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Small Kansas farms falling by wayside; other news

(Wednesday, June 29, 2005 -- CropChoice news) --

1. Small Kansas farms falling by wayside
2. Farm support's deep roots
3. Prepare for big ethanol imports under free-trade agreements
4. American Corn Growers reaffirm opposition to CAFTA: New study confirms CAFTA locks in ethanol imports to U.S.
5. ACGA Calls for Full Funding for Conservation Security Program
6. CAFTA would squash "buy domestic" efforts
7. Give populism a chance

1. Small Kansas farms falling by wayside

LJWorld.com, Wednesday, June 22, 2005

Kansas farms are disappearing.

Thirty-five years ago, there were 87,000. Today, there are 62,000.

Fewer farms mean fewer farmers. So more than two-thirds of the state's counties lost population between 1980 and 2000.

Four counties - Jewell, Graham, Rawlins, Osborne - suffered 20-year population losses topping 25 percent.

"It's not good," said George Pyle, a native Kansan and author of the book "Raising Less Corn, More Hell: The Case for the Independent Farm and Against Industrial Food."

"Communities all across the state that once supported - and were supported by - farmers are drying up and blowing away," he said.

More and more, Pyle said, family farms are giving way to bigger family farms or giant corporations that need fewer people to work more land, raise more cattle, feed more hogs.

"We're told all the time that this is inevitable, that it's a consequence of the free and open market," he said. "But the market is neither free nor open - it's built on subsidies that make no sense at all, that force the big to get bigger and the small to get out."

Pyle, 48, knows Kansas. After growing up in Hutchinson, he spent 23 years writing for the daily newspapers in Garden City, Ottawa, Olathe, Chanute and Salina.

Now an editorial writer at the Salt Lake Tribune, he was a Pulitzer Prize finalist for editorial writing in 1998.

The market, he argued, is controlled by a handful of corporations that have finagled a trade: Cheap food in exchange for the federal government looking the other way on enforcement of the nation's environmental, work place safety and anti-trust laws.

"We're helping the bear," Pyle said, referring to the joke about the man who skipped church to go hunting. Later treed by a hungry bear, the man quickly prayed: "Lord, I know you can't help me because I wasn't in church today, but, please, whatever you do, don't help the bear."

"Our government and the ag lobbies have bought into the notion that if something is bigger, faster, more efficient - it has to be better," Pyle said. "Well, that's what (Russian dictator) Uncle Joe Stalin thought. He was wrong, too."

"Raising Less Corn, More Hell" arrived in bookstores last week. Already, it has struck a chord with Dan Nagangast, a Lawrence organic farmer and executive director of the Kansas Rural Center.

"What this book does is take all the different issues that affect agriculture - world trade, commodity production, the environment, the fate of the family farmer - and ties them all together," Nagangast said. "I know that sounds simple, but I can't think of anybody else who's done it."

Aging farmers

At Kansas Farm Bureau headquarters in Manhattan, spokesman Mike Matson said the association does not dispute the demographic changes brought on by bigger-is-better agriculture.

"The average age of the Kansas Farm Bureau member is 58 to 59 years old," Matson said. "Play that forward a generation, and you'll see that the numbers of people producing raw commodities are clearly on a downward trend.

"And look at what's happening to the land - it's no longer a given that the son or daughter will come back to take over the farm," Matson said. "As a result, we're seeing fourth-generation farms divvied up and sold in ways the original landowners never would have imagined."

Rather than fighting the changes, Matson said, Farm Bureau is looking for ways to help its members adjust and survive.

"The train is on the track," he said. "I don't think anyone is going to say if we stood in front of it, we'd stop it."

That's true, Pyle said, but only because farmers are small pawns in a big game.

"If things are going to change, the public is going to have to understand that farmers are too few in number to be politically powerful. The power in agriculture lies in the corporations that have made it the way it is," Pyle said. "They're not going to change."

But grocery shoppers, he said, can make a difference.

"Instead of buying whatever's cheap, they need to look a little harder and pay more for whatever's organic or locally grown," Pyle said, "whatever makes it possible for producers who aren't in the industrial chain to make a living."

