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ISU economists back report suggesting return to supply management model; other stories

(Tuesday, Feb. 8, 2005 -- CropChoice news) --

1. ISU economists back report suggesting return to supply management model
2. External costs of U.S. agriculture may exceed $16 billion
3. ACGA leader Meets with Brazilian Farm Groups and Agriculture Minister to Discuss Mutually Supportive Ag and Trade Policy Issues
4. More colleges buying food from local farmers
5. Rift grows even wider over trade
6. Global seed industry is growing a monopoly

1. ISU economists back report suggesting return to supply management model

By PHILIP BRASHER, DesMoines Register, Feb. 6, 2005

Washington, D.C. - Could the future of government farm programs be in the past?

A group of populist economists thinks so.

The group, which includes Iowa State University's Mike Duffy and Neil Harl, as well as Darryl Ray of the University of Tennessee, believes the last two farm bills have been expensive failures.

They say it is time to consider returning to the days of supply management when the U.S. secretary of agriculture could order farmers to cut back on production.

This time, however, these economists think it is time to come up with a way to control farm production around the globe.

They don't say how you could do that - or who would be this world ag czar. Those are no small omissions.

"Today, U.S. agriculture and the agricultural sector around the world stand at a different crossroads," the economists say in a 39-page report released by Iowa State's Leopold Center for Sustainable Agriculture. "The pressing question now is whether there is a place for a global food and agriculture policy."

The report's co-authors are Traci Bruckner of the Center for Rural Affairs, a Nebraska advocacy group, and Mark Ritchie of the Institute for Agriculture and Trade Policy in Minneapolis.

Duffy, the Leopold Center's associate director, said his group is just trying to "get people to think about things."

There is no question that U.S. farm programs are in trouble. The World Trade Organization has said that subsidies for cotton growers unfairly encourage overproduction that depresses world prices.

The U.S. surplus in agricultural and food trade has evaporated. And farm spending this year is expected to more than double to $22 billion because of falling commodity prices brought on by last year's record crops of corn, soybeans and cotton.

However, Duffy and his group are going to have a tough time finding people inside Republican-dominated Washington - or even outside Washington, for that matter - willing to consider a return to supply management in agriculture.

"This is dinosaur-Democrat-type stuff," said Ford Runge, an agricultural economist at the University of Minnesota who has advised Democrats on farm policy.

Ouch. That's exactly how it will be seen in Washington, however.

The United States' production controls are widely viewed as having undermined U.S. exports in the 1980s. U.S. competitors, such as Brazil, Australia, Canada and the European Union, would love to see us do it again, Runge said.

If anything, there is pressure to go the other way and increase production. Feed and grain companies are pressing President Bush's administration to shrink the government's Conservation Reserve Program to put more land into cultivation.

Nevertheless, the Leopold Center report hits on some fundamental issues that will face policymakers as they start working on new government farm legislation: the high cost of the existing subsidy programs and the concerns of Third World countries whose farmers have trouble competing with heavily subsidized growers in the United States and Europe.

Those Third World issues were totally ignored in 2002 when the last farm bill was written. They won't be ignored the next time. The WTO ruling against U.S. cotton subsidies almost guarantees that.

The working assumption in Washington is that crop subsidies will have to be cut - to stop stimulating U.S. production - and that the money will be shifted into conservation programs.

Many farmers, though not all, realize that their government programs

must change, Duffy said.

Farmers "are not ideologues, they are more practical people," he said.

Duffy is practical, too, about what may happen with his group's idea.

"It may be that we sit around and think about this and the fact of the matter is that supply control of any sort is so non-politically acceptable that there is no point in thinking about it then," he said.

2. External Costs of US Agriculture May Exceed $16 billion

A new study, published this week in the peer reviewed International Journal of Agricultural Sustainability, estimates that the negative impacts of agriculture in the US may cost society anything from $5.7 billion to $16.9 billion (3.3 to 9.7 billion) annually. The negative impacts identified include the cost of greenhouse gas emissions from cropland and livestock (estimated as $450 million), damage to wildlife and ecosystem biodiversity ($3249 million), and damage to human health from pesticides ($129.4 million). The authors of the study call for a restructuring of agricultural policy that shifts production towards methods that lessen external impacts.

Erin M. Tegtmeier and Michael Duffy, the authors of this study, acknowledge that placing exact monetary figures on factors such as the value of a bird's or a human being's life is extremely difficult and that further work is called for, but insist that such studies can aid in influencing the future of agricultural practice: "A Monetary metric provides a base for comparisons to aid in policy decisions".

