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Seedy business: A sustainable-ag champion gets plowed under at Iowa State; other news

(Friday, November 4, 2005 -- CropChoice news) --

1. Farm and Food: Not milk!
2. French farmers cultivate ally: Small landowners, subsidy foes join to unveil big aid recipients
3. Seedy business: A sustainable-ag champion gets plowed under at Iowa State
4. Displaced Mexican corn farmers are streaming into the Bootheel
5. California dairy producer testifies before International Dairy Roundtable
6. U.S. says WTO talks remove need for Uruguay rice challenge
7. Ag lenders warn of 'erosion of equity'
8. New IATP analysis on the latest U.S. proposal on agriculture negotiations at the WTO
9.Edison group signs on for more wind power

1. Farm and Food: Not milk!

By ALAN GUEBERT/Farm and Food Columnist
Thursday, Nov. 3, 2005
http://www.journalstar.com/articles/2005/10/23/business/doc43596054ab8d20437 37148.txt

If a few American dairy processors have their way with the agribusiness compliant Department of Agriculture, American consumers will be buying milk, cheese and other dairy products altered with items not approved as food ingredients by the Food and Drug Administration.

In fact, most Americans are already buying and consuming dairy products that contain a dairy derivative, milk protein concentrates, or MPCs, not "generally recognized as safe," by the FDA.

Moreover, according to a proposed rule published in the Federal Register last Monday, milk's big operators also want to alter the recipe for cheesemaking to include "ultrafiltered milk," a product, they argue, "will promote honesty and fair dealing in the interest of consumers and ... achieve consistency with existing international standards..."

Neither move - changing today's definition of Class I fluid milk to accommodate the addition of milk protein concentrates or allowing cheese makers to use ultrafiltered milk, essentially MPCs again - is about honesty and international standards.

Instead, and here's a shock, both are about money.

That would be the money processors hope to make by outsourcing milk and dairy product ingredients, like cheaper milk kprotein concentrates, from New Zealand, India and other dairy exporters.

That's money processors can save by substituting cheaper, imported MPCs for pricier, unaltered American Class I fluid milk in their bottling and dairy product plants.

That's also money U.S. taxpayers will again be nicked for to support domestic dairy farmer income when, not if, U.S. Class I milk prices sag due to increased imports of milk protein concentrates.

And, of course, the fabulous waste of about $2 billion of producer-paid dairy checkoff funds spent over the last 20 years to promote "real" milk, cheese and dairy products to U.S. consumers.

But there is an upside to the proposed rule changes.

If either is adopted, the American dairy industry can re-engineer its "Got milk?" campaign more easily than it re-engineered "nature's perfect food."

By changing just one letter, the tagline can read "Not milk!" because, after all, the milk won't be milk.

Instead, it will be a product built by bottom line-driven processors who've shopped the globe for cheap milk replacer - milk protein concentrates from water buffalo in India, claim critics of the proposal. Those concentrates already are imported by U.S. dairy processors-then sold as "real" milk to unsuspecting U.S. consumers.

The irony of all this maneuvering is even more breathtaking when you consider who is behind the not-milk moves: the giant farmer-owned dairy cooperatives that market the lion's share of American fluid milk. Or the co-ops' hired men.

Initiated several years ago by Dairy Farmers of America the milk redefinition of milk we're talking about was later taken up, and forcefully presented to USDA at a three-day field hearing in June, by the National Milk Producers Federation, the umbrella organization of 33 American dairy coops, including mega-giant Dairy Farmers of America.

The producers federation claims milk's definition is "obsolete" because new technology can now separate milk's many components, like "worthless" lactose from valuable proteins.

This technology, the federation continues, will permit processors to make "new products created merely to avoid Class I pricing (to dairymen), which could undermine" the complicated U.S. milk pricing scheme and chisel producers out of income.

The federation is right- so far as it goes.

It doesn't note, however, that most of the processors now using the Class I-skirting technology and a large portion of the 34 million metric tons of milk protein concentrates imported into the U.S. in 2004 are also federation members -co-ops more bent on processing milk from members than marketing milk from members, their original reason to exist.