2. Farm support's deep roots

The Economist, June 22, 2005

A new report from the OECD indicates that progress on reducing agricultural subsidies in the rich world has been glacial. Unless governments get tough with their powerful farming lobbies and cut their supports, farm subsidies could stymie further progress on world trade liberalisation.

LITERATURE about farming often gushes about living in harmony with the eternal rhythms of nature. "Eternal" certainly seems the right word to describe the generous subsidies that rich-world farmers enjoy. For a group whose population is rapidly shrinking, and whose products have been declining in value for centuries, farmers wield an astonishing amount of political power. Though farm subsidies are the bane of liberal and conservative economists alike, farmers have survived decades of trade liberalisation almost unscathed, and may well emerge from the current Doha round of World Trade Organisation (WTO) negotiations with little alteration to their pampered existence.

A new report, released by the Organisation for Economic Co-Operation and Development (OECD) on Tuesday June 21st, shows just how little progress has been made on liberalising agriculture over the past two decades. While the value of farm protection in OECD countries has fallen from 37% of farm receipts in 1986-88 to 30% in 2002-04, progress has faltered since the late 1990s. The OECD estimates that the value of support to its producers was a staggering $279 billion in 2004.

There is, though, wide variation between OECD members. Producer support is worth less than 5% of farm receipts in New Zealand and Australia, but amounts to roughly 20% throughout North America, 34% in the European Union, and a whopping 60% in Japan. And while the overall value of support has fallen from 2.3% of GDP in 1986-88 to 1.2% now, the reductions have been uneven (see chart above). Canada and Mexico have made deep cuts in their farm supports, for instance, while Turkey has actually increased its supports.

While progress on reducing support levels may be painfully slow, most governments have managed to reduce the more distorting kinds of protections. Instead of subsidies tied to production levels, which were responsible for the infamous mountains of butter and lakes of wine that used to plague European agriculture officials, countries are slowly moving towards compensation based on acreage or historical support levels. In 1986-88, the majority of OECD countries had 90% or more of their support programmes linked to either current outputs or inputs; that number has now fallen below 75% in most of Europe, though it remains above 90% in Japan and South Korea.

But agricultural policies in rich countries still distort markets at home and abroad. Worse, they hurt the poor. Price-support mechanisms make domestic consumers pay more for their food, hitting low-income families the hardest. And for farmers in poor countries, OECD agricultural policies are disastrous. If those farmers aren't being kept out of export markets by quotas or tariffs, they are being undercut in domestic markets by heavily subsidised produce from the developed world. While some have argued that rich-world subsidies are a net boon to poor countries because they provide cheap food to the masses, in those countries the poorest are often rural farmers, whose lives would be improved by higher prices for their products.

Even where distortions have been reduced, legislators have passed up the opportunity to tailor supports to specific beneficiaries or policy goals, such as environmental protection. Instead, new programmes have mostly been drawn along broad lines, the better to maintain the political support of farmers. Payments for acres of land or head of cattle may be better than compensation based on bushels of wheat or gallons of milk, but they still distort the economy, and give farmers incentive to cultivate marginal land.

FARM POWER

Europe, in particular, is struggling with its cosseted and deeply entrenched farm lobby. France has historically been the biggest obstacle to reform; almost half its area is farmland, and its farmers defend their subsidies vigorously. Thanks to such obstructionism, the EU's common agricultural policy (CAP) accounts for nearly half of its overall budget, even though only 4% of its population still works the land. Though there has been some modest progress on reform in recent years, disputes over the CAP are still acrimonious. A row over its funding was the main reason for the collapse of the EU summit in Brussels last week.

America's agricultural mollycoddling is less egregious, but egregious it still is, and the farm lobby is just as determined to keep the money flowing. In 1996, Bill Clinton signed a farm bill that was supposed to lead to the gradual elimination of agricultural protections. Mr Clinton is long gone, but the protections aren't--indeed, the 2002 farm package signed into law by George Bush nearly doubled the level of federal subsidy.

