E-mail this article to
yourself or a friend.
Enter address:


Losing the farm; other news

(Friday, April 29, 2005 -- CropChoice news) --

1. What's for Dinner? Imports.
2. Another Lobby Group Wanting Cheaper Food at Farmers' Expense
3. Multinational fast food corporations in alliance seek to cut subsidies, tariffs
4.Losing the farm
5. New IATP Report: CAFTA Threatens Sugar Producers
6. Supreme Court Says Farmers May Sue in State Courts
7. Legislation Would Provide Opportunities for Young Ag Producers, Keep More Farmland in Production
8. Supachai sounds warning as WTO expectations for July drop fast
9. Wind Turbine Manufacturer Partners with John Deere Co.

1. What's for Dinner? Imports.


American agriculture is suddenly going through a lot of changes.

After decades as the world's biggest farm exporter, the U.S. farm sector is facing new challenges. Overseas farming giants are emerging to eat into America's business of supplying the world with crops such as wheat and soybeans.

See the complete Trend report at http://online.wsj.com/page/0,,2_1129,00.html

And at home, American consumers are demanding that farmers change the way they grow and sell their produce and livestock. Consumers want pesticide-free produce, giving rise to new ways of cultivating and processing food. They also are seeking new eating experiences. Their appetite for Chilean sea bass, vanilla-flavored lattes made with Italian syrups, and grapes in winter is erasing the U.S. farm sector's unique ability to generate a trade surplus.

U.S. farmers are seeking new streams of income from their land, such as developing wind power, and, most important, many are learning how to be marketers for the first time.

Here are some major trends down on the farm.

1. The Shifting Global Balance

Thanks to cheap land and labor, Russia, Brazil, Argentina, China and other countries are emerging as powerful agricultural producers. The burgeoning titans are building new roads and bridges that benefit their farming infrastructure, and overseas farmers now have access to U.S. equipment and sophisticated biotechnology that deters weeds and bugs.

Russia, for instance, used to depend heavily on the U.S. for wheat, but is becoming a rival wheat exporter. It's expected to ship almost 6% of the world's total wheat exports this year, according to the U.S. Department of Agriculture.

The USDA predicts that there will be no trade surplus in agriculture by the end of 2005. Just four years ago, the U.S. farm sector was generating an annual surplus of $13.7 billion.

But U.S. farmers are working to stay competitive. "What we're seeing among our best producers is embracing technology to reduce their costs of production to become more efficient," says Keith Collins, chief economist at the USDA. U.S. farmers continue to have an edge in things like irrigation and risk-management tools such as futures contracts and federally subsidized crop insurance.

2. Tasty Imports

U.S. consumers have increased their appetite for foreign food, and retailers are capitalizing on the trend. Imported food was once hard to find, but now retail chains like Cost Plus Inc. of Oakland, Calif., are popping up in suburban strip malls, selling treats like Swedish gingersnaps and Australian wine. The rise of new farm powers also is shifting the balance.

Trade pacts, including the North American Free Trade Agreement, make it easier for the U.S. to bring in food from other countries. Meantime, European countries have blocked U.S. exports of some genetically modified foods, and several other countries banned U.S. beef after the first U.S. case of bovine spongiform encephalopathy, or mad-cow disease, was discovered in December 2003.

Other countries also can produce raw ingredients at a lower cost, prompting food companies to go overseas for supplies.

3. A Modified Success

After sweeping across the American Farm Belt, genetically modified crops are making inroads overseas -- despite resistance in some nations where critics contend they could pose unknown risks to the food supply. Modified crops can tolerate weed-killing chemicals and resist damaging pests, saving farmers money in labor and lost crops.

Eighteen countries now grow biotech crops, with Argentina, China, Canada and Brazil leading biotech growth outside the U.S. An additional 45 are researching and developing their use, according to a study by C. Ford Runge, director of the University of Minnesota's Center for International Food and Agricultural Policy.

Monsanto Co., of St. Louis, is pushing into India with biotech corn and cotton, and into Brazil with biotech corn, cotton and soybeans.

And, while Europe imposed a de facto moratorium on the production and import of gene-spliced foods, it's starting to ease some restrictions.

4. Organic Growth

As demand for organic food grows, so does the number of organic farmers. Sales of organic food are growing about 18% a year, with meat and fish experiencing the fastest growth, according to figures from the Organic Trade Association. The amount of U.S. certified organic cropland for corn, soybeans, and other major crops doubled from 1997 to 2001, according to the USDA.

Instead of just growing organic strawberries and apples, farmers are expanding into agricultural staples like organic corn, wheat and soybeans as food marketers offer more organic products.

