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CAFTA wants to sacrifice profitable farm sectors; other news

(Friday, Aug. 12, 2005 -- CropChoice news) --

1. CAFTA wants to sacrifice profitable farm sectors
2. Market Matrix
3. EU-U.S. agriculture subsidy dispute could threaten WTO trade talks
4. American Corn Growers Foundation continues wind power information, education, outreach with new W.K. Kellogg Foundation grant
5. Alternative fuels popular in Nebraska, survey says

1. CAFTA Wants to Sacrifice Profitable Farm Sectors

by Paul Beingessner
Canadian farmer, writer

A couple decades ago, I used to pay the occasional visit to one of several dairy farms near Regina. The purpose was to buy some dairy bull calves to raise on an old Holstein nurse cow and eventually grace our dinner table. I used to have the odd twinge of jealousy as I saw the new metal roofs on the buildings in the farm yard, the up-to-date equipment working in the fields and the nearly new half-ton in the driveway.

Dairy farming was at that time, and remains today, a profitable business. Two decades ago, grain farmers on the Canadian prairies were in the middle of an eight-year drought, grain prices were tumbling and governments were threatening to remove both rail branch lines and the Crow freight rates. I could be forgiven, I guess, the momentary jealousy.

Since that time, the grain economy has generally gone from bad to worse. Input costs have lurched upward while grain prices stagnate perpetually. Dairy farming, along with poultry and egg production, has remained the lone bright spot in the farm economy.

Other than nursing an aging milk cow through her dotage, I haven't had much to do with the dairy industry. My one-time envy has been replaced by admiration for farmers who have been able to hold on to a system that has enabled them to thrive. Granted, supply management has its problems, but it remains a bright spot in an otherwise nasty farm economy.

So it really bothers me when some people think we should sacrifice the only prosperous sectors in agriculture in the unproven hope this will open markets to other farmers. At issue here is Canada's position in the World Trade Organization talks set to resume this fall. The leader in Canada in the push to sacrifice supply management and the monopoly export powers of the Canadian Wheat Board has been the Canadian Agri-Food Trade Alliance (CAFTA). This organization, which makes grandiose claims about representing almost every farmer in Canada, has been a powerful presence behind the scenes at WTO talks. It appears to split its time equally between lobbying Canadian government trade negotiators and coaching foreign governments on how to beat up on Canada at the talks.

Recently, CAFTA lobbyists claimed Canada could kick-start the stalled and failing WTO talks if it would signal its intention to negotiate away the benefits of supply management and the powers of the Canadian Wheat Board.

It reminds me of the stand Canada took a decade ago at a similar set of talks. Liberal cabinet ministers came home from the GATT talks and told farmers we would have to give up the Crow Benefit transportation subsidy. The GATT had demanded it, and if Canada did so, other countries would follow our lead and reduce their agricultural subsidies. Prosperity would flow to us because we were low cost producers and would grab the markets that would come available.

We all know the rest of the story. Canada ended its transportation subsidies, while the U.S. farm bill of 1996 ramped up support to its farmers. The predicted freer trade never happened, and Canadian farm incomes have never been the same. On top of that, we are no longer low cost producers.

Now CAFTA is telling us we need to sacrifice the farmer-controlled CWB and supply management. And what will we get in return? Last January, Liam McCreery, Ontario farmer and President of CAFTA told an audience in Yorkton, Saskatchewan that the elimination of tariffs on a global scale could result in gains to Saskatchewan farmers of over $500 million annually.

There is something odd about that number of $500 million besides the total speculation it is based on. It's about the same amount as Saskatchewan farmers lost when the Crow Benefit was eliminated. Except that was in 1995 dollars and they were a lot bigger.

CAFTA's promises should be viewed with the same scepticism as those of the Liberal politicians in 1995. Most farmers recognize that trade agreements have been the background against which the Canadian farm economy has self-destructed. It has also been the background against which agribusiness has consolidated and thereby gained a stranglehold over farmers.

Until the overwhelming power of processors and marketers, and the complete lack of power of farmers are dealt with, trade agreements will only serve to make farmers poorer. CAFTA's approach to trade is like the age-old remedy for a hangover that calls for taking another drink. It will likely be just as effective too.

© Paul Beingessner (306) 868-4734 phone 868-2009 fax beingessner@sasktel.net

2. Market Share Matrix

The Market Share Matrix is a free, accessible website listing the names of companies that dominate key segments of the food system from seeds to retail. The Matrix is designed to facilitate the collection and dissemination of research on the structure of the global agri-food system, and depends on the contributions of researchers from around the world. See: http://www.marketsharematrix.org . For information about how to contribute to the Matrix, contact: submissions@marketsharematrix.org

3. EU-U.S. agriculture subsidy dispute could threaten WTO trade talks

Scott Miller
Wall Street Journal

In global trade talks that have largely centered on the conflicting interests of rich and poor nations, a dispute between the U.S. and Europe over farming is throwing negotiations dangerously off course.