According to the authors, the study illustrates that current agricultural practice results in very real economic, social and environmental impacts, which would significantly affect the perceived economic efficiency of industrial agriculture if they were met by the industry itself. Whilst US farmers spent $8.2 billion dollars on pesticides in 2002 for example, the study points out that this is less than 80% of the actual cost of pesticide use, when considering the $2253.9-2283.1 million in damages to water resources, wildlife and ecosystem biodiversity and human health calculated by Tegtmeier and Duffy.

The study concludes by stating, worryingly, that the figures identified may be on the conservative side, partially due to a need for more data, and partially because the full consequences of industrial agriculture may not yet be known. It also calls for valuation studies into the potential positive externalities of sustainable agricultural practices, such as providing carbon sequestration or wildlife habitats. Such acknowledgment of the true costs and benefits of various methods, technologies and practices available to farmers may help to influence a shift in current agricultural practices and the policies that promote them.

Notes

For a copy of this article, or for more information about the International Journal of Agricultural Sustainability please contact: sami@channelviewpublications.com

Sami Grover
Channel View Publications
Frankfurt Lodge
Clevedon Hall
Victoria Rd
Clevedon
BS21 7HH
Tel: +44 (0)1275 876519
http://www.channelviewpublications.com

3. ACGA leader Meets with Brazilian Farm Groups and Agriculture Minister to Discuss Mutually Supportive Ag and Trade Policy Issues

Contact: Larry Mitchell (202) 835-0330
http://www.acga.org

CHAPECO, BRAZIL - Jan. 24, 2005- Keith Dittrich, Chairman of the Board of the American Corn Growers Association (ACGA) met with farm leaders from around the world, along with the Minister of Family Agriculture in Chapeco, Brazil this week to discuss agricultural and trade policy.

Brazilian farm organizations, including the local group FETRAF-SUL, along with CSA and groups from Belgium, sponsored a seminar called "Mutually Supportive Agricultural Trade Policies." There, farm leaders from Brazil, Senegal, Kenya, Canada, Belgium, France, Paraguay and other parts of the world discussed supply management policies that would help encourage higher farm prices for farmers around the globe.

In a document release from the conference, The Alert from Chapeco, participants reiterated their support for a change in current trade policy that has economically damaged farmers around the globe by sharply dropping prices.

"We, representatives of family farm and agricultural producer organizations from the different continents demand from our governments that they stop adhering to the dogmatic view of agricultural policies promoted by international institutions, in particular the World Trade Organization (WTO), International Monetary Fund (IMF), and the World Bank. This view, based on market deregulation, is destructive for family farmers across the world: ten years later, we can attest to the failure of the WTO. We call on the respective governments to reform their policies based on the legitimate needs of populations, respecting their productive and cultural diversities," the document stated. It went on to say that we should ensure remunerative (higher) agricultural prices by using a combination of instruments including supply management.

Dittrich also met personally with the Minister of Family Farm Agriculture for Brazil, Mr. Valter Bianchini. Dittrich expressed his organization's desire to encourage better cooperation between our countries and farm organizations to the benefit of both countries farmers. He offered documentation by the Agricultural Policy and Analysis Center (APAC) that explained the role of U.S. farm policy in world agricultural prices and offered a blueprint for future agricultural policy that would be mutually beneficial to both countries by instituting supply management measures. Minister Bianchini expressed his concern for the three million farmers in Brazil and suggested that continued Brazilian crop acreage expansion was also a concern.

"It was a great opportunity to dialogue with so many farmer leaders from around the globe," stated Dittrich. "It is becoming apparent that there is great concern about agricultural and trade policy everywhere and a new direction needs to be developed, one that is mutually supportive and hinges on supply management and price support measures with international cooperation. We look forward to this continued endeavor and call on leaders from our country to support such efforts, recognizing the positive outcome that fair market prices can have on many countries of the world including the United States, by developing a food supply that is beneficial for farmers and consumers alike," concluded Dittrich.

The entire alert, along with participants of the meeting can be accessed at http://www.dakar-cancun.org The APAC analysis can be accessed at www.acga.org http://www.acga.org

-30-

4. More colleges buying food from local farmers

Associated Press

MERIDEN, Conn. - Mealy apples, boxed mashed potatoes, frozen veggie mixes and suspicious meats drive many a college student to the cereal and bagel bins.

