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Mountains of corn and a sea of farm subsidies

(Friday, Nov. 11, 2005 -- CropChoice news) --

1. Mountains of corn and a sea of farm subsidies
2. Farmers choose contrasting paths
3. What's cooking on campus
4. Farm subsidies in crosshairs of deficit bill
5. Biodiesel boom fuels concerns
6. Program hopes to encourage next generation of farmers
7. Court upholds township's right to prohibit corporate farming

1. Mountains of corn and a sea of farm subsidies

NY Times
November 9, 2005

RALSTON, Iowa, Nov. 4 - As Iowa finishes harvesting its second-largest corn crop in history, Roger Fray is racing to cope with the most visible challenge arising from the United States' ballooning farm subsidy program: the mega-corn pile.

Soaring more than 60 feet high and spreading a football field wide, the mound of corn behind the headquarters of West Central Cooperative here resembles a little yellow ski hill. "There is no engineering class that teaches you how to cover a pile like this," Mr. Fray, the company's executive vice president for grain marketing, said from the adjacent road. "This is country creativity."

At 2.7 million bushels, the giant pile illustrates the explosive growth in corn production by American farmers in recent years, which this year is estimated to reach a nationwide total of at least 10.9 billion bushels, second only to last year's 11.8 billion bushels.

But this season's bumper crop is too much of a good thing, underscoring what critics call a paradox at the heart of the government farm subsidy program: America's efficient farmers may be encouraged to produce far more than the country can use, depressing prices and raising subsidy payments. In other words, because the government wants to help America's farmers, it essentially ends up paying them both when they produce too much and when their crop prices are too low.

Indeed, this season's huge volumes weigh heavily on farmers, who already have suffered a string of misfortunes: a large overhang of grain from last year, coupled with soaring energy costs and two Gulf Coast hurricanes that stymied transportation, and a severe drought that distorted prices. Together, these events have conspired to depress corn prices and potentially make this the most expensive harvest ever for the federal government.

Even as the Bush administration tries to persuade member nations of the World Trade Organization that it is serious about trimming agricultural subsidies, federal spending on farm payments is closing in on the record of $22.9 billion set in 2000, when the Asian financial crisis caused American exports to fall and crop prices to sink, pushing the Midwest farm belt into recession.

If export sales stay weak, this year's subsidies could hit a new record. Just last week the United States Agriculture Department raised its projection of payments to farmers by $1.3 billion, to $22.7 billion. In 2004, the subsidies were only $13.3 billion.

In response to pressure, the Bush administration said last month that the United States was prepared to cut its most trade-distorting farm subsidies by 60 percent over five years. The world's poor nations, which tend to be heavily dependent on agriculture, complain that American and European Union farm subsidies spur growers to produce gluts that depress crop prices throughout the world.

The Agriculture Department's $1.3 billion revision comes primarily from higher loan-deficiency payments, which are now estimated to total $6.2 billion, said Keith Collins, the Agriculture Department's chief economist. Such payments are meant to cushion the blow for farmers who borrow money to raise crops but then have to sell them in the market for less than the outstanding loan.

Most of that money will flow to corn growers. Based on loan-deficiency rates that have recently topped 50 cents a bushel, the government probably will pay corn farmers about $4.5 billion this year in that subsidy category alone, said Bob Young, the chief economist for the American Farm Bureau Federation.

For critics of the American subsidy system, the record corn production highlights the tenuous assumptions underlying the program. Farmers are encouraged to produce as much as they can with the idea that greater exports will soak up the excess production. More recently, there are high hopes for using corn to produce ethanol for gasoline, but the infrastructure to produce large amounts of ethanol will take time.

But the huge volumes in recent years have not been matched by greater demand for American corn, and the woes created by two big harvests, along with the stifling effect of Hurricane Katrina on the transport of grains, have kept exports in check, analysts and grain traders said.

"We are still in a condition of grossly overproducing for what the market can pay, at least what the market can pay that is acceptable to our corn producers," said Ken Cook, president of the Environmental Working Group, an environmental research group based in Washington that has been critical of farm subsidies. "We can't make up the difference in the export market, and the taxpayers are on the hook."

The government spent $41.9 billion on corn subsidies from 1995 to 2004, according to the Environmental Working Group.

So far, current and future corn shipments of 550 million bushels are running 11 percent behind last year's level of 640 million bushels in early November, according to government figures. But lately foreign and domestic buyers, sensing fire-sale conditions, have started to snap up corn at historically cheap prices, said Steve Bruce, a grain trader with Man Financial in Chicago. "We have reached the saturation point where the grain elevator managers have said we just have to sell the stuff," he said.

With corn spilling out everywhere, the Agriculture Department predicted last month that American corn growers would receive an average of $1.85 a bushel for their new corn, which would be the lowest price since the late 1990's. The government is expected to release new estimates for crop production and exports on Thursday.

Storm damage and transportation bottlenecks sharply raised costs this year for producers, so that Midwest farmers had a tough time this fall finding buyers.

Hurricane Katrina in late August damaged grain-exporting operations around New Orleans. Some 60 percent of corn and soybeans are normally exported through that city's port. A shortage of river barges and damage to the ports created domestic bottlenecks and added to internal freight costs, eating into farmers' profits and briefly making American crops less competitive than those of some foreign competitors. Barge rates have tripled in some places.

