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Supreme Court Beef Checkoff Decision Dismays Ranchers; Other news

(Friday, May 27, 2005 -- CropChoice news) --

1. Supreme Court Beef Checkoff Decision Dismays Ranchers
2. The Farm Report
3. Another Option
4. Proposal to Open Central American Markets Spurs Debate Over Free Trade
5. Fair Trade Advocates Say Open Markets Could Shatter Small Farms
6. ACGA Applauds Passage of Renewable Fuels Amendment

1. Supreme Court Beef Checkoff Decision Dismays Ranchers


FOR MORE INFORMATION, CONTACT: Mabel Dobbs, 208-549-3433; WORC staff - John Smillie or Kevin Dowling, 406-252-9672

(BILLINGS, MONT.) The Supreme Court's decision upholding the mandatory beef checkoff is a disappointment to cattle producers across the country, the Western Organization of Resource Councils (WORC) said today.

The Court ruled against WORC and the Livestock Marketing Association (LMA) in today's 6-3 decision, saying the mandatory beef checkoff is government speech and therefore does not violate the constitutional right to free speech.

"We challenged the beef checkoff because it forces ranchers like me to pay for speech with which we disagree and to associate with organizations that oppose our best interests as independent cattle producers," said Mabel Dobbs, a rancher from Weiser, Idaho, speaking for WORC.

"The Court has apparently ruled that the beef checkoff does not violate my free speech rights because it is a government program," Dobbs said. "That's news to me and most ranchers. We've long been told the beef checkoff is producer run, producer driven, and producer funded."

In his dissenting opinion, Justice David Souter quoted Thomas Jefferson, who said in 1779, "to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves, is sinful and tyrannical."

"We agree with Justice Souter, and with Thomas Jefferson," said Dobbs. "We object to supporting the National Cattlemen's Beef Association, which takes our money and promotes policies harmful to independent cattle producers."

Dobbs said WORC supports mandatory Country-of-Origin Labeling and reforming livestock markets. "The NCBA supports neither," she said.

The NCBA has received 87% of its revenue in recent years from the checkoff. The NCBA shares a building, staff, and a website with the Cattlemen's Beef Board, the organization charged with administering the checkoff. The NCBA is the primary recipient of checkoff-funded contracts from the Cattlemen's Beef Board.

Created by Congress, the beef checkoff became mandatory in 1988. Since then, ranchers have paid one dollar on the sale of every head of cattle. Checkoff assessment revenue totals over $80 million annually from U.S. producers and importers. U.S. cattle producers have paid more than $1 billion since 1988.

WORC and LMA sued the U.S. Department of Agriculture (USDA) in December 2000 after USDA rejected petitions signed by 140,000 cattle producers requesting a vote on the checkoff. The case was amended in August 2001 after the Supreme Court ended the mushroom checkoff. In June 2002, U.S. District Judge Charles Kornmann ruled the beef checkoff violated cattle producers' First Amendment rights by compelling them to pay for speech with which they disagreed.

The Eighth Circuit Court of Appeals affirmed Judge Kornmann's decision in July 2003. Today's Supreme Court decision reversed the lower court rulings by Judge Kornmann and the Eighth Circuit that the beef checkoff program was not government speech.

"We thank the Livestock Marketing Association and Professor Laurence Tribe, Phillip Olsson, Ronald Parsons, and all the attorneys who worked so hard on this case," Dobbs said.

A chronology of the case and links to court filings and rulings are available at www.worc.org.

WORC is a network of grassroots organizations from seven states that includes 9,500 members and 45 local community groups. Based in Billings, Mont., WORC represents farmers, ranchers, and consumers in Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, and Wyoming.

2. The Farm 'Report'

By Diane Farsetta, AlterNet
Posted on May 2, 2005, Printed on May 17, 2005

"Beef trade with Japan and Canada was on the minds of producers at the annual National Cattlemen's Beef Association convention in San Antonio, Texas," a man's voice intones, as the television news segment opens with a shot of a slowly rotating sign reading "U.S. Premium Beef." The voice continues, "Agriculture Secretary Mike Johanns addressed the gathering and afterward took questions from the media."

The two-minute news piece examines trade issues surrounding bovine spongiform encephalopathy, better known as BSE or mad cow disease. Since the December 2003 discovery of a BSE-infected cow in Washington state, Japan has banned U.S. beef. In the Feb. 10, 2005 TV segment, recently appointed Secretary Johanns says he is "anxious to continue the effort [to lobby Japan] and reopen the border."

