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OVERVIEW:
* E. COLI FEARS INSPIRE A CALL FOR OVERSIGHT
By Marian Burrows
* USDA DISPUTES CLAIM THAT U.S CHICKEN UNSAFE
By Christopher DoeringMon
* U.S. UNEASY ABOUT BIOTECH FOOD
By Rick Weiss
* DEMOCRAT'S GOAL: A FARM BILL BY NEXT HARVEST
By Philip Brasher
* CORPORATIONS CONTROL YOUR DINNER
By Debra Eschmeye
* U.S. SEEKS MORE INFORMATION ON CBOT-CME MERGER
By Chicago Tribune News Services
* PILGRIM'S PRIDE AND GOLD KIST ANNOUNCE MERGER
PRNews Wire
* USDA SAYS FARM INCOME TO DROP 20% IN 2006
By Padraic Cassidy
* BLACK FARMERS AND THE UPCOMING FARM BILL
By Jerry Pennick and Heather Gray
* ADM CEO SAYS FOOD DEMAND TO DOUBLE BY 2050
By Lavonne Kuykendall
E. COLI FEARS INSPIRE A CALL FOR OVERSIGHT
By Marian Burrows
New York Times
December 9, 2006
Facing a loss of consumer confidence in fresh fruits and vegetables because of repeated outbreaks of food-borne illness, three major produce industry groups have for the first time called for government regulation in an industry that until now has had none.
One of the groups, Western Growers, says it has gone further, meeting over the past six weeks with state officials in California to draw up an agreement that would call for a formal system of farm inspections, regulations of water and soil quality and sanitation and even cease-and-desist orders for violations.
The agreement may be ready by spring, said Tim Chelling, vice president of communications for the group, which represents growers in California and Arizona who account for half the nation's produce. "Anyone who ignores this," Mr. Chelling said, "will be out of business."
Since the outbreak of E. coli 0157:H7 linked to green onions served at Taco Bell restaurants, there have been more than 200 confirmed or suspected cases this week in New York, New Jersey and four other states.
It is the latest instance of food-borne illnesses tied to raw vegetables. E. coli 0157:H7 linked to bagged spinach killed three people and sickened 206 others in 26 states and Canada this fall.
In mid-October, sales of bulk and bagged spinach were down 60% compared with a year ago, and sales of other packaged salads were down as much as ten percent, according to the United Fresh Produce Association, another industry group.
James Gorny, the senior vice president for food safety and technology for the association, said government involvement, which the industry had long resisted, had become necessary.
"At this point, because of the seriousness of the issue, we are open to any and all solutions including regulation at the federal or state level," Mr. Gorny said. "Certain segments of the industry are under the gun to do everything possible."
"These are significant failures and the industry has done some deep soul-searching to make certain we are not missing important risk factors," he added. "No stone is being left unturned."
But Dr. David Acheson, chief medical officer of the Center for Food Safety and Applied Nutrition in the Food and Drug Administration, was cautious.
"If they feel taking that approach is going to get us a safer product, then it's certainly important to look at that," Dr. Acheson said. He warned, though, that the agency, which is seriously understaffed, did not have the resources to enforce such regulations.
The agency now has little authority over the industry. There are fewer than 2,000 F.D.A. inspectors for more than 12,000 facilities, 250 inspectors fewer than in 2003.
Produce-related outbreaks of disease rose to 86 in 2004, the latest year for which there is data, compared with 29 in 1997, when the states started electronic reporting to the federal Centers for Disease Control and Prevention.
Mr. Gorny said a coalition of industry officials and consumer groups were working to get more F.D.A. financing for inspectors and food safety research.
A longtime advocate of strong government regulation of agriculture, Representative Rosa L. DeLauro, Democrat of Connecticut, who will probably be the chairwoman of the Subcommittee on Agriculture in the House Appropriations Committee in the next Congress, called the industry request unprecedented.
She said Congress and the F.D.A. had abdicated their responsibility. "With an agency that doesn't believe in regulatory authority to do anything, that puts our public at great risk," she said.