For example, Dairy Farmers of America, the biggest milk marketing co-op in the U.S., is a partner of Fonterra, a 12,000-member dairy coop from New Zealand and one of the world's largest exporters of milk protein concentrates. DFA-Fonterra owns 10 dairy product plants in the U.S., including the nation's first MPC-making plant in Portales, N.M.

The partnership, like the proposed milk and cheese rule changes, exemplify what happens when marketing co-ops move to processing: they go into competition with their members.

As such - and setting aside the simple principle that milk should remain milk - these proposed rules, like the co-ops' processing-mad management, should be clobbered by consumers and co-op members alike.

Alan Guebert is a freelance agricultural journalist. He can be reached at agcomm@sbcglobal.net or at 21673 Lago Dr., Delavan, IL 61734.

2. French farmers cultivate ally
Small landowners, subsidy foes join to unveil big aid recipients

November 3, 2005; Page A10

MIGNÉ-AUX-ANCES, France -- Jacques Pasquier has begun spying on his fellow French farmers.

"See that tractor over there," Mr. Pasquier says from his blue Fiat Punto, pointing at a bulky red machine negotiating a dusty turn. "It's far too big for that little field. It belongs to a big farmer. One of the ones we want to know about."

Europe's generous and closely guarded agriculture subsidies are facing unprecedented pressure, both within the European Union, where they are weighing down the bloc's budget, and from the EU's trading partners around the world trying to negotiate lower global trade barriers. Despite fierce French resistance, Mr. Pasquier and other small farmers here are convinced that cutbacks are coming eventually.

So they are forging an unlikely alliance with an opponent of farm subsidies -- a free-market think tank based in Paris, Groupe d'Économie Mondiale, or GEM -- seeking to publicly identify the biggest beneficiaries of agricultural aid to demonstrate the system's flaws. The small farmers are trying to make sure any changes focus on big players -- not family farms of less than 100 hectares (about 250 acres), like his.

Of course, there is a chance Mr. Pasquier and his cohorts are playing into the hands of free-market advocates who want comprehensive cuts in aid, which could affect their own bottom lines. That is a calculated risk they are willing to take.

"We are not in a position to choose," says Mr. Pasquier, walking beneath fruit-laden fig trees on the family farm that also grows walnuts, wheat and sunflowers. He says the farm brings him ¤24,000 (about $29,000) in yearly profits -- less than the ¤30,000 he receives in aid. "If we don't face the problems of these subsidies, then the whole system will disappear. And we will disappear, too."

The subsidy-identification effort in France -- the biggest recipient of Europe's direct aid to farmers, at more than ¤9 billion, or 21% of the 2004 total -- follows publication this year of subsidy recipients in England, the Netherlands and parts of Spain. Most countries have tightly guarded the information, but the pressure to release it is spreading.

In September, information obtained by French farmers and computed by the Paris think tank showed the Netherlands farm minister was receiving more than ¤150,000 in subsidies for his farm in France's Dordogne region. Later that month, his department released Dutch figures showing the Netherlands's biggest recipients of direct aid and export subsidies from 1999 to 2003 were Mars BV, the Dutch arm of chocolate-bar empire Mars Inc.; Dutch brewer Heineken NV; and Philip Morris Holland, the Dutch operation of U.S. tobacco company Altria Group Inc.

United Kingdom figures this year showed that Queen Elizabeth II and such corporate titans as sugar company Tate & Lyle PLC are among the large beneficiaries there. Belgium last month joined the tide, publishing the biggest receivers of export subsidies: They included Tate & Lyle, German chemicals company BASF AG, Swiss food multinational conglomerate Nestlé SA and Campina, the European dairy cooperative.

The work in France toward such a list is slow. Strict privacy laws protect subsidy recipients, and politicians refuse to give information about these public funds. Still, the small farmers and the free-trade advocates who coordinate their efforts from Paris are undeterred.

In Mr. Pasquier's southwestern region of Poitou-Charente, a patchwork of small fields, stone villages and medieval castles near the Atlantic coast, the 45-year-old farmer is using his farm expertise for signs that big landowners are at work. In the evenings, he makes calls to his colleagues across the region, follows tip-offs about farm purchases on the Internet and communicates with GEM. This month, the think tank hopes to clear a raft of legal hurdles protecting farmers' identities and publish a partial who's who of big subsidy recipients.

