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Farm subsidies may not face limits; other news

(Friday, April 15, 2005 -- CropChoice news) --

1. Farm Subsidies May Not Face Limits
2. Deere wants to help farmers harness the wind: Company wants to buy, distribute turbines, business development manager says
3. ACGA Applauds Introduction of Renewable Fuels Legislation
4. Wheat Board Might Be Toast: A Canadian staple fights for survival
5. CAFTA First or America First?
6. Indians to protest 'anti-poor' global trade system
7. Farmers Hitting Rock Bottom Along With Crop Prices

1. Farm Subsidies May Not Face Limits

By Dan Morgan
Washington Post
Friday, April 15, 2005

The Bush administration has signaled that it will not pressure Congress to enact limits on government payments to big farmers this year if lawmakers can come up with other ways to cut spending on agricultural programs by $5.4 billion.

The subsidy cuts and other proposed changes in the farm program were hailed by budget cutters, environmentalists and foreign governments when they were included in the administration's budget proposals in February. They have run into heavy resistance in some parts of the Farm Belt. Southern cotton and rice growers in the GOP's political base would be hit particularly hard.

In remarks to a Senate Appropriations subcommittee this week, Agriculture Secretary Mike Johanns acknowledged that many of the policy proposals, such as reducing the maximum payment, are "sensitive." Lawmakers, he said, "may have other proposals to achieve these savings, and we are willing to work with Congress on other recommendations."

Kenneth Cook, president of the Washington-based Environmental Working Group, called that a "flip-flop."

"What the secretary is really saying is that the administration has backed down under pressure from members of Congress who depend on campaign contributions from big agribusiness," he said. "It was smart and courageous for the president to propose limiting payments, closing loopholes and cutting overall subsidies. His change of plans is a sad reminder of this administration's policy to leave no big business behind."

Administration officials deny that is the case.

"We have not withdrawn the president's proposal, and payment limitations are an important part of it," said Agriculture Department spokesman Ed Loyd. "I don't think you've seen the last discussion of payment limitations." White House press secretary Scott McClellan called the Bush proposals "common sense, reasonable ones."

They would reduce spending on farm programs and respond to growing foreign pressure to cut subsidies that are seen as giving U.S. farmers an unfair advantage in world trade.

Reducing agricultural spending by $5.4 billion is a key part of the administration's plan to cut the federal deficit in half. So far, however, the Senate Budget Committee has agreed to cuts amounting to only $2.8 billion. The House Budget Committee has come up with $5.3 billion in cuts, but those include savings in food and nutrition programs for the poor that the Senate has ruled off-limits.

Without reductions in some farm export subsidies before July 1, the United States could face trade retaliation under a recent ruling by the World Trade Organization. Additional retaliation could occur as early as 2006 unless Congress takes further steps to dismantle price and income support for growers.

The administration has proposed limiting total payments to individual farmers in a single year to $250,000 compared with the current $360,000. It also wants to close loopholes that enable farmers to evade the limits, reduce the costs of commodity programs by 5 percent and restrict use of a price support mechanism that has been the centerpiece of farm programs since the 1930s.

A Government Accountability Office report last April found that farmers were skirting the payment limits, often legally, using corporate entities, relatives and shadow partners. Some farms collect more than $1 million a year, far in excess of the limits.

While the idea of limiting these payments is extremely unpopular across the southern cotton belt, where more government aid is needed to make up for depressed world cotton prices, it resonates among prairie populists in both parties who are wary of corporate farming and big government.

Sen. Charles E. Grassley (R-Iowa), a champion of lowering the limits, said yesterday that he thinks he still has the president's support.

"I've spoken to officials at the highest levels in the administration and am confident they are committed to a reasonable limit. The president is a powerful ally in my campaign," he said.


2. Deere wants to help farmers harness the wind: Company wants to buy, distribute turbines, business development manager says

Steve Tarter, Peoria Journal Star, 04/12/05

MANLIUS - Deere and Co. wants to add something else to its product line besides John Deere tractors for U.S. farmers: wind energy.