Michael Doyle, an epidemiologist with the University of Georgia and a leading authority on food-borne illness, said the moves were long overdue.
"For years we've been trying to get people to eat more produce, and now we have had these safety issues over and over again and now people have heard the message that produce is not safe," said Mr. Doyle, a frequent consultant with the F.D.A. and the C.D.C. "It's something we've known, and I blame the industry big time because they have known they had this problem since the '90s and they refused to address the issue."
Until recently, he said, "the industry believed the major problems were not in the fields or processing facilities, but in homes and restaurants where cross-contamination with beef products was occurring."
But with the recent spinach contamination, government officials, using DNA tests, were for the first time able to positively link harmful bacteria to a farm.
"We have a smoking gun," Mr. Doyle said. "We have the definitive data to show industry that the problems go back to the fields and processing plants."
Spokespeople for the three trade groups, which also include the Produce Marketing Association, deny that anyone has ever suggested home cooks and chefs were to blame.
"I'm not saying it's consumers' responsibility," said Kathy Means, vice president of government relations for the Produce Marketing Association. "But consumers can feel some control by proper produce handling."
Ms. Means said that unlike bacteria in contaminated meat, which are killed by cooking, bacteria in vegetables and fruits eaten raw are not.
Despite the industry's newfound enthusiasm for regulation, food safety advocates say any new measures may face resistance in Washington.
Caroline Smith DeWaal, food safety director for the Center for Science in the Public Interest, said that even if the F.D.A. were given more authority over produce, "you need a commitment from the administration that they will support you."
Based on experiences over the past six years, she said, there is little indication that would happen.
USDA DISPUTES CLAIM THAT U.S CHICKEN UNSAFE
By Christopher DoeringMon
Reuters News Service
December 4, 2006
Eighty-three percent of chicken sold in U.S. grocery stores may contain bacteria that cause foodborne illnesses, a consumer group said on Monday, 34 percentage points higher than the rate it found three years ago.
Critics, however, said the study by Consumer Reports suffered from flaws that included an unreliably small number of samples. A U.S. Agriculture Department spokesman called the report "junk science."
Consumer Reports said tests on 525 chickens --- including samples from leading brands Perdue, Pilgrim's Pride Inc. and Tyson Foods Inc. --- showed most of the poultry had campylobacter or salmonella, two of the leading causes of food-borne diseases. A test conducted in 2003 showed 49% of the birds had at least one of the bacteria.
"We think it's really startling," said Jane Halloran, a policy director for Consumers Union, which publishes Consumer Reports. "It's a very significant deterioration in food safety."
No major U.S. chicken brand fared better in the study than the others, but Tyson had the lowest salmonella level and the highest rate of campylobacter. Similarly, Perdue had the fewest samples with campylobacter, but the most cases of salmonella.
A spokesman with the U.S. Agriculture Department's Food Safety and Inspection Service said the study was riddled with flaws such as a small sample size and uncertainty over the report's methodology.
Steven Cohen, spokesman for the agency, said the report did not go back to all the stores used in the 2003 report.
He said it also failed to mention what type of salmonella was found, noting that one common strain, Salmonella Kentucky, doesn't make people ill.
"There is virtually nothing or any conclusion that anyone could draw from 500 samples," said Cohen. "They're passing along junk science and calling it an investigation."
The study said the decline in chicken safety was tied largely to a surge in the campylobacter bacteria, which can be carried by birds without them becoming ill, but causes diarrhea in people.
About 81% of the chickens tested positive for the pathogen, up from 42% in 2003. Halloran said she could not determine what was responsible for the increase.
Salmonella, which causes diarrhea, headache and fever in most people, is one of the most frequently reported causes of food-borne illness in the United States. Consumer Reports estimated 15% of the chickens tested had salmonella, up three percent from the prior report.
USDA's Cohen said 11.4 percent of 8,000 broiler samples through September of this year tested positive for salmonella, which if it held for the remainder of the year would be down from 16.3 percent in 2005.