[Chart]"The current farm subsidies are a source of amazing inefficiencies and injustices," says Pierre Boulanger, who leads the GEM transparency project and contacted the staunchly protectionist farmers this summer to dig for information. "They are under attack from the world, and if they aren't reformed, then it will be the small farmers who suffer in Europe."

Data from the European Commission in Brussels say only 30 farmers in France receive more than ¤300,000 a year -- a figure many believe greatly understates the number of big beneficiaries. But large farms are hard to spot in France. French laws try to inhibit farms' expanding too far beyond 100 hectares, but landowners get around that by registering property under the names of spouses or relatives, with fields scattered through different jurisdictions. Landholdings fragmented over the centuries have created today's traditional -- and sometimes deceptive -- quilt of small fields.

Already, partial figures obtained from the French Agriculture Ministry by French magazine Capital recently say Prince Albert II of Monaco cashes in ¤300,000 a year for his French farmland, while French Sen. Remy Pointereau receives ¤120,000. So far, the French government provides figures if asked for a specific farm's income, but refuses to hand over comprehensive information.

"It's an amusing project, but I'm not going to give that information," said French Agriculture Minister Dominique Bussereau in an interview. "It would hurt France's farmers."

France is under increasing pressure from such countries as the U.K. and the Netherlands to show what it does with its farm funds and to allow alterations to the so-called Common Agricultural Policy that doles them out. Global-trade talks have intensified this pressure, shining light on the way Europe protects its farmers.

Paris maintains it won't allow farm-subsidy changes before 2013, but government insiders say that may be hard to avoid.

The fear of cutbacks is tangible in Mr. Pasquier's Poitou-Charente region. At a town-hall debate on what is to be done about the summer drought, farmers divided by the size of their subsidies give one another the cold shoulder.

Conspicuously absent is Bruno Broquerault, who has built his father's 100-hectare farm into a 2,000-hectare mechanized business that he says collects ¤200,000 a year in subsidies and brings him and his wife ¤500,000 of annual profit. Sipping coffee in his 18th-century hilltop mansion, Mr. Broquerault says changes wouldn't hurt him, but rather the few farmhands he employs. "Yes, it's possible to live without subsidies," he says. "But it would mean I would have to buy more land and hire fewer workers."

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3.Seedy business: A sustainable-ag champion gets plowed under at Iowa State

Tom Philpott
Gristmill, 02 Nov 2005

Plunked down in the land of huge, chemical-addicted grain farms and the nation's greatest concentration of hog feedlots, Iowa State University's Leopold Center for Sustainable Agriculture has always had a tough row to hoe.

Imagine trying to operate an Anti-Cronyism League from Bush's West Wing, and you get an idea of what the Leopold Center is up against. Industrial agriculture runs the show in Iowa, sustained by regular infusions of federal cash and its government-sanctioned ability to "externalize" the messes it creates. The state grabbed $12.5 billion in federal agriculture subsidies between 1995 and 2004 -- second only to Bush's own home state. Iowa leads all states in hog production: It churned out 14.5 million pigs in 2001 alone, the vast majority from stuffed, environmentally and socially ruinous CAFOs (confined-animal feeding operations).

Yet since springing to life in 1987 by fiat of the Iowa legislature -- funded ingeniously by state taxes on nitrogen fertilizer and pesticide -- the Leopold Center has become an invaluable national resource for critics of industrial agriculture and seekers of new alternatives.

Now, however, a sudden purge at the top has called the Center's much-prized independence from industrial agriculture into question.

The Leopold Center operates under the authority of Iowa State University's College of Agriculture. Last Friday, the college issued a press release announcing that the Leopold Center's director of five years, Fred Kirschenmann, had "accepted a new leadership role as a distinguished fellow of the center." http://www.leopold.iastate.edu/news/newsreleases/2005/kirschenmann_102805.htm

The college went on to state that it had named an interim director, effective Nov. 1.