The Moline-based farm equipment giant is doing more than simply endorsing the technology involved. It is actively seeking to assist farmers, schools or municipalities that want to generate their own power, said Karl-Heinz Mertins, Deere's business development manager.

"John Deere views community-based wind energy as a great economic opportunity for rural America," he said, speaking at a renewable energy workshop Saturday at Bureau Valley High School, a Manlius-based school where power is supplied by wind energy.

"We're not interested in making wind turbines, but in how wind energy can help farmers," said Mertins, noting Deere hopes to be a facilitator for farmers interested in wind power.

"Instead of everybody being on their own, John Deere would like to buy wind turbines and distribute them throughout the country," he said.

"(Deere) would like to streamline the business while taking the time and cost out of wind energy installations," Mertins said.

"It's time for wind energy to come back to the farm again. Wind power is over 100 years old. If you go back to the Dutch windmills, it's a lot older than that," Mertins said.

Farmers could recognize a new source of income by harnessing wind energy, said Dan McGuire, CEO of the American Corn Growers Foundation in Washington, D.C.

McGuire urged farmers who were interested to get grant requests filed with the U.S. Department of Agriculture before June 28.

Wind power could increase a 250-acre farm's annual farm income by $14,000, according to the U.S. Department of Energy.

Wind power is considered the world's fastest growing energy resource. According to Washington, D.C.-based Environmental and Energy Study Institute, the United States currently generates enough wind energy to power 1 million households.

Farmers were also encouraged to use biodiesel at the workshop by Julie Toohill of the Bloomington-based Illinois Soybean Association. Biodiesel is diesel fuel blended with vegetable oil that burns cleaner with reduced emissions than regular diesel fuel.

3. ACGA Applauds Introduction of Renewable Fuels Legislation

Contact: Larry Mitchell, 202.835.0330, http://www.acga.org

WASHINGTON ≠ April 13, 2005 ≠The American Corn Growers Association (ACGA) applauds the introduction in the U.S. House of Representatives of the Fuels Security Act of 2005. ACGA President Keith Bolin commended House Members Stephanie Herseth, D-S.D., Tom Osborne, R-Neb., Steve King, R-Iowa, and Collin Peterson, D-Minn., and Ranking Minority Member of the House Committee on Agriculture, for their initiative and leadership in introducing the bipartisan proposal legislation which contains a Renewable Fuels Standard (RFS).

"As the debate on energy moves forward in this yearís Congress, we believe one of the goals of energy independence should be to promote the production of renewable domestic fuels," said Bolin, a corn and swine farmer from Manlius, Ill. "We believe that an extraordinary opportunity is at hand to increase energy independence, reduce oil imports, improve our environment and stimulate rural economies."

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

The new legislation mirrors a measure introduced in the Senate last month (S. 650) by Senators Richard Lugar, R-Ind., Tom Harkin, D-Iowa, and the 21 other cosponsors. The Senate passed a similar initiative in the last Congress, but this yearís legislation has an updated schedule to reflect both growth of the renewable fuels industry and the fact that domestically produced energy has taken on a more important role in recent months. The establishment of an RFS will capitalize on the nationís growing bio-fuel industry, expanding the use of these domestic, "home-grown" fuels to 8 billion gallons per year by 2012.

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

Original co-sponsors of the bill include. Stephanie Herseth, D-S.D., Tom Osborne, R-Neb., Collin Peterson, D-Minn., Steve King, R-Iowa, Marion Berry, D-Ark., Earl Pomeroy, D-N.D., Sam Graves, R-Mo., Leonard Boswell, D-Iowa, Betty McCollum, D-Minn., Ike Skelton, D-Mo., Mark Kennedy, R-Minn., Marcy Kaptur, D-Ohio, John McHugh, R-N.Y., Jeff Fortenberry, R-Neb., Jerry Moran, R-Kan., Jim Leach, R-Iowa, Jim Ryun, R-Kan., Ted Strickland, D-Ohio, Tom Latham, R-Iowa, Ray LaHood, R-Ill., Mike Pence, R-Ind., and Julia Carson, D-Ind.