For farmers, the lure of going organic is a chemical-free work environment and higher organic-crop prices. Organic produce sells at about a 30% premium to traditional produce. However, much of that premium gets eaten up by the higher cost of growing chemical-free crops. Converting pesticide-tainted land into organic soil can cost as much as $10,000 per acre.

Although the number of organic farmers continues to climb, there are signs the growth may be leveling off. The number of organic farms rose by about 12% each year from 2000 to 2003 in California, the state with the most organic farmers. But last year, it grew only 6% to 7%, for a total of about 3,000 organic farms in the Golden State.

5. Longer Life

Commodity processors are increasingly using sophisticated equipment to improve the shelf life and taste of foods.

Chiquita Brands International Inc., of Cincinnati, last fall invested $3.5 million in a company that makes packaging designed to keep bananas fresher. Landec Corp., based in Menlo Park, Calif., has developed a membrane that regulates the flow of gases through the packaging. When shipped and stored in the packaging, the shelf life of a banana about doubles, making its quality more consistent.

6. The Safety Challenge

The industrialization and globalization of farming is making food safety more challenging. Food travels farther, spends more time in transit and is touched by more hands, increasing the opportunity for problems as well as the potential scope of any outbreak.

With the U.S. getting more food from overseas, detecting an outbreak and finding its source becomes more complicated and costly. The USDA estimates that five common food-borne illnesses cost the economy $6.9 billion annually in medical expenses, lost productivity and deaths.

Food-safety advocates also worry that new farming practices are having unintended consequences. Livestock are increasingly raised in confinement, a technique that allows producers to control their environment and diet in order to speed growth. But raising a large number of animals this way can make it easier for diseases to spread. Many producers resort to antibiotics so often that medical experts are growing concerned. The problem is that the practice can increase the opportunity for bacteria to develop resistance to antibiotics used in human medicine.

New technology is helping processors screen for bacteria. Minneapolis commodity-processing giant Cargill Inc. is installing a system of blue lights in its meat plants that can detect traces of chlorophyll on beef carcasses -- a sign that stray animal guts may have spread E. coli onto the beef. Previously, this job was largely handled by inspectors relying on keen eyes to spot problems with the meat.

7. Keepings Tabs on Trees

In a key food-safety advancement, the government and technology companies are laying the groundwork for a nationwide livestock-tracking system that would help prevent the spread of diseased meat.

By tracking animals from birth to the supermarket, regulators would be better able to find those that are potentially exposed to diseases and keep them out of the food supply.

The USDA has said it will put $51.8 million toward an identification system. Many technology companies are vying to supply the gear, and some farmers are already adapting it. Digital Angel Corp., of South St. Paul, Minn., makes a livestock ear tag that contains a data-rich microchip. The company sold more than one million units last year, five times as many as in 2003.

Some farmers fear such a system would bring to their doorstep liability for a food-safety problem. Cattlemen "tend to be very independent, and they are always concerned about Big Brother inserting itself into their business," says Kevin McGrath, president and chief executive of Digital Angel.

8. The Answer in the Wind

Seeking new streams of revenue, farmers are leasing land to energy companies that erect towering turbines with wind-spun blades to produce energy.

Such projects are a small but important source of income for farmers, particularly in poor rural counties. One turbine can generate as much as $5,000 in lease payments a year, according to a report by the U.S. Government Accountability Office.

The Department of Energy is aiming to make wind power the source of 5% of the nation's electricity by 2020, up from less than 1% in 2004. The department estimates the shift will provide $1.2 billion in new income for farmers and rural landowners and create 80,000 new jobs.

One challenge will be to match wind supply with demand. States that are best suited to produce wind power, including North Dakota and South Dakota, have seen little investment because they lack big cities to use the power and the transmission capacity to deliver it to small, remote towns, according to the GAO. State tax incentives have speeded projects in California, Texas and Minnesota, and federal funding that stretches through 2007 likely will spur more investment.

9. Aging Farmers

Young people continue to eschew farming, changing the demographics of the typical American farm household. The average age of principal farmers has risen steadily since 1978; in 2002 it was 55, up five years from 1978.

Experts say that thin profits in most years and steep upfront costs are keeping many young people from starting their own farms or even taking over the family farm. A poll conducted by Iowa State University last March found that 57% of Iowa farmers would not encourage young people to become farmers.

The state is working to change that. An Iowa State University program pairs aspiring farmers with ones who want to retire yet don't have heirs to take over their farms. Prospective farmers work as apprentices and get advice on securing loans to help them buy land. Since 1992, the program has matched about 90 farmers.

10. Fewer Farms

The continuing decline in the number of U.S. farms is reshaping the Farm Belt. The number of American farms peaked in 1935 at 6.8 million. As of 2003, there were 2.1 million farms nationwide, largely because of widespread farm consolidation. Improvements in farming equipment have reduced the amount of labor needed on farms and made it easier for farmers to handle large plots of land.