Higher costs for gasoline and diesel also led railways and trucking firms to increase their rates to haul the crops, in some cases by four to six times the normal rates. The rail system, in particular, was already strained coming into the harvest season, and grain merchants have struggled at times to find available rail cars. In Iowa, some grain elevators simply closed down when they got too full. For farmers in recent weeks, the morning harvest call was to "call two or three elevators and see which ones were open," Mr. Fray said.

To be sure, the last two years of bumper harvests have shown how good American farmers have gotten at producing corn. More drought-resistant varieties, improved pesticides and more efficient farming practices have all contributed to higher yields, farmers and grain managers said.

Nearly perfect growing conditions helped produce last year's record crop. But this year the biggest surprise came in Illinois, which despite suffering its worst drought since 1988, still managed to produce a large crop. The drought made many farmers hesitant to sell their corn at depressed prices, decisions that worsened what became an excessive surplus. "The big lesson this fall is don't believe the farmers when they say they don't have a crop," said Jeff Hainline, a commodities broker at Advance Trading in Bloomington, Ill.

Government incentives to produce flat-out have also helped make the large corn harvests possible. Farmers are hardly shy about exploiting the government safety net provided by guaranteed loan-deficiency payments. "Everybody leans on the L.D.P.'s as much as they can," said Ash Kading, a farmer in western Iowa who was harvesting his last few rows of corn late last week. "It is like opening up the federal Treasury. There were quite a few people this year that wish corn prices would go to zero because they would have a bigger L.D.P."

While farmers and grain merchants like Mr. Fray expect even more corn to be planted next year, some traders believe that higher natural gas prices will cause farmers to grow less corn - natural gas is used to make fertilizer, pesticides and herbicides. "With higher energy costs you will see more wheat acres and soybean acres," Mr. Bruce said.

This year grain piles are everywhere across Iowa and parts of Illinois, the two biggest corn-producing states. In Iowa, the amount of grain being stored on the ground for lack of storage is averaging more than 19 percent, its highest level in at least 25 years, Mr. Fray said, citing private industry data.

Lately the giant piles have become the butt of jokes in farm country. They were spoofed in a fake picture, widely e-mailed, that showed a skier airborne atop West Central's biggest pile, with the caption that said "one thing you can do with a 3-million-bushel pile of harvested corn: Ski Iowa."

Mr. Fray smiles when he recalls the fake picture. But he has hardly become attached to his largest corn creation. West Central, which markets corn for more than 8,000 farmers, is planning to dismantle the 2.7-million-bushel pile before year-end to avoid rains that could ruin the corn, he said. Last year the company built a similar-size pile and gambled on the weather, only to suffer the misfortune of repeated late-season rains that badly damaged the quality of the corn, trimming the cooperative's profit by 34 percent, to $4.8 million.

This year, with corn bursting out of storage bins and lots of dry weather, West Central put 13.4 million bushels on the ground in 11 piles; 12.8 million bushels were left outside last year. But with customers moaning about a possible repeat of last year, the co-op tried to plan ahead this time, spending $4.5 million to build additional storage and buy giant tarps to cover some of the piles. As of last week, the co-op had covered half of the corn.

The 2.7-million-bushel pile, however, is too big to cover, since there are no walls to tie a tarp to. For that one, the company can only pray for dry conditions while it tries to find buyers for the corn. "So far," Mr. Fray said, "we have dodged a bullet."

Failing that, West Central could always build a ski lift on the hill.

2. Farmers choose contrasting paths
In rapidly developing Charles County, families ponder future of their land

By Ann E. Marimow
Washington Post Staff Writer
Tuesday, November 8, 2005

David C. Hamilton and George L. DeMarr share something akin to a religious conviction for the land where they grew up, where their fathers and their fathers' fathers farmed. Both will tell you they dislike the development that is squeezing their properties in northern Charles County, one of Southern Maryland's fastest-growing areas.

Hamilton has accepted the change. He's selling, envisioning a business park, perhaps for high-tech firms, where his family farmed tobacco for generations.

DeMarr is not letting go. To him, selling would mean ripping up his roots and abandoning his father's aspirations.

The Hamilton and DeMarr families are among the oldest still farming in the northern area of Charles that local leaders hope is next in line to capitalize on the region's economic growth. Land values are surging and agribusinesses are struggling, putting longtime farmers near the border with Prince George's County in a bind.

"It's time that we older people have to make the decision to leave it or fight until the day we die and let the next generation figure it out," said Hamilton, 66, who wears a graying beard, bluejeans and a red-checked button-down to his open-space office.

"Friends of mine want to live and die on the farm. They refuse to change. I know there's an end date."

The two families -- one in Waldorf, the other in White Plains -- are separated by about five miles. They do not know each other well, but they are facing the same challenges.

No Future in Farming

Looking out Hamilton's living room window is like flipping through a family history. There is the white rambler his father and grandfather built, where Hamilton lived as a child. The 40-year-old maple he meant to cut down as a seedling now shades the picnic table.

His father, grandfather and great-grandfather are buried in a cemetery within walking distance of the farm on Berry Road.

As teenagers, Hamilton and his brother took batting practice in the middle of that two-lane road. One car, sometimes two, passed by in an afternoon.

Not anymore. Berry Road -- Route 228 -- hums nonstop with four lanes of traffic. During rush hour, it takes several minutes to pull out of Hamilton's driveway. Waldorf's shopping district has gotten so snarled that state highway officials are studying a bypass that could slice through the middle of Hamilton's ranch-style home.

"I don't like it, but the fact is we all have to make changes and grow," he said. "It's my turn to go."

