Fresh from the oven, The Economist article on the end of cheap food

Cheap no more
Dec 6th 2007 From The Economist print edition
Gerrit Buntrock
Rising incomes in Asia and ethanol subsidies in America have put an end to a long era of falling food prices
ONE of the odder features of last weekend's vote in Venezuela was that staple foods were in short supply. Something similar happened in Russia before its parliamentary election. Governments in both oil-rich countries had imposed controls on food prices, with the usual consequences. Such controls have been surprisingly widespread—a knee-jerk response to one of the most remarkable changes that food markets, indeed any markets, have seen for years: the end of cheap food.

In early September the world price of wheat rose to over $400 a tonne, the highest ever recorded. In May it had been around $200. Though in real terms its price is far below the heights it scaled in 1974, it is still twice the average of the past 25 years. Earlier this year the price of maize (corn) exceeded $175 a tonne, again a world record. It has fallen from its peak, as has that of wheat, but at $150 a tonne is still 50% above the average for 2006.
As the price of one crop shoots up, farmers plant it to take advantage, switching land from other uses. So a rise in wheat prices has knock-on effects on other crops. Rice prices have hit records this year, although their rise has been slower. The Economist's food-price index is now at its highest since it began in 1845, having risen by one-third in the past year.
Normally, sky-high food prices reflect scarcity caused by crop failure. Stocks are run down as everyone lives off last year's stores. This year harvests have been poor in some places, notably Australia, where the drought-hit wheat crop failed for the second year running. And world cereals stocks as a proportion of production are the lowest ever recorded. The run-down has been accentuated by the decision of large countries (America and China) to reduce stocks to save money.
Yet what is most remarkable about the present bout of “agflation” is that record prices are being achieved at a time not of scarcity but of abundance. According to the International Grains Council, a trade body based in London, this year's total cereals crop will be 1.66 billion tonnes, the largest on record and 89m tonnes more than last year's harvest, another bumper crop. That the biggest grain harvest the world has ever seen is not enough to forestall scarcity prices tells you that something fundamental is affecting the world's demand for cereals.
The meat of the question
Two things, in fact. One is increasing wealth in China and India. This is stoking demand for meat in those countries, in turn boosting the demand for cereals to feed to animals. The use of grains for bread, tortillas and chapattis is linked to the growth of the world's population. It has been flat for decades, reflecting the slowing of population growth. But demand for meat is tied to economic growth (see chart 1) and global GDP is now in its fifth successive year of expansion at a rate of 4%-plus.
Higher incomes in India and China have made hundreds of millions of people rich enough to afford meat and other foods. In 1985 the average Chinese consumer ate 20kg (44lb) of meat a year; now he eats more than 50kg. China's appetite for meat may be nearing satiation, but other countries are following behind: in developing countries as a whole, consumption of cereals has been flat since 1980, but demand for meat has doubled.
Not surprisingly, farmers are switching, too: they now feed about 200m-250m more tonnes of grain to their animals than they did 20 years ago. That increase alone accounts for a significant share of the world's total cereals crop. Calorie for calorie, you need more grain if you eat it transformed into meat than if you eat it as bread: it takes three kilograms of cereals to produce a kilo of pork, eight for a kilo of beef. So a shift in diet is multiplied many times over in the grain markets. Since the late 1980s an inexorable annual increase of 1-2% in the demand for feedgrains has ratcheted up the overall demand for cereals and pushed up prices.
Because this change in diet has been slow and incremental, it cannot explain the dramatic price movements of the past year. The second change can: the rampant demand for ethanol as fuel for American cars. In 2000 around 15m tonnes of America's maize crop was turned into ethanol; this year the quantity is likely to be around 85m tonnes. America is easily the world's largest maize exporter—and it now uses more of its maize crop for ethanol than it sells abroad.
Ethanol is the dominant reason for this year's increase in grain prices. It accounts for the rise in the price of maize because the federal government has in practice waded into the market to mop up about one-third of America's corn harvest. A big expansion of the ethanol programme in 2005 explains why maize prices started rising in the first place.
Ethanol accounts for some of the rise in the prices of other crops and foods too. Partly this is because maize is fed to animals, which are now more expensive to rear. Partly it is because America's farmers, eager to take advantage of the biofuels bonanza, went all out to produce maize this year, planting it on land previously devoted to wheat and soyabeans. This year America's maize harvest will be a jaw-dropping 335m tonnes, beating last year's by more than a quarter. The increase has been achieved partly at the expense of other food crops.
This year the overall decline in stockpiles of all cereals will be about 53m tonnes—a very rough indication of by how much demand is outstripping supply. The increase in the amount of American maize going just to ethanol is about 30m tonnes. In other words, the demands of America's ethanol programme alone account for over half the world's unmet need for cereals. Without that programme, food prices would not be rising anything like as quickly as they have been. According to the World Bank, the grain needed to fill up an SUV would feed a person for a year.
America's ethanol programme is a product of government subsidies. There are more than 200 different kinds, as well as a 54 cents-a-gallon tariff on imported ethanol. That keeps out greener Brazilian ethanol, which is made from sugar rather than maize. Federal subsidies alone cost $7 billion a year (equal to around $1.90 a gallon).
In theory, what governments mandate, they can also scrap. But that seems unlikely with oil at the sort of price that makes them especially eager to promote alternative fuels. Subsidies might be trimmed, of course, reducing demand occasionally; this is happening a bit now. And eventually, new technologies to convert biomass to liquid fuel will replace ethanol—but that will take time. For the moment, support for the ethanol programme seems secure. Hillary Clinton and John McCain used to be against ethanol subsidies, but have changed their minds. Russia and Venezuela are not the only countries that like to meddle in food markets for political reasons.
So demand for grain will probably remain high for a while. Demand, though, is only one side of the equation. Supply forms the other. If there is a run of bumper harvests, prices will fall back; if not, they will stay high.
Harvests can rise only if new land is brought into cultivation or yields go up. This can happen fairly quickly. The world's cereal farmers responded enthusiastically to price signals by planting more high-value crops. And so messed-up is much of the rich world's farming systems that farmers in the West have often been paid not to grow crops—something that can easily be reversed, as happened this year when the European Union suspended the “set aside” part of its common agricultural policy. Still, there are limits to how much harvests can be expanded in the short term. In general, says a new report by the International Food Policy Research Institute (IFPRI), which is financed by governments and development banks, the response tends to be sticky: a 10% rise in prices yields a 1-2% increase in supply.
In the longer run, plenty of new farmland could be ploughed up and many technological gains could be had. But much of the new land is in remote parts of Brazil, Russia, Kazakhstan, the Congo and Sudan: it would require big investments in roads and other infrastructure, which could take decades—and would often lead to the clearing of precious forest. Big gains could be had if genetically modified foods were brought into production or if new seed varieties were planted in Africa. But again, that will take time. Moreover, GM foods will not live up to their promise unless they shed the popular suspicion that dogs them, especially in Europe. And some of the new land—dry, marginal areas of Africa, Brazil and Kazakhstan—could be vulnerable to damage from global warming. By some measures, global warming could cut world farm output by as much as one-sixth by 2020. No less worryingly, high oil prices would depress the use of oil-based fertilisers, which have been behind much of the increase in farm production during the past half-century.
It is risky to predict long-run trends in farming—technology in particular always turns out unexpectedly—but most forecasters conclude from these conflicting currents that prices will stay high for as much as a decade. Because supplies will not match increases in demand, IFPRI believes, cereal prices will rise by between 10% and 20% by 2015. The UN's Food and Agriculture Organisation's forecast for 2016-17 is slightly higher. Whatever the exact amount, this year's agflation seems unlikely to be, as past rises have been, simply the upward side of a spike.
If prices do not fall back, this will mark a break with the past. For decades, prices of cereals and other foods have been in decline, both in the shops and on world markets. The IMF's index of food prices in 2005 was slightly lower than it had been in 1974, which means that in real terms food prices fell during those 30 years by three-quarters (see chart 2). In the 1960s food (including meals out) accounted for one-quarter of the average American's spending; by 2005 the share was less than one-seventh.
In other words, were food prices to stay more or less where they are today, it would be a radical departure from a past in which shoppers and farmers got used to a gentle decline in food prices year in, year out. It would put an end to the era of cheap food. And its effects would be felt everywhere, but especially in countries where food matters most: poor ones.
A blessing and a curse
If you took your cue from governments, you would conclude that dearer food was unequivocally a bad thing. About a score of countries have imposed food-price controls of some sort. Argentina, Morocco, Egypt, Mexico and China have put restraints on domestic prices. A dozen countries, including India, Vietnam, Serbia and Ukraine, have imposed export taxes or limited exports. Argentina and Russia have done both. In all these places governments are seeking to shelter their people from food-price rises by price controls. But dearer food is not a pure curse: it produces winners as well as losers.
Obviously, farmers benefit—if governments allow them to keep the gains. In America, the world's biggest agricultural exporter, net farm income this year will be $87 billion, 50% more than the average of the past ten years. The prairie farmers of the Midwest are looking forward to their Caribbean cruises.
Other beneficiaries are in poor countries. Food exporters such as India, South Africa and Swaziland will gain from increased export earnings. Countries such as Malawi and Zimbabwe, which used to export food but no longer do so, also stand to gain if they can boost their harvests. Given that commodity prices have been falling for so long in real terms, this would be an enormous relief to places that have suffered from a relentless decline in their terms of trade.
In emerging markets an income gap has opened up between cities and countryside over the past few years. As countries have diversified away from agriculture into industry and services, urban wages have outstripped rural ones. Income inequality is conventionally measured using a scale running from zero to one called the Gini coefficient. A score of 0.5 is the mark of a highly unequal society. The Asian Development Bank reckons that China's Gini coefficient rose from 0.41 in 1993 to 0.47 in 2004. If farm incomes in poor countries are pushed up by higher food prices, that could mitigate the growing gap between city and countryside. But will it?
Guess who loses
According to the World Bank, 3 billion people live in rural areas in developing countries, of whom 2.5 billion are involved in farming. That 3 billion includes three-quarters of the world's poorest people. So in principle the poor overall should gain from higher farm incomes. In practice many will not. There are large numbers of people who lose more from higher food bills than they gain from higher farm incomes. Exactly how many varies widely from place to place.
Among the losers from higher food prices are big importers. Japan, Mexico and Saudi Arabia will have to spend more to buy their food. Perhaps they can afford it. More worryingly, some of the poorest places in Asia (Bangladesh and Nepal) and Africa (Benin and Niger) also face higher food bills. Developing countries as a whole will spend over $50 billion importing cereals this year, 10% more than last.
Rising prices will also hurt the most vulnerable of all. The World Food Programme, the main provider of emergency food aid, says the cost of its operations has increased by more than half in the past five years and will rise by another third in the next two. Food-aid flows have fallen to their lowest level since 1973.
In every country, the least well-off consumers are hardest hit when food prices rise. This is true in rich and poor countries alike but the scale in the latter is altogether different. As Gary Becker, a Nobel economics laureate at the University of Chicago, points out, if food prices rise by one-third, they will reduce living standards in rich countries by about 3%, but in very poor ones by over 20%.
Not all consumers in poor countries are equally vulnerable. The food of the poor in the Andes, for example, is potatoes; in Ethiopia, teff: neither is traded much across borders, so producers and consumers are less affected by rising world prices. As the World Bank's annual World Development Report shows, the number of urban consumers varies from over half the total number of poor in Bolivia, to about a quarter in Zambia and Ethiopia, to less than a tenth in Vietnam and Cambodia.
But overall, enormous numbers of the poor—both urban and landless labourers—are net buyers of food, not net sellers. They have already been hard hit: witness the riots that took place in Mexico over tortilla prices earlier this year. According to IFPRI, the expansion of ethanol and other biofuels could reduce calorie intake by another 4-8% in Africa and 2-5% in Asia by 2020. For some countries, such as Afghanistan and Nigeria, which are only just above subsistence levels, such a fall in living standards could be catastrophic.
So it is no good saying “let them eat cake”: there are strong welfare arguments for helping those who stand to lose. But the way you do it matters. In general, it is better to subsidise poor peoples' incomes, rather than food prices: this distorts price signals the least and allows farmers to benefit from higher prices. Where it is not possible to subsidise incomes (because to do so requires a decent civil service), it is still possible to minimise the unintended consequences if food subsidies are targeted and temporary. Morocco fixed bread prices (the food of the poor) during Ramadan, the Muslim month of fasting; at the same time, it cut tariffs on food imports to increase competition.
AP
But a problem too
In contrast, Russia shows how not to do it. It imposed across-the-board price controls on milk, eggs, bread and other staples, benefiting everyone whether they needed help or not. Food is disappearing from shelves and farmers are bearing the brunt. As Don Mitchell of the World Bank points out, “if you want to help consumers, you can do it without destroying your producers but only if you go about it in the right way.” In reality, many of the recent price controls are blatant politicking. About half the countries that imposed price controls did so before elections or other big political events. Russia's are due to run out just after next year's presidential election. Funny, that.
There is one last important knock-on effect of agflation. It is likely to help shift the balance of power in the world economy further towards emerging markets. Higher food prices have increased inflation around the world, but by different amounts in different countries. In Europe and America food accounts for only about one-tenth of the consumer-price index, so even though food prices in rich countries are rising by around 5% a year, it has not made a big difference. There have been clucks of concern from the European Central Bank and a consumer boycott of pasta in Italy, but that is about all.
In poor countries, in contrast, food accounts for half or more of the consumer-price index (over two-thirds in Bangladesh and Nigeria). Here, higher food prices have had a much bigger impact. Inflation in food prices in emerging markets nearly doubled in the past year, to 11%; meat and egg prices in China have gone up by almost 50% (although that is partly because pork prices have been pushed up by a disease in pigs). This has dragged up headline inflation in emerging markets from around 6% in 2006 to over 8% now. In many countries, inflation is at its highest for a decade.
Central bankers are determined to ensure that what could be a one-off shift in food prices does not create continuing inflation by pushing up wages or creating expectations of higher prices. So they are tightening monetary policy. China increased interest rates in August, Chile in July, Mexico in May. The striking thing about these rises is that they are the opposite of what has been happening in some rich countries. The Federal Reserve reduced rates by 50 basis points in September and 25 points in October; the Bank of Canada cut rates this week. The indirect effect of food-price rises has therefore been to widen the interest-rate differential between rich and emerging markets.
And all this is going on as the economic balance of power is shifting. Growth in America and Europe is slowing; China and India are going great guns. Financial confidence in the West has been shaken by the subprime-mortgage crisis; capital flows into emerging markets are setting records.
This shift will be tricky to handle. Such transitions always are. The risk is of a bubble in emerging markets. As Simon Johnson, the IMF'S director of research, wryly notes, “every bubble starts with a change in the real economy.” Food markets are an obvious place to start. How emerging countries fare—and how poor consumers cope—depends on their economic policies. The imposition of food-price controls was not exactly a good start.