The declining farm numbers have been chipping away at the population of rural areas. That has broad implications for small-town America. Once-thriving downtowns are struggling in part because they have fewer farmers to patronize their stores.

The trend also is reshaping the political landscape for the agricultural industry. While the Farm Belt still has substantial clout in Washington, state farm legislation is increasingly being drafted by people who lack ties to agriculture, says Paul Lasley, chairman of the sociology department at Iowa State University.

Ms. Adamy is a staff reporter in The Wall Street Journal's Chicago bureau.

2. Another Lobby Group Wanting Cheaper Food at Farmers' Expense

by Paul Beingessner
Canadian farmer, writer

My father used to sardonically remark at the end of a hard day of farm work, "Another day, another dollar." Were he alive today, Dad would likely say, "Another day, another lobby group."

He would be referring to the grandiosely named "Global Alliance for Liberalized Trade in Food and Agriculture", which joined the cacophony of voices from the WTO talks this past week. The various press pieces put out by this new group make for some interesting, if confusing reading. Claiming to represent 39 organizations from 15 countries, the Food Trade Alliance (it has already shortened its name) has some unusual origins.

If you believe the Canadian Agri-Food Trade Alliance, it "spearheaded" the creation of the similarly-named international organization. And though the Food Trade Alliance website does not name its members, we know that four of the 39 are very small farm lobby groups from western Canada. These are the Western Canadian Wheat Growers, the Western Barley Growers Association, the Alberta Barley Commission and the Alberta Grain Commission.

While I would never doubt CAFTA, the Wall Street Journal reports that the Food Trade Alliance is the creation of fast food giant Yum Brands Inc. This Louisville, Kentucky company owns Taco Bell, KFC and Pizza Hut restaurants. Yum is trying to convince Wendy's and McDonalds to join the Alliance. They are all already de facto members through the National Restaurant Association in the U.S. The Food Trade Alliance seems dominated by restaurant, food processing and consumer organizations from rich countries.

The Food Trade Alliance makes the usual call for reductions in domestic and export subsidies. It identifies its targets as "trade distorting" subsidies. (Presumably this is so as to not scare off American farm groups since they seem to believe their own subsidies are not trade distorting.)

The Alliance reserves most of its venom for tariffs. It calls for "enhanced market access for all products, including 'sensitive' products, through deep and harmonizing tariff cuts". In translation, this means ending tariffs that protect such things as Canada's supply management system for dairy and poultry products.

The Alliance gives a great rationale for its wish to see tariff cuts. Tariffs, it says, do not allow food processors to search the world for the cheapest raw materials. The Alliance website uses an American perspective to decry the "high cost" of food, putting itself forward as the defender of "single mothers" who are hardest hit by today's high food prices. If tariffs did not protect American farmers, then food processors and restaurants could get cheaper foodstuffs from foreign countries where producers are "more efficient".

The Alliance gives cheese in Canada as an example. Because of supply management, food processors that use cheese must pay high tariffs if they want to import it, instead of getting it from Canadian dairy farmers.

It is easy to see why American restaurant giants like Yum and McDonalds would want to reduce tariff barriers. With global networks of restaurants, these companies would be free to play suppliers around the world off against each other to get lower prices. It is harder to see how Canadian farm groups would think that the race to lower prices would be a big help to Canadian farmers.

One Alliance member, U.S. based Consumers for World Trade figures the U.S. can have it all. While admitting that some U.S. farmers would be harmed when food processors discard them to pursue cheaper foods overseas, the group says "if all WTO member nations were required to eliminate or reduce barriers to food imports, American farmers would gain access to huge markets in Europe, Japan and elsewhere while American consumers would enjoy lower prices and more food choices".

This seems to mean that American farmers would lose domestic markets but somehow manage to steal markets in Japan and Europe. This would mysteriously make them better off. American consumers would get cheaper food from other countries while giving the raspberry to their own farmers. According to the Alliance, those poor single moms in the U.S. would not only get cheaper food, but would also get "better paying jobs" in food producing and exporting industries.

According to Alliance propaganda, American consumers pay prices for some food products that are much higher than "world market prices". Cheese is 40 percent higher, butter is 60 percent higher. The Alliance would break the domination of those filthy-rich dairy farmers by importing cheaper dairy products from agricultural powerhouses like India.

A short column doesn't give much scope to expose all the contradictions in the Food Trade Alliance's positions. It is obvious the Alliance is there to further the cause of giant food processors as they further beat down the price of raw materials. Apparently some Canadian farm groups think this is a good thing. Apparently some Canadian politicians agree. Ted Menzies, Conservative MP from Alberta, is one of them. As a one-time farmer, he should think a bit before becoming a shill for transnational food processors. As a former Wheat Grower, he seems comfortable with that role.