Kirschenmann himself, however, tells a more interesting tale than what's contained in the press release's bland prose. He says his move from director to "distinguished fellow" came suddenly and without his own input.

"On Wednesday [Oct. 26] I received a letter from the interim dean asking me to resign by Friday and decide by then if I would accept the position of distinguished fellow at the center," Kirschenmann told me yesterday.

"I wrote her [the interim dean] back telling her I thought she was moving too fast, that there wouldn't be time for a smooth transition. She wrote back that it was a done deal -- she had already named a new director."

Kirschenmann says the interim dean, Wendy Wintersteen, had been on Leopold's advisory board for years and had served on the search committee that hired him in 2000. "She was always very supportive of what we were doing," Kirschenmann says. "Until about two years ago. Then she became very critical."

Her critique centered on the idea that in its work the Leopold Center was neglecting "key stakeholders," Kirschenmann adds. "But she never really clarified who those stakeholders were."

Might she have been refering to agribusiness interests? "You can draw your own conclusions," Kirschenmann says. She never cited any reason for the de facto purge, save for "some verbiage about how I would be free to pursue my own work without having to worry about administrative duties."

To be sure, Iowa State's College of Agriculture draws agribusiness cash the way a penned-up pig wallowing in its own waste draws flies. I have a call into the college for a list of corporate donors; until that call is returned, let it suffice that this is the sort of research the college commonly proffers: A study claiming to show that the genetically modified seed industry deserves a greater "level of intellectual property protection ... than what existed in the North American seed corn market in the late 1990s." Collaborators: a pair of scientists from GM seed titan Pioneer Hi-Bred International Inc., a subsidiary of DuPont.

Here are glowing testimonials from two of the college's "partners": John Deere and Cargill. http://www.foundation.iastate.edu/corp/stories.html

Kirschenmann says he accepted the "distinguished fellow" position because Wintersteen assured him he could continue doing his own work on sustainable agriculture. And that work is important. Under Kirschenmann the Leopold Center bluntly criticized and rigorously documented the environmental and social calamities being wrought by industrial agriculture.

Will he continue to be able to do that work at Leopold? "We'll see how it goes," he told me.

In the meantime, I'll be doing some research about which corporations and commodity groups give what to Iowa State's College of Agriculture.

4. Displaced Mexican corn farmers are streaming into the Bootheel

By Bill Lambrecht
St. Louis Post-Dispatch
October 30, 2005

The state's Hispanic population has increased by 25 percent in the last four years, and cities and school districts are struggling to provide the services they need.

KENNETT, MO. Alonzo Moran earns more money driving a fork-lift in a cotton gin in Missouri's Bootheel than he could make in almost any job back home in Mexico.

But after 13 months as a migrant farm worker, Moran is eager to return to the 30 acres he owns in the Mexican state of Tamaulipas.

There, his land lies fallow, not worth planting because of depressed corn prices he blames on the North American Free Trade Agreement.

"What is my dream for the future? I want corn prices to be high again so I can go back to Mexico to farm," said Moran, 42. "But I don't know if that will happen"

There are many reasons for the recent record migration from Mexico to the United States. But many Mexicans say a prime motivation is the difficulty in making a living on small farms in rural Mexico.

A favorite destination is Missouri, where migrants -- legal and illegal -- find farm work in fields and slaughterhouses.

Many stay. From 2000 to 2004 alone, Missouri's Hispanic population -- mainly Mexican -- grew by nearly 25 percent, after a 92 percent increase from 1990-2000, according to U.S. Census data.

Illinois' Hispanic population grew 16 percent in the first four years of this decade after a 96 percent increase in the '90s.

And those are just the Hispanics who get counted.

Farm owners and many businesses welcome the immigrants as a means to lower labor costs. By the same token, the migrants add to the burdens of governments and communities to provide education, health care, housing and legal assistance -- costs that are rarely mentioned in discussions about farm subsidies and trade agreements.

Joe Tillman, who until recently headed the Missouri Migrant Education Language Learning program, says young men in their 20s arriving told him they saw no future on Mexican farms. Their presence is putting heavy pressure on rural towns in Missouri, Tillman said.

