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Pickett: A fight without referees

(Thursday, Feb. 23, 2006 -- CropChoice news) --

1. What are Monsanto, Wal-Mart doing on agri-research panel?
2. Brazil eyes farmer tax cuts
3. Saskatchewan farms not profitable
4. The Organic Center Symposium at AAAS annual meeting examines children's pesticide risks
5. Pickett: A fight without referees
6. China's soy industry has second thoughts about level of foreign participation; Some propose ASA counterpart

1. What are Monsanto, Wal-Mart doing on agri research panel?


NEW DELHI: Keeping up its anti-US rhetoric ahead of American president George Bush’s visit, the CPI has raised objections to the presence of the American multinationals Monsanto and Wal-Mart on the board of the Indo-US Knowledge Initiative on Agricultural Research and Education.

The party, which has described the two multinationals as questionable, is likely to demand a discussion in Parliament on the initiative.

The initiative, part of the MoU between India and US signed by Prime Minister Manmohan Singh last July, is slated to figure prominently in discussions during Mr Bush’s visit in early March…

More at… http://economictimes.indiatimes.com/articleshow/1423483.cms

Brazil eyes farmer tax cuts

Dow Jones

SAO PAULO (Dow Jones) -- Brazilian farmers need tax cuts, and Brazilian Agriculture Minister Roberto Rodrigues told local media he would propose emergency measures so those farmers could get them.

"We don't know when this is going to happen, but the Minister wants tax relief at the minimum for Brazilian farmers," Elisio Contini, an official from the strategic planning department of the Agriculture Ministry, told Dow Jones Newswires Wednesday.

This is a change from 2005 when Rodrigues said at the end of last year the worst was over for Brazil's cash-strapped and debt-burdened farmers.

The new proposal includes tax exemptions on all imported fertilizers, fungicides, herbicides and pesticides, billions of Brazilian reals in warehousing costs, and the inclusion of center-west soy farmers in Brazil's biodiesel program. The biodiesel program currently counts on small to mid-sized farmers in the northeast and southeast that produce biofuels from other oilseeds, such as sunflowers and mamona, which makes castor oil.

Moreover, the Agriculture Minister's proposal is once again asking for more farm loans to be made available at low interest rates.

As it is, Banco do Brasil, the federally owned bank responsible for the majority of rural credit, said it would make 2.6 billion Brazilian reals ($1.2 billion) available this month to shield farmers from having to sell while the dollar is currently trading at lower levels. The bank has already increased its credit line to farmers by roughly BRL1.7 billion in comparison to the same period in the 2004-05 summer crop.

A weak U.S. dollar is seen as the main culprit at the moment. The currency exchange is reminiscent of what happened in the 2004-05 grain and oil seed crops. For instance, during the 2004-05 season Brazil farmers planted with a dollar worth nearly BRL3.00 and harvested and sold with the dollar closer to BRL2.40.

Rodrigues doubted the same thing could happen in 2005-06, but soy and other farmers planted on BRL2.40 and as harvest approaches the dollar is trading at BRL2.14 as of Wednesday, from BRL2.15 on Tuesday. On Oct. 5, Rodrigues was quoted by Dow Jones Newswires as saying, "No amount of government aid can help with the dollar at 2.25 reals." Nowadays, Brazil's farmers and the food trade in general would delight with a dollar worth BRL2.25.

In a weekly bulletin, Agriculture Federation of Parana State President Agide Meneguette said crises in the 2005-06 crop go beyond the dry weather factor that destroyed a third of Parana's 2004-05 soy crop.

"We can produce 150 bags a hectare and still can't pay for the investments we've made or pay our debts," Meneguette said, using 150 bags only in theory. Parana soy farmers should produce an average of 45 to 50 60-kilogram bags of soybeans in the upcoming harvest, weather permitting.

Farmers say that Banco do Brasil's low 8.75 percent interest loans only cover up to 40 percent of crop costs. Brazil's benchmark interest rate is currently 17.25 percent, so when farmers need loans from other banks, they have to face a much higher interest rate.