The showdown, being played out in Geneva this week and likely into the autumn, could help determine whether the so-called Doha Round talks will make a leap toward their scheduled conclusion next year, or risk collapsing.

On the surface, Europe and the U.S. would seem to have little about which to fight. Political leaders in Europe and the U.S. agree that farm trade must be made fairer for developing countries and that barriers must be reduced. But the two are unable to agree on how to get there, each unwilling to make concessions on issues such as tariffs and subsidies until the other moves first.

Washington's chief agriculture negotiator, Allen Johnson, said in an interview that without more European Union action such as cutting tariffs and subsidies, "It's hard to see how others, including the U.S., can push their own reform."

EU officials use similar language, saying that they believe their own proposals take them "off the hook" and that the ball is now in the U.S.'s court.

Agriculture long has been the linchpin of the current round of talks, which also includes many thorny issues on opening trade in services and manufactured goods. According to a World Bank study last month, almost two-thirds of the economic gains that would come from dismantling all merchandise trade barriers would come from agriculture. Poor nations, many of which rely on farming, are reluctant to make concessions in areas important to the U.S. and the EU until they are convinced the richer players are making farm concessions first.

"The only people who can really break the standstill are the U.S. and the EU," said Amy Barry, trade specialist at aid group Oxfam International.

Talks this week were supposed to produce an initial blueprint of a final Doha package. Ministers from the 148 member nations of the World Trade Organization were then to fill in the details at a meeting in Hong Kong in December. The risk is that much of the preparatory work for the Hong Kong meeting will be left undone, raising the prospect that the meeting could go nowhere and cutting the chances of completing trade talks by late next year.

One reason negotiators want to finish Doha is that in 2007, the U.S. president's power to put trade deals on a fast track is set to expire. Negotiators worry that Congress then will have vastly increased powers to block U.S. approval.

Europe maintains it has taken steps toward compromise that the U.S. hasn't matched, agreeing in China earlier this month to begin work on a new tariff-cutting formula that appears to make the most reductions in tariffs on products with the highest levies, but about which it has provided few details. "We are now off the hook and I hope that there will be a similar contribution from the U.S.," said Europe's agriculture commissioner, Mariann Fischer Boel.

The EU would like the U.S. to further limit domestic subsidies, focusing especially on countercyclical payments made to farmers when prices fall. Such payments swing widely but can be large. In 2003, they amounted to $655 million. But they jumped to $5.65 billion in 2004. The U.S. has offered to limit such subsidies but only if the EU promises to follow suit.

Europe also is eager to see the U.S. overhaul its food-aid program, which, in EU eyes, amounts to a production subsidy. Under the U.S. program, the government buys food such as corn from its farmers and donates it to poor countries. Europe wants the U.S. to consider policies such as providing poor nations with money to buy food closer to home, helping regional trade. The U.S. says that as it provides 60% of the world's food aid, it would be foolish to end the program.

The U.S. wants Europe to cut tariffs on farm products. Europe charges major trading partners average agriculture tariffs of 25%. The U.S. figure is 15%. The EU says it is willing to negotiate such reductions. [ July 27, 2005 ]

4. American Corn Growers Foundation continues wind power information, education, outreach with new W.K. Kellogg Foundation grant

For Immediate Release ----- Contact: Dan McGuire (402) 489-1346

WASHINGTON, Aug. 10, 2005---The American Corn Growers Foundation (ACGF), through its Wealth From The Wind program, is continuing its information, education and outreach project aimed at developing the economic and environmental potential of wind power generation for the economic benefit of farmers, the people living in rural communities and for the future energy security of American society.

The wind energy education and outreach project is funded by a two-year $200,000 grant from the W.K. Kellogg Foundation of Battle Creek, Michigan and continues throughout calendar years 2005 and 2006.

"Wind energy offers tremendous economic development opportunity for rural America as well as an important means to establish diverse, dispersed and decentralized energy sources," said Dan McGuire, ACGF CEO. "Wind energy is an excellent source of renewable, sustainable and clean energy for the 21 st century. The American Wind Energy Association estimates that wind could provide six percent (6%) of America’s electricity by the year 2020. This new grant will help the ACGF aggressively pursue that target."

Gale Lush, ACGF Chairman stated, "A new 2005 Nebraska Rural Poll, conducted by the University of Nebraska, confirms a strong majority of Nebraskans think that ten percent (10%) of the state’s electricity should be generated from alternative energy sources. These new poll results reconfirm ACGF national corn farmer surveys conducted in 2003 and 2004." A May 2005 Yale University survey found that eighty-seven percent (87%) of the public support expanded wind farms. This level of support was found across all regions of the country and in every demographic group. "The American Corn Growers Foundation and American Corn Growers Association look forward to continuing our lead agricultural sector role in promoting community-based, farmer-owned wind energy as a renewable, inexhaustible, new cash crop," said Lush.