"In many cases, these are small, more rural communities that didn't have many resources to begin with. They're these generally white, older communities that suddenly are browning with the arrival of many kids," he said.

"Agribusiness clamors for cheaper and cheaper labor in order to keep their costs down, but we don't have the programs we need for all these people," he said. "It's an untenable situation that we have found ourselves in."

5. California dairy producer testifies before International Dairy Roundtable

For Immediate Release
Contact: Kevin Abernathy
October 27, 2005
Office Phone: 209-632-0885
Mobile Phone: 209-678-0666 Email: kevina@cdc-cfu.com

NEW DELHI, INDIA (October 27, 2005) - California Farmers Union (CFU) President Joaquin Contente testified today before the International Dairy Roundtable organized by the International Federation of Agricultural Producers (IFAP) in New Delhi, India. IFAP is the world farmers organization representing over 600 million farm families grouped in 110 national organizations in 75 countries. Contente of Hanford led the California Delegation to the roundtable that also included CDC Board Member Scott Magneson of Cressey. Contente testified about the importance of fostering greater competition in the international dairy market.

"One of the greatest challenges facing U.S. producers and every other producer in the world is consolidation and concentration of the marketplace, which also drives market globalization," stated Contente. "Consolidation within the agricultural industry has increased in recent years and has brought about the demise of thousands of family-run farms," he added.

"Due to politically motivated domestic dairy policies, the U.S. imports approximately 10 percent of its consumption needs," stated Contente. The imports consist primarily of proteins, cheese and butter. In 1995, the U.S. became a net-importer of dairy products for the first time as a result of the dramatic changes to federal dairy policy. The balance of trade for U.S. dairy products in 2004 totaled $1,452,904,000 in exports and $2,330,709,000 in imports.

"The loss of producer economic power is best illustrated by the widening gap between retail prices and farm-gate prices. While consumers continue to experience sticker-shock on dairy products, dairy producers are left with a shrinking percentage of the consumer dollar," he testified.

Contente urged dairy producers to realize the tremendous impact of corporate dominance not only of legislators, but also of our own cooperatives. He stated that producers worldwide must become more engaged in the political arena at the local-state-federal and international levels.

California Farmers Union (CFU) is a member organization of the National Farmers Union (NFU) which is a general farm organization representing family farmers and ranchers of all commodities throughout California. The California Dairy Campaign (CDC) is a member organization of CFU. CDC is a grassroots organizations made up of dairy farmers who are working to encourage lawmakers and the dairy industry to be more responsive to the needs of the family dairy farm in California.


6. U.S. says WTO talks remove need for Uruguay rice challenge

Inside US Trade
October 28, 2005

U.S. trade officials last week argued that U.S. proposals for agriculture liberalization in the ongoing round of World Trade Organization negotiations should remove Uruguay's need to challenge U.S. rice subsidies, as those subsidies would be cut dramatically if the U.S. proposals were adopted, according to a U.S. official. As a result of last week's talks, the U.S. is under the impression that Uruguay will wait until after the WTO's ministerial meeting in Hong Kong this December before deciding whether to file a case against the U.S., although others said Uruguay will continue to prepare its case.

Officials from both countries met last week in Geneva to discuss Uruguay's claims that U.S. subsidies are hurting its rice producers.

During that meeting, U.S. officials pointed out that the proposal the U.S. had made on trade-distorting domestic support two weeks ago would lead to a real overhaul of the marketing loans and counter-cyclical payments that U.S. rice producers receive. These were the two main subsidies found to be inconsistent with WTO rules in the cotton case successfully brought against the U.S. by Brazil, according to the U.S. official.

U.S. officials also emphasized that the U.S. proposal to cut trade-distorting amber-box support by 60 percent would lead to significant cuts in marketing loans and said the U.S. offer to cap the new blue box of less-trade distorting support at 2.5 percent of the value of a member's total agricultural production would provide a restraint on counter-cyclical payments, the official said.

U.S. officials argued that, if accepted, these proposals would go a long way toward addressing Uruguay's problem with U.S. subsidies, he said. More generally, the U.S. also argued that it would be awkward for Uruguay to bring a case now, as members are busy negotiating agricultural reforms.