This has not bought Mr Bush peace with the farm lobbies, however. Sugar growers are currently working overtime to derail the Central American Free Trade Agreement (CAFTA), which the president is trying to get through Congress before the July 4th holiday. Though other agricultural producers are actually supporting the agreement, the sugar lobby has a good chance of picking off enough Republican legislators to defeat it.

CAFTA is too small to make much difference to the American economy one way or the other, though passing it would give a huge boost to the other countries in the agreement. But politically, failing to pass CAFTA would be a deep blow to the Bush administration. And if the administration cannot manage to pass a small regional trade pact, prospects will look a lot dimmer for securing a substantial new agreement in the Doha round.

Nonetheless, the OECD is looking to the WTO for further progress on subsidies. A hopeful sign is that agricultural protections are beginning to be disputed at the WTO. Since last year Brazil has won WTO challenges against American cotton subsidies and EU sugar protections, on the ground that they far exceed established limits. This week the EU announced plans to cut its sugar subsidies by 39%, despite stiff resistance from uncompetitive European producers. Now that the Uruguay round's "peace clause", which protected farm subsidies from challenge provided they did not exceed 1992 levels, has expired, rich-world subsidies are vulnerable to further onslaught.

But a successful challenge at the WTO does not guarantee the rapid dismantling of farm supports. More than a year after being told to scrap its cotton subsidies, the Bush administration still hasn't put forward a plan palatable to both its own producers and those in Brazil, which is threatening to retaliate by removing patent and copyright protection for American products. Perhaps farmers can be forgiven for thinking that they have eternity on their side.

See this article with graphics and related items at http:// www.economist.com/agenda/displayStory.cfm?story_id=4100673

3. Farm and Food: Prepare for big ethanol imports under free-trade agreements

By ALAN GUEBERT/Farm and Food Columnist

The harder anyone scratches the Central American Free Trade Agreement pushed by the White House, the worse the smell in American agriculture gets.

First, it was the creeping expansion of sugar exports to the U.S.

Next, it was the time - years, even decades - before U.S. farmers receive duty-free, total access to the tiny, poor Central American countries included in the agreement.

Now it's a threat to American agriculture's shiny, new star, ethanol.

According to a June 22 report issued by the Institute of Agriculture and Trade Policy, the Central American agreement virtually guarantees a rising tide of duty-free ethanol exports from Caribbean and South American nations to the U.S.

A whiff of that plan arrived a year ago when Cargill, Inc., the $63 billion agbiz giant, announced plans to use a little-noticed clause in the Caribbean Basin Initiative to ship sugar-based, Brazilian ethanol into El Salvador for dehydration, then export to the U.S.

Under that initiative, up to 7 percent of total annual U.S. ethanol production - made from a "foreign feedstock, i.e. sugar from another, non-CBI country," notes the instittute's report - can be exported to the U.S. duty-free if it is produced in any of the 24 nations covered by the Caribbean Basin Initiative.

Years ago that 7 percent was a drop in the ethanol bucket.

Now, however, with the ethanol market booming in the U.S. - and Congress likely to require the use of 8 billion gallons annually, or more than double today's production, by 2012 - the bucket will overflow.

Under the Caribbean initiative, almost 240 million gallons of Caribbean-sourced ethanol can enter the U.S. tariff-free in 2005; 560 million gallons in 2012 if the pending energy bill includes the 8-billion-gallon mandate.

Then, according to the Institute of Agriculture and Trade Policy, once that threshold is hit, the Caribbean initiative allows "an additional 35 million gallons (to) be imported into the U.S. duty-free, provided that at least 30 percent of the ethanol is derived from 'local,' or Caribbean region, feedstocks."

Yep, sugar.

After those two targets are hit, more Caribbean ethanol can be imported. "Anything above the additional 35 million gallons is duty-free if at least 50 percent of the ethanol is derived from local feedstocks," the report explains.

Gee, more imported sugar, er, ethanol.

And that's exactly will happen under the Central American Free Trade Agreement, explains the institute's report (at http://www.iatp.org ), because "CAFTA adopts the CBI language for ethanol"... and "makes the CBI allowances on ethanol exports to the U.S. permanent."