The department has not carried out a national prevalence study for campylobacter in broilers, but plans to begin conducting one in late January.
"The evidence of our faltering food safety system continues to mount while the administration refuses to acknowledge the problem, believing that adequate safeguards are in place," said Democratic Reps. Rosa DeLauro, Connecticut, and Henry Waxman, California, citing the need for a better system to detect for campylobacter in raw chicken.
The National Chicken Council said the report contained nothing new and "greatly exaggerated" the rate of bacteria in raw chicken.
"Consumer Reports says what every cook already knows, that fresh poultry may carry naturally occurring bacteria and should be properly handled and cooked," said spokesman Richard Lobb.
The Center for Disease Control and Prevention estimated the two bacteria, which can be spread through other avenues in addition to chicken, cause millions of illnesses and 700 fatalities annually.
U.S. UNEASY ABOUT BIOTECH FOOD
By Rick Weiss
Washington Post
December 7, 2006
Ten years after genetically engineered crops were first planted commercially in the United States, Americans remain ill-informed about and uncomfortable with biotech food, according to the fifth annual survey on the topic, released yesterday.
People vastly underestimate how much gene-altered food they are already consuming, lean toward wanting greater regulation of such crops and have less faith than ever that the Food and Drug Administration will provide accurate information, the survey found.
The poll also confirmed that most Americans, particularly women, do not like the idea of consuming meat or milk from cloned animals --- a view that stands in contrast to scientific evidence that cloned food is safe. The FDA recently said it is close to allowing such food on the market.
Michael Fernandez, executive director of the Pew Initiative on Food and Biotechnology, which sponsored the survey, said that overall, Americans are "still generally uncertain" about genetically modified and cloned foods. "How the next generation of biotech products is introduced --- and consumers' trust in the regulation of GM foods --- will be critical in shaping U.S. attitudes in the long term."
In the five years since Pew began plumbing American views of genetically engineered food, U.S. acreage in such crops has grown substantially. Today, 89% of soybeans, 83% of cotton and 61% of corn is genetically engineered to resist weed-killing chemicals or to help the plants make their own insecticides.
Because most processed foods contain at least small amounts of soy lecithin, corn syrup or related ingredients, almost everyone in the United States has consumed some amount of gene-altered food.
That quiet revolution has been punctuated by occasional high-profile problems, including the 2000 finding of StarLink corn, unapproved for human consumption, in many food products, and the recent revelation that the U.S. long grain rice crop has been contaminated with an experimental variety of gene-altered rice.
In this year's survey, conducted by the Mellman Group, one-quarter of the 1,000 adults polled thought they had ever eaten gene-altered food, an indication that Americans have "very little in-depth knowledge of the topic," according to a Pew summary.
Support for marketing of genetically modified food has remained flat since 2001 at 27%, with opposition dropping from 58% in 2001 to 46% this year.
The proportion of Americans who say they "don't know" if gene-modified foods are safe has shrunk since 2001, while the "safe" and "unsafe" camps grew by about five percent each: 34% think they are safe, while 29% say they are not.
Of those who claim to have at least a rudimentary sense of how engineered foods are regulated, 41% say they would like to see more stringent rules, and 16% say there is already too much regulation.
Consuming cloned animals --- addressed in the poll for the first time --- popped up as a hot-button issue. Even among those who said they had no objection to eating genetically engineered foods, 34% were comfortable with animal cloning, while 51% were not.
Religion played a big role in those opinions. Among those who said they attend religious services only "a few times a year or less," 30% were comfortable with animal cloning, and 54% were not. Among those who attend weekly religious services, 17% were comfortable with cloning, and 70% were not.
Asked which sources they trust "a great deal" for information about gene-altered foods, "friends and family" ranked highest, at 37%. Only 29% named the FDA, continuing a steady drop from 41% in 2001.
The least trustworthy source, garnering 11%, was the news media. But remember, you read it here first.
DEMOCRAT'S GOAL: A FARM BILL BY NEXT HARVEST
By Philip Brasher
Des Moines Register
December 8, 2006
A new farm bill could be in place as harvest rolls around next fall.