"You are facing potentially major changes in policy anyway," the U.S. official said. "If we end up with an agreement with the kind of domestic support changes we have proposed, that will substantially reduce any trade distorting support and will certainly make it very difficult to bring a case against us."

Uruguayan officials reacted favorably to the U.S. agriculture proposals during the meeting and indicated that they had also been supportive of it during meetings of the G-20 group of developing countries, but echoed many points the G-20 had made about improvements it would like to see to the U.S. proposal, he said. Uruguay also said that while the U.S. proposals could address the medium and long-term effect of U.S. subsidies, Uruguay would still have short-term problems with these U.S. programs.

Still, the U.S. source said Uruguay would wait until after Hong Kong before deciding to bring a case, which he said is a positive sign. However, he also cautioned that it is "unclear what they will do one way or the other in January."

The U.S. and Uruguay agreed to the meeting in August, following comments in late July from Uruguay's ambassador to the WTO Guillermo Valles Galmes, that his country planned to challenge U.S. rice subsidies in the WTO.

Hugo Manini, president of Uruguay's Rice Growers Association, attended the meeting along with Uruguayan officials and said Uruguay is committed to finding a solution to the controversy through consultations. However, he said Uruguay would continue to prepare its WTO challenge in case it cannot agree to a negotiated solution. He added that the rice growers were being advised by Sidley Austin, which counseled Brazil in its successful challenge of U.S cotton subsidies, and by the Advisory Centre on WTO law, which provides assistance in dispute settlement proceedings to developing countries.

Manini said Uruguay used the meeting to present its rationale for why it believed that U.S. rice subsidies harm its rice producers. He also said Uruguay discussed how U.S. rice production had displaced Uruguayan rice exports to third countries, especially within Latin America. In its presentation, Uruguay drew upon many of the same arguments made by Brazil in its successful challenge of U.S. cotton subsidies, according to the U.S. official.

Manini stressed the vital importance of the case for a small country like Uruguay. Rice exports are as important to Uruguay's economy as all agricultural exports are to the U.S. economy, he said. Rice exports account for 8 percent of the country's total exports and 15 percent of its agricultural exports, according to statement from Uruguay's Ministry of Foreign Affairs.

During the meeting, U.S. officials also stressed that despite the obvious similarities between the supports provided to rice and cotton that a challenge to U.S. rice subsidies was not necessarily an easy case, the U.S. source said.

In addition, he said studies on the impact of U.S. counter-cyclical payments were new at the time the cotton case was litigated and said a lot of new evidence has surfaced on counter-cyclical payments that would suggest that they are less trade distorting that they were portrayed in that case. "It isn't a static world, there's certainly more data that we could use."

To prove serious prejudice, Uruguay would have to show that U.S. subsidies have led to its rice exports being displaced in the U.S. or a third-country market or that the subsidies have resulted in significant price depression.

This will be a much tougher challenge than in the cotton case, industry sources said, since the U.S. accounts for only about 14 percent of world trade in rice, which will make it hard to prove that U.S. rice subsidies distort international prices. In contrast, the U.S. produces about 40 percent of the world's cotton and accounts for about 50 percent of world trade in cotton.

7. Ag lenders warn of 'erosion of equity'

Delta Farm Press | David Bennett | October 28, 2005

LITTLE ROCK, Ark. ? While others are concerned about the next farm bill, Arkansas bankers are worried about something more immediate. This month, both USDA officials and state politicians heard that loud and clear at the USDA's "farm bill listening tour" stop in Little Rock.

Continuing a chorus that began earlier this summer, the bankers and lenders predicted an unhappy reality will soon hit agriculture. When it does, the USDA can't claim it wasn't warned.

Lenders speak

Farmers this winter will "definitely" see "a real erosion of equity," said Fred Cole with the Farm Credit System in Arkansas. "Being in the financial business, we get to see the big picture with farmers -- the income statements, how much is made, how much is spent, how much they receive from farm subsidies."