As smelly as that will be for the farmers who grew the 1.26 billion bushels of corn used to make 3.4 billion gallons of American ethanol in 2004 - and who now own 40 percent of the domestic ethanol production capacity - it may get worse.

U.S. Trade Representative Robert Portman calls the Central American agreement a "gateway" that opens the door to the Bush Administration's bigger, hemisphere-wide Free Trade Area of the Americas.

In effect, the CBI-to-CAFTA-to-FTAA triple play would open the U.S. biofuels market to ethanol giant Brazil which, in 2003, produced 3.6 billion gallons of ethanol from sugar. It's a maneuver that free-trading agribusiness masters like Cargill appear to be banking on.

In May 2004, Cargill announced a $10 million partnership to build a 63 million gallon ethanol dehydration plant in El Salvador to export Brazilian sugar-based ethanol into the U.S. duty-free under the Caribeean Basin Initiative.

In Dec. 2004, Cargill and Brazilian commodities trader Coimex struck a deal to drop another $10 million in a Jamaican ethanol plant to, again, dehydrate Brazilian ethanol.

On May 19, 2005, Cargill announced it would invest in one of Brazil's biggest sugar processors, a producer of about 50 million gallons of ethanol.

The Renewable Fuels Assoc., ethanol's Washington, D.C. lobby, objects to the Institute of Agricultural and Trade Policy's assertion that the Central American agreement means greater ethanol imports. "They're allowed under (the Caribbean initiative) already," says spokesman Monte Shaw.

OK, so why institutionalize what could be a flood of imported ethanol with the Central American agreement and the Free Trade Agreement of the Americas.

On second thought, ask your local National Corn Grower Association director, your county Farm Bureau president or the American Soybean Association - all supporters of the Central American agreement and the Free Trade Agreement of the Americas - why America needs to import any ethanol at all.

Alan Guebert is a freelance agricultural journalist. He can be reached at agcomm@sbcglobal.net or Alan Guebert, 502 W. Fourth St., Delavan, IL 61734.

4. American Corn Growers Reaffirm Opposition to CAFTA: New Study Confirms CAFTA locks in ethanol imports to U.S.

WASHINGTON- June 23, 2005 - Larry Mitchell, American Corn Growers Association (ACGA) Chief Executive Officer, today reaffirmed his organization's opposition to the U.S. ratification of the Central American Free Trade Agreement (CAFTA), and cited more evidence of the problems with the pending trade pact from a new report by the Institute for Agriculture and Trade Policy (IATP) titled "CAFTA's Impact on U.S. Ethanol Market."

"We have stated our concerns about increased ethanol imports which will be allowed under CAFTA before, but the new IATP report documents and quantifies the reasons for our concerns," said Mitchell. "U.S. farmers have worked too hard and too long to build our domestic ethanol industry and we do not plan to allow this critical industry to be outsourced."

According to the IATP report, issued this week, CAFTA locks in tariff-free access to the U.S. market for foreign ethanol. It also makes permanent provisions in the Caribbean Basin Initiative (CBI), which allows 7 percent of total U.S. ethanol production that is produced by foreign feedstock (outside CBI countries) to be imported into the U.S. tariff-free. The foreign feedstock must be processed in a CBI country.

In a case that has received a lot of attention, high water content Brazilian ethanol would be dehydrated and turned into fuel in an El Salvador plant, and then exported into the U.S. Moreover, the CBI also allows unlimited amounts of ethanol above the 7 percent cap to enter the U.S. without a tariff, provided it is produced with at least 50 percent Caribbean Basin country feedstock.

"The IATP report clearly shows the pending exposure to the farmer-owned ethanol industry in the U.S.," added Mitchell. "We recognize that beef, dairy, and other livestock and other agricultural sectors will meet the same fate that the U.S. textile industry has met if the proposed free trade agreements pass, and the continuing attrition among American vegetable and fruit producers caused by already existing free trade agreements will only accelerate. That alone is more than enough reason to oppose the agreement, but now comes the evidence of the perils that will befall the U.S. corn producers. ACGA cannot support such an agreement and we question how any U.S. farm organization can.