That's the goal of the next chairman of the House Agriculture Committee, Democrat Collin Peterson of Minnesota.
The 2002 farm bill expires at the end of next September.
"You can expect to see a bill that looks similar to what we have now," said Peterson, who supports the crop subsidy provisions enacted in 2002.
Peterson is setting an ambitious schedule. Lawmakers won't know until at least March --- when Democratic leaders hope to come up with a long-range budget plan --- how much money there will be available to spend on farm programs after 2007.
"That's going to be the first big issue, and probably the key to this farm bill is getting the adequate budget allocation," Peterson said.
Peterson and the new chairman of the Senate Agriculture Committee, Sen. Tom Harkin, Dem.-Iowa, say more money will be needed for conservation payments and to subsidize the development of biofuels.
Peterson also pledged to work to enact a permanent disaster-assistance program that will trigger payments to farmers whenever there are significant weather-related crop losses.
CORPORATIONS CONTROL YOUR DINNER
By Debra Eschmeyer
National Family Farm Coalition
December 5, 2006
Most everyone has been told to not play with his or her food, yet somehow agribusiness is playing Monopoly with the nation's food supply.
When pouring your next glass of milk, consider who decided what the cow ate and who controls the distribution of profits. One would think the farmer and consumer take the lead roles in managing the supply of safe and healthy food. The farmer should control his or her business while mainly battling unpredictable weather --- expecting the price they receive for a quality product to be set by a fair and honest marketplace.
However, in today's market, the lack of competition is wielding just as much force as Mother Nature as witnessed by the recent proposed acquisition of the Chicago Board of Trade by the Chicago Mercantile Exchange (CME) to become the CME Group Inc. --- combining the two largest U.S. futures exchanges.
If you think this and similar mergers do not affect your freedom of choice and the quality of food you eat, think again. Food is not simply a commodity to produce at a larger and larger scale, squeezing the family farmer out along with the value of safe and healthy food.
The CME is already the world's largest commodity broker determining futures and cash prices for products such as cheese, butter, live cattle, timber, and fertilizer as they set the benchmark prices for farm country. Within seconds the coarse yelling on the trade floor is translated around the world, affecting farm gate prices and grocery bills of billions of people.
If this merger goes through, the newly formed CME Group will enjoy unprecedented power over global food markets to the detriment of producers and consumers and the glee of large agribusiness and traders --- lining their own pockets with money generated by destroying family farmers and the consumer value that exists in having diversity in the market.
The new CME Group could still end up with the Go to Jail card, as the U.S. Department of Justice must decide whether this merger violates federal anti-trust laws. The CME does not have a clean slate either. Last July six U.S. Senators including Clinton, Specter, and Feingold sent a letter calling on the Government Accountability Office to investigate whether cheese trading on the CME is susceptible to price manipulation.
The study was requested to fully evaluate the CME in light of the upcoming farm bill. The Commodity Futures Trading Commission (CFTC) is also currently investigating the nation's largest dairy cooperative, Dairy Farmers of America, for alleged racketeering and insider trading on the CME.
Family farmers already know from previous paychecks that this is not a good forecast. Because the CME is a privately owned corporation, it does not have to follow normal transparency and accountability rules. The CME is subject to nominal oversight by the CFTC over the trading of futures, but there is no external oversight for cash trading.
With market consolidation and little to no oversight, competition and economic fairplay are almost defunct in the U.S. food system. Consumers will pay more for fewer choices; farmers will get paid less --- don't pass go, and don't collect $200 --- that will go to the commodity trader living down on Park Place.
Lack of competition is not new to modern agriculture. The largest producer and processor of hogs in the U.S., Smithfield Foods, Inc., recently announced plans to purchase Premium Standard Farms, the second largest hog producer. On top of owning 20% of the nation's hogs, Smithfield would then envelope the ContiGroup, the largest cattle feeding entity in the world, and they control 40% interest in Premium Standard Farms. Pork or corporate profit for dinner?