Beef trade between the United States and Canada has also been restricted -- by the United States, this time -- since the first BSE-infected Canadian cow was discovered in May 2003. The TV segment shows Johanns warning, with regard to U.S.-Canadian negotiations, "If we just tangle trade up in any way that isn't based upon risk analysis and science and all of the things I've talked about, then where's our protection with another country? Devastating trade is devastating to agriculture."

Johanns adds, referring to the beef industry conference attendees, "These folks that, that sat in front of me today are the most remarkable, efficient producers we've ever known on the face of the earth. And they produce and produce, and we need to figure out a way to get their product sold."

The news piece completely ignores some important, basic facts: Mad cow disease is an always-fatal neurodegenerative condition transmitted between animals -- and from animals to humans -- via the food supply. The U.S. government doesn't follow World Health Organization recommendations for avoiding animal-to-human transmission of the disease. Even with limited animal testing, four BSE cases have been confirmed among North American cattle. (Two other BSE-infected Canadian cattle were found in early 2005.) The experience of other countries, especially Britain, suggests how to successfully battle the disease.

Is this shoddy reporting? Worse -- it's "news" that's been scripted, recorded and produced by an interested party, in this case, the U.S. Department of Agriculture. The segment, titled "Johanns Addresses Trade At NCBA Conference," is a fake television news story, or video news release (VNR), produced by the USDA's Broadcast Media & Technology Center (BMTC).

With its $2.8 million annual budget, BMTC is "one of the most effective public relations operations inside the federal government," the New York Times concluded in its March 2005 expos on government VNRs. BMTC's web site resembles a cutting-edge communications firm, advertising full-service digital production facilities and offering services to other government agencies, including video and audio conferencing, field video production, CD-ROM and internet content for distance learning, and radio and television "news" production.

For the USDA, BMTC "produces more than 90 TV news stories a year in the form of Video News Releases" and "over 2,000 radio news stories," or audio news releases (ANRs), in addition to public service announcements. BMTC has eight TV production staff, three radio reporters, two TV reporters, and several other multimedia, support and administrative staff. The BMTC web site says its ANRs cover "issues from food safety to international trade in a nonpartisan manner," while its VNRs cover "mission messages" in such areas as trade, biotechnology, food safety, conservation, small farms and marketing.

'Nothing But Media Hype'

Mad cow disease has been a frequent topic of these USDA reports. Over the past six months, BMTC has produced five VNRs and 29 ANRs on the issue. Like the piece described above, they tend to ignore safety concerns, instead focusing on international trade or USDA "accomplishments."

Just two of the recent mad cow disease VNRs even mention the word "safety." One is a "good news" story, announcing that the USDA "is redirecting $2 million for projects and facilities to study mad cow disease." In that piece, Secretary Johanns (often the only source quoted by BMTC) reassures viewers, "Americans today know that their food is safe, and we're making progress towards making it even safer."

The other VNR to mention the dreaded "s" word covered the hearing on Johanns' nomination as secretary of agriculture. (It was "a friendly Senate Agriculture Committee confirmation hearing," viewers are told, but Johanns "still had to outline his positions on some important issues.") Nearly half-way through the segment, the off-screen narrator says, "On the recent Canadian BSE cases, Johanns says he is ready to work with Congress on an issue that affects animal safety and food safety." Johanns then cryptically states, "We need to make sure that those issues have been touched. That we paid attention to them, that we're doing the, the right things in, in those areas in terms of this rule and in terms of Canada. So, I'll do that."

The ANRs are similar. One produced in April 2005 warns that delays in reopening the U.S. market to Canadian beef have resulted in "the Canadian beef industry ... growing and going elsewhere, which may hurt the U.S. cattle industry." A March 2005 radio segment features University of Maryland Extension Livestock Specialist Scott Bareo, who says, "The BSE situation in the United States has been nothing but media hype. We have a food safety system in this country second to none." In an October 2004 piece, USDA Undersecretary J.B. Penn explains why U.S. beef is safe, "without having to test all animals."


Of course, BMTC covers other topics besides mad cow disease. What's recently become a hot beat for these taxpayer-funded news hounds is the Central American Free Trade Agreement (CAFTA). CAFTA, which would basically extend the North American Free Trade Agreement to another six countries, was negotiated and signed by President Bush last year. A Congressional vote could occur as early as May 2005; committee hearings began in mid-April.