Nothing But Nets

Hi there,
Malaria prevention remains a very important component on the fight against poverty. The disease is the leading killer of children, having a huge impact in the development process of countries, specially those in subsaharan Africa. As my girlfriend helps CDC in a workshop on how to conduct mosquito nets survey in Togo and I get ready to take the stomach-upsetting malaria pills for my next trip, I found this global campaign on the matter that you readers should definitely check out.

This video tells you more about it. the website is http://www.nothingbutnets.org/

EVENTS: Transforming the Rural Nonfarm Economy: Opportunities and Threats in the Developing World

For those in the Washington Area, here is a very intersting event:

IFPRI, the Sustainable Rural and Urban Development Unit of the World Bank’s Development Research Department, and the World Bank’s InfoShop invite you to a panel discussion on

Transforming the Rural Nonfarm Economy: Opportunities and Threats in the Developing World

With

Paul Dorosh, World Bank
Steven Haggblade, Michigan State University
John Horton, Inter-American Development Bank
Forhad Shilpi, World Bank
Maximo Torero, IFPRI

At the World Bank InfoShop
Friday, 14 December 2007
12:00 – 1:30 pm

Abstract

Contrary to the conventional belief that rural economies subsist on agriculture, nonfarm work actually accounts for between one-third and one-half of rural incomes in the developing world. The nonfarm rural economy, a vibrant, often fast-growing, small-scale service and manufacturing sector, holds much promise both for overall economic growth and pro-poor rural and agricultural transformation. But it is also threatened by globalization, competition from larger businesses, and other trends.

How can this rapidly evolving segment of the economy contribute to economic growth and poverty reduction, despite the many risks? This new book, edited by Steven Haggblade, Thomas Reardon, and Peter Hazell and published by Johns Hopkins University Press on behalf of the International Food Policy Research Institute and the World Bank, answers this question in detail. Contributors examine the varied scale, structure, and composition of the rural nonfarm economy; the role of public intervention in this sector; the ways that poor people can successfully navigate the rapid transition underway in rural areas; and the most effective policy environment.

“Policymakers focus on macro-magnitudes first, urban-industrial growth next, agriculture last, and on the rural nonfarm economy hardly at all. Yet it creates at least one-third of rural income, output, and employment, and faces huge new prospects, but also huge threats, from post-liberalization supply chains. This path-breaking book organizes numerous examples and experiences into a new picture of what causes or impedes rural nonfarm growth, what makes it pro-poor, and what governments can do about it.”

--Michael Lipton, Research Professor of Economics, Poverty Research Unit, University of Sussex

This panel discussion on the book will include a question-and-answer session, as well as panelist presentations. The discussion will be held at the InfoShop, located at 701 18th St. NW, corner of 18th St. and Pennsylvania Ave.

Copies of the book will be available for purchase in the InfoShop bookstore after the event.

For more information on the book, visit http://www.ifpri.org/pubs/jhu/transformrural.asp.
Please RSVP to InfoShopevents@worldbank.org if you intend to come.