4. Wheat Board Might Be Toast: A Canadian staple fights for survival

by Sarah McGregor

A delegation is planning to defend Western Canada's grain monopoly next week in Geneva, even though it's the type of "state-trading enterprise" the world has pledged to eliminate, according to International Cooperation critic Ted Menzies, himself an Alberta grower for over 30 years. He adds that the federally legislated Canadian Wheat Board is this country's "stumbling point" as the world limps toward improving rules governing international trade.

"Our negotiators have a difficult job in trying to defend (the Wheat Board), especially given the fact that the majority of Western farmers don't want to defend it anyway," Mr. Menzies says. "I find it fundamentally wrong that a Crown corporation is paying members to get on a plane to Geneva and try to defend its kingdom."

The CWB will be up against stiff worldwide opposition next week as two observers attend a Senior Officials Meeting being hosted by Canada's WTO permanent mission between April 18 and 19.

It will be the first time since Canada put the CWB on the bargaining table last July that the export agency will meet with high-level foreign diplomats on the sidelines of a major negotiating session. The group will also meet with producer and agricultural export groups of other nations to try and build support for their survival.

CWB Director Larry Hill says Geneva is a long way from his farm in Winnipeg, and timing is inopportune given that feeding season will have just begun. But he notes that getting all of the decision-makers at one time, in one place is a rare opportunity that can't be missed. "It's costly to run around and talk to these people. One of the toughest things is to meet these countries, and schedule meetings here and there," he says.

"The more people we have understanding the Canadian Wheat Board, the better chance we have of not being bullied off the block," adds Mr. Hill. "What we are getting ready for here is a negotiation that is going to be very difficult. (It's a question of)... can we make connections with people and give them a better understanding?"

The Prairie-based group has been actively doing so in other forums, and that includes tension-filled meetings with American and European farm lobby groups that many times got off to a rocky start because they misunderstood CWB's mandate, says Mr. Hill, also chairman of the trade committee.

He says farm groups, such as the International Federation of Agriculture Producers, called on the CWB to attend the upcoming session as a way to spread factual information and get its voice heard. "If we don't go there directly and correct this misinformation, then others won't know," he says.

Last July, countries adopted a package at the last minute which revived the Doha Round. International Trade Minister Jim Peterson said Canada was pushed by every other trading nation to reform the CWB as part of the deal. "It was one against 146. We had no allies," he told reporters shortly after. The board is the sole marketer of Western Canadian wheat, and is run by a 15-member executive board that includes 10 farmers and five government appointees.

The agency offers wheat and barley producers an annual price guarantee for the sale of their commodity. If world price drops below that guarantee, the board will provide the difference to farmers. Some argue it amounts to a subsidy, a practice that these talks aim to end in all rich nations.

Mr. Hill says that international tribunals have ruled that the Wheat Board isn't doing anything illegal. He says that Americans and Europeans, as nations where domestic subsidies to agricultural producers are massively trade-distorting, are using the Wheat Board as a bargaining chip. He concedes that it will be almost impossible for the board to retain its price guarantee, and it's just a matter of how soon it will change. "The government signed [July's] framework text and that's what it says. We think it would be very difficult for anything but that to happen. But it isn't without frustration," he says.

The real fight will be protecting the use of a farmer-controlled single desk, which acts as the sole marketer for 85,000 wheat and barley sellers. If that changed, for example, the CWB could be forced to report its sale prices to competitors, putting Canadian farmers at a disadvantage, says Mr. Hill. He cites New Zealand and Australia as two nations somewhat aligned with Canada in negotiations. "We're looking at ways to cooperate," he says. "The European Union and Americans are the only [parties] that want to put restrictions on the single desks."

Hartley Furtan, an agriculture economist and professor at the University of Saskatchewan, says the Canadian government has so far successfully kept discussion of the Wheat Board at bay. "I don't think those talks are imminent at this stage," he says. "But it is something that we should be thinking about and planning for."

Mr. Furtan adds that it's a smart strategy for the CWB to take its future into its own hands. "They have to be there for two reasons: to hear the message themselves, and to put their case forward. Sometimes they have to be more forceful with their message and they have more data than government," he says.