In 2002 the late Senator Wellstone joined with Senators Daschle, Harkin, Feingold and Grassley to reinstate some degree of competition into agriculture and to reign in the excessive control of a few giants in the livestock sector.
Unfortunately, the measures to benefit farmers and consumers that were won in the Senate were negotiated away in the conference with the House. Let's hope following the 2006 election that Congress will listen to the public and restore democratic fairness to the markets that are critical to our nation's economy and diet.
The CME Group merger is yet another win for corporate agribusiness players and a loss for consumers and farmers in the game of food system Monopoly.
DEBRA ESCHMEYER is the project director of the National Family Farm Coalition, a non-profit that provides a voice for grassroots groups on farm, food, trade and rural economic issues to ensure fair prices for family farmers, safe and healthy food, and vibrant, environmentally sound rural communities here and around the world.
U.S. SEEKS MORE INFORMATION ON CBOT-CME MERGER
By Chicago Tribune News Services
December 2, 2006
The Chicago Mercantile Exchange and the Chicago Board of Trade have received requests from the Justice Department for additional information on their merger.
The second requests will extend the waiting period for approval until 30 days after the information is provided, the exchanges said Friday.
In October, Chicago's two major futures exchanges announced an $8 billion merger that will create an exchange with average daily trading volume approaching nine million contracts.
Rivals including NYSE Group Inc. have argued the combined firm could dominate clearing functions of the $484 trillion exchange-traded futures market.
"It's not uncommon for the DOJ to request additional information," said Mark Hawkinson, an interest-rate broker at Cube Financial LLC in Chicago. "The consolidation will provide investors an easy access and a single platform to trade futures. This is a good deal."
The Justice Department review is "going as planned," Bernard Dan, president and chief executive of the Board of Trade, said this week.
Sen. Richard Durbin and 16 other members of Congress from Illinois asked regulators in a letter last month to approve the merger.
The two exchanges account for more than 150,000 jobs in the state and are responsible for $80 billion in overnight deposits, according to the letter.
Also Friday, the Merc said its November volume averaged 5.3 million contracts a day, up 28% from a year earlier. Average daily volume on its Globex electronic trading platform increased 38% from a year ago, to four million contracts a day.
The Board of Trade said its average daily volume last month was a record 4.0 million contracts, a 38% jump from a year ago. Average daily volume on the exchange's e-CBOT electronic trading platform was 2.9 million contracts in November, up 50% from November 2005.
The Chicago Board Options Exchange's average daily volume for November climbed 40% from a year ago, to 2.8 million contracts.
PILGRIM'S PRIDE AND GOLD KIST ANNOUNCE MERGER
PRNews Wire
December 4, 2006
Pilgrim's Pride Corporation and Gold Kist Inc. today announced that the two companies have entered into a definitive merger agreement under which Pilgrim's Pride will acquire all of the outstanding shares of Gold Kist common stock for $21.00 per share in cash. The transaction, which was unanimously approved by the boards of directors of both Pilgrim's Pride and Gold Kist, has a total equity value of approximately $1.1 billion, plus the assumption of approximately $144 million of Gold Kist's debt.
Together, Pilgrim's Pride and Gold Kist will create the world's leading chicken company in terms of production and the third-largest U.S. meat protein company by revenues. The combined company will have a broad geographic reach and customer base, while maintaining a balanced portfolio of fresh chicken and value-added products. In particular, the enhanced geographic diversification will enable the new Pilgrim's Pride to compete more efficiently both in the U.S. and internationally.
"This is a momentous day for both companies and for the chicken industry," said Lonnie "Bo" Pilgrim, chairman of Pilgrim's Pride. "We believe the combination of these two great companies will result in substantial value creation for our respective stockholders, employees, business partners and other constituencies."
Added O.B. Goolsby, Jr., Pilgrim's Pride president and chief executive officer: "We are excited about the opportunity to begin realizing the substantial benefits that will result from the combination between Pilgrim's Pride and Gold Kist. The combined company will be well-positioned to provide even better service to its customers. We look forward to welcoming Gold Kist's employees and contract growers to the Pilgrim's Pride family so they can participate in the long-term growth opportunities of the combined company."