Rodrigues might not be able to deliver on his fiscal proposal for Brazilian agribusiness.

Last month, the preliminary 2006 budget for Brazil's price support system for farmers, for instance, was 50 percent less than the BRL1.2 billion Brazil's farmers had access to in 2005.

"It's too early to say this, but if international prices don't rise enough to make up for the falling dollar than you will see Brazilian soy growers reduce planting area again next year," Fernando Muraro, a soy analyst at agribusiness consultancy AgRural, said of the 2006-07 soy crop.

Brazil reduced the 2005-06 soy planting area by 1.2 million hectares, according to government data released last month. Government estimates are for a 58.1-million-metric-ton harvest in 2005-06.

3. Saskatchewan farms not profitable

02/21 11:37

-Financial Support Seen Necessary to Keep Family Farms Alive

SASKATOON (CP) -- Family grain and oilseed farms can no longer turn a profit and society must choose whether to subsidize them or let them fade away, a University of Saskatchewan professor says.

Agriculture economics professor Hartley Furtan said an analysis of Statistics Canada data from 2003 shows family farms were kept afloat only by government subsidies and income earned outside farm gates.

With similar data expected from 2004 and 2005 and a bleak outlook for 2006, it's time for society to make a choice, he said.

"If the sector is not important enough to warrant more financial support, let the market process take its course and we will have fewer farm families with less grain and oilseed production," Furtan writes in his policy paper entitled Whither Goes Prairie Agriculture.

"If it is the families we care about, we need to consider new policies such as guaranteed annual income for farmers."

In 2003, the average farm household market income for business-focused farms was $27,000. When off-farm income is subtracted, farm income is negative, Furtan said. That also doesn't account for the depreciation of land and equipment and the cost of family labour on the farm.

Furtan said he's not recommending either subsidization or a laissez-faire approach. He's merely saying society must choose.

Resisting intervention and letting some farms fold would lower government costs and shouldn't affect food prices, he said.

"The con would be, once these people leave, we're never going to get them back," Furtan said.

"Having them exit the local community would not be a good thing. We would lose part of our cultural heritage by not having a vibrant agricultural industry. That's also a con."

Farmers who abandon the land would also have to seek a different livelihood and might need more training, he said.

Furtan will present his paper at a Saskatchewan Institute of Public Policy forum at the university on Wednesday.

Stewart Wells, president of the National Farmers Union, said he's disappointed Furtan is presenting government intervention or bust as the only two paths.

"He's certainly right in thinking times are tough for family farmers," Wells said.

"We're in a dysfunctional marketplace right now where everyone except the farmer is being rewarded."

Globalization has pitted Canadian farmers in competition with growers across the globe, he said.

The corporations that sell farmers supplies and process their grain and oilseeds are consolidating to dominate market power and turn record profits.

To keep the family farm alive, the government must support initiatives that give farmers power, such as the Canadian Wheat Board and the Farmer Rail Car Coalition, Wells said.

The government also needs to move to prevent the sale of so-called terminal seeds, which grow for one year before dying.

Government aid won't solve farmers' problems in the long-term, he said.

"In terms of stewardship (and) environmental practices ... family farmers are absolutely essential," Wells said.

"If you start turning over the food production system to the boardrooms of these international corporations, those corporations are bound legally to maximize returns to their shareholders."

4. The Organic Center Symposium at AAAS annual meeting examines children's pesticide risks: Contributions of organic farming in reducing pesticide risks and enhancing food quality to be highlighted

For more information, contact:
Charles Benbrook, Chief Scientist, The Organic Center
541-828-7918 or after 2/16/06 208-290-8707

Foster, RI (February 14, 2006) -- The lack of progress in reducing children's exposures to pesticides, despite passage in 1996 of the Food Quality Protection Act (FQPA), will be highlighted during a symposium organized by The Organic Center at 1:45 p.m. on Sunday, February 19th at the 2006 annual meeting of the American Association for the Advancement of Science (AAAS). The papers and PowerPoint presentations by Dr. Alan Greene, Dr. Chenshung (Alex) Lu, Dr. Charles Benbrook, and Dr. Philip Landrigan are posted on the Center's website at http://www.organic-center.org/science.events.php.