"We stand ready, willing and able to support an agreement to help all farmers, but CAFTA falls well short of that goal," concluded Mitchell. "We must rethink U.S. agriculture and trade policy and change course to secure farmer livelihoods worldwide"

The American Corn Growers Association represents 14,000 members in 35 states. See http://www.acga.org . -30-

ACGA Calls for Full Funding for Conservation Security Program

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

WASHINGTON ≠ June 21, 2005 ≠ The American Corn Growers Association (ACGA) has joined over 200 groups and organization, in signing a letter to leadership of the United States Senate urging full funding for the Conservation Security Program (CSP).

"ACGA wholeheartedly supported the CSP as part of the Food Security and Rural Investment Act of 2002 and now we call upon Congress to fully fund the program as it was intended," said ACGA President Keith Bolin.

CSP, initiated under the 2002 Farm Bill, is a unique and valuable conservation program, which rewards farmers for implementing conservation measures that benefit the environment. The groups signing the letter represent a broad spectrum of farmer, environmental, wildlife, consumer and religious groups. The Senate Agriculture Appropriations Committee is scheduled to write its funding bill this week, and CSP supporters are asking them to fully fund CSP. Last year, Congress took money from the CSP program to provide disaster relief, and the money has not yet been returned to the program.

"CSP creates a win-win situation. It supports our farmers -- while they preserve our land and natural resources," said Deb Burd, Executive Director of the National Campaign for Sustainable Agriculture, which spearheaded the letter.

Last year, farmers were allowed to apply for CSP in less than one percent of the nationís watersheds. This year it was offered in only ten percent of watersheds ≠ still far below the nationwide scope that was intended in the 2002 Farm Bill. The groups urge the Senate to provide the funding needed to make this popular program available to significantly more farmers. To see the letter, please go to http://www.agmatters.net/Stewardship/CSP_SignOnLetter_Approps_June_13_Final.doc

The American Corn Growers Association represents 14,000 members in 35 states. See www.acga.org .

6. CAFTA would squash "buy domestic" efforts .

St. Louis Post-Dispatch (Missouri)
June 19, 2005 Sunday

By WILLIAM HAWKINS

The Central America Free Trade Agreement (CAFTA) debate is heating up in Washington. But despite the blitz of publicity, one section of the pact has not received the attention it deserves.

Chapter Nine of CAFTA covers government procurement and establishes a rule of "national treatment" in government purchasing. This means that under CAFTA each participating nation must treat goods, services and suppliers from the other CAFTA parties in a manner that is "no less favorable" than domestic firms when awarding contracts. And so governments cannot treat their own citizens better than foreigners, or use "buy domestic" policies to support their economies.

Governments have long used procurement to support domestic industry, particularly public infrastructure, national defense and other strategic sectors. It is both good politics and sound economics.

Money taken out of the economy through taxes or borrowing needs to be plowed back into the economy via procurement. Otherwise the economy is weakened.

Such government spending is a vital stabilizer and stimulant during the business cycle and has proven to be a much more effective tool for stimulating the economy than monetary policy. Fiscal policy puts money to work, but its impact is lessened if the work is done overseas.

There are already rumblings against federal, state and local governments that outsource U.S. work to foreign locales. Much of this has involved security concerns over the sending of sensitive personal records to overseas data processing centers.

There has also been an ominous trend at all levels of government of letting foreign firms bid against American firms for projects paid for with taxpayer dollars.

With the United States having run a $617 billion trade deficit last year (heading toward $700 billion this year), American officials should not be adding to the nation's economic woes by sending more funds -- and the jobs and productive capacity they support -- out of the country.

The lure of saving money on imports is a penny wise, pound foolish notion when it slows the economy and shrinks the tax base. The only way to balance budgets without excessive taxation is through growth of the domestic economy.

Unfortunately, the U.S. trade representative who negotiated CAFTA, Robert Zoellick, has been hostile to all "Buy America" preferences.

When the House Armed Services Committee tried to strengthen the domestic production of critical weapons technology for American armed forces in its 2004 authorization legislation, Zoellick objected.