To understand Hamilton's decision, it helps to know that he does not call himself a farmer. He is an agribusinessman -- part scientist, part economist, part mechanic, part lawyer.

His father, Earl, prepared him for this time from a young age. He told Hamilton there was no future in farming. He never said, " 'Look, son, don't ever sell the land.' "

Hamilton's father, who died in 1980, wanted his children to have choices. Tobacco helped pay for Hamilton's four semesters at the University of Maryland. He spent two decades as an electrical engineering technician for the Navy before finding his way back to the farm through a seed.

On weekends and evenings, Hamilton had studied up on grasses and consulted turf specialists. In 1968, he planted his first eight-acre experiment that grew into the lush, dark-green plant he would sell to new homeowners as "instant lawn."

Hamilton decided to return full time, because, he said, "This is me. It's what you believe in -- nature," which to him is "one and the same" as God.

"You see things being born. Animals, plants, things coming from nothing to death and everything in between."

From his patio, Hamilton has marveled at the migration of dozens of purple martins that arrive each spring. Their fledglings peek out from the holes of his gourd-shaped nests before taking flight. Bird experts tell Hamilton that the same martins return each year because they are imprinted by the place that has marked him, too.

There have been dry disaster years that ruined the turf, but, Hamilton said, "you like to do it whether you make money or not." That is, "until you wake up one morning and ask, 'Why?' You don't want to be grubbing stumps until you're 90."

Hamilton's four siblings left farming long ago. When his mother died in 1997, talk about the future of the farm turned serious.

He compares the 90 acres to a stock investment. As the county has grown, the land's value has outpaced its agricultural value. Two years ago, a 29-acre lot on Route 228, closer to central Waldorf, sold for $4.25 million. In August, Hamilton's neighbor sold 48 acres for $2 million.

Hamilton's watery green eyes widen when he describes the possibilities. He has planted a modern sign in front of his turf fields to promote what he hopes will be a future technology hub.

The sod farm could be sold as early as March, according to his real estate agent, but Hamilton has not decided what's next.

"What would I feel like when I have to physically go? I don't know. I can't answer that. My whole being has been here on this property."

Love It or Hate It

St. Charles Parkway -- the main route through St. Charles, a planned community of 40,000 residents -- dead-ends just beyond DeMarr Road. Bulldozers have cleared 130 acres to build tennis courts, an indoor pool and 350 homes for adults over 55.

Construction begins next month to extend the four-lane parkway on a path that will bend around the 35 acres Raymond and Betty DeMarr left their children.

George DeMarr and his brother, Eddie, have not earned much more than $1,000 a year from their land since 1992. After that last tobacco crop, George experimented. He planted apple trees and French grape vines and researched recipes for wine. The apples were too spotty, the grapes became diseased and his batches of wine were so strong that his children dubbed it "George's Moonshine Wine."

Fuel prices have made it impractical to haul other produce to suppliers. DeMarr ends up giving away most of his string beans and spinach because, he said, people are "too much in the fast lane" to drive up to the farm.

He was thrilled this summer when visitors from Fort Washington cleared out the watermelon supply at $1 apiece. On a recent weekend, he sold $150 worth of hay.

DeMarr and his wife, Darlene, pay most of their household bills with the money she makes as a computer technician for the Navy. The money he gets from fixing lawnmowers and cutting grass goes back into the farm.

"You gotta have it here," DeMarr said, patting his heart with a weathered hand. "My wife says, 'You either love it or you hate it. And if you love it, you keep doing it and work yourself to death.' "

Stepping into the DeMarrs' tobacco barn is like walking into the past. George, 49, sees his father on a tractor in the musty stripping room. Eddie, 47, hears Pop shouting, "Come on, boy," pressing him to hustle as he passes tobacco sticks into the barn.

Look up to see the brittle leaves from the tobacco George planted to humor his aging father, who died two years ago in January. Straight ahead to feel the hand-hewn beam where lanky Eddie bopped his head when he did hustle. Breathe in to smell the sweet bales of orchard and timothy hay.

"I can walk around and see my dad every day," Eddie said. "Selling this land would be leaving dad behind."

The brothers' grandfather, Claude, left his farm near Temple Hills in 1941 in search of sandy soil that would be better for tobacco, or what the old-timers call "bacca." He purchased 140 acres for $3,500 when there were 1,276 farms on 182,000 acres in Charles. At last count in 2002, there were 418 farms on 52,056 acres.

In the 1960s, their grandfather turned away the first developer. When the next one approached their father in the 1970s, the DeMarrs said he offered the farm for $1 million per square foot.

The DeMarr brothers said they are as headstrong as their father and grandfather were.

"We aren't selling,'' Eddie said. "It's family." "We're in the dirt," George said. "Our roots are in the ground just like that oak tree."

The brothers wear matching brass belt buckles engraved with the John Deere logo. They refer to each other as "down-home farm boys," even though they have both held outside jobs to subsidize the farm and two of George's daughters live in homes that are part of the St. Charles development.

They joke about "Harry Homeowners" who pay to watch nature on TV or listen to CDs with sounds from the forest. To Eddie, heaven is watching deer and turkey flocks from his modest porch with a glass of iced tea.

"People ask, 'How can you stand the quiet?' " he said. "To me, that's worth a million dollars."

One day, Eddie said, someone will make a lot more than that from his family's land. But it won't be him, he said. "As long as I'm alive, it won't be sold."