The four national experts will assess and compare the impacts of organic farming, regulation, discovery of new pesticides, Integrated Pest Management (IPM), and ecolabel programs on reducing children's pesticide risks. The impact of regulation, in particular the FQPA, has been modest. While the panelists applaud the Environmental Protection Agency (EPA) for decisive actions reducing risks from residential uses of pesticides, similar actions to reduce dietary exposures remain "few and far between."

"Regulation, and the FQPA in particular, has advanced knowledge of pesticide risks and addressed residential risks reasonably well, but has done surprisingly little to reduce pesticide dietary risks," says Dr. Charles Benbrook, Chief Scientist for The Organic Center. "Regulation has great unfulfilled potential, but in the current political climate, it is unlikely that the EPA is going to alter its current tentative and deliberate course in implementing the FQPA."

The results of a 2005 consultant's report to the EPA's Office of Inspector General are drawn upon in estimating the trends in dietary risks from 1994 through 2003. Overall dietary risks fell about one-third between 1994 and 2003. Regulatory actions impacting just nine crop uses of two organophosphate insecticides, chlorpyrifos and methyl parathion, account for 98 percent of the impact of the FQPA in reducing pesticide dietary risks through 2003.

A pronounced shift of pesticide risks from domestically grown to imported foods has also occurred over this time period, raising important economic, trade and political issues.

Key Findings to be Discussed

The discovery of new, reduced risk pesticides has clearly helped farmers in their transition away from high-risk pesticides. Steps by EPA to expedite registration of new chemistry should be strengthened.

Integrated Pest Management has not markedly reduced risks because it remains too focused on the efficiency of pesticide use and does not include even a secondary focus on risk reduction. Ecolabel programs that strive to reward farmers committed to risk reduction goals and/or IPM also have not substantially impacted risks because less than 3 percent of cropland acreage are enrolled in such programs and most lack clear-cut restrictions on high-risk pesticides.

Organic farming is highlighted as the clear exception. Evidence is presented showing that organic food assuredly and dramatically reduces pesticide risks to children and offers the greatest potential for effective private sector actions to reduce risks.

Second Session to Feature Organic Center Research In addition to the session on children's pesticide risks, the work of The Organic Center will be featured in a session at the AAAS meeting sponsored by the Tufts University Friedman School of Nutrition. This session is entitled "Understanding and Nourishing the Roots of Food Quality," and will be held at 2:00 p.m. on Monday, February 20th.

Trends in food quality will be summarized, highlighting the declining levels in several essential nutrients and the need to increase average daily intakes of health-promoting antioxidants. The root causes of slipping food quality will be described, as well as the potential to increase the concentrations of vitamins, minerals, and antioxidants in food through organic farming practices. Significant taste and nutritional differences between conventional and organic apples and strawberries will be among the research findings presented.

Steps required to provide Americans more healthful food choices will be discussed. Information needed by consumers to select foods naturally high in antioxidants and vitamins will be summarized, emphasizing the need to also increase the number of daily servings of fresh and minimally processed fruits and vegetables.

Dr. Kathleen Merrigan, Friedman School of Nutrition, organized the session in cooperation with The Organic Center. The four presenters are:

*Dr, Jeffrey Blumberg, USDA Human Nutrition Research Center on Aging, Tufts University;
*Dr. Donald Davis, University of Texas-Austin;
*Dr. Preston Andrews, Washington State University; and
*Dr. Neal Davies, Washington State University.

Presentations will be posted on the Organic Center website at http://www.organic-center.org/science.events.php

5. Pickett: A fight without referees

Organization for Competitive Markets
P.O. Box 6486
Lincoln, NE 68506

The following editorial was authored by Dr. Robert Taylor, Organization for Competitive Markets Economics Fellow and Auburn University professor. If you would like to arrange an interview with Dr. Taylor, would like a photo to accompany the editorial, or need any further information, use the contact information below.