It's the same old story. Multi-national food companies want to roam the globe freely, playing farmers off against each other. They try to use consumer groups against farmers, and pit rich countries against poor ones. They manage to drag along a few silly farm groups and a bunch of self-interested consumer groups. They have bags of money to buy any and everyone they want, including the press, and they enlist a bunch of front groups that they secretly fund. And they think farmers will be stupid enough to buy it. (Hey, have I got a greasy pizza to sell you!)

The whole business gets sadder and sadder. And more deadly...

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

3. Multinational fast food corporations in alliance seek to cut subsidies, tariffs

Scott Kilman and Steven Gray, Wall Street Journal, via The Agribusiness Examiner

U.S. fast-food giants, in a move reflecting the crucial role of agricultural subsidies at the World Trade Organization, are for the first time injecting themselves into trade talks in a big way.

A coalition hatched largely by Yum Brands Inc., the Louisville, Kentucky., operator of Taco Bell, KFC and Pizza Hut restaurants, is trying to recruit Yum's rivals and food processors to lobby for free food trade, as the WTO's Doha Round of trade negotiations heads for a climactic meeting in December in Hong Kong.

Fast-food retailers are usually leery of taking sides on controversial issues for fear of upsetting customers.

The Doha talks, which were launched in the Qatari capital in late 2001, have been marked by acrimony both inside the meetings and outside on the streets. Negotiations in Cancun, Mexico, over a 147-nation multi-industry trade treaty broke down in September 2003, amid disputes between poor nations and developed countries over agricultural subsidies.

Starbucks Corp., which witnessed first hand the havoc of street protests during a 1999 meeting in Seattle of trade ministers, said it isn't participating in the Yum coalition, known as the Food Trade Alliance. Closely held Burger King Corp., which is focused on turning around its operations, also isn't participating.

But Wendy's International Inc., the No. 3 U.S. hamburger chain, said it might join. McDonald's Corp., the world's biggest restaurant chain by sales, said it "currently" isn't a member of the lobbying group. The National Restaurant Association, a Washington trade group that counts as members Yum, McDonald's, Wendy's and Burger King, said it is a member of the Food Trade Alliance.

The alliance's Web site and printed materials don't identify sponsoring companies, and company officials had little to say about it publicly. Bill Ehrig, who heads government relations for Yum, confirmed in an e-mail that Yum has "taken a leadership role" with the Food Trade Alliance.

"We support efforts to lower barriers to trade in processed foods and commodities, ultimately lowering the prices of our ingredients world-wide," wrote Mr. Ehrig, who didn't return phone calls seeking additional comment. Yum has 33,600 restaurants and 840,000 employees in 100 countries.

Despite its backers' desire to stay in the background, the Yum-backed group's strategy is to generate publicity about what it sees as the benefits of freer food trade. The group is slated to take its first big public stand today in Geneva, where the WTO has its headquarters.

The group is joining like-minded business organizations from 15 countries to call on trade representatives to lower agricultural trade barriers such as tariffs. The fast-food group also wants the WTO to make it harder for countries to concoct food-safety disputes in order to temporarily close borders to commodities such as chicken and soybeans.

The Food Trade Alliance has hired two public-relations firms with experience in trade issues: PBN Co. in Washington and Strategy XXI in New York. The group has also retained Washington law firm Hogan & Hartson, which has worked on trade issues such as U.S. steel tariffs.

Lewis E. Leibowitz, an international-trade lawyer at Hogan & Hartson, is working for the lobbying group. Another member of the firm, Clayton Yeutter, a former U.S. agriculture secretary and U.S. trade representative, is an adviser. The creation of the group allows sponsors to "speak with one voice but stay behind the scenes," Mr. Leibowitz said.

American fast-food companies paid little attention to the Uruguay Round of trade talks in the early 1990s, when the world's major economic powers first tried to impose discipline on farm subsidies and import barriers.

Trade barriers have since become a major headache for U.S. fast-food companies because the companies are making big pushes in overseas markets, creating vast supply lines to places such as Mexico, China, Germany and India.

Just more than half of McDonald's roughly 30,000 world-wide units are outside the U.S. Burger King recently opened its first units in Brazil and will soon open its first Chinese unit. Yum's KFC unit arrived in China in 1987, and has since grown to about 1,200 restaurants there.

A hodgepodge of tariffs and duties can hamper the ability of these companies to find the least expensive ingredients for their world-wide operations. Costa Rica and Thailand, for example, impose stiff duties on french fries. India has a high duty on pasta. Several nations, such as Canada, tightly control cheese imports.

The Yum-backed group, which largely supports the Bush administration's proposals in the Doha Round to eliminate agriculture-export subsidies and reduce farm trading barriers, secured a meeting last week with Allen F. Johnson, chief agricultural negotiator for the U.S. [ April 19, 2005 ]

4. Losing the farm

To take the soil of one's land, to make of it bread, and to share that bread with others seems a most basic form of self-identification.

