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Jeff Bezos and Elon Musk want to set up operations on the moon. “An exclusive look at Jeff Bezos’s plan to set up Amazon-like delivery for ‘future human settlement’ of the moon” (Washington Post, March 2, 2017) reports Bezo’s Blue Origin plans to to set up moon habitats by mid-2020. From separate story: “Jeff Bezos says NASA should return to the Moon, and he’s ready to help,” (Ars Technica, March 3, 2017):

Bezos explained the philosophy behind this idea. “We are hoping to partner with NASA on a program called Blue Moon where we would provide a cargo-delivery service to the surface of the Moon, with the intent over time of building a permanently inhabited human settlement on the Moon,”

Blue Origin Launch

The Washington Post also reported on Elon Musk’s plans for SpaceX moon flights in 2018: “Elon Musk’s SpaceX plans to fly two private citizens around the moon by late next year” (February 27, 2017).

The Diplomat asks “Are China and the US Set for a Showdown in Space?” (January 28, 2017). China’s interest is more economic than military, exploration, or for scientific research:

… Chinese views on space resources are particularly under-studied. Space resources deserve to be studied because of the potentially vast economic value and potential to cause inter-state conflict. … China conceptualizes space activity principally within the context of economic development, which has important implications for space resources and property.

Elon Musk and other private U.S. space companies also focus on economic opportunity, beginning with lucrative satellite launches, and preparing for space tourism for wealthy customers, and then looking at mining and other moon resource opportunities. Like high-definition televisions, the wealthy buy high-tech goods and services first. Their early high-dollar purchases help pay for further development and innovations that bring costs down for wider markets.

This Motley Fool article looks at SpaceX as a for-profit business: “How Does SpaceX Make Money?,” (June 25, 2016). This Space.com article, “Blue Origin’s Sweet Spot: An Untapped Suborbital Market for Private Spaceflight,” (August 12, 2016) reports:

A central objective of the company is creating a commercial suborbital space tourism vehicle for paying customers. But Blue Origin also plans to make money by taking science experiments into the final frontier.

Critics complain that much SpaceX income comes from federal funding (“Without NASA there would be no SpaceX and its brilliant boat landing,” (Ars Technica, April 11, 2016). But supporters of SpaceX, Blue Origin and other private space companies reply that NASA is fully federally funded and its launch and exploration costs are far, far higher (in part because they rely on traditional NASA/military contractors).

So, the debate over private vs. government space exploration tilts now toward private firms. This TEDx presentation by Jeff Greason, “Making Space Pay and Having Fun Doing It,” then of XCOR, outlines how commercial space development brings costs down.

The Chinese are heading to the moon as well, and Space.com reports on “China’s Lofty Space Ambitions Include 2018 Landing on Moon’s Far Side” (December 28, 2016):

China’s Information Office of the State Council on Tuesday (Dec. 27) released an expansive white paper on that country’s space activities in 2016. The document also projected a look at China’s space agenda over the coming years, a plan that includes a lunar sample-return mission and the first soft-landing on the far side of the moon in 2018.

And from 2015: “China unveils plan to land on mysterious far side of the moon” (Christian Science Monitor, July 21, 2015).

Back to potential U.S./China conflicts in space, The Diplomat article above reports on controversial 2015 U.S. legislation:

While many analysts believe the topic of space resources is far removed, there are at least two companies in the United States working on mining asteroids: Deep Space Industries (DSI) and Planetary Resources International (PRI). In 2015, Congress passed the U.S. Commercial Space Launch Competitiveness Act, which established a “first come, first serve” principle for property ownership in regard to space mining, and the United States has granted a license for Moon Express to accomplish the first commercial landing on the moon.

The U.S. law has been controversial worldwide. Since China is a growing power in space and an active member in formulating international space policy, its attitudes are perhaps of greatest importance in normalizing activity related to space resource utilization.

Mining and other operations on the moon may be a legal challenge as well as a technical and economic one. “Mining the Moon? Space Property Rights Still Unclear, Experts Say,” (Space.com, July 25, 2014):

But it’s unclear at the moment who is allowed to extract and profit from the moon’s resources, leading to a growing debate within scientific, entrepreneurial and policy circles — a debate made more lively and complicated by the changing landscape of stakeholders in space.

Lunar exploration is no longer the domain of governmental agencies alone. With activities like the Google Lunar X Prize and private-public partnerships stimulating a “New Space” industry, commercial organizations have business plans and are attracting investment to develop low-cost, regular, reliable access to the moon within a decade…

See also, “Moon Mining Idea Digs Up Lunar Legal Issues,” (Space.com, January 13, 2011)

More on Google’s Lunar X Prize here: “Google Lunar X Prize: The Private Moon Race Teams (Images).”