BMTC's interest in CAFTA dovetails nicely with the Bush administration's legislative agenda, as described by the Grand Forks Herald (North Dakota) on April 6. "Last week, Bush administration officials launched a campaign in rural America to urge farmers to convince Congress to approve the CAFTA," the paper reported.

As might be expected, BMTC's coverage of CAFTA tends to repeat Bush administration talking points. What's more notable is their faint nod to some opponents of the trade agreement, which effectively defines, limits and refutes the "other side."

In a VNR released in late February, the narrator explains CAFTA "detractors say it would hurt small farmers." Secretary Johanns is then shown at a podium, saying, "We could probably line up a lot of people, aggressively supportive. And we could probably line up some people who raise questions and concerns. ... I've studied that issue very, very closely. My view of CAFTA is that it is very good for agriculture."

An early April VNR briefly notes two other sources of opposition: inscrutable members of Congress and greedy sugar barons. "CAFTA is opposed by the Senate Agriculture Committee Chairman, Republican Saxby Chambliss of Georgia," says the narrator. Johanns then gently questions Chambliss' opposition by stating CAFTA would result in "excellent access in many areas for ag products that are grown in his state." Sugar growers, the narrator states, oppose the agreement "because of possible increased sugar imports from CAFTA nations." But Johanns disputes their claims: "I don't see the amount of sugar coming in as having a downside impact on that industry."

These BMTC pieces seem almost designed to construct teetering anti-CAFTA straw men. No opponents are given air time, and many -- including family farm, human rights, environmental and labor organizations -- aren't even mentioned. The lack of explanation for Senator Chambliss' opposition is particularly striking. More than a week before the VNR naming Chambliss was released, he issued a statement on CAFTA. "I am very concerned," Chambliss' statement read, about CAFTA's "long-term impacts," which might "restrict options available to Congress in future farm bills."

The 13 radio ANRs produced on CAFTA in early 2005 are, if anything, even more one-sided. One proclaims CAFTA to be "part of the new world order for trade." As the piece ends, the "reporter" enthuses that CAFTA "would be very good news for America's farmers." The only CAFTA opponent mentioned in any ANR is the sugar industry. The most frequently used phrase to describe CAFTA is "level playing field."

Fake News On the Range

Does government-funded fake news really shape public opinion? One way to measure its impact is how widely it's aired. According to the BMTC web site, its VNRs are shown "on two nationally syndicated programs with targeted audiences of farmers and strong rural viewership, 'AgDay' and 'U.S. Farm Report,'" as well as "a variety of commercial television station markets." Their ANRs are "particularly important to the many radio stations in rural areas ... that do not have a Washington correspondent." Recordings of radio features are mailed weekly to 675 radio stations; other stations download audio directly from the BMTC web site.

Of course, "fake news" has its greatest effect -- and is most deceptive -- when viewers aren't aware of its source. The New York Times reported on WCIA, a CBS station in Champaign-Urbana, Illinois, that airs BMTC segments so frequently they asked BMTC to "record a special sign-off," implying the VNRs were "the work of WCIA reporters."

Until mid-February 2005, the standard sign-off for all BMTC television segments was, "I'm [name] reporting" -- pause -- "for the U.S. Department of Agriculture." The pause allowed TV stations to easily remove any indication that they were allowing the USDA to report to their viewers on the USDA. As of mid-April, BMTC radio sign-offs still regularly include the word "reporting."

"Listeners and viewers are entitled to know who seeks to persuade them," the Federal Communications Commission noted in an April 13, 2005 Public Notice on VNRs. Existing but rarely enforced federal laws and FCC rules already forbid government propaganda and set strong disclosure requirements for "political material and program matter dealing with controversial issues." (After the Public Notice was released, an FCC spokesperson admitted she was "not certain who would judge what is political or controversial.") A strong and growing consensus among government watchdog groups, journalism schools, media organizations and some reporters is that all material provided by third parties and aired by news broadcasters should be clearly identified as such to listeners or viewers.

In March 2005, several California news outlets reported on the Schwarzenegger administration's use of VNRs to tout its policies. State officials unrepentantly said they planned to make more, as VNRs are "an effective way to reach residents." They're correct, in a way. Most U.S. residents get their news from television, and government does have a duty to inform the public of its policies and actions.