By SALLY ITO, The Globe and Mail, Friday, April 22, 2005

'I sold the farm. The neighbour bought it. I worried about it. But now I don't."

So wrote my 90-year-old great aunt in a recent card to me, closing a chapter on our family history in this country. The farm. What is it about losing it that is so painful? For so many Canadians, especially those of us on the prairies, the news is always hard.

The journey of life on the land, the nurturing of lives and livelihood on its soil, the inevitable passage of time that cripples our ability to keep ourselves on it is one of those small unspoken tragedies of life. Like any loss, it is poignant only in the remembrance of particulars. The farm, in this case, was a quarter section north of Edmonton in a tiny community called Opal. The farmers were my great aunt and uncle, Sanjiro and Kiyoe Nakamura. The land was acquired in 1960, four years before my birth, and it was, from my earliest memory, the "family farm" -- the one where you learned about those mysterious workings of natural life: the seasons of planting and harvest, the cycles of birth and death, the making of one's bread, literally and figuratively, from soil to table.

Over the years, crops of oats, barley and wheat were grown on the fields while at various turns, turkeys, hogs, and chickens were raised in the outbuildings. As long as I could remember, there was always a huge berry-patch full of strawberries alongside a wonderful vegetable garden filled with produce of all kinds: corn, potatoes, carrots, peas, tomatoes, onions. So much has passed on that farm in the 45-odd years it has been in the family that it is hard to let go.

For my great aunt (or Aunty Kay as she is known) to relinquish this last piece of her life history is a final succumbing to the forces of time and aging. Her recalcitrance in letting go of the place long after others in the area had sold their farms and left is particularly moving in light of the family history. A Nisei born before the war, my great aunt lived through a succession of farms beginning with the 40-acre berry farm belonging to her father in Surrey, B.C., which she and her first husband farmed until wartime events forcibly dislocated them to camps in interior B.C.

After the war was over, she and her husband moved temporarily into the Okanagan valley near Oyama where they rented a plot of land to grow onions and tomatoes. Her first husband died unexpectedly there, and my great aunt, now a widow, moved back to her parents who were working the sugar-beet fields of southern Alberta near Taber. My great aunt worked the soil with her parents and her brother's family there, planting sugar beets ("with your back and behind to the wind or else you'd get a faceful of dust," is what she told me) until a marriage proposal arrived from Edmonton from an Issei man seeking a bride. My great aunt accepted and made the journey north to Opal where she and second husband Sanjiro began their new life together on a farm Aunty Kay could now call her very own.

For Aunty Kay, currently living with her nephew and his wife in Calgary, to maintain the farm from such a distance was simply too much. She had no children so there were no direct heirs to the property; over the years, it was mostly her nephews (my father and his brothers) who helped looked after things after her husband died in 1987. Aunty Kay lived at the farm well into her 80s, alone with her dog, until the arthritis grew so bad that she had to move into Sherwood Park into a senior's lodge.

I remember visiting my aunt in her last year on the farm, taking my then-toddler son out there every week in the late spring and summer to enjoy the scenery of the locale. I wanted my son to experience the same wonder of the place I had when I was a child.

What was the wonder of the place? The variegated stand of mixed woodland forest that surrounded the stuccoed wooden house and the outbuildings. The path that snaked through it and the adjoining fields to the ruins of the very first house -- logs patched with sod -- my great aunt and uncle built on the land. The outbuildings, like the old granary sheds and chicken coops. The cement pad where the hog barn had been. The old well used to water the pig trough, the kind with a rope and pulley. The saskatoon bushes on the road to the house and by the asparagus patch, so rich with fruit, the berries looked like grapes gleaming in the late afternoon sunlight. The tiny slough by the garage full of small croaking frogs we collected as children in the palms of our hands. The apple tree with white blossoms under which my visiting grandmother would sit in a rickety lawn chair with aluminum legs. The old Austin from my Uncle Tom's university days parked and rotting in a stand of aspen behind the house. The rusting red combine out front we children used to clamber all over in our weekend visits to the place.

The cement stairs in front of the house on which generations of our families had our photos taken with fat zucchinis, and bucketfuls of strawberries or piles of unshucked corn at our ankles.

In dreams, my aunt's farm appears to me as a symbol of my belonging to this country. Through her line, we are five generations thick into the land and although wartime events disrupted our lives and new blood flowed in from Japan through successive generations of immigrant wives and mothers, that patch of land in Opal somehow seemed to embody belonging in a way no urban dwelling ever could. To take the soil of one's land, to make of it bread, and to share that bread with others seems to me the most basic form of self-identification. I live on the land. I eat off it. The land is me.