Also opening possible paths to the moon is the nonprofit Waypaver Foundation:

WayPaver is a catalyst for possibility. Through our efforts to eliminate roadblocks to Lunar Settlement we generate momentum for sustainability on Earth, the moon, and progress in further space development.

Waypaver’s lunar settlement page is here.

The department will spend $154 billion in 2016, or $1,230 for every U.S. household. After adjusting for inflation, spending has increased 45 percent since 2000. The department operates about 268 subsidy programs and employs 90,100 workers in about 7,000 offices across the country.

These agricultural subsidies distort trade, which adversely affects poor farmers and environmental protection in developing countries. Subsidies also impose a fiscal burden on taxpayers. Conversely, reducing agricultural subsidies in the United States (and other developed countries) could help poor farmers in developing countries compete in the marketplace, reduce ecosystem degradation and help reduce federal spending

…the United States has been a major player in the global rice trade since the 1970s. The country may only produce around 2 percent of global output, but it is consistently among the top five exporters in the world. Arkansas rice is eaten around the world — from Japan to Mexico to Turkey — and roughly half of the rice grown in the state is sold in foreign markets.

The U.S. reached an agreement that would enable rice exports to China, according to a trade group, a development that would give U.S. rice farmers their first foothold in the world’s largest market for the grain.

USA Rice, which represents growers, millers and exporters, said late Friday that officials from the U.S. Department of Agriculture had informed it that Washington and Beijing agreed on a protocol to allow U.S. producers legal access to China, which has long barred American rice.

hbeiser, Pixelbay

The article reports US rice production estimates for 2015-16 at 6.1 million tons, with over half, 3.1 billion tons, for export.

The Congressional Budget Office estimates that under the previous farm bills, the U.S. government provided an average of $1.53 billion in annual support for rice between 2000 and 2004. Under the Agricultural Act of 2014, CBO projects the annual outlay for rice from 2014 to 2018 will average around $231 million.

Thailand’s government spent far more:

Thailand’s rice paddy pledging program is a textbook case of how not to run a farm subsidy program. What started as an effort to win farmer support during parliamentary elections in 2010-11 became an economic disaster that cost the government of Thailand $27.7 billion before it ended in 2014.

The Economist‘s leader, “Hare-grained,” (November 14, 2015),  outlines the mess that Japan, South Korea, China, and other Asian countries have made of the international rice trade:

Tariffs, quotas, floor prices, ceiling prices, producer subsidies, consumer subsidies, state monopolies—no measure is too meddlesome (see article). As a result, the market for rice is more distorted than that for any other staple. Rice growers pocketed at least $60 billion in subsidies last year, according to the OECD, twice as much as maize (corn) farmers, the second-most-coddled lot.

The full article, “Paddy-whacked,” explains the problem in its subtitle: “By meddling in the market for rice, Asian governments make their own citizens poorer.“

Rice policy matters a lot for Asia’s 4.4 billion people, about 60% of the world’s population, as Asians consume 90% of the world’s rice,

Asia consumes 90% of the world’s rice. It is used to make flour, noodles and puddings. Babies and the elderly survive on rice gruel. Steaming rice porridge is eaten for breakfast in skyscraping hotels in Hong Kong and rustic village kitchens in Hunan.

The U.S. government supports domestic rice production through tariffs on imported rice and direct taxpayer subsidies based on production, prices, and historical acreage. Those programs make rice one of the most heavily supported commodities in the United States, with ramifications for U.S. taxpayers and consumers and rice producers abroad.

Back in 2006, Dan Griswold’s Cato Institute Trade Policy Briefing looked at “Grain Drain: The Hidden Cost of U.S. Rice Subsidies.”  Here is part of the paper’s Executive Summary:

Americans pay for the rice program three times over—as taxpayers, as consumers, and as workers. Direct taxpayer subsidies to the rice sector have averaged $1 billion a year since 1998 and are projected to average $700 million a year through 2015. Tariffs on imported rice drive up prices for consumers, and the rice program imposes a drag on the U.S. economy generally through a misallocation of resources. Rice payments tend to be concentrated among a small number of large producers.

Globally, U.S. policy drives down prices for rice by 4 to 6 percent. Those lower prices, in turn, perpetuate poverty and hardship for millions of rice farmers in developing countries, undermining our broader interests and our standing in the world. The U S. program also leaves the United States vulnerable to challenges in the World Trade Organization.

