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First case of U.S. soybean rust; diversification key for family farm survival; other stories

(Sunday, Nov. 14, 2004 -- CropChoice news) -- Below are 6 items dealing with agriculture, agribusiness, trade and rural life:

1. Creativity, diversification key to survival for local farmers
2. NFU president's statement on first U.S. case of soybean rust
3. Rust and rust panic in the US soybean crop
4. Small business: Tapping the work ethic in fading rural towns
5. China offers loans to help support cotton prices
6. South Korean farmers and students hurl rocks against police over rice

1. Creativity, diversification key to survival for local farmers

By Jennifer Babulsky
Norwich (CT) Bulletin, Nov 13, 2004

Jerry Grabarek looked like a proud papa as he talked about Shania, Destiny and Cocoa.

Those three ladies are his cows.

Grabarek, owner of Preston Farms and a Preston selectman, takes pride in knowing the names of all of his cattle, which includes 60 milking cows and another 60 heifers.

"I just have to see their udder and I know which one she is," he said. "It's easy."

Such familiarity comes from years of experience.

Since 1923, the 340-acre Grabarek family farm has survived the Great Depression and crippling economies. It wasn't easy. It has taken commitment, patience and a love of farming, Grabarek said.

"You just keep going," he said.

Only 185 farms remain active statewide, according to the Department of Agriculture, but many survive only because of creative ways to make a little money on the side.

In Grabarek's case, it's the 7.5-acre corn maze, which has become a popular fall attraction in Eastern Connecticut over the past five years.

While the maze is only open for about six weeks, that's enough.

"The corn maze is the future of farming in Connecticut," Grabarek said.

Whether it be corn mazes, hay rides or selling vegetables, supplementary income is a necessary part of farming in Connecticut.

Every year, nearly 10,000 acres of farmland are lost in the state, according to the American Farmland Trust, and there are only 370,000 acres left, 12 percent of the state.

Agri-business contributes more than $2 billion to the state's economy each year, but as farms decrease, that number drops.

At 4:45 each morning, Grabarek wakes up, watches the Weather Channel, goes and finds the cows and attaches them to milking machines.

As the cows get milked, Grabarek grabs a cup of coffee and his morning newspaper. Later, the cows are milked again. The hours pass by.

Grabarek's workday begins and ends in darkness.

"I don't get too much time off," he said with a laugh. "There's always something to do."

Robert Desjardins and his family are no different.

Their 500-acre farm in Plainfield has been in the family since the family matriarch, Doris, was a child.

If the Desjardins have their way, generations to come will be able to grow up on that same farm.

Robert, his mother and three brothers each has their own set of responsibilities.

"We all kind of have our own department we take care of, like the crops or cows," Robert said.

But crops and cows are not the only money source for the family.

They also have a gravel and soil excavation business.

Even with the added sources of income, financial problems arise.

Fluctuating prices of milk and grain often determine what the month's pay will look like, he said.

Along with the unpredictability of product costs, there are day-to-day surprises too, he said.

"One day everything is fine. And the next day, a cow is sick," he said.

As other farmers sell off portions of land to developers, Desjardins said no way: "I think we'll be here a while."


2. NFU president's statement on first U.S. case of soybean rust

For Immediate Release
Contact: Laura Johnston, 202-314-3104, ljohnston@nfudc.org
Rae Price, 303-338-2535, rae.price@nfu.org

WASHINGTON (Nov. 10, 2004)  National Farmers Union President Dave Frederickson issued the following statement after today's confirmation of the first case of soybean rust in the United States:

"Until today, the United States had been the only rust-free soybean market in the world. This disease has resulted in production losses of 10 to 80 percent of growers' crops in other countries, so National Farmers Union is extremely concerned about the spread of this disease in the U.S.

"Farmers Union is extremely concerned that additional fungicide expenses may cost producers up to $25 an acre in order to control the spread of the disease. This comes at an unfortunate time of declining soybean prices and rising energy inputs. We can be thankful that soybean harvest in Louisiana was virtually complete, so that the spread of this fungal disease might be more easily contained.