When the family farm goes, there is also an incalculable loss in identity. I worry about it. Then I don't. Oh, for me to be at last like Aunty Kay -- to relinquish that last thread of being that defines us. The land we owned and the life that passed thereon.

Sally Ito lives in Winnipeg.

5. New IATP Report: CAFTA Threatens Sugar Producers

Press Release from the Institute for Agriculture and Trade Policy
April 28, 2005
Contact: Ben Lilliston, 612-870-3416, blilliston@iatp.org.

Minneapolis - Increased sugar imports required by the proposed Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) will threaten the viability of the U.S. sugar program, finds a new report by the Institute for Agriculture and Trade Policy (IATP). The end of the U.S. sugar program would be devastating to sugar and sugar beet farmers in the U.S., and would hurt sugar farmers in many developing countries, which are currently guaranteed a share of the U.S. sugar market at a higher than global price.

The report, Sweet or Sour: The U.S. Sugar Program and the Threats Posed by the Dominican Republic-Central American Free Trade Agreement by IATP's Dennis Olson, examines the impact of DR-CAFTA on the delicate balance between supply and demand that is central to the sugar program which maintains fair market prices and requires no government subsidies.

The full report can be read at http://www.iatp.org

The Bush Administration has negotiated DR-CAFTA with six other countries: the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. DR-CAFTA is viewed as crucial to regaining momentum for the stalled negotiations over the Free Trade Area of the Americas (FTAA) and at the World Trade Organization (WTO).

"The USDA and Bush administration have not been straight about the impact of DR-CAFTA on U.S. sugar," said IATP's Dennis Olson, lead author of the report. "When combined with NAFTA commitments made with Mexico and other trade agreements on the table, the passage of DR-CAFTA would seal the fate of U.S. sugar growers, and lower prices for sugar growers in poor countries as well."

Major Findings:

  • DR-CAFTA Will Lead to Major Disruptions to the U.S. Sugar Program - Imports from DR-CAFTA would bring U.S. sugar supplies perilously close to a Congressionally mandated "trigger level" that would disrupt the entire program. When combined with Mexico's right to export unlimited amounts of sugar into the U.S. under NAFTA starting in 2008 and several pending trade agreements that include sugar-producing countries, the U.S. will face a flood of sugar imports in the near future.
  • DR-CAFTA Could Turn Sugar's No Cost Program Into Big Bill For Taxpayers. An increase in the supply of sugar would dramatically depress sugar prices to the point where the Sugar Program could be transformed from a no cost program to just one more expensive farm commodity program.
  • DR-CAFTA Will Lead to a Price Drop for Sugar Farmers in U.S. and Many Developing Countries. DR-CAFTA would jeopardize the current Congressional mandates to ensure that U.S. farmers participating in the sugar program receive a fair price from the marketplace.
  • DR-CAFTA Will Result in Lower Sugar Prices for Farmers in Developing Countries. If U.S. sugar prices drop, it would negatively impact the 41 countries, including some of the world's poorest that now export sugar to the U.S. under the current program.
  • DR-CAFTA Will Turn Sugar Into a Dumped Commodity on International Markets. Unlike other major U.S. commodity programs, the Sugar Program actually prevents dumping on the world market at below the cost of production. The Sugar Compensation Mechanism in the DR-CAFTA allows the U.S. government to either pay DR-CAFTA countries in cash or sugar to compensate for blocked imports. This unsound provision could quickly turn the U.S. Sugar Program from a non-dumping into a dumping program.

"For decades now, the U.S. Sugar Program has offered a sound policy model that has successfully created market stability at little public expense, while avoiding the structural over-production that leads to dumping onto international markets," said Olson. "While not perfect, it provides important lessons on how to design an agriculture program that benefits farmers and taxpayers. The passage of DR-CAFTA would be a nail in the coffin of this successful program."

The full report, Sweet or Sour: The U.S. Sugar Program and the Threats Posed by the Dominican Republic-Central American Free Trade Agreement, can be read at: http://www.iatp.org

The Institute for Agriculture and Trade Policy works globally to promote resilient family farms, communities and ecosystems through research and education, science and technology, and advocacy.

6. Business: Supreme Court Says Farmers May Sue in State Courts

LINDA GREENHOUSE WASHINGTON, NY Times, April 27 - The Supreme Court ruled on Wednesday that farmers whose crops are damaged by federally approved pesticides or herbicides may pursue damage claims against the manufacturers in state court.