Contact: Chase Carter, Executive Director
(402) 817-4443
Contact: Dr. Taylor
(334) 844-1957
This editorial is authorized for reprint.

A few courageous cattlemen, frustrated by USDA's failure to enforce the Packers & Stockyards Act,[1] filed suit in 1996 against the nation's largest beef packer, IBP, now Tyson, alleging that the firm used captive supplies to manipulate the cash market for fed cattle, in violation of the P&S Act.

This historic lawsuit, known as Pickett v. Tyson/IBP, reached trial on January 12, 2004 in United States District Court for the Middle District of Alabama. Senior Federal Judge Lyle Strom, from Nebraska, presided. After four weeks of testimony, the Court submitted the case to the Jury on February 10, 2004. Cattlemen and plaintiff were shocked that Judge Strom's instructions to the Jury were not based on the P&S Act, under which the lawsuit was filed and the case tried, but based on the more demanding standard of Sherman and Clayton Acts antitrust law. Even defense lawyers appeared surprised that Judge Strom instructions reflected the standards of antitrust law rather than the P&S Act. Nevertheless, after deliberating five days, the Jury found Tyson/IBP guilty on all counts and assessed actual damages of $1.28 billion over the Feb. 1994 through Oct. 2002 period.

Justice for independent cattlemen was short lived, as Judge Strom set aside the Jury's verdict two months later and entered summary judgment for Tyson. One year later the Court of Appeals for the Eleventh Circuit sided with Judge Strom.

Neither Judge Strom nor the Circuit Judges made a substantive challenge to the Jury's verdict that Tyson's use of captive supply had an anticompetitive effect on the cash market for fed cattle (Jury questions # 1, 2, 4, and 5). Rather, the Judges' "opinion" centered on the Jury verdict "that the defendant lacked a legitimate business reason or competitive justification for using captive supply (Jury question #3)."

Judge Strom's instructions to the Jury and subsequent rulings related whether Tyson had a legitimate business reason for captive supply reflect an extremely far-fetched view of what is known as the antitrust "rule of reason." The rule of reason emerged in a 1911 Supreme Court interpretation of the Sherman Antitrust Act. The common and long-standing interpretation of this rule is founded in economics: any pro-business benefits derived from an alleged anticompetitive practice should be weighed against harm to the market.

Judge Strom claimed--and the 11th Circuit endorsed--the notion that a practice (captive supply) was acceptable as long as there was any benefit to the defendant (Tyson), no matter what the harm to the market. Thus, Judge Strom and the 11th Circuit are of the opinion that pro-business benefits do not need to be weighed against harm to the market. This opinion is inconsistent with almost a century of "rule of reason" legal cases, inconsistent with basic economic reasoning, and inconsistent with common sense. In short, the Judges' rule of reason is profoundly unreasonable.

Although the Jury concluded that Tyson's claimed business justification for captive supply was pretext, or an excuse or effort to conceal something, Judge Strom claimed: ". the trial record is barren of any evidence which would permit the jury to conclude that defendant lacked a legitimate business reason for its use of captive supply. The evidence reveals that captive supply transactions permit defendant to achieve a reliable and consistent supply of fed cattle, allowing it to operate its plants in an efficient manner."

Fact #1: The Trial record includes testimony based on extensive statistical analyses of Tyson's weekly slaughter plant costs showing no significant efficiency gain from captive supply. But the Judge claims that the Trial record is "barren" or any evidence. Fact #2: Tyson's weekly captive supply was 2.8 times more variable than cash acquisitions, contrary to Judge Strom's claim that captive arrangements assured them of a stable supply. The Trial record also shows other substantive evidence that on which the Jury could base their verdict.

It is deeply troubling that the Judges got the facts wrong; it is equally troubling that they appointed themselves as fact finders. The 7th Amendment to the U.S. Constitution states "In Suits at common law . the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law." Thus, in Civil cases like Pickett, the Jury is to be the fact finder; in the American Court system Judges are to insure that trials are conducted properly and they are to rule on legal issues only. Yet, by anointing themselves fact-finders, the Judges overstepped their Constitutional authority.