Paul Dorosh is a senior economist in the Bank's Spatial and Local Development Team of the Sustainable Development Network and a book contributor. Steven Haggblade is professor of International Development at Michigan State University . John Horton is a senior natural resource specialist at the Inter-American Development Bank. Forhad Shilpi is a senior economist in the Bank’s Sustainable Rural and Urban Development Unit of the Development Research Department. Maximo Torero is director of IFPRI's Markets, Trade, and Institutions Division.

Thomas Reardon, coeditor of the book, is a professor of agricultural economics at Michigan State University . Peter Hazell, coeditor of the book, is Visiting Professor at Imperial College, London, prior to which he was director of IFPRI’s Development Strategy and Governance Division. They both will be unable to attend but can be contacted at reardon@anr.msu.edu and p.hazell@cgiar.org, respectively.

About IFPRI
The International Food Policy Research Institute (IFPRI) was established in 1975 to provide sustainable solutions for ending hunger and poverty. IFPRI is one of 15 agricultural research centers that receive their principal funding from governments, private foundations, and international and regional organizations, most of which are members of the Consultative Group on International Agricultural Research.
For more information, visit http://www.ifpri.org.

About the InfoShop
The InfoShop is the public information center and development bookstore of the World Bank. It functions as the only publicly accessible space at headquarters, hosting book launches, exhibits, seminars, receptions, and other community outreach events.
For more information, visit http://www.worldbank.org.

Corn

Hi there,
When I don't have anything relevant to say (at least for now), I post pictures, and today I'm doing just that.

Corn, the best friend of many people around the world, has been under though criticizing lately. With the release of the new documentary King Corn and pointed denunciation from the environmental community about corn-based ethanol, farmers are left questioning what is it that they have done. This Washington Post article explains all the components of the debate.

Now some photos!. The picture on top is from last year at my community garden plot. The cob on it came from one of the few plants that survive a heavy storm. The other picture is from a Mayan market in Guatemala, the closest I've been to corn's origin in southern Mexico.

Finally, the picture beneath was taken a couple months ago in Togo. The lady is making Pot, basically corn flour boiled on water and eaten with meat or vegetables.

And here, from a new flickr contact Andrea Dunlap, a baby King Corn from the mountains of Peru. Click Here to see the flickr Picture

King Corn Preview

Ag-Biotech Updates

Control of Coleopteran Insect Pests through RNA Interference Source:Nature BiotechnologyAuthor:James A. Baum
Chinese researchers say they may have found a way to overcome the resistance of cotton bollworms (Helicoverpa armigera) to the inhibitory chemical gossypol, which is produced naturally by cotton plants. The researchers identified the cotton bollworm gene, called CYP6AE14, that confers resistance to gossypol. They then genetically engineered cotton plants that produce a piece of double-stranded RNA which is specific to the CYP6AE14 gene. The researchers found that the RNA acts to "silence" the CYP6AE14 gene, thus restoring the effects of gossypol and retarding the growth of cotton bollworm larvae that try to feed on genetically modified (GM) cotton. The researchers write that this may be a general strategy for triggering "RNA interference" and could find applications in entomological research and field control of cotton bollworms. Their research was funded by the National Science Foundation of China, the Chinese Academy of Sciences, and China's Ministry of Science and Technology. The article can be viewed online at the link below, with a paid subscription to the journal Nature Biotechnology.
http://www.nature.com/nbt/journal/v25/n11/pdf/nbt1359.pdf



Kenya Government Committed to Biosafety Bill 2007 Source:Crop Biotech Update
Author:n/a
Kenyan Agriculture Secretary Wilson Songa has reported that the country's draft Biosafety Bill was not discussed during the last meeting of Parliament. Songa said, however, that the government will continue to advocate for passage of the law when the Kenyan parliament reconvenes in March 2008. Songa was speaking at the official opening of the Eighth Meeting of Stakeholders of the Insect Resistant Maize for Africa (IRMA) project, which is undertaken jointly by the Kenya Agricultural Research Institute (KARI) and the International Maize and Wheat Improvement Center (CIMMYT). The article can be viewed online at the link below.
http://www.isaaa.org/kc/cropbiotechupdate/online/default.asp?Date=11/9/2007#1197+

GMO: Kenyan Minister Disowns Draft Biosafety Law Source:Africa Science NewsAuthor:June Ngetich
Kenyan Environment and Natural Resources Minister David Mwiraria has said that the Environmental Management Authority (NEMA) lacks the capacity to identify genetically modified organisms (GMOs) and make decisions about whether they should be released in the environment and on the market. Mwiraria also stated that environmental and civil society groups consider GMO research and biosafety processes to be unaccountable and non-transparent. These and other remarks were part of a statement by Mwiraria that was read out loud at the opening of a six-day training for NEMA staff on GMO Biosafety Risk Assessment. The article says that Mwiraria's statement comes as the Kenyan government is distancing itself from a draft Biosafety Bill. The article says this bill has been in the public domain for close to 15 years. The article can be viewed online at the link below.
http://africasciencenews.org/asns/index.php?option=com_content&task=view&id=73&Itemid=1

The Economic Impacts of Introducing Bt Technology in Smallholder Cotton Production Systems of West Africa: A Case Study from Mali Source:AgBioForumAuthor:Jeffrey Vitale et al.
This article by researchers at Purdue and Oklahoma State universities in the U.S. uses an economic model to predict what would be the economic impacts on farmers and consumers if Bt crops were introduced to smallholder cotton and maize farms in Mali. Results indicate that the potential economic impacts to West African consumers and producers would be significant, potentially reaching $89 million in an average year. In the case of Bt cotton, the article finds that where seed company revenues are maximized, and the companies charge an additional US$60 per hectare, Malian farmers would capture 74 percent of the financial benefits. The seed companies would capture the other 26 percent. The article finds that adoption of Bt maize in Mali would be weaker than adoption of Bt cotton, at least in the absence of complementary changes in maize markets and technology. If Malian maize farmers were charged the same technology premium as South African producers, the model found that adoption would be at less than 10 percent. The article can be viewed online at the link below.
http://www.agbioforum.org/v10n2/v10n2a02-vitale.htm

Market and Welfare Effects of GMO Introduction in Small Open Economies Source:AgBioForumAuthor:Alejandro Plastina and Konstantinos Giannakas
This article by researchers at the University of Nebraska in the U.S. tries to sort out how farmers and consumers in small "open" developing economies would be affected by the introduction of genetically modified (GM) products. Economic modeling indicates that while the agronomic benefits associated with the introduction of the first-generation, farmer-oriented GM products are "certainly important," their presence does not guarantee welfare gains to small developing countries. The introduction of GM products is shown to create winners and losers among the consumers and producers of these small open economies. The model finds that the hypothetical introduction of GM products without domestic labeling requirements creates more economic benefits for consumers than when labels are required. The article can be viewed online at the link below.
http://www.agbioforum.org/v10n2/v10n2a05-giannakas.htm

Japan Says No to GMO Source:Rural Press LimitedAuthor:n/a
A delegation from the No! GMO Campaign, an alliance of Japanese groups representing 2.9 million Japanese consumers, has visited Australia and urged against the lifting of Australian state bans on genetically modified (GM) food crops. The delegation met with officials from the states of South Australia, Victoria, and New South Wales. The group used the opportunity to express concerns about GM foods, and presented a petition signed by 155 Japanese consumer and farmer organizations representing the 2.9 million Japanese consumers. Campaign spokesman Ryoko Shimizu, said: "We Japanese consumers are now standing at a critical crossroads in assuring our food safety . . . Australia is the only country that can supply GM-free canola to food-importing countries like Japan. If the moratoria are lifted it would damage the reputation of Australian crops in Japan and Japanese consumers would stop buying Australian crops." GM canola has been approved by the Australian federal government but banned by the individual states. Several Australian states are now considering whether to life their bans. The article can be viewed online at the link below.
http://www.checkbiotech.org/green_News_Genetics.aspx?infoId=15974

GM Crops - Asian Farmers Have Their Say Source:SciDev.NetAuthor:Jia Hepeng
Farmers participating in a recent Asian Regional Farmers' Exchange Program in the Philippines were asked about their thoughts and experiences with genetically modified (GM) crops. Many said they welcome GM crops, according to this feature article. Zu Maotang, president of the Farmer's Association of Gaobeidian City in the northern Chinese province of Hebei, is one such farmer. Zu said, however, that a dramatic reduction in bollworms achieved through the adoption of Bt cotton has coincided with outbreaks of other pests, especially mirid bugs. Agricultural scientists reassured Zu that increased insecticide spraying in the early stages of the mirid bug life-cycle could deal with the insects, but he said that many of his fellow farmers were startled when the bugs appeared, because they had been convinced that Bt-cotton was insect-free cotton. He wondered whether "Perhaps scientists will soon identify a gene against mirids." Kraisorn Kunluechakorn, a farmer and small seed dealer from Thailand, expressed more caution, saying, "Despite the benefits we have seen here [in the Philippines], we would not lobby the government for GM crops. Who knows if it's good or bad in the long term?" The feature article can be viewed online at the link below.
http://www.scidev.net/content/features/eng/gm-crops--asian-farmers-have-their-say.cfm