For our own national interest, the U.S. Congress and the president should work together to adopt a more market-oriented rice program in the upcoming 2007 farm bill, including repeal of tariffs and a rapid phaseout of subsidies.

Federal government rice subsidies have changed since 2006, but still involve significant taxpayer subsidies and price distortions internationally. The U.S. could be a leader in reforming damaging rice policies in China and across Asia.

Mercantilist policies still dominate across many industries, from steel to agriculture. Rice is no exception. Governments want to be self-sufficient in rice and where possible promote exports. Subsidies to domestic rice growers cost each country’s taxpayers millions, and tariffs on imported rice (and other grains) cost each country’s consumers millions more.

Public Choice theory explains how concentrated special interests (like rice growers, millers, and exporters) gain political leverage to enact legislation that benefits them while raising costs for consumers and taxpayers (benefits of rice subsidies are concentrated and larger per rice producers and lobbyist, while total costs, though higher,  are spread out across tens of millions of consumers and taxpayers).

The same mercantilist thinking and public choice pressures distort rice production and trade in the U.S..  This July 12, 2015 Wall Street Journal article, “Should Washington End Agriculture Subsidies?” offers a debate on current agricultural policies, after 2014 reforms. Vincent Smith, arguing against farm subsidies, notes:

First, many people seem to believe that farmers, like the Joad family in John Steinbeck’s “The Grapes of Wrath,” are poor, when in fact the average farm household enjoys an income that is about 15% higher than that of the average nonfarm family. What’s more, the 10% to 15% of farm families that receive more than 85% of all farm subsidies—amounting to millions of dollars a year in a few cases—have annual household incomes many times as large as those of the average U.S. taxpayer. Some estimates suggest that the farmers who receive the bulk of all subsidies—many of whom mainly raise corn, cotton, rice, peanuts, soybeans and wheat—are worth somewhere between $6 million and $10 million on average. 

Rice is one of the big grain crops still subsidized, and because rice is the major food of Asia, students could argue that it should be the first to be pulled out of the world of subsidies and left to market competition and international trade.

This May 15, 2015 Bloomberg View article, “Rice Gets a Bath Amid California’s Drought,” looks in depth at subsidized rice production in California: “much of it destined for sushi … shipped to customers, about half of them outside the U.S.”:

As you read this, farmers in the Sacramento Valley are flooding hundreds of thousands of laser-leveled acres under five inches of water as they prepare to plant the annual rice crop. After that comes my favorite part. From the California Rice Commission’s “How Rice Grows” tutorial:

Rice seed is then soaked and loaded into planes. Flying at 100 mph, planes plant the fields from the air. The heavy seeds sink into the furrows and begin to grow.

They will keep growing throughout the hot valley summer (temperatures regularly top 100 degrees Fahrenheit), in the midst of a historic drought. Harvest comes in September, after which the rice — mostly medium-grain, much of it destined for sushi — will be milled and then shipped to customers, about half of them outside the U.S.

The Los Angeles Times article, June 11, 2015, “California rice farmers find Japanese trade negotiators a bit starchy,” looks at other foolish rice policies, beginning with Japanese rice protectionism:

For years Charley Mathews Jr. has exported tons of his best Sacramento Valley-grown rice to Japan, but it grates on him that very little of that has ever ended up on the tables of sushi restaurants or Japanese households.

Instead, the Japanese government, which controls rice imports under a 2-decade-old quota system, has given away most of his and other foreign rice as food aid or sold it domestically as animal feed and an ingredient for rice crackers.

Again, however, U.S. rice farmers benefit from a range of water and price subsidies. Bloomberg View’s “Save California Farmers From Themselves,” April 27, 2015, looks at the water subsidy values for California rice farmers:

In a 2004 study, the Environmental Working Group estimated that the total subsidies for the Central Valley Project added up to roughly $600 million a year. While farmers dispute that figure, they don’t deny they have a very special deal. Why else would they fight efforts to make the pricing of water more market-based and defend their “rights” to it?

This competitive advantage has been worth tens of billions of dollars. All over the West, farmers served by federal projects have benefited from 50-year zero-interest loans, with generous repayment rates, plus low-cost power. And about 45 percent of the farmers who receive irrigation subsidies are growing commodity crops (such as rice and cotton) that qualify for price supports from the U.S. Department of Agriculture — a classic example of double dipping.

This giant international rice farming mess seems endlessly complicated. But at the least the U.S. could be a leader in saving hundreds of millions of taxpayer dollars by ending the rice subsidies that also encourage rice protectionism in Japan, South Korea, and other Asian countries.