Pilgrim's Pride expects to achieve approximately $50 million of annualized synergies, primarily from the optimization of production and distribution facilities and cost savings in purchasing, production, logistics and SG&A. Pilgrim's Pride expects the acquisition will be accretive to the company's diluted earnings per share after the first full year of operations. Pilgrim's Pride believes that the combined company will have a strong financial position and substantial cash flow, enabling it to consistently reduce debt and return to historical debt levels.
"After careful consideration, the special committee of independent directors, as well as our entire board, determined that the Pilgrim's Pride enhanced offer is in the best interests of our shareholders, employees, growers and customers," said A.D. Frazier, chairman of Gold Kist. "Since becoming a public company more than two years ago, Gold Kist has made significant progress in achieving its business goals. We look forward to working with the Pilgrim's Pride board and management on a smooth integration, and we recommend that all stockholders embrace this transaction by tendering their shares into the premium offer."
"This transaction will position the combined company for long-term growth and leadership in our industry," said John Bekkers, president and chief executive officer of Gold Kist. "The collective talents and expertise of our employees and growers, along with our combined customer relationships, will represent a new standard in the chicken business and make Pilgrim's Pride the preeminent industry player."
The Pilgrim's Pride offer represents an approximately 62% premium over Gold Kist's closing stock price on August 18, 2006, the last day of trading before Pilgrim's Pride notified Gold Kist's board of directors in a public letter that it was offering to purchase the company.
Under the terms of the merger agreement, Pilgrim's Pride will amend its tender offer to increase its offer price to $21.00 per share and Gold Kist will amend its Schedule 14D-9 to include the Gold Kist board's recommendation that Gold Kist stockholders tender their shares to Pilgrim's Pride pursuant to the amended tender offer.
A revised offer to purchase will be distributed to Gold Kist stockholders and the scheduled expiration date for the amended tender offer is 5:00 p.m., New York City Time, December 27, 2006, unless extended. The offer and related transactions contemplated by the merger agreement are subject to the satisfaction of customary closing conditions. As previously announced, the transaction has received early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. . . . . . .
Pilgrim's Pride Corporation is the second-largest chicken producer in the United States and Mexico and the largest chicken producer in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride products are sold to foodservice, retail and frozen entree customers. The Company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the Northern and Central regions of Mexico. For more information, please visit www.pilgrimspride.com.
Gold Kist is the third largest chicken company in the United States, accounting for more than nine percent of chicken produced in the United States in 2005. Gold Kist operates a fully integrated chicken production business that includes live production, processing, marketing and distribution. Gold Kist's operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina
USDA SAYS FARM INCOME TO DROP 20% IN 2006
By Padraic Cassidy
MarketWatch
November 30, 2006
Net farm income in the United States is expected to total $58.9 billion in 2006, a 20% drop from last year, the Department of Agriculture said Thursday.
A $4.7 billion drop in the value of livestock production, including a decline in the price for milk, are responsible, according to the updated forecast from the USDA. The report, Agricultural Income and Finance Outlook, also cites lower direct government payments and higher farm costs as reasons for the drop.
Total direct payments from the government are expected to fall to $16.5 billion, 4% below the five-year average, from $24.3 billion in 2005.
The average farm household income should fall 0.9% in 2006 to $80,703, the USDA said.
Increases in farmland values have lifted farmer equity at a faster rate than farm debt.
Citigroup analyst David Raso said the income estimate is better than the previous USDA forecast for a 26.3% decline and is encouraging for an eventual farm equipment recovery.
BLACK FARMERS AND THE UPCOMING FARM BILL
By Jerry Pennick and Heather Gray
Federation of Southern Cooperatives
December 1, 2006
In 1999, black farmers in the United States reached a $2.8 billion settlement with the U.S. Department of Agriculture in a class-action discrimination lawsuit. But the problems are ongoing. In fact, under various farm bills and trade agreements, discrimination has expanded to farmers throughout the world.