Massive Rise in GM Farming Still Not Enough, Says Europe\'s Biotech Industry Source:EuropaBioAuthor:n/a
EuropaBio, the European bioindustries association, has reported a 77 percent increase over the past 12 months in the area planted to genetically modified (GM) crops in Europe. The group says that more than 1,000 square kilometers of GM crops have been harvested. [According to a related article (BBC; October 29), a Bt maize variety resistant to the corn borer is the only GM crop grown widely in Europe. Planted in Spain for the last 10 years, it is now proving popular in France where the acreage has tripled in a year and also in Germany and the Czech Republic. The French president recently placed a temporary ban on GM planting, however, and some environmental groups claim that beneficial insects could be harmed by Bt maize. EuropaBio argues that GM maize is appealing to farmers and safe for the environment.] The press release can be viewed online at the link below.
http://www.checkbiotech.org/green_News_Genetics.aspx?infoId=16028

New Breed of Seed Source:IndyStar.comAuthor:John Russell
Dow AgroSciences has said that over the next three years, it wants to produce a genetically modified (GM) seed called SmartStax with eight genetic traits to fight pests and weed killers on "multiple fronts". The article says that would be significantly more than the maximum of three traits in GM seeds that are currently on the market. The article can be viewed online at the link below.
http://www.checkbiotech.org/green_News_Genetics.aspx?infoId=16007

Modified Toxin Helps Crops Kill Resistant Insects Source:NatureAuthor:Heidi Ledford
Researchers at National Autonomous University of Mexico and the University of Arizona in the U.S. have modified Bt toxins to make it more difficult for insects to develop resistance. Their work has been published in the journal Science. More work will need to be done to see whether plants can be genetically engineered to produce the modified form of toxin, according to the article. Bruce Tabashnik, an entomologist at the University of Arizona and a member of the research team, says it is "almost inevitable" that insects will develop resistance to the Bt toxin. So far, the article says resistance has only been documented in the field for two insects: diamondback moths (Plutella xylostella ) and cabbage loopers (Trichoplusia ni), both of which produce larvae that feed on vegetable crops. The resistant insects have only been found in fields and greenhouses where Bt is sprayed as an environmentally-friendly pesticide, not in fields planted with Bt-producing genetically modified (GM) crops. The article says that biotechnology companies are pursuing several options to prevent Bt resistance from developing among insect populations. These include selling GM crops that contain two different Bt toxins which bind to separate receptors found in insect guts. Researchers are also developing plants that produce an entirely different toxin, normally made by bacteria that live in nematode worm guts. William Moar, an entomologist at Auburn University in U.S., comments that the modified Bt toxin could make a useful addition to this "arsenal." The article can be viewed online at the link below.
http://www.checkbiotech.org/green_News_Genetics.aspx?infoId=16048

Non-target Effects of Bt Crops Database Available Source:ISB NewsAuthor:L. LaReesa Wolfenbarger
A comprehensive new public database houses information from 171 scientific studies of the effects of Bt crops on non-target arthropods (including insects and arachnids). The database is designed to facilitate a quantitative approach to synthesizing available studies on the effects of Bt crops. The online database contains 5,758 "experimental comparisons" obtained from the 171 studies. An extensive search was conducted to find these studies, and each study featured in the database meets four criteria: 1) it involves a Bt field crop; 2) it measures an effect on a non-target arthropod; 3) its design includes a non-transgenic control or varies exposure levels to Bt plants or their products; and 4) it is in English. About half the studies are based on laboratory work and about half on field trials. Author affiliations for the studies include academic institutions, government, corporations, and non-profit organizations, with the largest contributor being academic institutions. Publications on the non-target effect of Bt crops on arthropods began in 1992 with the majority of studies published after 2000. The database is available online at the link below.
http://delphi.nceas.ucsb.edu/btcrops

Genetic Approach to Identifying Bt Resistance Genes in Heliothis Virescens Source:ISB NewsAuthor:Joan LeGloahec and Linda J. Gahan
Researchers in the U.S. have developed varieties of Heliothis virescens (Hv) in the laboratory that are resistant to the Bt toxin Cry1Ac, produced in many insect resistant genetically modified (GM) crops. Their purpose was to identify what sort of genetic mutation can lead to Bt resistance. The article says this information is of interest to scientists who want to assist farmers with pest management. The article can be viewed online at the link below.
http://www.isb.vt.edu/news/2007/news07.nov.htm#nov0703

New Leadership for CIMMYT Source:Crop Biotech UpdateAuthor:n/a
Thomas Lumpkin, the current director general of the World Vegetable Center's Asian Vegetable Research and Development Center (AVRDC) in Taiwan, has been chosen to succeed Masa Iwanaga as director general of the International Maize and Wheat Improvement Center (CIMMYT), based in Mexico. Lumpkin, a respected scientist and science administrator, will assume the new post on March 15. CIMMYT is one of the research centers of the Consultative Group on International Agricultural Research (CGIAR). The article can be viewed online at the link below.
http://www.isaaa.org/kc/cropbiotechupdate/online/default.asp?Date=10/31/2007#1124

More on Subsidies; articles from American Newspapers

As the Senate continues its debate on the Farm bill, it seems that very little will change from the current US farm policies. Here is the latest from US newspapers:

New York Times In Farm Belt, Ethanol Plants Hit Resistance;
Washington Post Senate's Farm Bill Includes $10 Billion in New Aid;
Washington Times: An unworthy farm bill

November 13, 2007
In Farm Belt, Ethanol Plants Hit Resistance
By MONICA DAVEY
SPARTA, Wis. — When plans were announced for a new ethanol distillery on the outskirts of this city of 9,000, residents complained that it would mar the view from the municipal golf course. They worried that its emissions would taint the milk-based products made at nearby Century Foods International, one of the community’s biggest employers. They even argued over whether the plant would reek like burned molasses or blackened popcorn or fermenting beer.
The T-shirts opponents printed up told the story: “Good idea. Bad location.”
For years, the arrival of an ethanol distillery in agricultural America was greeted mainly with delight, a ticket to the future in places plagued by economic uncertainty. But in the nation’s middle, the engine of ethanol country, the glow is dimming.


In Kansas, Illinois, Indiana, Minnesota and even Iowa, the nation’s largest corn and ethanol producer, this next-generation fuel finds itself facing the oldest of hurdles: opposition from residents who love the idea of an ethanol distillery so long as it is someplace else.
“What they are trying to sell we aren’t buying,” said Deb Moore, who owns a sandwich shop and soda fountain here.
The disputes have left some proposed plants waiting, mired in lawsuits; a few have given up.
“There is a campaign of sorts that is seeking to slow and preferably to stop the growth of the ethanol industry,” said Matt Hartwig, a spokesman for the Renewable Fuels Association, a trade group based in Washington. “We have to get through a barrage of mud pies to get our message out.”
These are not the better-known philosophical opponents to ethanol, those who question the efficiency of corn-based ethanol as an energy source, blame ethanol for rising food prices, or disagree with the federal subsidies that have long held up the industry.
These people are farmers. Or they know a farmer. Or their grandfather was a farmer and, as in so many farm families, ethanol has meant new hope for the fading towns built on corn fields. The biggest complaints are cousins of the gripes brought about by proposed paper mills, landfills, prisons and the like: an increase in noise, traffic, odor, emissions and demand on the water system.
“No, no, no, we’re not against ethanol production whatsoever,” said Lonnie Nation, who lives near New Castle, Ind., where he and others have posted signs, filed a lawsuit and were going door to door this month to stop a new plant. “But if you put it where they want to, you’re going to be squeezing all our homes between an ethanol plant and a prison. What will that do to home values?”
Some experts say the local protests reflect a new anti-ethanol mood spurred by a slow but steady drumbeat of negative attention on the industry. Across the Midwest, questions about ethanol have been raised by environmental advocates, livestock owners have complained about soaring prices for corn feed and farmers have fretted about how expensive some farmland has become.
“That wonderful aura that the ethanol plants had may be wearing off a little,” said Wallace E. Tyner, an agricultural economist at Purdue University.
Industry advocates play down the size of the opposition and suggest the increase in objections to new plants is simply a factor of math; 131 plants are now operating and more than 70 others are under construction, and the vast bulk of them are in the Midwest.
That is a marked increase from less than three years ago, when Congress enacted an energy law that included a national mandate for the increased use of renewable fuel in gasoline, setting off the ethanol rush. In January 2005, more than a quarter century after the commercial ethanol industry got started, just 81 plants were functioning.
“The fights are rare, and sometimes it’s just 11 people in a town of 5,000 or 6,000,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association, a trade group. In Iowa, which has more ethanol distilleries than any other state, residents near Grinnell filed a lawsuit to try to stop a company from building an ethanol plant. “There are some people who would rather see their town dry up and blow away than change the status quo,” Mr. Shaw said.
The local strife coincides with what is already a moment of tumult for the ethanol industry. In recent months, an enormous supply of ethanol has glutted the market, sinking its price and sending a chill through the ethanol boom.
At least three proposed plants have halted construction recently, industry officials said, including one in Reynolds, Ind. Only two years ago, Mitch Daniels, the Indiana governor, had held up the town as a symbol of the shift to renewable energy sources and nicknamed it BioTown U.S.A.
In October, the owners of at least one long-running plant — one that opened in 1983 in Grafton, N.D., and made 10.5 million gallons a year — announced it would shut down for now, thanks to market forces.
Experts debate whether the current ethanol glut is the start of the end to the rush to corn-based ethanol or merely a temporary correction as transportation lines are developed from the Midwest to bigger markets on the coasts. Either way, residents’ complaints about proposed plants have only added to the cascade of bad news for ethanol.
“It’s like the dot-com industry,” said Anne Yoder, who is pressing to stop plans for an ethanol plant outside Topeka, Kan., and describes herself “not at all” as an activist but as “an ordinary soccer mom.”
“When ethanol first came along there was so much promise,” she said. “Maybe that’s starting to trickle off.”
This spring, when Ms. Yoder first began going door to door to her neighbors to describe her worries about a proposed facility, she expected to be dismissed by the many farmers in her rural county, who presumably would benefit from having a plant nearby to sell their corn.
“But I was shocked by what I heard,” she said. “They don’t want it here either. Farmers have been in the business for hundreds of years and what they told me is that they don’t have a limitless supply of water to produce more corn anyway. This isn’t as pretty a picture as everyone wants to make it out to be.”
Ms. Yoder, who said she now spent several hours a day on this battle and has helped to gather more than 500 names on a petition, has exchanged e-mail messages with the organizers of communities in other states fighting ethanol plants.
A loose network of opponents is growing. In June, officials from Portsmouth, Va., toured three ethanol plants in Wisconsin, meeting with neighbors and noting observations about odors (“like beer but with a metal smell mixed in,” for instance, residents in Wisconsin cautioned the Virginia officials).
“We just swap information and talk about what tactics they took that worked,” Ms. Yoder said.
Still uncertain is how much these protests will affect the industry.
In Sparta, city officials were the ones who initially sought out Coulee Area Renewable Energy to consider moving here, said Michael B. Van Sicklen, a lawyer for the ethanol makers. The plans were sailing along through annexation and zoning proceedings for months, he said.
Then complaints emerged from leaders at Century Foods International, which sits not far from the proposed plant. Residents signed petitions. They demanded meetings. They filed lawsuits.
In October, the ethanol makers and Century Foods International announced they had reached a deal — one so tentative, confidential and in flux that representatives on both sides declined to talk to about it. No one on either side would say where an ethanol plant might go now, only that it would not be here, in view of the golf course.