Full Story: http://query.nytimes.com/mem/tnt.html?emc=tnt&tntget=2005/04/28/business/28preempt.html&tntemail0

7. Legislation Would Provide Opportunities for Young Ag Producers, Keep More Farmland in Production

FOR IMMEDIATE RELEASE - Thursday, April 28, 2005

Congressman Lee Terry
2ND district, Nebraska

Congressman Earl Pomeroy North Dakota

CONTACT: Jen Rae Hein (Terry): 202 - 225-4155
Mac Schneider (Pomeroy) 202-225-2611

WASHINGTON - Congressman Lee Terry (R-NE) and Congressman Earl Pomeroy (D-ND) today introduced legislation to provide tax relief in the effort to increase the number of beginning farmers and ranchers, while keeping more of the nation's agricultural land in production.

"Soaring land values and the high rate of absentee land owners often prevent young agricultural producers from owning their own land. My bill aims to help the upcoming generation of farmers and ranchers compete with larger producers. At the same time, it will help preserve productive farm ground near rural areas," Terry said.

"Agriculture is the backbone of North Dakota's economy, and the next generation of farmers and ranchers represent our state's future," Congressman Pomeroy said. "This legislation will make it easier for individuals to begin their career and ensure that family farmers remain the basis of production agriculture in this country."

The bipartisan legislation would provide capital gains tax relief to land owners who voluntarily sell their land to "first-time buyer" farmers and ranchers, as well as to other buyers who keep the land in agricultural production. The bill has been endorsed by numerous state and national agricultural organizations, including the American Farm Bureau Federation, National Farmers Union, and the Center for Rural Affairs.

Specifically, the Terry-Pomeroy legislation would create three levels of relief for farmers and ranchers who choose to sell their land:

1. Producers who sell their agricultural land to a beginning farmer or rancher would receive a 100% reduction in their capital gains taxes. This full exemption from the capital gains tax would help level the playing field for younger producers, who must often compete against larger, established producers, as well as developers who are able to offer higher prices for land. (Exemption may not exceed $500,000 per year.)

2. Producers selling their land that will be kept in agricultural production would receive a 50% reduction in their capital gains taxes. This provision would help ensure adequate agricultural resources at a time when landowners are pressured to sell their land for purposes other than agriculture.

3. All agriculture producers selling their farm or ranchland would receive an automatic 25% reduction in their capital gains taxes -- regardless to whom they sell their land, or for what purpose.


Inside US Trade, April 29, 2005

Expectations for a July package of World Trade Organization texts meant to set the stage for the Hong Kong ministerial at the end of the year have been dramatically lowered, according to Geneva sources representing a spectrum of the WTO membership. These sources said a serious dispute on technical agriculture work and significant differences among members on non-agricultural market access (NAMA) are the main reasons why delegations are lowering their aims for July.

Highlighting this negative mood, WTO Director General Supachai Panitchpakdi said in an April 28 address to the WTO's Trade Negotiations Committee that he has doubts about what members will be able to achieve in July. Supachai also diverted from his prepared remarks to state his belief that at their current rate, WTO members would not be able to achieve a good outcome in July or in December at the Hong Kong ministerial, according to a WTO spokesman. Supachai indicated he would be pleased if members could prove him wrong, the spokesman said.

Initially, delegations were aiming to have "first approximations" of possible modalities meant to set more specific terms for negotiations in agriculture, NAMA and other areas by the end of July, just before members take a one-month summer break from the talks. These first approximations were intended to make it easier for delegations to agree to specific modalities at the Hong Kong ministerial, which would make it possible to conclude the round sometime in 2006.

However, the continued differences in agriculture and NAMA have now made it apparent that the best outcome that can be achieved in July is for some negotiating group chairs to provide texts reporting on the progress their groups have achieved so far. These texts will almost certainly not be endorsed by the WTO's membership, delegation sources said.

In addition, it does not appear possible for many of the texts to be specific in suggesting areas of agreement, sources said. While these sources said it is still possible that some chairman's texts, particularly in agriculture and NAMA, could point at potential areas of convergence, they said other areas such as rules, trade facilitation, development and services, are likely to only represent progress reports.

"The bar is getting lower by the day," one developing country delegation source said of the expectations.

This had led Supachai to press members to inject a sense of urgency in the talks, delegation sources said. At an April 25 meeting of a select group of WTO members, Supachai said he was a little less optimistic about July at that meeting, but that he did not think it was time to ring the alarm bell yet about the talks, according to a delegation source familiar with the meeting.

Supachai offered a similar message at the April 28 TNC, as he said the lack of concrete progress in several areas makes for "a rather worrying picture." Supachai said members cannot leave too much work for this fall, and that if members do not kick-start negotiations they will face serious problems.

Besides the problems in agriculture, Supachai noted that talks on services have not gained momentum despite an approaching end of May deadline for revised offers. He also noted that negotiations on improving special and differential treatment for developing countries is encountering difficulties. A Geneva source was less diplomatic, stating that services is a mess and the development talks are in "disastrous" shape.