"We urge the U.S. Department of Agriculture to do everything possible to stop the spread of this highly mobile disease, including further steps to ensure soybeans and soybean products from contaminated areas do not enter the United States. While we understand that soybean rust may spread via its principle method of distribution  wind, we do not believe it is in our national interest to facilitate its introduction into the United States through imports of crops that may be infected."



3. Rust and rust panic in the US soybean crop

THE FINAL WORD Issue 122 Nov. 12, 2004
Alan Guebert
1.) Rust and rust panic

News early Wednesday that USDA had confirmed the presence of Phakopsora pacyrhizi, or Asian soybean rust, in two Louisiana State University-maintained research plots hit farmers and the markets like a sledge hammer.

By mid-day, the ag press fell in line to report the dire consequences of the discovery: reduced soybean plantings nationwide; $20 to $25 per acre increased production costs; 15% to 80% reduction in yields; a shortage of fungicide to treat infected acres.

By late Wednesday afternoon--perhaps winded by their morning sprints--both the markets and farmers began to calm. Chicago soybean futures, up 31-cents on initial reports of the disease, settled 12-cents higher for the day.

Thursday then brought this shocking news: the world had not ended.

Why? Because a careful review of the facts--we got our from the best soybean extension agronomist we know, Iowa State‚s Palle Pederson--shows soybean rust here will be very different from soybean rust there--Brazil and several African nations.

First, it is very likely that this year's active and late hurricane season did indeed bring the rust spores to Louisiana as USDA suspects.

Five weeks ago Pederson and a colleague ran computer simulations, based on National Weather Service data gathered during the September hurricanes that pummeled the American Gulf Coast, and predicted soybean rust spores from South America likely made it to America.

Unlike USDA, however, the models showed the series of late-season hurricanes did the trick, not a big one by itself like Hurricane Ivan. The rust spores likely were shuttled to the Gulf Coast by the unprecedented wave of storms.

The models, explains Pederson, are „good enough‰ to refute ideas that farmers, USDA officials, plant breeders or others accidentally brought rust into America.

Moreover, since rust spores are an "obligated parasite"--they need living plant material to survive--South American soy importers and seed companies bringing Southern Hemisphere seed into the US can also be scratched as a likely source.

Parasite is the key, he stresses. Since rust needs a living host to survive, the lack of a living host means importers, researchers or travelers weren‚t the carrying culprits.

More importantly, Midwestern winters and most Delta winters are too harsh to allow the rust to survive season-to-season on living plants. Southern states like Louisiana, though, often remain warm enough to harbor the fungus year around.

In fact, says Pederson, Asia rust can be found in nearly 90 plants other than soybeans. Kudzu, almost as common as air in most Southern states, is a one widespread host. Many of the hosts easily survive mild Coastal winters.

The weather difference between the South and the Midwest also means that Asian soybean rust must travel to key Midwestern soybean areas each year -- "just like corn rust does every year," Pederson explains--in order to reduce yields. And it likely will, he explains.

But the airborne arrival doesn‚t mean rust will always find a Midwestern home. Conditions must be receptive when it arrives for it to impact yields. According to the soybean specialists, rust loves moisture, high humidity and moderate temperatures.

In short, too dry and it dies; too warm and it dies. A pleasant, almost perfect growing season like 2004 would, however, be a boon to rust. A dry, hot growing season like 2003 would be a bust to rust.

Rust treatments are available. Syngenta currently markets a fungicide that is foliar applied once rust appears--usually at or after full canopy. The cost is a steep $20 per acre.

Also, since most US farmers do not spray soybeans at that late stage, Extension agronomists are now examining equipment, techniques and economics growers may soon need to combat the disease if and when it arrives.

On a more hopeful note, Pederson relates that Brazilian growers--who spend an estimated $1 billion per year fighting the fungus--are getting a better handle on how to attack it. "They are learning how to time fungicide applications better. In fact, most Brazilian producers only spray once after the rust appears."