3. What's cooking on campus
Locally grown food is the latest student cause. Can this movement save family farmers?

Time Magazine
November 7, 2005

They shut down the Pepsi machines in the University of Portland cafeteria the other day. The plastic bottles of Hunt's Ketchup disappeared. Sugar was replaced with honey from a neighborhood beekeeper. And everything else on the lunch menu, from soup (lentil) to nuts (hazel), was locally grown, baked, milked and mixed. The shrimp was harvested in nearby Netarts Bay, not in Thailand; the herbs were gathered in adjacent Clackamas County, not in California; the chicken was pastured on fields outside Eugene, not imported from the Midwest's vast factory farms. "It's awesome," said Alex Samuels, 19, a freshman from Puyallup, Wash., swigging a drink made from Oregon berries. "We're helping smaller farmers instead of big corporations."

It may seem to lack the ideological passion of antiapartheid or antiwar protests, but the new activist slogan on campuses is "Eat local." Students are rediscovering the political adage that you are what you eat. And colleges are voting with their palates--and their multimillion-dollar food budgets--against an ever more global agricultural industry in which produce travels, on average, 1,500 miles from farm to plate. Posters around the University of Portland campus proclaimed that BUYING LOCAL FOOD IS ONE WAY YOU CAN HELP STOP GLOBAL WARMING ... AIR AND WATER POLLUTION. A racier consciousness-raising stunt was staged at Brown University, where activists published Ripe, a 2005 calendar featuring naked students posing with strategically positioned Rhode Island fruits and vegetables (for August, cantaloupes rest on the buttocks of the women's soccer team).

Will politically correct gastronomy save the family farm? That may be wishful thinking. At the University of Portland, the all-local lunch was merely symbolic--Pepsi was back for dinner. What's meatier is that the university, which serves 22,000 meals weekly, has hiked spending on local and regional products to 40% of its food dollars--up from less than 2% five years ago. "Even the burgers are from Oregon steers," boasts dining manager Kirk Mustain.

Some 200 universities have jumped onto the eat-local haywagon--half of them since 2001, according to the Community Food Security Coalition, an advocacy group based in Venice, Calif. For many of these academic foodies, buying local is only part of an educational mission. Scholars like Oberlin environmental-studies professor David Orr advocate "ecological literacy," tying agriculture to the study of fiction, history, science, economics and politics. In a form of dirty-fingernail "experiential learning," some 45 universities and colleges, from Maine's Bowdoin to Minnesota's St. Olaf, have started campus farms. And courses like Sustainable Food Systems at the University of California at Santa Cruz deconstruct relationships between producers and consumers, with such readings as The Maturing of Capitalist Agriculture: Farmer as Proletarian.

The eco-food movement may appeal to antimultinational globophobes: packaged, refrigerated goods transported from afar use tons of fossil fuels that pollute and release ozone-depleting gases. Locally grown produce typically needs fewer pesticides than big farms use--and fewer synthetic additives for a long shelf life. But as students seek to upend the food-supply chain, they get a gritty lesson in practical economics. Cafeterias are often serviced by billion-dollar behemoths such as Sodexho Inc. and Aramark Corp., which make money partly by purchasing cheap foreign produce and centralizing distribution. Even when colleges operate their own dining halls, the staff is used to making a single phone call to order thousands of meals from distributors like the $30 billion Sysco Corp. Roast beef arrives cooked and sliced, powdered soup requires only added water, broccoli comes in precut florets. When the University of Montana decided to eat local two years ago, four graduate students spent months finding 34 nearby suppliers and organizing logistics. "We couldn't have 10 different farmers driving pickup trucks to drop off tomatoes," said dining director Mark LoParco. They nudged growers into co-ops for delivery and processing. Now the romaine comes washed and chopped--and the farmer gets a higher price. In January the university's new contract with Sysco will stipulate that the company supply bacon from Daily's Inc., a Missoula processor.

If caterers are starting to pay heed, it may be none too soon. University of California students on 10 campuses launched a statewide campaign last month to pressure U.C. regents to spend at least 10% of their $20 million annual food budget on local and organic products. Sodexho, which was ousted from the University of California at Santa Cruz after a student campaign, recently began to draw its supplies from local sources near eight Midwestern campuses. Aramark works with the University of Rochester and Vassar to buy from nearby farmers. And California-based Bon Appetit, which operates dining halls at 67 colleges, has hiked spending on local food to 20% of its budget.

In some cases, cooking from scratch with local ingredients is more expensive. Williams College will pay $85,000 more this year to double local products to 14% of its $2.7 million food budget. But at the University of Montana, even though the price of local beef and safflower oil was higher, the dining bill actually shrank slightly because of reduced spoilage. Liability can also be an issue, as University of Vermont students discovered when Sodexho forced a nearby orchard to buy $4 million worth of insurance. But activists persist. "Students go through purchasing reports to see where we are buying pears," says Robert Volpi, Williams' dining director.

Pure idealism? Not necessarily. Local food is usually tastier. When Alice Waters, the celebrity chef, helped her daughter's Yale cafeteria switch to a seasonal, regional menu (even the chips are made from organic potatoes grown in Connecticut), students from other dining halls began forging IDs to crash the feast. When Brown introduced Rhode Island Macouns and Winesaps--replacing the Red Delicious and Granny Smiths grown for long-distance trucking--apple consumption doubled. To be sure, some colleges find it easier and cheaper to install fast-food counters. And some students would just as soon dine on Kraft cheese and Cocoa Puffs ("This stuff is weird," grumbled University of Portland physics major David Baldwin, 18, sniffing at the salmon-fennel latkes). Even a few Yalies grouse that the all-local dining hall doesn't serve tomatoes in winter. "My generation knows how to put food in a microwave and eat in front of a computer screen," says Louella Hill, 24, a food activist at Brown. But she adds, "When someone bites into an heirloom plum, I see a profound awakening."