Recently, Bruce Christie, Director of the Multilateral Trade Policy Division at International Trade, acknowledged that because agriculture reform is at the heart of the Doha round, Canada will likely be forced to make changes. "If the negotiations arrive at a certain ambitious outcome, certain elements of our economy like the Canada Wheat Board and our ability to manage our supply-managed sectors will be on the table. It will be increasingly difficult to defend those programs in those sectors," he told the Senate Foreign Affairs Committee last month.

Alexandra Strickner, head of trade information at the Institute for Agriculture and Trade Policy in Geneva, is following the WTO negotiations closely, and says there's a slim chance the Wheat Board's future will be discussed at the meeting, despite the fact Canada is the host.

International Trade says the agenda of next week's meeting will focus on the "core areas," including non-agricultural market access (NAMA), services, agriculture, development, rules, and trade facilitation.

The CWB delegation will include Mr. Hill, Ken Ritter, chair of the CWB, and an administrative staff member. In 2001, the CWB joined a handful of non-governmental organizations in Geneva for a government-sponsored symposium prior to the Doha, Qatar ministerial meeting.

5. CAFTA First or America First?

Randy Stevenson
Double S Livestock
Wheatland, Wyoming

Adam Smith, the infamous 18th Century economist and moral philosopher said, "I have never known much good done by those who affected trade for the public good."

Proponents of trade agreements like CAFTA are quick to call those of us who oppose this import agreement protectionists. Smith would have been considered a protectionist. So would the American presidents memorialized on Mt. Rushmore, for they all believed that the core of American sovereignty is the prosperity of her citizens through their labor and products. They built a form of government anchored in this belief and they sanctioned the notion that America's freedom is rooted in her ability to feed and supply herself without relying on other nations.

The battle over CAFTA must be won. It is one giant step toward international trade agreements that sacrifice the very lifeblood of America. Make no mistake about this - the humanistic capitalists who advocate the selling of America's soul in this global free trade process have put America's heartland on the block. Under CAFTA, U.S. sugar beet producers are left virtually to the wolves. If we do not speak out now to help them, there will be no sugar beet producers to speak out for us.

When we permit the true source of wealth - our means of production - to be outsourced from this nation, we relinquish control of our own destiny. Countries are not made great by the quantity of goods they consume, but by the quantity of goods they produce. We put our futures in the hands of multinational businesses who have no conscience to call upon, no soul to save and no rear end to kick. Politicians however, have souls, consciences and rear ends.

Let's defeat CAFTA and let Congress know that we're proud to protect America . . . . Let's put America first!

6. Indians to protest 'anti-poor' global trade system


New Delhi, Apr 8 (UNI) Indians will join the Global Week of Action on Trade beginning on Sunday to protest an ''unjust'' world trade system that is leading to increasing inequalities.

Industrial and agricultural workers, farmers, child rights activists and health rights activists of 20 states will organise protest rallies in rural and urban centres, says organisers of the event in India.

''The people want the current global trade rules to be changed because they are unjust and unequal and affecting the poor countries,'' says Global Week of Action-India convenor J John.

The anti-trade lobby in India say they will submit a memorandum to Prime Minister Manmohan Singh and send millions of postcards to President APJ Abdul Kalam to seek reversal of national policies built around the structures of the World Trade Organisation (WTO) and other international financial institutions.

"The future of about 600 million Indians in the villages is linked very closely to globalisation. Our national policies are designed to drive the poor out of farming,'' says Davinder Sharma of the Forum for Biotechnology and Food Security.

According to Mira Shiva of the Voluntary Health Association of India, the exclusion of the poor and increasing disparities in an ''unequal'' global trade system is having a ''telling effect'' on the health of millions of poor people in the Third World.

The global trade has also adversely affected the workers in the country as they face more and more downsizing, contractualisation and casualisation of labour, says All India Trade Union Congress secretary H Mahadevan.

''The children, especially girls, suffer the most due to lack of healthcare and educational facilities in villages and even urban centres,'' points out child rights activist Eeenakshi Ganguly Thukral.