Senate's Farm Bill Includes $10 Billion in New Aid

By Dan MorganSpecial to The Washington PostTuesday, November 13, 2007; A02
Thanks to the application of a little last-minute budgetary magic, the farm bill before the Senate this week authorizes about $10 billion in new subsidies, price guarantees and disaster aid in the next decade, even as farmers report near-record profits.
There is a new $5.1 billion "disaster trust fund," as well as a revenue insurance program that would increase taxpayer costs by $4.7 billion over 10 years, according to the Congressional Budget Office. Spread through the huge bill are gains for producers of wheat, milk, sugar, peanuts, barley, oats and honey, and a new $1 million-a-year subsidy earmarked for camelina, a seed used to make biofuels.
"Pretty much everywhere you look, farm subsidies are being increased," said Daniel A. Sumner, an agricultural economist and adjunct scholar at the American Enterprise Institute, a conservative think tank.
Few predicted that outcome a few months ago.
Fiscal conservatives and a broad coalition of farm program critics were primed to pare back the subsidies. President Bush, stung by a barrage of criticism after he signed a 2002 farm bill laden with billions of dollars in new subsidies, was on the side of the reformers.
Worse, from the perspective of the farm bloc, Congress's new Democratic leadership reinstituted "pay-as-you-go" budgeting, which barred new spending that increases the fiscal deficit.
"It's made it much more difficult," Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) grumbled in September. "There's very little left for a lot of things."
But in a surprising turnabout engineered by key farm-state lawmakers, the bill on the Senate floor builds strongly on the price guarantees and supports included in the controversial 2002 legislation, which authorized $73 billion more in subsidies, food stamps and other agriculture-related spending. The Senate bill is more generous than a House version that passed in July.
To Sen. Judd Gregg (R-N.H.), a longtime critic of the program, this year's bill marks a "continuum" with the past rather than a change in direction.
"The farm program is agriculture's answer to 1930s socialism," he joked last week. "It's commissar policy."
One innovation would pay farmers $15 a year for each eligible acre -- whether they plant anything or not -- while guaranteeing them an additional payment if crop revenues in their state fall short of the norm.
Farmers choosing the program, which would start in 2010, would no longer be eligible for traditional farm subsidies. But budget officials predict that tens of thousands of farmers growing corn, wheat or soybeans will opt for it because traditional payments stand to be sharply reduced in coming years because of higher commodity prices.
The plan is backed by the National Corn Growers Association and is sponsored by Sens. Richard J. Durbin (D-Ill.), Sherrod Brown (D-Ohio) and Harkin.
In a Nov. 1 estimate, the Congressional Budget Office (CBO) determined that the program would reduce government costs by $2.4 billion between 2008 and Sept. 30, 2017 -- the official window for judging whether a program conforms to the pay-as-you-go budget rules.
Those savings would occur because farmers enrolling would forgo traditional federal price guarantees and direct payments during the budget window.
But the CBO said that about $11 billion in revenue-guarantee payments would be made after the 2017 cutoff date. So instead of reducing expenditures, the new program would actually cost $4.7 billion, after some delayed savings are factored in.
"Unfortunately, it's a tried-and-true gimmick because of how CBO counts," said Steve Ellis, vice president of Taxpayers for Common Sense. "The only change in this farm bill is they're getting more money than they got before."
Harkin himself has criticized another major new program included in the Senate version of the bill, a $5.1 billion, five-year trust fund to cover weather losses of farmers and ranchers.
The costs of the disaster program and other new farm bill initiatives would be offset in part by tightened tax rules on business. The tax changes, which would raise at least $15 billion in new revenues through 2017, were approved last month by the Senate Finance Committee and then attached to the farm bill to meet budget requirements.
The disaster fund has been a priority for Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Kent Conrad (D-N.D.), whose dry Western states are plagued by droughts and other natural disasters. But acting Agriculture Secretary Charles F. Conner last week blasted the Senate for "asking other sectors to bear the costs" of the farm bill.
Meanwhile, a wide range of commodity interests also stands to benefit from the Senate bill.
Sugar beet and sugar cane growers would get a new program aimed at protecting their share of the U.S. market in the face of an expected surge in Mexican imports. The 10-year cost: about $1.3 billion.
Tucked into the measure is good news for the companies that store and handle the South's peanut crop. The bill partially reinstitutes a program that was discontinued in 2006, allowing the companies to bill the government for some costs they incur under the federal price-support program. The CBO has set a $175 million, 10-year price tag on that.
According to records provided to The Washington Post by the Department of Agriculture, peanut warehousing is dominated by two large corporations that in the past received about half the federal storage payments. They are Virginia-based Birdsong and a joint venture between agribusiness giant Archer Daniels Midland and a Swiss partner.
The Senate version of the bill also continues a special break for peanut growers that was included in the 2002 legislation. Diversified farmers can keep collecting federal peanut subsidies even after they have reached the subsidy limit on their other farming operations.
Last week, Sen. Saxby Chambliss (Ga.), ranking Republican on the Agriculture Committee, fired back at critics of farm program spending, noting that commodity programs now claim only a 14 percent share of the $288 billion Senate bill, half the share of five years ago.
"There is a significant reform just in terms of pure dollars," he said.
Budget analysts say that is due less to declining spending on farmers than to runaway growth in the food stamp program, which is also funded in the bill. The number of recipients has jumped from 19 million in 2002 to nearly 27 million, boosting 10-year cost estimates by almost $200 billion.
Morgan is a contract writer of The Washington Post and a fellow with the German Marshall Fund, a nonpartisan public policy institution.
Article published Nov 13, 2007


Washington Times: An unworthy farm bill
November 13, 2007
Due to the ethanol boom and strong export markets, U.S. farm incomes are projected to reach a nominal record this year ($87.1 billion, up nearly 50 percent from 2006 and 70 percent higher than the 2000-03 average farm income). Meanwhile, both the Agriculture Department and the Congressional Budget Office forecast that currently robust prices for subsidized crops will continue over the next five years. Nevertheless, the five-year farm-reauthorization bill passed by the House earlier this year and the one now being debated in the Senate contain provisions that would extend for another five years the most egregious farm subsidies — direct payments — ever established. Unlike other farm subsidies, which are triggered when prices fall below support levels or Mother Nature devastates crop production, direct payments are made irrespective of the price level, current output or farm income. This year's farm bill projects making more than $26 billion in direct payments over five years.
Congress established direct payments in the historic Freedom to Farm Act of 1996. The fixed-but-declining annual direct payments, which were made regardless of market prices, were designed to wean farmers from decades of dependence upon other farm subsidies, which the 1996 act abolished. When the 2002 farm bill re-established those older subsidies, it also retained direct payments, whose only purpose was to help farmers overcome their addiction to the very commodity subsidies that were reinstated. The 2002 farm bill essentially set the stage for the Republican Party's spending orgy. The Environmental Working Group (EWG), which became famous in 2001 when it posted on its Web site a list naming every recipient of federal farm subsidies during the previous five years, has just released a major study on direct payments.
Over the next five years, under pending legislation, EWG estimates that (1) taxpayers will pay more than $10 billion to corn farmers, nearly $6 billion to wheat farmers, about $3 billion to both cotton and soybean farmers and more than $2 billion to rice farmers — regardless of their income or the price of their crop; (2) these five crops alone will command 93 percent of the $26.2 billion in direct payments; (3) the top 10 percent of direct-payment recipients will pocket 60 percent of the subsidies, and "the top 1 percent of beneficiaries (15,200 of them) will collect over $3.3 billion, or a five-year total of $220,500 apiece"; (5) "taxpayers will be sending millions of dollars to some of the largest, wealthiest farming operations in America," EWG reports, including more than 250 farm businesses that would each collect at least $1 million over the next five years — even if the price of their crop, such as corn, remained at record levels; (6) seven states will collect half the money, and the 19 states represented on the Senate Agriculture Committee will grab more than 60 percent of the taxpayer subsidies. Unless radically modified, this farm bill cries out for a presidential veto.