Bob Cook, president of BancorpSouth's Stuttgart Banking Division, told USDA Deputy Secretary Chuck Connor, "Never have so many spent so much to produce abundance and realized so little. That applies to every (farmer in attendance), I don't care what kind of production agriculture (they're in)."

Critics of the distribution of agriculture program payments have presented their side of the story, said Cook. "The interesting thing is they always talk about the cost of program payments. We never have dialogue about the net, the bottom line (farmers) realize...

"I can assure you that we calculate repayment of crop production loans on five-year production averages...If not for program payments, none of these operations cash flows. And I look at loan applications from farmers from Brinkley, Hazen, Devall's Bluff, Des Arc, Carlisle, Lonoke, Stuttgart, and DeWitt (Ark.). They're all in the same situation."

Financial jeopardy

Glen Bauman with Farmers and Merchants Bank in Stuttgart, echoed his fellow lenders' concerns. Farmers who visit his bank "are scared. We're here talking about a new farm bill. Well, I'm not sure some of them will make it long enough to see a new farm bill.

"The financial statements and net worths just keep going down and down. This year, I see farmers having to mortgage their farms and houses to try to farm another year. It scares me, if next year isn't any better what will happen? They'll lose it all."

The farm bill, said Bauman, "has a lot to do with rural America. The small towns and businesses up and down Main Street are all dependent on the farmer. If the farmer doesn't make it, the small towns won't make it."

On the heels of the bankers, Harvey Joe Sanner, a farmer and activist from Des Arc, Ark., told Connor he was "too nice a guy to be working with such a mean bunch of cats in the USDA and White House. We've got real, real troubles...

"I started hearing from bankers and farmers back in the summer. We're talking about some wholesale bankruptcies...coming this winter. This is at a time when the Bush administration is talking about dismantling (FSA) offices, cutting funding for programs, doing away with subsidies."

The Bush administration's constant attacks on agriculture through budget proposals are "totally unfair. It's not our fault (Bush) mismanaged the treasury and got into debt."

According to Sanner, it's a myth that "somehow we can trade our safety net for market access...There's not a commodity being produced in Arkansas that can be sold on the world market and make a profit. Not one. And I don't think there's been one in 10 years."

The politicians

The last time agriculture faced "anything close to the distress we are in today, and I don't mean a few months from now, but today, was during the Great Depression," Rep. Marion Berry, a Democrat, told Connor. "At that time, we put in place public policy that provided a safety net for producers that has produced the most powerful, innovative, productive food and fiber system...in history."

Berry is not impressed with the proposals being floated for trade and the new farm bill. "We are literally taking what we know works and turning it into something we don't have a good reason to think might work. It's an experiment, at best."

Berry said he was spurred to the microphone by recent quotes from U.S. Trade Representative Rob Portman.

"Portman said he is willing to take a 60 percent cut in farm subsidies. In his words, 'We might have to accept some pain.' Now, that would be just fine if he was the one to accept it. But I know Portman. He...isn't going to be hurt a frazzling bit."

Berry said while the lesser of two guilty parties, Democrats deserve some blame for current conditions.

"We have an unholy alliance between the environmentalists and the ideologues on the conservative side. (They say) 'If we just beat the tar out of the ag and poultry community for long enough, we'll take all this wonderful, productive land and all this wonderful people and turn it into a national park or something.' I never have figured out what their objective is.

"But I can tell you this: we're hanging on by a thread. Our ability to produce and sustain ourselves ? and not get into the situation with food and fiber that we're in with petroleum ? is very real. It is here today and we need to do something about it right now."

Rep. Mike Ross, D-Ark., told Connor some of his farming constituents "spent $20,000 on diesel in August (2004). This August, they spent $70,000. The energy prices are absolutely driving our farm families out of business. They need an energy policy that works for them.

"I believe (payment limits, the three-entity rule) and the $3 billion in proposed cuts ought to be off the table. There should be no room for compromise in negotiations in the $3 billion this administration is proposing. There should be no cuts..."

Ross pointed out that at the same time the Bush administration wants to cut agriculture programs, it's proposing $106 billion in tax cuts.