That awakening is enhanced by growing contact between students and farmers. At the University of Portland's local-foods lunch, fish broker Amy Dickson set up a display with shells, nets and a sign reading SIGNATURE SALMON: 100% LINE-CAUGHT IN OREGON WATERS. "My slogan is 'Roe vs. Wave: Salmon is a choice,'" she joked. Aaron Silverman of Greener Pastures Poultry gave out brochures describing how his chickens "wobble around as they please." And wheat farmer Karl Kupers touted the environmental benefits of no-till planting. "Students come up and shake your hand and call you a hero," said Kupers, whose co-op sells to seven area colleges. Spokane senior Emily Magnuson, 21, echoed the sentiment. "It's a homey feeling to know who's growing your food," she said as the scent of fresh-baked bread made from Kupers' wheat wafted out of the kitchen.

4. Farm subsidies in crosshairs of deficit bill

By Matthew Murray
Baking Business
Nov. 9, 2005

WASHINGTON -- The House is expected to vote Thursday on a more than $ 50 billion deficit reduction package, legislation that would cut millions in agricultural subsidies for assistance-dependent Weld County.

"A lot of farmers and ranchers are experiencing high fuel and fertilizer costs and low commodity prices," said John Stencel, president of the Rocky Mountain division of the National Farmers Union. "They really need the conservation and commodity (subsidy) dollars."

The plan would cut more than $ 1 billion in commodity programs and at least $ 635 million in conservation programs nationwide between 2006 and 2010. In addition, the bill would eliminate $ 794 million in food stamp disbursements before 2011.

Until 2009, the House proposal would cut all direct agriculture subsidy payments by 1 percent nationwide, or little more than $ 1 billion, in direct agricultural payments to farmers.

During the past 10 years, Rep. Marilyn Musgrave's 4th congressional district, which includes Weld County, received about 1.4 percent of the Department of Agriculture's $ 143.8 billion in total subsidy payouts. During that time, the 4th district was No. 1 in Colorado and No. 18 nationwide in total farm subsidies, with nearly $ 2 billion in commodity, disaster and conservation payments, according to data from the Environmental Working Group in Washington.

Musgrave was first elected in 2002.

Using the proposed cuts and historical payouts by the USDA, farmers in the 4th district could lose as much as $ 3.5 million in direct payments per year between 2006 and 2009.

Since 1995, payments to the 4th district represented 77 percent of all agricultural subsidies in Colorado. The second leading recipient was Colorado's western 3rd Congressional district, with about 12 percent of the state's total. The 3rd district is represented by Rep. John Salazar, a Democrat.

In 2004, Musgrave's 4th district received nearly $ 160 million in total USDA subsidies, including $ 58 million in conservation payments and $ 88 million in commodity payments.

Since 1995, the top five subsidies in the 4th district were wheat, with 18,482 farmers receiving about $ 583 million; corn, with 12,518 farmers receiving nearly $ 553 million; conservation reserve programs, with 8,662 farmers receiving $ 528.5 million; disaster relief, with 13,502 farmers receiving almost $ 185 million; and sorghum, with 6,745 farmers receiving close to $ 44 million.

According to Aaron Johnson, a spokesman for Musgrave, escalated federal spending from summer hurricanes has put the federal government in a fiscal pinch. The fairest response is to spread cuts out, a goal the House version has achieved, he said.

"As a nation we've suffered losses, and we need to address them in a responsible fashion," Johnson said. "The House version looks for budgetary savings throughout the USDA, without singling out farmers." Although Musgrave's non-committal on how exactly she will vote, Musgrave has been "supportive of the bill's passage during the committee process," Johnson said.

The Farm Bureau agrees with Musgrave's stance that cuts are the responsible and pragmatic way to go, according to Dana Brooks, a lobbyist for the organization.

"We'd rather not take the cuts at this time, but with deficits we feel it's fiscally responsible," Brooks said. "We wanted it to be fair across the board."

"We lobbied hard for this from the start," she added. "But considering the president wanted $ 9 billion in (agriculture) cuts, $ 3.7 billion is considerably better."

5. Biodiesel boom fuels concerns


Washington, D.C. -- When Rudolph Diesel invented his engine more than a century ago, he used a fuel made of peanut oil, not petroleum.

Now, thanks to the soaring price of oil, some new environmental rules and a $1-a-gallon government subsidy, there's a rush to go back to making some diesel fuel out of soybeans, vegetable oils and other sources. Advocates say biodiesel helps farmers by providing a significant market for crops, and the plants create jobs and attract investment in rural areas in need of economic development.

From Maine to California, farmers, private investors and agribusiness giants like Cargill, Archer Daniels Midland and Louis Dreyfus are planning and building biodiesel refineries.

"The growth is just unbelievable," said Monte Shaw, director of the Iowa Renewable Fuels Association.

But could the Next Big Thing be the Next Big Bust?

Some agriculture leaders are concerned the industry could be growing too fast, outpacing the market for biodiesel or the supply of raw materials. The National Biodiesel Board's goal is to reach an annual production of 1 billion gallons in 10 years, a target that is easily attainable given the flurry of construction.