International Experience and Your Career

International Experience and Your Career:
Networking Panel
Wednesday November 14, 2007 5:30 to 7:30 pm
Location: University Career Center, 3100 Hornbake
Library

About the event:
This event will begin with a panel discussion.
During the panel employers from various
organizations will discuss their international
experiences as well as how students can market their
international experience. Employers will also share
the skills their organizations value the most in
potential employees. After the panel discussion,
employers and students will move to the resources
for the networking event. During the networking
event employers will collect resumes, answer
questions and provide interested students with
information about employment opportunities.
Refreshments will be served.

Organizations in Attendance:
The organizations in attendance recruit a variety of
majors.

Organizations represented: U.S. Department of
State, REHAU, Peace Corps, Education Development
Center, and Cross Cultural Solutions.

For more information contact:
Letitia Williams
lwillia7@umd.edu
301-405-0276

FT: Rising food prices to hit consumption

Intersting article about the impact of high commodity prices.
As always, click on read more to see the whole article

Rising food prices to hit consumption
ByJavier Blas, Commodities Correspondent, in London
Copyright The Financial Times Limited 2007

Published: November 7 2007 11:00 | Last updated: November 7 2007 11:00

Poor developing countries will be forced to cut food consumption and risk an increase in malnutrition after an “alarming” increase in their agricultural commodities bills, the United Nations’ Food and Agriculture Organisation warned on Wednesday.


In its biannual Food Outlook report the FAO ­predicted that food prices, particularly cereals, would remain high in 2008 having hit record levels this year.

“Given the firmness of food prices in the international markets, the situation could deteriorate further in the coming months, leading to a reduction in imports and consumption in many low-income food-deficit countries,” the report said.

Ali Arslan Gurkan, chief of commodity markets and ­policy analysis at the FAO in Rome, said that sub­Saharan countries were most at risk and added that high food prices meant it was increasingly difficult to meet the UN goals of hunger reduction.

“We are lagging well behind our targets [of hunger reduction] and we are not likely to meet them,” Mr Gurkan said. “The outlook for food and, at the same time, crude-oil importing countries is bleak.”

The world’s food import bill will rise in 2007 to $745bn (€508bn, £354bn), up 21 per cent from last year. The cost for developing countries will increase by 25.5 per cent, to almost $233bn.

The annual food expenditure of the most vulnerable countries has more than doubled since 2000, according to FAO estimates.

Mr Gurkan said that, as a result, some countries were already reducing their food imports. Prices were rising because of strong demand from developing countries; a rising global population; more frequent floods and droughts caused by climate change; and the biofuel industry’s appetite for grains.

“Soaring grain prices are to blame, especially for wheat, but also freight costs, which have doubled since last year, putting additional pressure on countries’ ability to cover their import expenditures,” the report said.

The warning on sustained high food prices comes after Russia last month imposed price controls on food and other countries were forced to increase their food subsidies or scrap their food import tariffs.

The UN body has warned that high food prices could trigger social unrest, after episodes of strife this year in Mexico and Yemen.

Dairy products have ­so far registered the largest price increase, rising almost 65 per cent over the past 12 months, while grains and vegetable oil have surged almost 40 per cent. Meat prices have risen by about 6 per cent. Sugar costs, on the other hand, have declined by almost 35 per cent.

Mr Gurkan said that the food crisis had the potential of having an impact on long-term nutrition in contrast to previous episodes, which “were short lived and without lasting impact”.

Copyright The Financial Times Limited 2007

Farm Bill: Contrasting view: "Finally, an Editorial for Farmers"

In my effort to show the two sides of the Farm Bill debate, here an oped by Congressman Collin Peterson (D) represents Minnesota’s seventh Congressional district and is the chairman of the House Agriculture Committee. Although the underlying factors behind the subsides -the huge economic and political clout of the agribusiness sector in the US- and its impact on world prices are not addressed, the Congressman puts forward the usual arguments to defend the program: tradition and culture, food security, urban bias, and " safe, stable food supply".
In my opinion the fact that the small farmers argument is central in their justification to defend a policy that barely affects them, shows how little maneuver the Farm lobby has to insist in a policy that every year makes less sense.

Here is the article by the Congressman


Finally, an Editorial for Farmers (Original Post HERE)

In my position on the House Agriculture Committee, I have traveled around the country and met with many different kinds of farmers, and I have come to the conclusion that editorial board writers don’t spend a lot of time on farms.


If they spent some time in rural America, witnessing the hard work and risk that farmers and ranchers endure every day, I think we would see fewer editorial pages pontificating about farmers getting rich on taxpayer subsidies.

Every year, farmers and ranchers invest thousands of dollars into their crop, buying equipment, fuel, seed, fertilizer, water, labor and other inputs. They invest this money with no assurance that the seeds they put in the ground will produce a crop that will cover their investments, much less bring in enough money to support their families.

Is this the kind of investment you would be willing to make? Few Americans would put their credit, property and livelihood on the line every year, but that is what farmers and ranchers do, and they should be appreciated for that effort. Instead, they are demeaned for receiving federal support. This is a disgrace that reveals our collective ignorance of where our food comes from and why we pay some of the lowest food prices in the world.

Most people don’t understand that without the assurance of government payments, farmers may not be able to get the loans they need to plant a crop each year. If farmers can’t get financing from the bank, the other option they have is entering into contracts with big agribusinesses. If that happens, they’ll control the prices, and we’ll end up with vertically integrated agriculture, which means the end of independent family farming in this country. Americans need to ask themselves – would they rather support independent farmers in America or let big agribusiness control our food, fiber and fuel supplies.

The House-passed 2007 Farm Bill includes some meaningful reforms, including lower limits on adjusted gross income that prevent millionaires and wealthy non-farmers from receiving farm subsidies and changes that will tie farmers directly to the government payments they receive.

We have also made the largest federal investment in fruit and vegetable production in history. We have increased spending on nutrition programs that support needy families in the United States and abroad. We included new investments that will expand renewable energy production and use in our nation. This was accomplished because we had an open process that invited everyone to participate.

But for some, this isn’t enough. Nothing but a complete overhaul of our farm policy would please some critics. They have forgotten the last time we went out on an ideological limb on farm policy in 1996 with the ill-fated Freedom to Farm legislation.

The political environment then was similar to now. Commodity prices were high, and people thought they would stay high. Congress decided to phase out farm payments, and the consequences were disastrous. The government spent tens of billions of dollars over budget to prevent farmers nationwide from going out of business.

In 2002, we passed a Farm Bill that provided a safety net for farmers, making payments when prices are low and saving money when prices were high. This strategy worked for farmers and it also worked for the government. Since we passed the 2002 Farm Bill, it has cost much less than anyone expected. How many government programs can say they are spending LESS than expected?

Despite this success, some people again want to get rid of farm programs, destroying the safety net for farmers and ranchers. They don’t understand that drastic change has caused trouble in the past, and it will happen again.

This is an exciting time for American agriculture with a growing market for ethanol and other energy products helping farmers get fair prices on the market. It is possible that if these opportunities continue, there will be less need for subsidies in the future.

However, we can’t get ahead of ourselves like we did in 1996. We have a system that makes most payments when prices are low, so as long as prices stay high, reformers will get what they want – lower government payments for farmers. But, if prices drop, the system will support our farmers, so the public continues to get what they want – a safe, stable food supply. I think that’s a Farm Bill with something everyone can like.

About the Author: Congressman Collin Peterson (D) represents Minnesota’s seventh Congressional district and is the chairman of the House Agriculture Committee.

More on Subsidies; articles from American Newspapers

Hi Folks,
I’ve put together some good articles that have come out during the past week about the Farm Bill debate and its implication in world poverty. Click on read more to get them all.
Any comments????