Antitrust is not a trivial issue in our present economic setting. Connor[2] identified ". hundreds of published studies of private, hard-core cartels that contained 674 observations of long-run overcharges. The primary finding is that the median cartel overcharge for all types of cartels over all time periods is 25%: 18% for domestic cartels, 32% for international cartels, and 28% for all successful cartels." Connor also found $9 billion in damages from global price-fixing of lysine, citric acid and bulk vitamins during the 1990s. alone Add to that $1.28 billion in Pickett, plus unknown damages that may have occurred from P&S cases that GIPSA did not investigate or did not prosecute, and the need for aggressive antitrust enforcement becomes obvious.

Current Status of Pickett: Petition was filed in Jan. 2006 for the U.S. Supreme Court to reconsider Pickett, particularly since the 11th Circuit is the lone outlier in the unreasonable interpretation of the antitrust rule of reason. If the Supreme Court does not override Judge Strom and the 11th Circuit, agricultural producers and food consumers will have little, if any, protection from the economic power of the few. The Sherman and Clayton Antitrust Acts, and the Packers & Stockyard Act are effectively gutted if the Judges' opinion becomes the new norm. If the Supreme Court does not restore sensibility to the Packers & Stockyards Act, the only long-term recourse is new antitrust legislation.

Randy Stevenson recently said, "They (packers and integrators) first made serfs out of poultry producers, then they made serfs out of hog producers; they knew better than to pick on a cowboy first as John Wayne just wouldn't stand for it without one helluva of a fight." Speaking of antitrust fights, Thurman Arnold, Assistant Attorney General in charge of the Antitrust Division in Franklin Delano Roosevelt's Department of Justice, said, "The competitive struggle without effective antitrust enforcement is like a fight without a referee." It sure looks like the cowboys are in a fight without referees; Judges are ignoring the plain language of the law and overstepping their authority, and GIPSA is not enforcing the Packers & Stockyards Act. Of course, the lack of referees never stopped cowboys like John Wayne from fighting-successfully fighting--for what is right! RT

[1] Dr. John Connor, Purdue University, April 24, 2005: http://www.agecon.purdue.edu/staff/connor/papers/

[1] The USDA Office of the Inspector General recently confirmed Cattlemen's long-standing claims that GIPSA was not enforcing the P&S Act. http://www.usda.gov/oig/webdocs/30601-01-HY.pdf

[2] Dr. John Connor, Purdue University, April 24, 2005: http://www.agecon.purdue.edu/staff/connor/papers/

6. China's soy industry has second thoughts about level of foreign participation; Some propose ASA counterpart

Date Posted: 1/25/2006

Business Daily Update via NewsEdge Corporation : With 5,000 years of soybean cultivation, China, the home of the oil crop, now has one- third of its soybean processing capacity monopolized by foreign companies. Archer Daniels Midland Company (ADM), an agro-giant in the United States, alone controls one quarter of it since it landed in China in 1992, according to Cheng Guoqiang, a researcher with the Beijing-based State Council Development Research Centre.

Coinciding with the rising trans-national control of the country's soybean crushing industry is the skyrocketing import of soybean, dominantly genetically-modified (GM) varieties from the United States, Brazil and Argentina. The year 2005 has witnessed "very serious" monopolization of China's soybean processing industry by foreign trans-nationals like ADM, who are speeding up their purchasing of Chinese soybean processing facilities on a large scale, according to Cheng.

Meanwhile, 2005 is the third consecutive year in which China's soybean imports topped the 20 million-ton level to reach 25 million tons, well exceeding its domestic soybean output of around 16 million tons a year, according to Cheng. All this took place without any public hearing, as might be required in other countries. After all, public participation in decision making, even on matters concerning their daily food security, is still alien to many Chinese.