"This is about priorities and I believe priority number one should be to keep the promise we made to America's farm families in the 2002 farm bill."

8. New IATP analysis on the latest U.S. proposal on agriculture negotiations at the WTO


The U.S. proposal claims to want a zero-tariff, zero-trade-distorting support model for agriculture. This vision - not supported by Congress or U.S. farm organizations - would allow agricultural export dumping at artificially low prices to continue and possibly even accelerate, according to the analysis.

"The model leaves food production to be driven by import and export commercial interests rather than by public interest priorities, such as food security, jobs and the need to protect an already stretched natural resource base," IATP's analysis concludes.

According to IATP's analysis, the U.S. proposal is severely compromised by the absence of timely notifications of domestic support to the WTO. The U.S. has not notified its spending since the reintroduction of various domestic support programs under the 2002 Farm Bill. The EU is similarly behind in its notifications of domestic support.

"It is impossible to have a high functioning system of trade rules when countries refuse to notify their domestic support," said the report's author Sophia Murphy. "There is no accountability and no basis for evaluation without notifications. The U.S. promises a 60 percent cut to its most trade-distorting support. IATP estimates the cut is closer to five percent. But without knowing how the U.S. plans to classify its support, a precise appraisal is impossible."

Other key findings:

  • The U.S. proposal ignores the most trade-distorting aspect of agricultural trade: unmanaged production sold at less than cost of production prices into world markets, resulting in dumping, the impoverishment of commodity growers and the rapid consolidation of food processing and retailing.
  • The timing proposed by the U.S. envisages a total elimination of tariffs and domestic support by 2022. The proposal includes flexibility to change course midway but such flexibility leaves developing countries negotiating in uncertainty.
  • While WTO ceilings on elements of U.S. program spending would be lowered, actual spending on U.S. domestic support would hardly be affected. The trick lies in the expanded Blue Box, which would allow the U.S. to include countercyclical payments.
  • Current levels of countercyclical payments are below the proposed Blue Box spending limit. But the proposed cap on the Blue Box could affect future spending.
  • The inclusion of a renewed Peace Clause at the behest of powerful agriculture chairs in Congress is a deal breaker for some countries. Effectively, a Peace Clause would grant agricultural subsidies a privileged place at the WTO, even if the subsidies are found to nullify and impair another member's expected benefits from signing a round of agreements. Such an exemption from WTO disciplines dramatically undermines U.S. credibility as a country that seeks fair rules for agriculture that treat all countries alike.
  • The U.S. proposal for market access would be disastrous for family farmers, food workers and small-scale producers worldwide. The proposal shows no interest in accommodating developing country concerns (nor those of the G-10 developed countries, whose agricultural sectors are generally small, highly protected, and for the most part not especially trade-distorting as exporters)). The proposal insists that even special products (crops that play a significant role in food security and rural employment) for all non-least developed countries should be subject to significant tariff cuts.
  • The U.S. proposal on food aid ignores the key problems - the concessional sale of some food aid rather than grant-based donations; and, insisting on the costly and time-consuming transport of food rather than allowing the flexibility to buy from regional producers when circumstances warrant it. The disciplining of poorly designed food aid with a prohibition on all food aid not made in grant form is an obvious goal for the new Agreement on Agriculture. WTO members should firmly reject the U.S. proposal and continue to push for meaningful disciplines on U.S. food aid.

9. Edison group signs on for more wind power

Los Angeles Business from bizjournals - 12:34 PM PST Tuesday

On Tuesday, Edison Mission Group Inc. and Midwest Wind Energy LLC have partnered up in a deal where EMG will provide funding and support for Midwest Wind Energy's projects.

Upon completion of the wind-energy projects, EMG will own and operate them. Midwest Wind Energy is a utility-scale wind power development company. Its current portfolio of wind-energy projects generate about 700 megawatts of power.

EMG has ties to the midwest through its Chicago-based Midwest Generation, an independent power producer that has six coal-fired plants throughout Illinois. EMG currently has a wind-energy portfolio of 318 megawatts at nine projects in Iowa, Minnesota and New Mexico.

EMG is subsidary of Rosemead's Edison International. (NYSE: EIX)