Yet, the World Trade Organization Government Procurement Agreement allows "the protection of essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defense purposes." It is an odd thing when the WTO shows more concern for national interests than does the U.S. trade representative.

CAFTA may appear to be a minor agreement with small countries of no economic importance. However, it contains controversial provisions that pose major threats to the American economy should they establish precedents for future agreements.

The only way to change a failed trade policy and embark on fresh strategic thinking is to lay CAFTA aside.

William Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council in Washington.

7. Give populism a chance

By Dan Nagengast
Prairie Writers Circle

The word "populist" has popped up in the recent European Union referendums as a dirty word, a stand-in for xenophobia and bigotry, the mark of a far right fearful of immigration.

That message comes from the elite. It implies the powerful could never be xenophobic or racist or nationalist, or sexist or classist. And that governments and their leaders are invariably the counter to the forces of darkness.

But populism is really a belief in the sense and virtue of common people. And we need more of it.

French and EU leaders called France's 55 percent "no" vote on the new EU constitution an unholy alliance of the left and right. Indeed, the extreme right did oppose the charter. But so did 70 percent of farmers and 55 percent of people ages 18 to 25. And workers voted against it overwhelmingly.

Dutch opposition was even higher, 62 percent. For the BBC World News, Michiel van Hulten of the Better Europe foundation identified the reasons: "The message from France and the Netherlands is that they are unhappy with the way Europe is being built. People are unhappy with the fact that Europe is a project of the elite, not the ordinary people."

Great Britain quickly shelved its own EU referendum following the French and Dutch votes.

Do you wonder what would happen if the United States had the courage to chance a popular vote on the North American Free Trade Agreement, the General Agreement on Tariffs and Trade or now the Central American Free Trade Agreement?

Our leaders, both Republican and Democratic, push all these pacts. They talk of modernization and removing archaic trade barriers. They have an almost religious faith that this kind of free-market economics floats all boats, that there is unlimited potential for wealth creation, and that world trade, if freed from regulation, will somehow overcome the problem of finite natural resources.

Truth is, these deals painted as win-win are big wins for a few, small wins for a few more and big losses for many people, rural communities and to the natural resource base on which our wealth is built. They aim to lower the cost of those resources and the cost of labor. They are a way to override conservationist restraint, and to push the environmental and social costs of business onto society and the natural world.

Before the French and Dutch elections, I had hoped the EU, along with India and China, would challenge U.S.-led ordering of the world's political economy to suit our own elites. Granted, international financial interests are hardly attached to countries anymore. They're equal opportunity exploiters. Still, I hoped that another big economy -- a united Europe -- and more competition might give a marginally better deal to the farmers, laborers and rural communities of the world.

Middle-class French and Dutch voters saw through this. They understood that the reordering was not based on their interests.

U.S. leaders might take this as a lesson to never allow such a vote on how the world will be structured -- much better to incite a choice of politicians based on their views of gay marriage and what to do about a dying woman. By focusing our political debate on issues like these, our leaders divert voters from matters of greater import, such as the war in Iraq.

There was a referendum of sorts in the Clinton administration's final days. Agriculture Secretary Dan Glickman let hog producers decide whether to keep the checkoff for hog promotion. The checkoff is a toll on every hog sold and helps fund hog producer associations. Many felt the money was being misused to promote big operations and run family farms out of business. So they voted to discontinue the checkoff, and Glickman obeyed.

But a new agriculture secretary, Ann Veneman, came with the Bush administration and reinstated the checkoff. No discussion. No embarrassment. No sense of right or wrong. No symbolic bow to democracy. Just exercise of power.

I think we need more referendums, and ones that stick. I think voters need a more direct voice. I think our democracy is becoming farcical, skewed by money, lobbyists and a fuzziness that lets politicians hide behind inflammatory issues to get elected, and then screw their constituents. I think we need a change.

###

Dan Nagengast is a Lawrence, Kan., farmer and executive director of the Kansas Rural Center. He wrote this for the Land Institute's Prairie Writers Circle, Salina, Kan.