"More importantly," he adds, "they have discovered that spraying for rust kills other diseases and some growers have actually improved overall yields after spraying."

But, he warns, Southern US growers will be hit first and he urges them to "spend the next eight months learning all they can about rust."

4. Small business: Tapping the work ethic in fading rural towns

November 11, 2004

Across the Great Plains, farm towns are dying, their downtown shops going dark, their young people forsaking failing family farms and sputtering local economies to make a living elsewhere. Enter (or, rather, re-enter) the entrepreneurs Tom Galloway and Carl Kelly, who came back to help breathe some life into the communities of their youth.

Both men had witnessed from afar the slow, wrenching declines of their hometowns, and both wanted to lend a helping hand. But it was not just altruism that brought Mr. Galloway back to the sand hills of north central Nebraska or Mr. Kelly to the rolling prairie of southeast Kansas.

Both also saw a solid business opportunity in the grit of the men and women they had left behind, who struggled to keep their farms and ranches afloat as falling commodity prices and the crush of agribusiness crippled local economies. Here was a farm-raised, self-reliant work force made to order for expanding businesses like theirs, old neighbors who possessed a traditional work ethic, openness and loyalty - hallmarks of rural life, but traits sometimes hard to find in urban America.

Mr. Galloway, 41, grew up in Bassett, Neb., and was one of 40 students in a high school graduating class; now, the classes are half that size as the town has fallen to 681 residents. Like many of his classmates, he sought his future elsewhere. After a year at the University of Nebraska at Kearney, he headed for California, attended two junior colleges and, in 1988, took the first of several jobs in the computer industry between manufacturer and customer.

He learned the ropes at these hardware and software distributors and resellers, then struck out on his own in February 2002 with Technologent in suburban Los Angeles, selling service contracts and products for Sun Microsystems.

As sales surged from $15 million in the first year toward $30 million in 2003, Mr. Galloway decided to open a call center. And he chose a location far from his California headquarters and his other office in Dallas: Ainsworth, Neb., a town of 1,850 people more than 250 miles from Omaha and a half-hour drive west on U.S. 20 from Bassett, his childhood hometown. There, he concluded, he could avoid one of the big frustrations common to urban call centers.

"It's a reality of the computer world: we hire people, train them, a year or two they're gone,'' he said. "It's hard to keep good people. In our culture, the assets are the people, and I know the people back there are hard working and extremely ethical."

A credit card call center in Ainsworth had just closed, throwing 50 people out of work, Mr. Galloway said, and "people were begging for these jobs," which start at $8.65 an hour and for many, have risen above $10 or $12. They also offer a benefit that can be hard to find in the heartland, health insurance. Technologent provides health, dental and vision benefits for its 35 employees at the call center and offers family coverage at group rates via payroll deduction.

Families that lacked health insurance or that were deterred by high deductibles from getting regular checkups have returned to their doctors and dentists, according to Sheryl Hiatt, a business development consultant for the Nebraska Department of Economic Development.

Technologent's presence has not only pumped money into the local economy, it has prompted a few expatriates, like Audrey Kramer, to return home. Ms. Kramer, 49, who grew up on a 2,500-acre cattle ranch outside Ainsworth and married a local rancher, had spent the last two decades in Omaha, where her husband, Ken, held jobs at an insurance company and a car dealership.

They missed their rural roots, though, and saw a job for her at Technologent as a way back. The couple bought a 146-acre farm outside Ainsworth, where Mr. Kramer now trains horses.

"The benefits are good and the camaraderie - I think I missed that most when we were gone," Ms. Kramer said.

Today, Technologent's account representatives average over 30 calls a day, about twice the industry average, according to Mr. Galloway. And Julie Younkin, the center's director, says not a single employee has left for another job. "I think one family moved and one person left to get married," she said.