"Farmers are very, very good at overproducing when something is making money," said Craig Lang, president of the Iowa Farm Bureau.

Biodiesel is being made from recycled grease and slaughterhouse waste as well as things like vegetable oil. It's typically mixed with conventional diesel. The resulting blends contain 2 percent to 5 percent biodiesel.

In 2004, the industry produced less than 30 million gallons. In comparison, 47 billion gallons of conventional diesel was used on roads nationwide.

But this fall, at least 100 biodiesel plants are either in operation or in various stages of planning and construction in 34 states, according to MARC-IV Consulting, a firm that tracks the market for the National Biodiesel Board.

When completed, these plants will be capable of producing more than 800 million gallons of biodiesel a year. That will nearly fulfill the demand created if all conventional diesel is mixed with 2 percent biodiesel - but whether truckers and others will buy that much is in question.

Despite the risks, investors are eager to get on board. Earlier this year, nearly 700 people, many of them local farmers, pledged $22 million within 11 days toward building a 30-million-gallon plant at Wall Lake, Ia.

The equity drive was so popular it had to be canceled two weeks early, disappointing some would-be investors willing to plunk down the minimum $20,000.

Two other plants under construction in Iowa are a 37.5-million-gallon facility Cargill is building at Iowa Falls. An existing Ag Processing Inc. plant at Sergeant Bluff has announced plans to nearly triple its capacity. There are at least 10 additional Iowa plants in various stages of planning or construction, according to the Iowa Soybean Association.

The state of Iowa and the U.S. Agriculture Department are encouraging still more growth with grants or loans for new biodiesel projects. Southern Iowa BioEnergy got a $400,000 state loan - $100,000 of which can be forgiven - for a new plant at Lamoni. Also, the department has given Clinton County BioEnergy a $500,000 grant to build a plant at Clinton.

Secretary of State Chet Culver, who is running for governor in 2006, last week proposed a $100 million Iowa Power Fund to encourage more biodiesel and ethanol production.

Profits of biodiesel plants are closely tied to the cost of the vegetable oils, grease or animal fats, experts say. A penny-per-pound increase in the price of vegetable oil or animal fats increases the price of biodiesel by 7.5 cents a gallon, said Leland Tong, a business specialist for MARC-IV Consulting.

"My fear is that people look at this as the next big cash cow," said Tong.

"You really can't take the approach that we are going to build a plant and people are going to be rushing to sell us oil or knocking down the door to buy biodiesel."

But industry officials see several reasons for optimism.

Congress last year enacted the $1-a-gallon subsidy, actually a tax credit, for biodiesel derived from vegetable oils. This year, the tax break was extended through 2008.

In another boost for biodiesel, the Environmental Protection Agency is requiring refiners to start removing sulfur from conventional diesel. The ultra-low-sulfur fuel, which goes on the market next year, needs an additive to maintain its lubricity. One of the additives that could be used is biodiesel.

The increased price of crude also has made truckers take a second look at biodiesel.

The American Trucking Association, which has spent years fighting the biodiesel industry in Congress, recently did an about-face, endorsing the use of biodiesel in blends of up to 5 percent, known as B5. The reason: Trucking companies believe the use of biodiesel will expand fuel supplies. The average price of conventional diesel hit a record last month, topping $3.23 a gallon nationally and $3.31 in Iowa.

Biodiesel "fits in with our mission of ensuring an adequate diesel fuel supply - something important to the trucking industry," said Rich Moskowitz, the trucking association's regulatory affairs counsel.

Getting truck stops to sell biodiesel blends - and truckers to buy it - is another question.

"I have to sell what customers will buy, it's not up to me what I will carry," said Delia Meier, vice president of the Iowa 80 Truckstop at Walcott.

The trucking association's endorsement, however, will probably improve acceptance of biodiesel, she said.

Many truckers have been reluctant to use biodiesel blends, partly because of concerns that it can gel on winter days in the Midwest. That shouldn't be a problem in blends of B5 or less, industry officials say.

"It certainly has tremendous potential for us and other companies as far as a great alternative to fossil fuels," said Terry Solvedt, senior vice president and general manager for Des Moines-based Ruan Transportation. "It's pretty widely known that fuel costs are going up dramatically."

The biggest obstacle for biodiesel makers may not be finding places to sell it, but procuring the raw materials.

Soybean yields have not increased like corn has.

Energy Department analysts estimate that there are adequate supplies of soybean oil, grease and animal fat to make about 800 million gallons of biodiesel.

Some plants are being located near slaughterhouses or are using vegetable oils other than soybean. A refinery in Missouri will use turkey parts to make biodiesel. A plant that is being built in North Dakota will rely on canola oil. Meanwhile, facilities in Texas are using cottonseed oil. Imported palm oil, which also is eligible for the new federal subsidy, is a possible feedstock for some plants.

The Western Iowa Energy plant at Wall Lake is to use soybean oil as well as waste fats from hog, poultry and beef processors in the region.

Renewable Energy Group, a joint venture between West Central, which is a cooperative at Ralston, and Todd & Sargent Inc., an Ames-based construction firm, is providing management for the plant and will also market the biodiesel.

Still, the Wall Lake plant will open next March with some uncertainty.

"The demand is out there for our plant when it gets on line," said John Geake, a farmer who is chairman of the Western Iowa Energy board.

But what about five years from now?

"We think the demand is there, but there is only so much feedstock," such as soybean oil or animal fats, he said.