Where should the line be drawn demarcating responsible media practices for governments -- and for corporations, which are responsible for the vast majority of fake news (and own much of the media)? Who should referee conflicts between government agencies' various motivations -- for example, between USDA's mission to protect the public and its mission to promote agricultural trade? Is there an acceptable solution that takes into account the severe lack of resources faced by most U.S. newsrooms today?

The status quo is unacceptable, yet questions about the solutions to these media problems remain. What's undeniable is that fake news is finally getting serious attention. Influential mainstream media outlets are reporting on VNRs. U.S. senators are calling for federal investigations. In one week, 40,000 people signed a petition demanding an end to taxpayer-funded fake news. The FCC signaled its intention to study the issue and take "appropriate enforcement action." Even the White House Office of National Drug Control Policy, an agency whose VNRs were found to be "covert propaganda" by the nonpartisan Government Accountability Office, has promised to stop using VNRs.

In the short term, USDA-produced "news" will continue to infiltrate rural airwaves, without disclosures. PR firms that produce VNRs are scrambling to do damage control and fight back against the effort to stop fake news. But as public awareness grows, so does the pressure for real news.

Diane Farsetta is senior researcher at the Center for Media and Democracy. © 2005 Independent Media Institute. All rights reserved. View this story online at: http://www.alternet.org/story/21909/

3. Another Option

QSR MAGAZINE, SSUE 76, May 2005, BY Lea Davis | Page 1

Bill Niman says his natural meat standards are better for taste, the animals, and the earth. Increasingly, quick-serve chains are joining him.

Rancher Bill Niman is a reporter’s dream—returning phone calls, answering e-mails, and setting up appointments right away. So it’s surprising when he ducks out of the initial telephone interview for this story, saying he’ll be back in an hour.

Exactly 60 minutes later, he’s on the phone again, apologizing. "We got a lot of rain last night, and there were some things on the farm I had to take care of right away," he says. "It’s funny—we’re either praying for rain or dealing with the rain. That’s just how it goes."

In today’s model of food production, in fact, that is not ordinarily how it goes. As food production consolidates under a handful of large corporate agribusinesses, the image of the farmer tending to his animals is increasingly quaint. Equally quaint are the livestock practices to which Bill Niman and his cooperative of independent family farmers adhere: Only natural, vegetarian feeds. No hormones. No antibiotics. No crowding even at the slaughterhouse. And as few layers of distribution as possible between the farm and the fork… http://www.qsrmagazine.com/issue/76/another_option-1.phtml

4. Proposal to Open Central American Markets Spurs Debate Over Free Trade

Part One of Three on the CAFTA clash

by Michelle Chen, http://newstandardnews.net/content/index.cfm/items/1827

Lawmakers consider an expansion of the corporate trade agenda while opponents work to stop what they see as a key to industry’s broader goals for international market control.

Part II of this series, addressing CAFTA's impact on farmers, will appear on Monday and will be followed later next week with a look at its effect on US labor.

May 20 - As the US Congress weighs a plan to stretch the country’s domain in the global economy, the debate has spread beyond Capitol Hill to farms, corporate boardrooms and factory floors across the Western hemisphere.

The Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), which would weave together the markets of the United States, El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and the Dominican Republic, represents to critics and supporters alike a concept of free trade that has shaped US foreign policy for over a decade.

The governments of El Salvador, Honduras and Guatemala have fully ratified CAFTA, but Congress has just begun officially deliberating on the issue. The Bush administration, business interests and other free trade proponents promote the agreement as a crucial formula for economic development in the region. Organized labor, fair trade advocates and human rights groups, on the other hand, denounce CAFTA as a recipe for the erosion of workers’ rights, the gutting of regulatory protections, and deeper inequality throughout the CAFTA region.

CAFTA opponents are also pointing legislators to evidence that NAFTA failed to deliver on its original promises of prosperity Predictions about the social and economic impacts of the agreement range from devastating poverty to unprecedented prosperity. Yet at the core of the issue is not so much the immediate results, but rather CAFTA’s potential to pivot the public debate over how "free" trade should be.