Mr. Galloway's business has also benefited from some $500,000 in federal community development funds, half to help cover employee training and start-up costs, the other half a seven-year, no-interest loan. Moreover, the local owners of the call center's 8,000-square-foot building made a gift of it to Mr. Galloway. With revenue continuing to grow to a projected $50 million this year, he expects to hire 45 more people in Ainsworth by the end of the year, for a total of 80.

In addition, he is seeking a larger community in Nebraska to help him fill 200 to 250 jobs at a planned second call center.

Mr. Galloway says he has won over Sun Microsystems' executives, whom he has brought to visit his native state. "They're now big believers in the heartland of America, that we've got to stop sending jobs overseas and bring back jobs to the United States,'' he said. "These are the hardest-working people. They'll do anything for you."

One state to the south, there is no longer a school of any kind in Grenola, Kan., which was a thriving cattle-drive town in the 19th century but is now down to 280 residents. This summer, when milk and bread delivery trucks no longer considered it worthwhile to take the highway exit for Grenola, the town's one small supermarket shut its doors, leaving the True Grit Cafe and a small tire and auto repair shop as the only commercial establishments.

But thanks to Mr. Kelly, owner of Kelly Manufacturing, a $5.5-million-a-year maker of aviation instruments in Wichita, the economic outlook has brightened.

Mr. Kelly, 62, who grew up on a farm near Grenola, got a business degree and then a law degree from the University of Kansas, and went on to become a corporate lawyer at R. C. Allen Inc. in Wichita, a maker of aviation gyroscopes and various engine gauges. In 1993, when its fortunes were falling, he bought the company and threw his energies into turning it around.

In 1996, the same year he renamed the company, keeping R. C. Allen as the trade name, he opened a satellite plant in a vacant 40,000-square-foot school building in Grenola, 50 miles east of Wichita, where his brother worked the family farm and where he, too, had a farm. In return, local officials offered the building rent- free for 10 years.

Today, he pays 17 employees $8 to $13 an hour and subsidizes their health insurance.

"We feel fortunate to have them here. They're very community oriented," said Grenola's mayor, Walter Dean, explaining that the company's prairie-style work hours allow working mothers to pretty much match the school bus schedule of their children. "If we had three Kellys here, maybe a service station would come in."

In effect, there will soon be two Kelly-owned companies. Mr. Kelly has begun renovating a 15,000-square-foot industrial arts building adjacent to the school, which was also offered to him tax-free, and will soon relocate about half of another business, Kansas Diecasting, to Grenola from Le Roy, Kan.

Mr. Kelly's brother Lynn, the Grenola plant manager for the last four years, boasts about the local work ethic. "In emergency situations, people will stay half the night," he said.

He toils just as hard, at all hours. He gets up at 6 a.m.; works at the plant from 7 to 10:15; drives 17 miles to West Elk High School in Howard to teach classes in introductory calculus, calculus, principles of technology and advanced physics for more than two hours; returns to the plant and works until about 5; heads back to his 2,600-acre farm to feed his 120 cows and tend his wheat, soybeans, and milo; and then, often, puts in a final late-evening stint at the plant.

Source: http://www.nytimes.com/2004/11/11/business/11sbiz.html?ex=1101154358&ei=1&en=a518a571ee691b48

5. China offers loans to help support cotton prices

China Offers Loans to Help Support Cotton Prices (Update2) Nov. 10 (Bloomberg) -- China, the world's top cotton grower and consumer, will double lending to buyers to encourage purchases of the fiber as the harvest is expected to rise 32 percent to a record this year, reducing prices and farm incomes.

The Agricultural Development Bank, a state-owned policy lender, will loan 20 billion yuan ($2.4 billion) this year to millers and state-owned buyers, said Martin Liu, a cotton analyst at Beijing Orient Agribusiness Consultant Ltd., an agriculture ministry affiliate.

``Lending is rising because of the bigger harvest this year and concern prices will decline, which would hurt farmers' incomes,'' Liu said in a telephone interview in Beijing. Cotton is the worst-performing global commodity this year, falling 41 percent, according to Bloomberg data.