NYTimes Weed It and Reap By MICHAEL POLLAN
Washington Post Cotton and Conscience By Michael Gerson
Miami Herald A chance to end farm subsidies The Christian Science Monitor; Farmers deserve better
The Wall Street Journal Editorial. Farm Belt Follies

Op-Ed Contributor
Weed It and Reap
By MICHAEL POLLAN
Berkeley, Calif.

FOR Americans who have been looking to Congress to reform the food system, these past few weeks have been, well, the best of times and the worst of times. A new politics has sprouted up around the farm bill, traditionally a parochial piece of legislation thrashed out in private between the various agricultural interests (wheat growers versus corn growers; meatpackers versus ranchers) without a whole lot of input or attention from mere eaters.
Not this year. The eaters have spoken, much to the consternation of farm-state legislators who have fought hard — and at least so far with success — to preserve the status quo.
Americans have begun to ask why the farm bill is subsidizing high-fructose corn syrup and hydrogenated oils at a time when rates of diabetes and obesity among children are soaring, or why the farm bill is underwriting factory farming (with subsidized grain) when feedlot wastes are polluting the countryside and, all too often, the meat supply. For the first time, the public health community has raised its voice in support of overturning farm policies that subsidize precisely the wrong kind of calories (added fat and added sugar), helping to make Twinkies cheaper than carrots and Coca-Cola competitive with water. Also for the first time, the international development community has weighed in on the debate, arguing that subsidized American exports are hobbling cotton farmers in Nigeria and corn farmers in Mexico.
On Capitol Hill, hearings on the farm bill have been packed, and newspapers like The San Francisco Chronicle are covering the legislation as closely as The Des Moines Register, bringing an unprecedented level of attention to what has long been one of the most obscure and least sexy pieces of legislation in Congress. Sensing the winds of reform at his back, Senator Tom Harkin of Iowa, chairman of the Senate Agriculture Committee, told a reporter in July: “This is not just a farm bill. It’s a food bill, and Americans who eat want a stake in it.”
Right now, that stake is looking more like a toothpick. Americans who eat have little to celebrate in the bill that Mr. Harkin is expected to bring to the floor this week. Like the House bill passed in July, the Senate product is very much a farm bill in the traditional let-them-eat-high-fructose-corn-syrup mold.
For starters, the Old Guard on both agriculture committees has managed to preserve the entire hoary contraption of direct payments, countercyclical payments and loan deficiency payments that subsidize the five big commodity crops — corn, wheat, rice, soybeans and cotton — to the tune of $42 billion over five years.
The Old Guard has also managed to add a $5 billion “permanent disaster” program (excuse me, but isn’t a permanent disaster a contradiction in terms?) to help farmers in the High Plains struggling to grow crops in a drought-prone region that, as the chronic need for disaster aid suggests, might not be the best place to grow crops.
When you consider that farm income is at record levels (thanks to the ethanol boom, itself fueled by another set of federal subsidies); that the World Trade Organization has ruled that several of these subsidies are illegal; that the federal government is broke and the president is threatening a veto, bringing forth a $288 billion farm bill that guarantees billions in payments to commodity farmers seems impressively defiant.
How could this have happened? For starters, farm bill critics did a far better job demonizing subsidies, and depicting commodity farmers as welfare queens, than they did proposing alternative — and politically appealing — forms of farm support. And then the farm lobby did what it has always done: bought off its critics with “programs.” For that reason “Americans who eat” can expect some nutritious crumbs from the farm bill, just enough to ensure that reform-minded legislators will hold their noses and support it.
It’s an old story: the “hunger lobby” gets its food stamps so long as the farm lobby can have its subsidies. Similar, if less lavish, terms are now being offered to the public health and environmental “interests” to get them on board. That’s why there’s more money in this farm bill for nutrition programs and, for the first time, about $2 billion to support “specialty crops” — farm-bill-speak for the kind of food people actually eat. (Since California grows most of the nation’s specialty crops, this was the price for the state delegation’s support. Cheap indeed!)
There’s also money for the environment: an additional $4 billion in the Senate bill to protect wetlands and grasslands and reward farmers for environmental stewardship, and billions in the House bill for environmental cleanup. There’s an important provision in both bills that will make it easier for schools to buy food from local farmers. And there’s money to promote farmers’ markets and otherwise support the local food movement.
But as important as these programs are, they are just programs — mere fleas on the elephant in the room. The name of that elephant is the commodity title, the all-important subsidy section of the bill. It dictates the rules of the entire food system. As long as the commodity title remains untouched, the way we eat will remain unchanged.
The explanation for this is straightforward. We would not need all these nutrition programs if the commodity title didn’t do such a good job making junk food and fast food so ubiquitous and cheap. Food stamps are crucial, surely, but they will be spent on processed rather than real food as long as the commodity title makes calories of fat and sugar the best deal in the supermarket. We would not need all these conservation programs if the commodity title, by paying farmers by the bushel, didn’t encourage them to maximize production with agrochemicals and plant their farms with just one crop fence row to fence row.
And the government would not need to pay feedlots to clean up the water or upgrade their manure pits if subsidized grain didn’t make rearing animals on feedlots more economical than keeping them on farms. Why does the farm bill pay feedlots to install waste treatment systems rather than simply pay ranchers to keep their animals on grass, where the soil would be only too happy to treat their waste at no cost?
However many worthwhile programs get tacked onto the farm bill to buy off its critics, they won’t bring meaningful reform to the American food system until the subsidies are addressed — until the underlying rules of the food game are rewritten. This is a conversation that the Old Guard on the agriculture committees simply does not want to have, at least not with us.
But its defiance on the subsidy question may actually be a sign of weakness, for one detects a note of defensiveness creeping into the rhetoric. “I know people on the outside can sit and complain about this,” Representative Collin Peterson of Minnesota, chairman of the House Agriculture Committee, told The San Francisco Chronicle last summer. “But frankly most of those people have no clue what they’re talking about. Most people in the city have no concept of what’s going on here.”
It seems more likely that, this time around, people in the city and all across the country know exactly what’s going on — they just don’t like it.
Mr. Peterson’s farm bill passed the House by the smallest margin in years, and might have been picked apart on the floor if Representative Nancy Pelosi, the speaker of the House, hadn’t leapt to its defense.
(She claimed to be helping freshmen Democrats from rural districts.)
But Senate rules are different, and Mr. Harkin’s bill will be challenged on the floor and very possibly improved. One sensible amendment that Senator Byron Dorgan, Democrat of North Dakota, and Senator Chuck Grassley, Republican of Iowa, are expected to introduce would put a $250,000 cap on the payments any one farmer can receive in a year. This would free roughly $1 billion for other purposes (like food stamps and conservation) and slow the consolidation of farms in the Midwest.
A more radical alternative proposed by Senator Richard Lugar, Republican of Indiana, and Senator Frank Lautenberg, Democrat of New Jersey, would scrap the current subsidy system and replace it with a form of free government revenue insurance for all American farmers and ranchers, including the ones who grow actual food. Commodity farmers would receive a payment only when their income dropped more than 15 percent as the result of bad weather or price collapse. The $20 billion saved under this plan, called the Fresh Act, would go to conservation and nutrition programs, as well as to deficit reduction.
What finally emerges from Congress depends on exactly who is paying closest attention next week on the Senate floor and then later in the conference committee. We know the American Farm Bureau will be on the case, defending the commodity title on behalf of those who benefit from it most: the biggest commodity farmers, the corporations who sell them chemicals and equipment and, most of all, the buyers of cheap agricultural commodities — companies like Archer Daniels Midland, Cargill, Coca-Cola and McDonald’s.
In the past that alliance could have passed a farm bill like this one without breaking a sweat. But the politics of food have changed, and probably for good. If the eaters and all the other “people on the outside” make themselves heard, we just might end up with something that looks less like a farm bill and more like the food bill a poorly fed America so badly needs.
Michael Pollan, a contributing writer at The Times Magazine and a professor of journalism at the University of California at Berkeley, is the author of “The Omnivore’s Dilemma” and the forthcoming “In Defense of Food: An Eater’s Manifesto.”