NAFTA’s Lessons Loom Large

If ratified, CAFTA would advance the free market agenda that drove the controversial North American Free Trade Agreement (NAFTA), passed in 1993 amid promises of breakthrough economic development in the US, Mexico and Canada. CAFTA would effectively eliminate most tariffs and other trade barriers that protect the agricultural and manufactured goods markets of Central America and the Dominican Republic. About 80 percent of imports from the region are already duty-free as a result of existing preferential trade policies designed to encourage market development.

Supporters of CAFTA in the US have pushed the agreement as a way to give the US more "level" access to Central American markets for US products.

Neena Moorjani, a spokesperson for the US Trade Representative Office, predicted that new exports through CAFTA "would benefit Americans across the board." In response to concerns about the outsourcing of US jobs, she explained that with unfettered market access, "the US can sell more products to Central America, therefore not harming American workers and in fact… supporting US jobs."

Hosting Central American leaders last week at a White House event, President Bush declared, "For American farmers, businesses and workers, CAFTA would create a more level playing field" by allowing two-way market access, while the other member countries would benefit from "new investment that means good jobs and higher labor standards for their workers."

Activists believe that squashing CAFTAwould break a key link in the administration’s so-far unsuccessful effort to push forward other free trade agreements.

Linking trade liberalization to political progress, Deputy Secretary of State Robert Zoellick said in a recent speech that the growth precipitated by CAFTA would "strengthen the foundations of democracy" in the region and ultimately make the US more secure.

These claims of the benefits of greater market access contrast starkly with the opposition’s arguments that CAFTA would at best lead to insignificant gains for the domestic economy, would actually hurt workers in the US manufacturing and agricultural sectors, and could decimate the economies of the other member countries.

Human and labor rights advocates take issue with the view of free trade as a cure-all for social ills. The Washington Office on Latin America (WOLA), a think tank that tracks political developments in the region, argues that in Central America, trade barriers have been steadily lowered over the past twenty years, but this has not dramatically raised living standards or led to sustainable infrastructure improvements. Rather, rural poverty and economic inequality have increased markedly.

Elsa Falkenburger, a policy analyst with WOLA, said that in the case of the rural sector in particular, by enabling multinational agribusiness corporations to wipe out small-scale farmers in poorer countries, the "opportunities" created by free trade "have really gone towards the businesses, and not towards the communities."

CAFTA opponents are also pointing legislators to evidence that NAFTA failed to deliver on its original promises of prosperity -- a major reason why public support for aggressive free-trade policies has waned in recent years.

According to an analysis by the Economic Policy Institute, a progressive think tank, in the seven years following NAFTA’s implementation in 1994, the new trade policy contributed to an almost 380 percent increase in US trade deficit with Mexico and Canada.

The researchers also linked NAFTA to the elimination of an estimated 766,000 US jobs -- including those they predicted would have been created had the policy not been enacted -- along with rising economic inequality and a shift in the labor force toward lower-wage jobs. In Mexico, the first several years under NAFTA saw the massive displacement of farmers, a decline in wages, and a general deterioration of working conditions and employment opportunities.

"There’s no doubt about what this kind of free-trade logic leads to," said Larry Weiss, executive director of the fair-trade advocacy group Citizens’ Trade Organization. He admitted that in statistical terms, NAFTA has led to an expansion of trade among member countries, but questioned: "Did that produce anything good for any people, other than the large stockholders and CEOs of the transnational companies that were able to drastically slash their labor costs? … [T]he answer is no."

CAFTA Opens Door to Fundamental Free Trade Debate

Despite the political clamor, some involved with the debate concede that CAFTA will not have as dramatic an impact as NAFTA has had, largely because the economies of the other member countries are much smaller than Mexico’s. But in some ways, they see the agreement as part of a war of ideas.

According to Robert Stern, an economic policy analyst with the University of Michigan’s Ford School of Public Policy, CAFTA would yield noticeable but relatively minor changes for the US economy. He predicted the agreement would contribute to the displacement of 19,000 manufacturing jobs -- much less than the disruption that occurred under NAFTA -- and would also produce slight job growth in other sectors.

The CAFTA will thus have comparatively negligible effects on US sectoral output and employment," he predicted.

Stern speculates that, given the small domestic economic gains under CAFTA, proponents probably have their sights set on an ideological victory. He views the agreement as "part of a desire to extend American political interests," he said. "And in order to do this, of course, they have to get support from particular companies that would benefit from these agreements."

Enlisting the backing of business interests, noted Stern, is one of the lesser challenges the administration faces in selling CAFTA. When it comes to helping officials draft free trade legislation that feed their profits, he said, "The companies are right at the door."