Chinese Premier Wen Jiabao made a recovery in rural incomes one of his priorities to ensure social stability. About 800 million of China's 1.3 billion people rely on agriculture for their livelihoods and the government wants to ensure farmers don't miss out on the country's economic growth of more than 9 percent over the past two years.

Chinese farmers may gather 6.42 million metric tons of cotton this year after improved weather and increased plantings boosted the crop, the National Bureau of Statistics said last month. The harvest would be the biggest since the bureau started publishing the figures in 1978.

Cotton traded on the New York Board of Trade for December delivery last traded at 44.04 U.S. cents a pound yesterday compared with 75.07 cents on Dec. 31 last year.

The fiber for January delivery dropped 145 yuan a ton to 12,235 yuan a ton on the Zhengzhou Commodity Exchange, according to the exchange's Web site as of 2:21 p.m. Beijing time. The contract has fallen 20 percent since the exchange began trading cotton futures on June 1.

``The bigger loans would ensure farmers are able to sell their crop in exchange for immediate cash income and allow them to continue to plant cotton next year,'' said Cao Heping, vice- dean of Peking University's School of Economics. ``This would prevent price volatility and stabilize the cycle.''


The cotton crop in China dropped for a second year to 4.86 million tons in 2003, driving up prices of the fiber. The shortage, along with expectations of increased demand because of textile quotas removal, contributed to a 47 percent surge in cotton prices on the New York Board of Trade last year, Cao said.

The Chinese government responded by setting up the China National Cotton Reserves Corp. in March 2003 to buy and stockpile cotton and help stabilize prices.

China's textile exports may rise by at least 24 percent to $100 billion next year from 2003, the agriculture ministry said last month, after quotas on textile trade expire on Jan. 1 under World Trade Organization rules.

Last month, six industry organizations in the U.S. and the textile workers' union UNITE said they'd petition the U.S. Commerce Department to prevent surges in imports of 15 product categories including woolen trousers, polyester shirts, cotton sheets and underwear.

``Cotton prices last year were too high,'' Cao said. ``The expectations of an increase in exports are reasonable though prices were over-speculative. Everybody didn't expect other countries to resort to alternative trade restrictions.''

Cotton Reserve

China National Cotton Reserve said it planned to buy 300,000 tons starting Nov. 9 at a price of as much as 11,500 yuan a ton, Liu said. No year-earlier comparative figures were provided.

China on May 14 restricted credit to textile industry as part of efforts to slow growth and stem inflation. Lending curbs helped rein in economic growth to 9.1 percent in the third quarter against 9.6 percent in the previous three months.

Rising raw material and grain prices contributed to the seven-year high inflation rate of 5.3 percent in July and August in China. Inflation slowed to 5.2 percent in September.

6. South Korean farmers and students hurl rocks against police over rice

[LatelineNews: 2004-11-13] SEOUL, South Korea - Crowds of South Korean farmers and students hurled rocks and wielded bamboo sticks at riot police on Saturday, demonstrating against free trade in rice. About 10,000 farmers rallied in a railway station and later marched through the center of Seoul, chanting, ``We oppose opening the rice market!''

Under the free trade agreements of the World Trade Organization, South Korea has started talks with rice-exporting countries. Farmers fear the talks will open the gate for cheaper rice from China and the U.S. state of California.

Clashes erupted near Seoul City Hall when police blocked thousands of farmers and students who tried to march on the main government building and the presidential palace a few blocks away.

Police repelled the protesters by firing water cannons, and brandishing batons and plastic shields. The demonstrators fought back, throwing empty bottles, burning garbage and sticks.

There were no immediate reports of arrests or serious injuries.

Under a 1994 global free trade agreement, South Korea was allowed to limit rice imports to 4 percent of the domestic consumption.

That deal expires this year, and South Korea is holding bilateral talks with nine rice-exporting countries, including the United States.