But dining halls from Bates College in Maine to the University of California at Santa Cruz are improving their food and helping their local agricultural economies by going straight to the farm.

They're seeking out small and medium-size farms near campus for fresh produce, meat and dairy products. Most of the farmers grow organic crops or use pesticides sparingly and practice methods of sustainable agriculture, such as crop rotation.

About 200 colleges nationwide purchase at least one product from a small farm in their community or state, according to Kristen Markley, National Farm to College Program Manager of the Community Food Security Coalition.

The hook, many say, is that locally grown food just tastes better.

"Produce that's meant to be transported is grown for durability," Markley said. "Local farmers grow varieties that are delicious, but not as durable."

Last year, Yale undergraduates would often doctor their school-issued ID cards to get into the one dining hall that regularly cooked with farm-fresh ingredients.

"It's not as much of a problem this year since we spread the menu to all the college dining halls," said Melina Shannon-Dipietro, Associate Director of the Yale Sustainable Food Project.

Buying locally also helps satisfy student demand for vegetarian, vegan and organic options, and reduces or eliminates the fuel, packaging and refrigeration needed to transport perishable foods.

And replacing hardy but spiritless produce with local varieties - luscious heirloom tomatoes and sweet Rome apples - encourages students to munch on more fruits and vegetables.

"This is the time to show students healthy choices so they can develop food habits that are good and long-lasting," said Jennifer Wilkins, Director of Cornell University's Farm to School Program.

As sales of organic produce have skyrocketed and restaurants have turned to local farms for haute cuisine, Shannon-Dipietro even sees the move as a recruiting tool.

"Twenty years ago it was important how good academically a college was. Now it's overall quality of life that's also important, and food is right up there," she said.

Advocates of buying locally, many of whom are students, also hope to sustain the ever-shrinking population of small to medium-size farms.

"Colleges are lucrative customers for farmers because they buy in bulk on a regular basis and have good credit," said Jack Duff of Blackberry Meadows Farm, an organic vegetable farm in Natrona Heights, Pa.

Last fall, Meriden farmer Wayne Young sold almost 4,000 pounds of apples and pears per week to Yale. "It helps," Young said.

Interest in farm-to-college programs perked up three or four years ago, said Gary Valen, director of operations for Glynwood Center, a sustainable agriculture organization in Cold Spring, N.Y.

Valen co-founded the first university-based local food project in 1986 at Hendrix College in Arkansas. When the program started, only 6 percent of the school's food came from Arkansas despite its heavy farming, he said. By 1989, it was 30 percent.

"Now it's a movement that's sweeping the country," Valen said.

This fall, at the urging of students, the University of California at Santa Cruz started a new contract to source at least 2 percent of its produce from small farmers operating within a 250-mile radius of the campus. Kenyon College began supplying its two dining halls with apples, potatoes, squash, lettuce, berries and other produce from small farmers in Ohio.

Tufts University, Cornell University, Vassar College, Middlebury College, the University of Wisconsin at Madison and Ohio University are among other colleges committed to buying as much as they can from local farmers.

Christine Schwartz, dining services director at Bates College in Maine, said buying from Maine farmers costs about the same as buying exclusively through a major food supplier. Twenty percent to 30 percent of Bates' food budget goes to products produced in Maine.

Bates' dining hall staff is accustomed to chopping lettuce and peeling potatoes, rather than ripping open prepackaged salads and boxes of dehydrated spud flakes. Schools with fledgling programs must consider additional labor costs involved, but many say it's worth it.

5. Rift grows even wider over trade

Evelyn Iritani, LA Times, Feb. 5, 2005

American small businesses, tired of being walloped by low-cost foreign competition, are increasingly asserting themselves in U.S. trade policy, leading to a growing rift with big U.S. multinational companies pushing for freer trade.

The latest example of the tension came recently when the National Association of Manufacturers released a 2005 trade agenda that calls for getting tougher on China, including more aggressive use of penalties to counter unfair trade practices.

That isn't exactly a revolutionary position. But executives from small U.S. companies said it took a revolt on their part to get the nation's leading manufacturing organization to deviate even slightly from its decades-old stance that opening borders and reducing trade barriers is good for the U.S. economy.