Activists, for their part, believe that squashing CAFTA in this legislative session would break a key link in the administration’s so-far unsuccessful effort to push forward negotiations for the Free Trade Area of the Americas FTAA. That far more comprehensive trade pact, currently deadlocked due to conflicts among potential member countries and massive international grassroots opposition and protest, would encompass the entire Western hemisphere. Its opponents say it would be the administration’s ultimate free trade trophy.

Calling the showdown in Congress "a surrogate for a much bigger fight," Weiss said CAFTA is now "a question of political momentum. It is the question of whether this country wants to pursue the NAFTA model further or wants to bury it once and for all."

Groups ranging from human rights advocates to environmentalists to trade unions have launched campaigns highlighting the hardships that CAFTA would bring to farmers and industrial workers in all of the member countries. Underlying their message is the hope that the CAFTA question will compel Congress and the public to rethink the principles driving US trade policy.

"Trade is not the way to reduce inequality," said Stephanie Weinberg, a policy advisor with humanitarian organization Oxfam America, "but the rules of trade have to be such that they don’t limit other policy mechanisms, and … that they ensure that benefits can and will be broadly distributed, and not only benefit a few."

An alternative agenda for international commerce, argued Weiss, should prioritize strong labor protections and the strengthening of internal markets -- crucial aspects of improving quality of life that critics say are often ignored in free rhetoric. Conventional free trade policies, he said, aim only "to create the climate where these transnational corporations can scour the globe for the cheapest labor, or the most lax environmental enforcement. And that logic only drives living standards down everywhere."

5. Fair Trade Advocates Say Open Markets Could Shatter Small Farms

Part Two of Three on the CAFTA Clash

by Michelle Chen, http://newstandardnews.net/content/index.cfm/items/1832

The Central American Free Trade Agreement would spread the effects of unequally subsidized agribusiness onto freshly opened markets in Latin America, while enhancing the impact NAFTA had on small farmers in the US.

Part I in this series, "Proposal to Open Central American Markets Spurs Debate Over Free Trade," appeared on Friday, May 20.

May 23 - A proposed trade agreement that would dismantle barriers shielding US, Central American and Dominican farmers in the global marketplace, has become a focal point in the controversy over international agricultural trade, and fair trade advocates are warning Congress that the accord could render the free market system even more volatile and less equitable.

Under the Dominican Republic-Central American Free Trade Agreement (CAFTA) the agricultural sectors of the US, El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and the Dominican Republic would be stripped of tariffs and similar trade protections. In the view of the opposition, this policy, now awaiting full ratification by the US and three other member countries, would perpetuate a trend in US farm policy that has fattened multinational agriculture organizations and starved smaller farms across the world.

Fair trade advocates argue that unrestricted free markets, rather than lifting farmers out of poverty, have plunged them deeper into financial insecurity.

"[CAFTA] is going to be a disaster for farmers, in particular in the other member countries," predicted Robert Scott, director of international programs at the Economic Policy Institute (EPI), a progressive think tank that analyzes how free trade agreements disrupt rural economies.

Rallying in support of the agreement are agricultural industry groups such as the American Farm Bureau Federation, which called CAFTA a "win-win for agriculture" and projected the policy could yield a net economic gain of $1.35 billion by 2024, including an added $47 million in beef exports and $62 million in wheat exports.

But critics charge that any gains under CAFTA would go to large agribusinesses at the expense of smaller producers. They also cast doubt on the optimistic export estimates, noting that economies of Central America and the Dominican Republic are simply too small to consume a great amount of US exports; the size of their combined economy, according to federal government estimates, is less than two percent that of the US.

Fair trade advocates argue that unrestricted free markets, rather than lifting farmers out of poverty, have plunged them deeper into financial insecurity. The watchdog group Public Citizen pointed out that under the North American Free Trade Agreement ­ a precursor to CAFTA that involved the US, Mexico and Canada ­ both US net exports and crop prices for major commodities declined.

That change was paralleled by losses to Mexican farmers on a much greater scale. The decline of Mexican agriculture under NAFTA, reported Public Citizen, displaced some 1.5 million peasant farmers stimulating an exodus to urban areas as well as undocumented migration to the US.

According to Dennis Olson, director of the Trade and Agriculture Project at the research organization Institute for Agriculture and Trade Policy, "[T]he whole theme of exporting our way to prosperity has been a colossal failure."