As the world's largest importer of GM soybean, China does not even have a say on the market price, Cheng said. China used to be the world's largest soybean producer and exporter up to the 1930s, with the United States taking over in the 1950s. The real watershed for China's soybean industry came in 1996 when its soybean imports soared to 1.11 million tons from 290,000 tons the year before, while its soybean exports plummeted from 380,000 tons to 190,000 tons. That year marked China's shift from a net exporter to a net importer of soybean, said Wei Wei, from the Research Institute of World Economy and Politics of Chinese Academy of Social Sciences.

China opened its soybean market to the outside world long before its WTO entry in 2001, with no quota but a symbolic tariff of around 3 per cent, said Zhu Xigang, from the Research Institute of Agricultural Economy at the Chinese Academy of Agricultural Science. Zhu said China had to import soybean because its domestic production, though increased in the past few years, could not meet rapidly increasing demand for the oil crop. And the imported GM soybean features "higher oil content, better quality and less transportation cost."

But a professor from the University of International Business and Economics, who declined to be identified, would not buy this view. "It's the demand from the soybean processing industry, not from the consumers," he said. "We were told we were short of 20 million tons of soybean a year, but we don't know where the figure comes from and who has conducted the market survey. We as consumers didn't really feel a shortage when we saw the sudden boost of imports, and of all GM stuff at that."

Environmentalists also doubt if it is necessary to import so much GM soybean even if China does have a shortage. Sze Peng Cheung, a programme manager with Greenpeace China, an environment watchdog, said that China does have its own non-GM soybean strains with high oil and protein content, only it has not developed them into industrial-level production. But China has exported its non-GM soybean to the European Union, Japan and South Korea, where consumers maintain strong reservations or opposition to GM food. In Japan alone, the price of non-GM soybean can be 5 to 10 per cent higher than that of the GM product, according to Cheng Guoqiang. That partly explains why endeavours to boost its domestic production of soybean have been among China's policy cards to counter foreign monopoly.

In 2003 the Ministry of Agriculture (MOA) announced an ambitious plan to develop China's Northeast into the world's largest non-GM soybean production centre for exports in the next five years. If successful, China can win the Asian and European market with its non-GM soybean products. Yet the major challenge to this plan is whether China can keep its non-GM soybean clean. With more wild and cultivated soybean varieties than anywhere in the world, China forbids any GM soybean to be grown inside its boundaries, said Chang Ruzhen from the Institute of Crop Germplasm Resources at the Chinese Academy of Agricultural Science.

China also has one of the strictest bio-safety regulations in the world, at least on paper, requiring safety certificate and labelling for GM products. But with so much GM soybean imported, it is a question of whether China is able to keep a GM-free soybean zone.

Chang's institute conducted a test by growing GM soybean alongside non-GM soybean in a field to monitor natural pollination. They found that GM soybean could contaminate non-GM cultivated soybeans and wild soybeans through pollination, said the professor. A 2004 Greenpeace report pointed out that "without effective management, imported soybeans are very likely to enter the domestic soybean cultivation system during transport, storage or processing. Once this happens, contamination may be very hard, if not impossible, to control."

To this Chang agreed. "Those farmers hired at soybean processing factories can easily bring some imported soybean back home to grow," he said.

"If such GM contamination occurs, that will certainly influence our exportation (of non-GM soybean)," warned Zhu Xigang.

That is why he and some other experts strongly oppose any future plans to cultivate GM soybean on Chinese soil. Yet some Chinese biotechnologists have already started their research on GM soybean, in some leading labs including Chang's institute and one in Jilin Province of Northeast China, according to Chang, who added that all the current research is still in the preliminary stage.

Another card to counter foreign monopoly, as some experts and industry insiders have proposed, is to set up China's own soybean industry association, as a Chinese equivalent to the American Soybean Association, to join hands in the battle against foreign monopoly, increase China's bargaining power in the international negotiations, and raise the international competitiveness of Chinese soybean industry. But the proposal is still in the air, partly because of the opposition by those importers. "But such an organization can really protect farmers and the industry at large," said Chang.

Copyright (c)2006 Business Daily Update Source: Financial Times Information Limited - Asia Intelligence Wire.