Cotton and Conscience
By Michael GersonWednesday, November 7, 2007; A21
In land area, the four West African countries of Benin, Burkina Faso, Chad and Mali are about 1 1/2 times the size of the southern United States. Together, they have roughly the economic output of greater Charleston, S.C. And when the American economic giant shuffles its feet, these distant lands feel the earthquake.
Cotton provides an example. For years, the federal government has guaranteed American cotton producers about 72 cents a pound, even though the real market price of cotton has averaged about 57 cents. The more cotton U.S. growers produce, the more they get from the government in subsidies. Since 2002, market prices haven't even covered the cost of producing cotton, but the amount of acres planted in cotton has increased because the government guarantees a higher price.
Most Americans hardly notice this economic distortion and perhaps chalk it up to typical, interest-group politics. But the effects in the cotton-growing regions of West Africa are dramatic. American subsidies result in overproduction, which depresses the global price of cotton, which keeps millions of Africans on the edge of malnutrition. In some of the poorest countries on Earth, cotton farmers are some of the poorest people, earning about a dollar a day. The typical cotton-producing household has 10 members. About 40 percent of children under 5 are malnourished.
Who benefits from the current system of subsidies? About 20,000 American cotton producers, with an average annual income of more than $125,000 -- a portion of which goes to hire lobbyists. And these lobbyists do their work well. Even after the World Trade Organization in 2005 found U.S. cotton supports to be illegal, Congress made only cosmetic changes in policy. And recently the compliance panel of the WTO reaffirmed that America remains in violation.
Who would benefit from a reform of subsidies? A recent report by Oxfam America, " Paying the Price," estimates that family incomes for perhaps 10 million people in West Africa would increase by 2.3 to 5.7 percent. This extra cash would feed an additional 1 million children a year, or pay the school fees for 2 million children, or allow farm families to pay for medicine and buy fertilizer to increase their yields.
An odd alliance has gathered around the cause of reform. Fiscal conservatives such as the nonprofit Citizens Against Government Waste see cotton subsidies as a market-distorting waste of public money -- reducing the target price of cotton from 72 cents to 56 cents and changing the loan rate would save the U.S. government about $1.2 billion a year. Humanitarian and faith-based groups such as Bread for the World see subsidies as an enemy of economic growth in the developing world. Both are correct. They also see this year's farm bill as the chance to reverse an inefficiency that is also an injustice. Both understand it is an uphill fight.
There is a lively intellectual debate on the causes of the most extreme forms of global poverty. In his challenging new book, "The Bottom Billion," Oxford University professor Paul Collier details a range of "traps" that limit the potential of the poorest countries. Many of these countries have experienced internal conflict or are "cursed" by natural resources that distort their development and perversely undermine their growth. Some are landlocked nations without access to regional or global markets, while others suffer under corrupt and incompetent governments.
But whatever the ultimate reasons, at least some of this poverty exists because Congress has not acted in responsible ways on agricultural policy. So a fraction of the blame is our own. The cost to America of reforming cotton subsidies is low -- a mite from a billionaire. The benefit to the world's poorest people is great. As is often the case, bad economics turns out to be bad morality.
It is the nature of American global power that an ignored amendment in a boring agricultural debate can take or save lives in a distant village, among people who will never know the names of Richard Lugar, Ron Kind and Jeff Flake-- members of Congress leading this agriculture debate. But the price of power is moral responsibility. And giving African farmers a chance to earn and live is one of the clearest of those responsibilities.
Michael Gerson is the author of "Heroic Conservatism." His e-mail address ismichaelgerson@cfr.org.


A chance to end farm subsidies
Another disgraceful corporate welfare bill could come to the Senate floor today.
November 5, 2007It's good to be a farmer. With money rolling in as many subsidized crops such as corn, wheat and soybeans command unusually high prices, and with net farm income expected to hit a record this year, the government continues to throw cash at commodity growers. And despite the fact that a large coalition of corporate interests, environmentalists, nutritionists, economists and international anti-poverty groups has been loudly urging an end to this form of corporate welfare, Congress has so far turned a deaf ear.Last month, the Senate Agriculture Committee approved a version of the 2007 farm bill every bit as bloated, unfair and irresponsible as the one passed by the House in July; it's expected to come to the Senate floor today. It will continue to award the bulk of subsidies to the richest growers and send checks to gentlemen farmers in Beverly Hills and Manhattan. It will continue to raise consumer prices for some crops, such as sugar, while distorting trade and wrecking livelihoods in the developing world. And it will waste about $16 billion annually in taxpayer money far better spent elsewhere -- the closest thing to "reform" in the Senate bill is a provision that would cut off payments to households making more than $750,000 a year, apparently under the rationale that farmers who make less than this are clearly in need of government assistance.Farm bill supporters from the handful of Midwestern states that benefit heavily from these subsidies have succeeded largely by buying off their opponents. Because the farm bill also funds food stamps, urban representatives in the House were persuaded to sign on when some $4 billion was added to that program. Lawmakers from states such as California that don't traditionally get much in the way of subsidies acquiesced when extra money was added for conservation, nutrition and specialty crops of the kind grown here, such as tree nuts and vegetables. Yet all of the most destructive provisions of the last five-year farm bill, an outrageous giveaway to agribusiness that continues to damage U.S. trade relationships, remain in place.There is some hope. Sens. Frank R. Lautenberg (D-N.J.) and Richard G. Lugar (R-Ind.) have proposed an alternative called the Fresh Act, which would do away with billions in trade-distorting subsidy payments. Instead, it would expand free crop insurance to farmers with incomes under $250,000 a year, paying off only when they lose money. Unlike the current system, it would benefit all farmers regardless of what they grow, so it could be a boon for California. Democratic Sens. Dianne Feinstein and Barbara Boxer should do the right thing by their state, the nation and the world and back it.




November 3, 2007
Editorial
Farm Belt Follies
The Senate has one last chance to rid the country of an irrational, outdated and unfair 70-year-old program of federal farm supports that enriches the few at the expense of the many, distorts international trade and damages the environment. It has one last chance, in other words, to produce a farm program of which the country can be proud.

Floor debate on the farm bill begins next week, possibly as early as Monday. The choice facing the Senate lies between an old-fashioned bill produced by the Senate Agriculture Committee and an entirely different bill that is expected to be offered as an amendment by Richard Lugar, the Indiana Republican, and Frank Lautenberg, Democrat of New Jersey.

The old-fashioned bill, which is only marginally better than a similarly retrograde measure approved earlier this year by the House, would perpetuate a system that directs more than half of all farm payments to less than one-tenth of the farms, most of them concentrated in eight states and most of them producers of big row crops like corn, cotton, soybeans, wheat and rice.
To make matters worse, these lucky few get their billions regardless of market conditions — and conditions now happen to be particularly good, given the strong demand for corn-based ethanol as well as for American farm products abroad. So whenever you hear its proponents describe this welfare-for-the-rich program as a safety net, remember this: for the most part, it provides an extra bounce for those who don’t need a safety net while failing to catch those who do.

The Lugar-Lautenberg bill aims to correct this. It would replace existing subsidies with genuine crop insurance that would cover all farms, whether they produce rice or rutabaga. It would save $20 billion over five years. And it would funnel the savings to valuable soil, open space and wetlands preservation programs, as well as the food stamps program — all of which could use the extra help.

The most visible enemies of such a sensible approach are all the farm state legislators from both parties who love things just the way they are. But an equally powerful enemy is plain old Congressional inertia. That makes the Lugar-Lautenberg amendment a long shot, but we hope they give it their best shot.


Farmers deserve better
The House and Senate bills only perpetuate a broken subsidy system. But there is an alternative.

Every five years, Congress rethinks its role in farming. Next week, the Senate debates a bill from its agriculture panel that perpetuates subsidies for a few crops and many well-off farmers. This time, however, it has a fresh choice.

Farming in the US is no longer simply a declining industry that needs a big federal prop-up in the name of "the family farm."

Many other worthwhile nonfarming interests have gained a stake over the years in how government influences the use of millions of farm acres and billions of taxpayer dollars.

Even born-in-the-cornsilk legislators who favor the current bill before the Senate (and a similar one passed by the House in July) have openly questioned the wisdom of traditional subsidies – $16 billion a year – but then they've vote for them anyway under pressure from well-funded farm lobbies.

Their questions start with recent revelations of the many rich farmers and corporations that receive the hefty subsidies.

They start with calls for other, often healthier foods, mainly fruits and vegetables, to also be supported – if there is to be federal support at all – and not just the current, main beneficiaries: corn, wheat, rice, and soybeans.

They start with growing evidence that corn ethanol is a net polluter of greenhouse gases and not worthy of massive subsidies.

They start with the need for better conservation of land, less pollution, and more opportunities for wildlife – which would mean no federal "disaster" support in drought-prone Plains states where commercial farming isn't viable.

They start with a rising public interest in growing and eating locally grown produce, especially if it's organic – and in reducing support for subsidized, highly processed foods.

They start with a US responsibility to trim its farm supports in order to push other nations to do the same and achieve a grand, new global trade pact.

To their credit, a few farmland senators have bucked the lobbyists and are proposing an overhaul of the federal role in farming.

Sen. Richard Lugar (R) of Indiana and Sen. Frank Lautenberg (D) of New Jersey plan to introduce an alternative bill to the one recommended by the Senate Agriculture Committee. It provides a new type of safety net against the ups and downs of climate and markets, but it would eventually end the program that provides direct payments when prices are low to only a few types of farmers.

It would instead provide a type of insurance that would be available to many kinds of crops and would be based on crop revenues calculated on averages. It would end a system in which only about one-third of farmers receive subsidies – and of those, only the top one-fifth get most of the money. And it would end a system in which only seven states – Iowa, Texas, Kansas, Nebraska, Indiana, Minnesota, and Illinois – received more than half of all federal farm supports.

Under the Lugar-Lautenberg bill, more money would go to land conservation and a wider range of healthier foods, while saving the US budget about $3 billion a year.
While it may not be perfect, the bill can serve to push Congress out of its lock-step support of a system created in the Depression, and which needed a radical change soon after it. Now lawmakers have a chance to make up for lost opportunities.