Most farmers in the world are, in fact, people of color, from Africa to Asia to the Americas. Abuse of the agriculture program was rampant in the American South in the past century. Examples abound.
Early in the 20th century, cotton plantation owners convinced the U.S. Department of Agriculture that allotment payments should be filtered through them, rather than go directly to their black tenant farmers or sharecroppers. This resulted in as little money as possible going to those farming the land. It set a pattern of abuse.
We've seen in recent years Farm Service Agency county supervisors totally disregard loan applications from black farmers. Information about farm programs is not always made available to black farmers. If loans are approved, the payments often come too late to plant the season's crops. County committees that determine farm loan qualifications often lack black epresentation.
The United States now wants to expand these devastating discriminatory policies throughout the developing world. The subsidy commodity program is a prime example. Congress and corporations wanted to increase U.S. exports so they lowered the guaranteed minimum price for U.S. commodities such as cotton.
Prior to this devastating legislation, farmers were guaranteed a minimum price that was close to the cost of production. No more. Congress also stopped the acreage set-aside program, under which cotton farmers were paid not to plant on some of their land. This opened up an additional ten million to 14 million acres into production, some of which went into cotton.
Without regulations that set a fair price, corporations can purchase cotton below the cost of production in the United States, driving down prices in the developing world. And the higher production has increased demand for chemicals and seeds. It's been a corporate windfall.
So where are farmers in this picture? Because there are virtually no regulations to offer a fair price for commodities, the government pays farmers a subsidy to make up for their loss. It usually just barely covers the cost of production. Black farmers and small family farmers in the United States depend on subsidies in an attempt to break even.
In a recent survey of African-American cotton farmers we conducted throughout the Southeast, it was found that the subsidy program is essential for their survival. But when asked if subsidies would be as important if the farmers received a fair price for their cotton, the answer was "no."
The subsidy program is a scapegoat for failed agriculture and development policies that are bolstered by the World Trade Organization, International Monetary Fund and the World Bank that force the governments of developing countries out of agriculture. This enables corporations to control the global agriculture system.
World governments should instead be encouraged to create an agricultural system that supports small farmers and protects borders through fair trade and not free trade.
Policies that would go a long way toward resolving the current corporate agriculture welfare system would include a "Farmer Living Wage Program" so that corporations would have to pay a fair price to farmers and supply management that would reinstitute the acreage set-aside program.
We believe farmers in the United States and all over the world would benefit from these reforms. With these recommendations, the United States would be taking the lead in defining the role of government in agriculture and moving the debate toward the establishment of an "International Living Wage" policy for farmers. Food and fiber are far too important to be left in the hands of the private sector.
JERRY PENNICK and HEATHER GRAY are staff members at the Atlanta-based Southern Cooperatives/Land Assistance Fund, which specializes in helping Southern black farmers.
ADM CEO SAYS FOOD DEMAND TO DOUBLE BY 2050
By Lavonne Kuykendall
Marketwatch
November 8, 2006
CHICAGO, Illinois --- Global demand for food will more than double by 2050, and by the same year traditional energy supplies will be insufficient to meet demand, said the chief executive of a company involved in food and energy production.
Calling her company a "category of one," Archer Daniels Midland Co. (ADM) Chief Executive Patricia A. Woertz said the company has the ability to keep its leadership position in the renewable energy and food processing businesses.
Demand for food will grow not only because of population growth, but because people worldwide are seeing improved quality of diet, and eating more meat. Demand for ethanol and biodiesel fuel is growing more quickly than production capacity in both the U.S. and Europe, Woertz said. The two trends "point to a bright future" for ADM, she said.
She said the company will maintain its lead in both industries. She also said ADM is launching strategic management initiatives to improve its capital project management, investment screening and execution, to review its businesses for strategic fit, and to monitor performance and align its talent with strategic objectives.
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The Agribusiness Examiner Issue #474
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By A.V. Krebs, Ed.
Corporate Agribusiness Research Project, December 12, 2006
Straight to the Source