An alternative food festival in Kerala to highlight the impact of genetically modified food on people's health, a cycle rally in Tamil Nadu and burning of effigies representing WTO in Rajasthan are being planned during the protest week.

The protests will be held in as many as 70 countries, all of them in the Third World.

7. Farmers Hitting Rock Bottom Along With Crop Prices

by Paul Beingessner
Canadian farmer, writer

The recent billion-dollar aid announcement by the federal government to Canadian farmers made for some interesting coffee shop talk. That was before the number crunchers told farmers they would get, on average, about $5,000. When that bit of news filtered through, the second cup of coffee tasted a tad bitter.

Mind you, farmers probably lingered over that second cup anyway. With an average age over 50 years, and nearly 40 percent of farmers being over 55 years of age, a little extra sit-down time likely feels all right.

Few things testify to the grisly state of the farm economy like spring auctions. Want to buy a good used four-wheel drive tractor? You can take your pick from a pile of them. Unlike past decades that saw sales mostly confined to smaller farms and retiring farmers, this year's lineup boasts many heavy hitters. The remaining farmers might think it's a good time to grab a bargain, but prices for large equipment haven't hit rock bottom, despite lack of cash on the farm. Some blame American farmers coming north to pick up cheap Canadian iron.

I doubt I've seen a year with such bitter cynicism among farmers. As input costs rise continually and crop prices languish in the doldrums, farmers understand two things. They are going to depend on government largesse for some time, and government largesse just isn't all that large.

Which leads to the bitter cynicism. Farmers, by and large, have given up on farming. Those who are 55 and over plan to ride it out to the end of their working careers, because they have no other options. Wal-Mart only hires so many greeters. Some will turn farming into a hobby when they can draw Canada and old age pensions. Others hope to sell if the market blips briefly upward. This may work for better quality land. Poorer land is becoming almost impossible to sell, or even rent out in this part of Saskatchewan.

My own survey went like this: in a five-mile radius around my farm there are 23 occupied farm houses. Six of the 23 families are no longer farming. A further five of those farming are over 70 years of age, without successors. This leaves twelve families. Of these, six have no likely successor. In some cases, a child may entertain the idea of farming, but the farms simply will not be viable. In 20 years time, it is likely there will be no more than four or five active farm families left in that circle.

There are about 78 square miles of land in that five-mile circle. This works out to 78 quarter sections of land per farmer in 20 years. They are going to be awful busy.

I doubt this grim picture is much different in most of the drier regions of Saskatchewan. As I write this at 1:00 AM, just before making the first of two late night checks on the cows and ewes, I wonder if the federal and provincial politicians know about this reality. I suspect they do. I also suspect they haven't the foggiest idea how to change it.

But it's a reality they themselves have painted. In fact, they continue to add new layers to the canvas, as if it will somehow make the picture look better. We saw renewed calls last week for greater free trade in agriculture, despite the fact each advance in trade and increase in exports has produced smaller farm incomes. We saw an apparent weakening again in support for supply management, the only sectors of agriculture yielding a profit.

We see the price of domestically produced oil, which has seen no increase in the cost of producing it, rising to heights that will choke the life out of farmers. Governments have no plan to deal with this.

And we saw continued waffling on real government support to beef and other ruminant producers. The federal government simply won't take the bold steps necessary to expand the packing industry in Canada. There can be only one reason. In a free-trade universe, the feds must believe that beef packing plants not owned by the huge American packers are doomed to failure.

The real failure is one of vision. It is a failure of governments, economists, scholars, farmers and the community in general. The ideas that might change all this simply don't fit the current paradigm. Controlling input prices, guaranteeing cost of production, pursuing fair trade deals, encouraging production for local consumption, restricting monopolies, investing more, not less, public money in research, setting aside land and controlling surpluses -these things aren't even discussed by governments.

Small wonder farmers are so bitter. While all this may seem distressingly negative, only the ostriches would not be able to see it. And there aren't many of those left on the prairies. They must have moved to Ottawa.

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