn comes back from the grave to get his revenge for those who mistreated him.

And Ahmadinejad thinks he is having trouble with riots over gasoline rationing!

–MC

This entry was posted on Friday, July 6th, 2007 at 9:33 am and is filed under General, Political Economy, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “Congress, in helping farmers, deals John Barleycorn a blow—What revenge will Barleycorn exact?”

  1. Audra Cook Says:
    July 15th, 2007 at 3:36 pm

    I never really thought about the effects of farmers switching from one crop to corn. The market for corn is definetly on its way to becoming a booming market, but what would happen if people refused to use the “other fuel” because of what it has cost them. I guarantee there will be MANY angry folks if beer prices rise! But beer wont be the only product whose price will rise. Perhaps the government should look into some type of compensatoin for continuing to grow other crops besides corn. What would happen to the country if the price of bread went up 9%??

  2. morris.coats Says:
    July 16th, 2007 at 4:44 pm

    Audra,

    Much more of a concern is what has already happened in Mexico to the price of corn tortillas, because of US ethanol subsidies. See my brother’s “guest” post on this in the January 2007 archives.

    MC

  3. Michelle Plaisance Says:
    July 19th, 2007 at 1:47 pm

    The issue in Mexico with corn tortilla prices rising and the issue of beer prices rising 9% is directly related to each other. The Market of these two crops will most likely decrease a little due to the high prices and poor people not wanting or not being able to pay for leisure(beer) or Tortillas(food). When poor hungry alcoholics do not get what they want things will get ugly. There will be riots formed and caos filling the air.

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