"We wanted to see balance in NAM's trade policy," said David Frengel, director of government relations for Penn United Technology, a 630-employee maker of precision tools in Cabot, Pa. "We don't want to be treated like, 'Those who do their manufacturing in the United States are Neanderthals.' "

'Quite influential'

NAM is among Washington's most influential lobbying groups. And its new position on trade is certain to make it more difficult for the Bush administration to build support for a controversial trade pact with Central America and for global talks designed to open markets for farm goods and services.

That the business community's opposition to the Bush trade agenda is coming mainly from smaller companies could prove particularly powerful.

"Small business, when it speaks with a unified voice, has historically been quite influential in Congress and in politics generally," said Gary Hufbauer, a trade expert with the Institute for International Economics.

Although the tug of war between protectionists and free traders has always existed, the split within the U.S. business community has widened in recent years because of China's emergence as a global manufacturing force, a steep rise in low-cost imports and the accelerating loss of manufacturing jobs.

Imports from China

Many small companies that hadn't worried about foreign trade suddenly find themselves losing sales to cheaper imports, especially from China. And their major customers are moving overseas, taking orders with them.

Jack Davis, president of I Squared R Element Co., a small Akron, N.Y., producer of silicon carbide heating elements, said he became evangelical about America's trade problems two years ago when a Texas company began selling a competing Chinese-made product for 25 percent of his price.

"That was eye-opening," said the 71-year-old engineer, who recently founded a lobbying group called Save American Jobs. "The U.S. has the best workers in the world, but they're also the highest-paid workers in the world."

Though big multinational corporations such as Boeing Co. and Microsoft Corp. dominate the headlines, small businesses are the foundation of the American economy, accounting for 97 percent of all U.S. exporters, according to the U.S. Small Business Administration. In Los Angeles County, businesses with 500 or fewer employees made up 99.8 percent of all companies in 2002 and were the major engine of growth in the preceding decade.

Strain in California

As the nation's most trade-dependent state, California has been smack in the middle of these escalating tensions.

Rayne Thompson, trade expert at the California Farm Bureau, said her organization is caught between the concerns of export-oriented cotton and rice producers anxious to lower tariffs globally, and apricot and peach growers who have been hammered by imports from Latin America and Europe.

"What we're finding as a general agriculture organization is one size does not fit all," she said.

Beyond the small-business lobby, others are also lining up to oppose Bush's trade initiatives. For instance, U.S. cattle ranchers and sugar producers - faced with the prospect that agricultural imports could outpace exports this year for the first time in nearly half a century - are opposing the Central American Free Trade Agreement and other trade pacts. U.S. textile producers have allied with foreign manufacturers in a bid to keep Chinese imports out of the U.S. market.

'Everybody engaged'

For NAM, one of the country's most vocal trade supporters, the battle over this year's agenda was unusually contentious, according to Frengel and others. Though small-business leaders didn't succeed in getting the manufacturing group to consider a total moratorium on new trade agreements, Frengel said, the platform that emerged was a "compromise."

"There's not everything in this document the large companies like and not everything in here the small companies like," agreed Arnold Allemang, a member of multinational giant Dow Chemical Co.'s board of directors and the chairman of NAM's international economic policy committee. "But I can assure you, everybody engaged in the process."

6. Global Seed Industry Is Growing a Monopoly

Wall Street Journal, February 7, 2005

Your Jan. 25 article "Monsanto Co. to Pay $1 Billion for Produce-Seed Firm Seminis" raises important issues about the potential uses of biotechnology in the vegetable seed market and the consolidation of the global seed industry. The bigger issue, however, is the fundamental question of how few companies will dominate the seed industry and thus shape the very foundation of our food system.

With this acquisition, Monsanto has surpassed DuPont Co. in the global seed market. The company now owns a major portion of the corn, cotton, soybean, canola and vegetable seed markets, and only five firms -- Monsanto, DuPont, Bayer, Dow and Syngenta -- are major players in the global seed and agricultural chemicals industry. The monopolization of this market and the earlier hybridization of seeds have left many American farmers with higher seed costs, forcing some to purchase seeds when they would traditionally produce their own. The bottom line is a transfer of wealth from the farmers to seed companies.

Will a company like Monsanto offer new opportunities for vegetable farmers, or will these produce farmers meet the same challenges as soybean and cotton farmers -- bigger farms, fewer farms and intense international competition?

Mary Hendrickson
Food and Society Policy Fellow
University of Missouri
Columbia, Mo.

URL for this article:
http://online.wsj.com/article/0,,SB110773328612247198,00.html