New site: John Geake of Wall Lake, chairman of Western Iowa Energy, and around 700 other farmers invested in a biodiesel plant to open at Wall Lake. The plant is to use soybean oil and waste fats from hog, poultry and beef processors in the region.

Biodiesel vs. ethanol

The biodiesel industry is in its infancy, so few studies have been done that show its potential economic impact. In some ways, the biodiesel industry is where the ethanol industry was 20 years ago.

ETHANOL'S IMPACT: An analysis by Iowa State University showed that Iowa's ethanol industry provided 3,700 jobs, consumed about $910 million worth of corn a year, and racked up $2.6 billion in sales of alcohol and a byproduct used for cattle feed. Ethanol plants increase corn prices in their areas by 5 cents to 10 cents a bushel.

BENEFITS: Advocates say farmer-owned ethanol and biodiesel plants are particularly beneficial because the profits from those plants go to producer-investors and the rural communities where they live.

6. Program hopes to encourage next generation of farmers

BY ART HOVEY / Lincoln Journal Star

UNADILLA -- Many Nebraskans measure success down on the farm by big tractors, big cornfields and cattle herds, and sons picking up where their fathers left off.

Different standards apply at a farm of much more modest scale midway between Palmyra and Unadilla.

Here there's a wind generator that meets most of the day-to-day power needs -- and a gas-powered generator, not a whirling electric meter, to fill in any gaps.

There's a wood furnace in the back yard that delivers hot-water heat through an underground pipe to a 1912, two-story house.

Instead of cattle and corn as far as the eye can see, there's a 25-year-old horse named Flame, two dairy goats named Midnight and Samantha, and a garden near the end of its farmers market outpouring of potatoes, carrots, squash and other vegetable crops.

And the 79-year-old man and the 35-year-old man who smile over these accomplishments don't fit the father-son profile, either.

Lowell Fey, a retired atomic physicist, and Chuck Porter, graduate of an Ohio seminary, appear to be a much better reference for a new Nebraska pilot program called Farm Beginnings.

They're models for the program meant to bring more of the younger generation into agriculture in Nebraska. It is an approach that emphasizes class work, mentoring and careful attention to a business plan that any self-respecting banker would want to see before lending money.

Farm Beginnings debuted quietly Saturday in the basement of the First National Bank in Syracuse. As of Tuesday, 14 participants, 14 fledgling farmers, had agreed to the $800 cost.

Fey, the older of two men who've already traveled this road, did atomic-clock research for the National Bureau of Standards in Washington, D.C., and later in Boulder, Colo. He earned advanced degrees in horticulture and geography before he and his wife retired to Nebraska City.

Indiana native Porter attended seminary in Dayton, Ohio, before pairing missionary-like zeal with an ecologically and environmentally driven vision four years ago on the farm where Fey grew up.

Their paths crossed in 2000 only because Porter's wife, Susanna, now an occupational therapist in Lincoln, made friends with Jackie Andrews while their children played in an Ohio park.

Andrews is the daughter of the Syracuse handyman Fey had hired to fix up the house.

Before that, "the only Nebraska I knew," Porter said, "was in traipsing across Interstate 80 getting to somewhere else."

Four and a half years later, implausible as it might seem, these two men sit near each other in the living room of the house where the Porters, son Riley, 9, and daughter Emma, 6, live.

"Nobody lived in this place for probably 20 years," Porter said. "It was very much a raccoon, skunk and squirrel hotel."

With the house restored, Fey and Porter focus on the same sustainable, organic, diversified future.

"We both had the same sort of passion for organic agriculture,? Porter said.

Fey recently moved a camper to the 160-acre farm to spare himself some of the 60-mile round trips to the farm.

"I'm happy to have somebody like Chuck wanting to do what he's doing," he said.

The older man never outgrew his attachment to his roots. He bought out his brother's interest, rather than sell his own.

But that's not the only reason for the partnership.

"The other reason," Fey said, "is that I'm very disturbed at the way agriculture is going now days. It's become industrialized. It's no longer farming. It's industrial agriculture.

"So I'm wanting to do a little bit to prevent that from happening here. I'd also like to see this operation become a model for other people to think about."

Porter sees it the same way. "Farmers are essentially becoming heavy equipment operators," he said.

As a man of his word, Porter has agreed to be on the board of directors for the Nebraska version of Farm Beginnings, a program begun nine years ago by the Land Stewardship Project in Minnesota.

A fact sheet prepared by the Land Stewardship Project traces Farm Beginnings to the mid-1990s and to inquiries from a local group called "The Wabasha County Give A Damns."

Its members were concerned about where the next generation of farmers would come from.

In the first eight years since the Land Stewardship Project responded, 222 people completed the course in southeastern and western Minnesota.

About 20 percent of the graduates moved from urban to rural settings to pursue farming.

More than 60 percent of the graduates are still farming.

Kate Twohig of Land Stewardship's Minneapolis office said economic success is only part of the picture. Stewardship, environment, strengthening rural communities and quality of life are there, too.

"We've actually been very lucky in Minnesota," Twohig said, "in that we've had a pretty good match of people who want to mentor and people who want to be mentored."

In Minnesota and in pilot programs in Nebraska, Illinois and Missouri, spending an adequate amount of time on the groundwork is just as important as the groundwork farmers do before they plant their crops.

In Nebraska, in particular, "we've been working for a year," she said. "And, of course, they have wonderful networks themselves."

Among those doing Farm Beginnings spade work here:

-- Martin Kleinschmit of Hartington, a sustainable agriculture specialist with the Nebraska Center for Rural Affairs.