ACGF is a nonprofit foundation that was formed in 1987 and is dedicated to meeting the needs of America’s agricultural producers and rural citizens through the development of educational and informational programs. The ACGF works closely with the American Corn Growers Association as well as other foundations, governmental agencies, farm, commodity, rural and community-based organizations in carrying out its educational and informational programs.

The W.K. Kellogg Foundation was established in 1930 "to help people help themselves through the practical application of knowledge and resources to improve their quality of life and that of future generations." Its programming activities center around the common vision of a world in which each person has a sense of worth, accepts responsibility for self, family, community, and societal well-being; and has the capacity to be productive, and to help create nurturing families, responsive institutions, and healthy communities.

To achieve the greatest impact, the Foundation targets its grants toward specific areas. These include: Health; food systems and rural development; youth and education; and philanthropy and volunteerism. Within these areas, attention is given to the crosscutting themes of leadership; information and communication technology, capitalizing on diversity, and social and economic community development. Grants are concentrated in the United States, Latin America and the Caribbean, and the southern African countries of Botswana, Lesotho, Mozambique, South Africa, Swaziland and Zimbabwe.


5. Alternative Fuels Popular In Rural Nebraska, survey says

August 09, 2005

Nearly 90 percent of respondents to the 10th annual University of Nebraska poll agreed the government should encourage use of renewable energy sources.

More than 80 percent agreed that producing more ethanol and biodiesel blended fuels and generating more electricity with wind turbines would benefit Nebraska's economy. Sixty-five percent also agreed alternative energy sources are better for the environment than traditional fossil fuels. While some respondents had no opinion, only 4 percent or fewer disagreed with these statements.

"The people have spoken and a strong majority feels alternative energy can be win-win," said Bruce Johnson, an Institute of Agriculture and Natural Resources agricultural economist who works on the poll.

To see the full report on the alternative energy portion of the poll click here.

He said he has long sensed strong support for alternative energy among rural Nebraskans, but the magnitude of the results surprised him.

"Self-sufficiency is part of rural culture. It's part of having some power over one's future," Johnson said. Using home-grown or produced energy fits that ethos well. "I think people are seeing the local potential."

Poll results indicate ethanol blended gasoline, called E-10, is becoming the fuel of choice for rural residents, Johnson said. Over half said they always or almost always fill up with ethanol blend, 22 percent sometimes use it and 20 percent said they seldom or never use it.

"The economic incentive to use ethanol has become greater as gas prices have risen," said Becky Vogt, the poll manager.

Rural residents also strongly favor harnessing Nebraska's seemingly ceaseless winds for energy. More than 70 percent of respondents agreed 10 percent of Nebraska's electricity should come from alternative energy sources. Eighty-four percent said wind power can be produced and used locally. Only 3 percent of respondents disagreed with either statement.

"This strong response sends a clear signal to our public electric utilities to accelerate their efforts to move ahead with wind power," Johnson said. "This tells policy-makers that Nebraskans want this to be part of their future."

That strong positive view of wind energy comes despite Nebraska's relatively low electric rates and the ready availability of coal in neighboring Wyoming. Nebraska is one of the nation's top states for wind power potential and rural residents seem to recognize this untapped resource, he said.

Part of the appeal of generating electricity with wind power is that turbines can operate locally on a small-scale much like ethanol plants rural Nebraskans have watched develop across the state, Johnson said.

Likewise, a local wind farm could create good jobs.

"It could be an economic advantage to rural areas if that energy can be produced and used locally," Johnson said. Instead of a few large, concentrated production facilities, wind power can be generated on a relatively small scale. "It's a dispersal of economic activity. There can be little fish as well as a few big fish in this business."

Not surprisingly, farmers and ranchers are among the strongest supporters of renewable energy, including wind power as well as ethanol and biodiesel made from their crops. More than 90 percent of farmers and ranchers agreed producing more ethanol and soy biodiesel would be good for Nebraska's economy and that the government should encourage renewable fuelu se. Eighty-seven percent said wind power can be produced and used locally.

While support for alternative energy sources is strong, opinions on their cost and reliability were mixed. A third of respondents agreed alternative energy sources are more expensive than traditional fuels such as oil, gas and coal, 28 percent disagreed and 39 percent had no opinion. One-third disagreed that fossil fuels are more reliable than alternative sources while 23 percent agreed and 44percent had no opinion.

That probably indicates a lack of certainty about specifics of these new energy sources, Vogt said. "They tended to be more undecided on the more technical questions."

Questionnaires for the scientific poll were mailed in March to 6,250 randomly selected households in Nebraska's 84 rural counties. Results are based on 2,851 responses. This year's response rate was 46 percent. The margin of error is plus or minus 3 percent.

The poll is the largest annual survey of rural Nebraskans' perceptions on quality of life and policy issues. To access complete results click here.

The poll is conducted by the university's Center for Applied Rural Innovation with funding from the Partnership for Rural Nebraska and IANR's UNL Extension and Agricultural Research Division.