The lowered expectations were also signaled by Tim Groser, the chairman of the agriculture negotiating group, at a senior officials meeting in Geneva on April 18-19. Groser asked members at that meeting to consider whether to endorse the first approximation he would table in July. Delegation sources said they interpreted this as a signal that members would not have to endorse any text.

At the same meeting, delegation sources said EU Director General for Trade Peter Carl indicated first approximations delivered in July should take the form of chairs reporting on the state of negotiations in their areas, sources said.

At the April 28 TNC, Groser said there had been progress since last summer on export competition and he could see putting something on paper on domestic subsidies that would go beyond what members agreed last summer in a July framework that set broad outlines for the talks. But he acknowledged there has been no progress on market access because of a dispute over technical work (see related story).

Finding a solution to this agricultural dispute is key to determining what is possible in July, as negotiations on agriculture are likely to come to a standstill without an agreement on converting tariffs into ad valorems, delegation sources said. In addition, they said since agriculture is seen as the key to the entire round, no other sectors are likely to move forward as long as agriculture is stuck.

One developed country delegation source said the dispute over agriculture and its effects on the negotiations are "extremely serious," and added that lowering ambitions for July "does not auger well for the Hong Kong meeting." While it may have been unrealistic to expect full-fledged drafts for all of the negotiating areas in July, some draft texts would help members make progress this fall, the source said. With only chairman's reports, WTO members will be left with just a few months this fall to complete most of their work.

Another source said that ideally, if there are 10 difficult issues to solve in the agriculture talks, eight or nine would be solved before the Hong Kong ministerial, and it is naturally more difficult to reach this goal if expectations in July are lowered. At the same time, this source pointed out that the WTO talks generally need pressure in order for their to be progress, and that it was "far-fetched" to expect members to steadily make progress throughout the year.

While the dispute over agriculture has particularly dimmed moods about the talks, delegation sources said there is also pessimism about how to move forward the NAMA talks considering the differences between ambitious WTO members, particularly among industrialized countries, and less ambitious developing country members typified by Brazil and India. "We're far away from a convergence of positions," one developed country delegation source said, which will make it "extremely difficult" for a chairman to produce a text with any specificity.

WTO members with defensive interests on agriculture tend to be the members downplaying ambitions for July the most, one developing country delegation source charged. This source speculated that this is because those members are willing to trade a non-ambitious result in agriculture for a lack of ambition on rules, NAMA and other areas.

One developed country delegation source agreed that expectations for July have been lowered, but said this is partly because members misunderstood what was possible in the first place. This source said members only started talking about achieving first approximations in various negotiating areas after Groser set this as his goal for agriculture, and that texts were never likely to appear in July for areas beyond agriculture and NAMA.

Last summer, members stuck a deal on a framework setting the terms for future talks after marathon negotiations in Geneva involving some trade ministers. This has seemed to increase expectations for similar events this summer, and delegation sources said Supachai has noted that members do not have the same sense of urgency they had last year at this time.

9. Wind Turbine Manufacturer Partners with John Deere Co.

April 21, 2005
Rolling Meadows, Illinois [RenewableEnergyAccess.com]

India's wind turbine manufacturer Suzlon is taking wind farming to a new level by partnering with one of the most recognizable names in the U.S. agricultural industry, the John Deere Co.

Suzlon signed an agreement to provide 31 wind turbines, totaling 39 MW of capacity, for projects financed by John Deere for sites located in Minnesota and Texas.

The move is viewed as a way to gain trust from America's heartland where there are considerable opportunities for wind power developments.

In Texas, Suzlon is providing three projects with a total of 24 units of the S64, a 1.25 MW wind turbine. Each project will have eight turbines installed on 73-meter towers. When completed in December 2005 the entire site will total 30 MW of wind power capacity.

For the southwest Minnesota projects, Suzlon is providing seven S64 turbines on 73-meter towers for a total capacity of 8.75 MW. The projects will be located on the popular Buffalo Ridge and developed by Dave Norgaard, a farmer and wind power developer based in Tyler, Minnesota.

The wind power projects, which are scheduled to be operating by December 31, 2005, follow an earlier effort by Suzlon and John Deere in U.S. wind energy that was successfully launched in 2004.

Suzlon entered the U.S. market in 2003 with its first wind power projects located in Southwest

Minnesota, which features 12 separate sites of approximately 2 MW each. The collective of wind turbines were developed by Dan Juhl, and include sites near Brewster, Woodstock, and Pipestone, Minnesota. After the wind power projects were completed in 2004, John Deere took ownership of the wind turbines in Brewster, while Edison Mission (formerly known as Edison Capital) purchased the turbines in Woodstock and Pipestone.

Suzlon is a vertically integrated wind-power company, offering consultancy, design, manufacturing, operation, and maintenance services to provide customers with total wind power solutions.