-- Paul Rohrbaugh of Steinauer, executive director of the Nebraska Sustainable Agriculture Society.

-- Gary Lesoing of Auburn, an agricultural Extension agent with the University of Nebraska-Lincoln.

"Hopefully, a lot of this will be focusing on the nuts and bolts business aspect of it," Lesoing said. "It will be explained by farmers who actually went through it themselves."

Rohrbaugh said those tracking Farm Beginnings' progress shouldn't read too much into making Syracuse its first base.

"This is a pilot program or a debut in Nebraska. And right now our expectations, our plans are to move around to all regions of Nebraska."

Kleinschmit said Farm Beginnings isn't aimed at a particular class of farmers.

"This program fits any clientele," he said, "because what it does is it starts with basic goals. What are your goals and what do you want to gain from this?"

"Could farming be a part of that? So that's the first question. How do you want to farm?"

While not trying to pigeon-hole participants, the Nebraska organizers of Farm Beginnings concede that operations with thousands of acres of corn or thousands of cattle may not fit the mold.

"If you can figure out a way to make a very large feedlot or a very large corn and soybean farm work for you," Kleinschmit said, "that's great. But typically we find out that people who are getting started don't have the capital to invest in that large farm or large operation."

Without a parental presence or substantial savings, "the margins are so small you can't make it work," he said. "So many of the people in our program are moving toward specialty items."

Rohrbaugh said Farm Beginnings fits with the goals of his organization.

"I have a couple of hopes. One is a local food movement is progressing in Nebraska. Obviously we need more producers. And this is one way to encourage new producers.

"The other thing I like about it is students are going back to their local communities and being community leaders. And they'll be espousing this same philosophy."

At age 35, Rod Christen of Steinauer realizes he's another example of an increasingly rare occupational breed.

Of the 21 graduates in his Table Rock graduating class, he knows of one part-time farmer and one full-time farmer besides himself.

"I've only got one neighbor anywhere close to my age, " he said, "and the rest of them are all much older."

Christen and sister Kay are the main cogs in a cow-calf operation built around 225 cows and a strong commitment to rotational grazing.

That gives them some diversification in an increasingly specialized age. But Christen is far from certain that they are an example of where agriculture is headed.

"I like to be optimistic and think that's the case," he said. "But I realize when I look around, I'm afraid agriculture is going the Wal-Mart effect as well."

As the sun climbs higher and the morning chill fades, Lowell Fey and Chuck Porter head outdoors.

Porter grabs a power drill and starts driving screws into the rafters of an addition to a former granary that's on its way to becoming a goat barn.

Fey leads a brief tour of the farm he's intent on saving from abandonment.

He talks about the barn that a storm blew down, about a 160-acre farm that once included both beef and dairy cattle, hogs, chickens and much more.

For those who choose the conventional path to farming, "now it takes more than a thousand acres," he said. "You're not in the game if you have less than a thousand acres."

That is not the game he and Porter have chosen.

"What I'd like to see is a return to a local economy," Fey said. "Maybe it's a pipe dream, but it isn't necessarily. A local area could be largely self-supporting as far as food goes, and in other ways, too."

Porter sounds equally unwavering.

"Going into seminary it was clear enough to me that I would be working along the lines of environmental issues and opening the eyes of the church to the church's role in dealing with ecological issues," he said.

Is owning the Fey farm a key personal objective? Not necessarily, Porter said.

It's more about "dedicating myself to being the caretaker and the steward of this land."

The possibility of not owning "makes some of my friends and family nervous," he said. "But the answer I have for them is that this relationship that has developed is more familial, much more of a family relationship than it will ever be a contractual relationship."

Contracts are no substitute for trust.

"Lowell and I are really kindred spirits," Porter said. "And I believed that from the first phone conversation I had with him."

7. Court upholds township's right to prohibit corporate farming

Public Opinion, Chambersburg, PA: local news
Senior writer
Saturday, November 5, 2005
http://www.publicopiniononline.com/apps/pbcs.dll/article?AID=/2005110 5/NEWS0>http://www.publicopiniononline.com/apps/pbcs.dll/article?AID=/ 20051105/NEWS0 1/511050307/1002

Belfast Township in Fulton County has won the first round in a legal fight to regulate corporate farming.

John R. Walker, president judge of the Franklin/Fulton County Court of Common Pleas, recently upheld a township's authority to prohibit corporate involvement in farming.

Agribusiness interests had sought a summary judgment and asked the court to rule that the township's "anti-corporate farming" law and other ordinances were "void as a matter of law."

They argued that Pennsylvania Corporations Code preempted the ordinances, and that the Commerce Clause of the U.S. Constitution, and provisions in the Pennsylvania Constitution prohibited the township from adopting the ordinances.

Walker rejected each argument and ruled that the "plaintiffs have failed to prove that they are entitled to judgment as a matter of law."

Belfast Township supervisors in July 2000 adopted the ordinance, which stated:

  • Corporations cannot engage in farming, either by owning farmland or by contracting for a farmer's production.
  • Family corporations and family partnerships are exempt.

During the mid-1990s, residents had become concerned about the economic, cultural and environmental harms that could be caused by corporate factory farms, according to court documents.

Needmore farmers Ricky Leese and Ralph Swope in November 2001 challenged the ordinance and two others that regulate farming.

A dozen townships in five counties have adopted similar ordinances.

The Pennsylvania Farm Bureau lobbied the governor and state Legislature to ban local ordinances that control farming.

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