Advocates Say Rush to Export Leaves Behind Small U.S. Farmers

Detractors of the free trade model say that small-scale farmers are already experiencing a slow death under established free trade policies, and CAFTA would provide more opportunities for large corporations to swallow small US farmers and to destroy the rural sectors of poorer countries.

In the mid-1990s, the federal government realigned its agricultural policy to complement the promotion of export-oriented foreign trade. Intending to revitalize the sector and boost the competitive advantage of US growers, Congress retooled farm subsidy programs to push US commodities onto the international market.

But since the policies went into effect, small- and medium-scale farming in the US has been steadily evaporating. According to Public Citizen, from 1995 to 2002, more than 38,000 small farms shut down, and overall net farm income dropped by 16 percent. Meanwhile, multinational agribusiness corporations, controlling the bulk of commodity markets like corn and beef, saw their profits surge.

Government data reveals that the federal support structure for domestic agriculture already tends to favor multinational agricultural businesses. The Environmental Working Group, a watchdog organization, reported that between 1995 and 2003, the top 10 percent of agricultural producers received more than 70 percent of government subsidies, and agribusiness behemoths like Cargill and Riceland Foods received handouts ranging up to $500 million.

According to the Institute for Agriculture and Trade Policy’s (IATP) economic forecast, the US rural sector’s biggest casualty under CAFTA would be the sugar industry, which supports 146,000 jobs, in large part tied to unions or cooperative farms. To CAFTA opponents, sugar farmers represent both free trade’s victims as well as a dying industry model that prioritizes smaller producers.

The US sugar industry, which is one of the world’s largest in terms of both imports and production, maintains a supply-demand balance through a special price regulation system that limits imports and withholds a certain volume of sugar from the domestic market. Once sugar imports reach a certain "trigger level," however, Congress can respond to market demand by removing the supply controls that buoy prices.

The US Trade Representative’s office pointed out that CAFTA sugar imports would reach only 1.7 percent of total US consumption, phased in over 15 years -- the equivalent of "one and a half teaspoons per week per American." But according to the IATP’s analysis, this increase amounts to about 150,000 tons of additional sugar, which, combined with rising imports under existing and pending trade agreements, could push the industry toward price decontrol, subsequently diluting the market potentially destroying 80 percent of domestic production. Once the price-control system unravels, IATP argued, sugar might follow other US commodities in becoming beholden to massive government subsidies, which in turn further disrupt world markets.

This cascade of deregulation catalyzed by CAFTA could essentially, in Olson’s words, transform a system "now costing the taxpayers nothing to administer… into a multibillion dollar subsidy program that’s already being heavily criticized, both at home and abroad."

The IATP study also found that in recent years, prices for sugar-based foods have increased, even as sugar prices have declined. The price drop, Olson observed, "does not get passed through to consumers. It gets sucked up by these multinational companies who just pocket the difference."

In Olson’s view, the economic gains promised by CAFTA would fail to materialize not only for domestic sugar farmers and consumers, but also for Central American farmers --the most needy of CAFTA’s supposed beneficiaries. He believes the official barriers to the US sugar market would be replaced by a fierce global price war, in which most CAFTA member countries would find themselves unable to compete against established sugar exporters like Brazil.

"If you dismantle the sugar program and leave it wide open to free trade liberalization," said Olson, "then a lot of the poorest sugar exporting countries will not be able to get any access… to the US market. And so, why is that a good development policy?"

Agribusiness Clashes with Fair Trade Models

The most intense criticism of CAFTA’s impact on rural economies is that the gutting of the US sugar system, along with the deregulation of exports in general, would encourage heavily subsidized US agribusinesses to flood foreign markets and wipe out local farmers.

In the international community, advocates for the trade rights of developing countries argue that subsidies under free trade policies have led to the glutting -- or "dumping" -- of surplus commodities onto foreign markets, which enables US mass-producers to vastly undersell farmers in poorer countries. Critics say the practice destroys the livelihoods of rural communities.

Scott of the EPI commented that although the Central American and Dominican markets are smaller than Mexico’s, where NAFTA exports contributed to the collapse of domestic corn farming, "The major grain trading companies are going to stand to gain a lot on increased exports.… Those are the people who won under NAFTA. They’re the people who are going to win under CAFTA."

CAFTA includes some provisions for incremental adjustment toward full-blown free trade, such as phase-in periods for tariff eliminations and safeguards for so-called "sensitive crops," protected because of their special value to local populations. But considering that similar provisions under NAFTA failed to protect Mexican farmers from economic devastation, critics doubt such measures would help farmers in the poorer CAFTA member countries.

Compared with the impact on the US, potential economic disruption under CAFTA would be more severe for Central American and Dominican farmers because they constitute a relatively large -- and relatively poor -- portion of their national populations. Rural regions encompass an estimated 60 percent of the poor in Central America, and 42 percent in the Dominican Republic, according to the data from the World Bank and the International Center for Tropical Agriculture, a Latin-American research and development institute.

A study by Oxfam America, an international humanitarian organization, revealed that dumped goods have already begun choking local farmers in Central America: as a result of removing rice tariffs in 1991, rice imports washed out more than 85 percent of domestic production in Honduras and pushed 23,000 farmers out of business over the next decade. During this crisis, reported Oxfam, rice prices for consumers increased and the country became even more dependent on US imports.

Stephanie Weinberg, a trade policy advisor with Oxfam America, said that in order to advance themselves, poor countries require not unbridled free trade, but instead, "the opportunity to develop their own industry, their own processes, their own agriculture, so that they can supply domestically, as well as increase their exports."

The opposition to CAFTA overlaps with a push for the reform of US agricultural and trade policies. Fair trade advocates hope a rejection of the agreement by Congress could spark interest in alternative models, like the sugar market framework, that are focused less on international price manipulation and more on income supports for local, smaller-scale farming enterprises.

Weinberg stressed that trade policies that allow poorer countries to strengthen local agriculture would not be a rejection of trade itself, but a response to the economic imbalances ingrained in the current market structure.

Olson believes the economic force with the most potential to spoil the fruits of trade for independent farmers is the corporations at the helm of globalized agriculture. "Farmers don’t export, and countries don’t export," he reflected. "Multinational agribusiness cartels export … and everybody else looses in this policy."

6. ACGA Applauds Passage of Renewable Fuels Amendment

For Immediate Release
Contact: Larry Mitchell (202) 835-0330

WASHINGTON ­ May 25, 2005 ­The American Corn Growers Association (ACGA) applauds the U.S. Senate Energy Committee’s passage of an amendment to expand and advance the use of ethanol and biodiesel. The amendment, offered by Senators Jim Talent, R-Mo., Tim Johnson, D-S.D., Byron Dorgan, D-N.D., and Ken Salazar, D-Colo., establishes a 4 billion gallon Renewable Fuel Standard (RFS) for 2006 that increases to 8 billion gallons by 2012.

ACGA President Keith Bolin commended the Senators for their initiative and leadership in introducing the bipartisan proposal legislation, which contains a Renewable Fuels Standard (RFS). " As the debate on energy moves forward in this year’s Congress, we believe one of the goals of energy independence should be to promote the production of renewable domestic fuels," said Bolin, a corn and swine farmer from Manlius, Ill. " We believe that an extraordinary opportunity is at hand to increase energy independence, reduce oil imports, improve our environment and stimulate rural economies. The establishment of an RFS will capitalize on the nation’s growing bio-fuel industry, expanding the use of these domestic, ‘home-grown’ fuels to 8 billion gallons per year by 2012."

"We must also work to incorporate agriculture and energy policies," added Bolin. "In the first week of April, 2005, in my home county of Bureau, Ill., it took almost three times as many bushels of corn to buy a barrel of oil as it did just one year ago. It did take over three times as many bushels of soybeans to buy a barrel of oil this April as it did one year ago. We need better agriculture policy. We need better energy policy. These policies must also be coordinated

"ACGA fully understands that the initiatives in this bill will greatly benefit America’s farm families," said Bolin. "Requirements for a portion of the nation’s motor fuel to come from domestic, renewable bio-based sources will make us less dependent on imported oil and will give additional market opportunities and flexibility to farmers of corn, soybeans, and other crops. Our nation needs a national energy policy which ensures affordability and reliability through diverse, decentralized, domestic and renewable energy sources."

The Senate Energy Committee is expected to complete mark up of the energy bill this week. The bill will then be advanced for passage by the Senate, and then conference with the U.S. House of Representatives version of the energy (H.R. 6), which was passed on April 21 by a recorded vote of 249 - 183 .