Monday, January 31, 2005

Better and better every day?

One of the themes of Bitter Greens Gazette will be to debunk the idea that the industrial food system is crumbling under the weight of a sustainable food movement--that small-scale local ag might, sometime soon, overwhelm or transform Big Food.

The argument goes like this: Everywhere I go, I have more chances to buy organic. Not only are Whole Foods outlets sprouting like mung beans in suburban strip malls, but my locally dominant massive supermarket chain has a whole section that's organic. Why, just the other day, I was in Sam's Club, and I found some organic milk! And my favorite local "gourmet" restaurant features local vegetables. Our side is winning!

By indulging in a bitter laugh at such effusions, we'll certainly be accused of pessimism, of not "thinking positive," a self-help platitude that's taken on near-religious status over the past decade or so. But let us nod to Herbert Marcuse and test the "power of negative thinking." By doing so, we might get a clearer picture of what's happening globally and right around us with food production and consumption. And that might help us come up with a more rigorous response to the disaster of the current food system.

Have a look at this article from today's Wall Street Journal, detailing the top 10 "trends in U.S. agriculture."

Optimists will find much comfort here. "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."

But organic hardly means local, or even sustainable. Organic produce gets a 30 percent premium to conventional in the wholesale market, but converting to organic can cost as much as $10,000 per acre. The cost requirement, as well as mass amounts of paperwork required for certification, are better suited to large industrial farms than small ones. The organic apple of bunch of kale you buy at Whole Foods was likely trucked crosscountry from California after being grown on a huge farm, almost certainly worked by exploited migrant labor. In other words, many of the industrial practices and social relations have been preserved.

I talked to an excellent small-scale farmer from the Chapel Hill area recently. He's been certified organic for nearly 30 years, and reports that certification has become more of a headache than it's worth, and that many of his peers continue to farm with organic methods but have dropped certification. He says Whole Foods, who he used to sell to, is willing to buy local--if you can beat the price offered by industrial-organic California farms.

While optimists are cheering the organic trends, we negative thinkers are getting a cold chill from the news, much detailed in this blog, about genetically modified (GMO) crops. Here is our WSJ correspondent:
"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." (Bold not in original).

(Note to self: Research the Center for International Food and Agricultural Policy, which is funded by Cargill Foundation, Archer Daniels Midland Company, and John Cowles, Jr.)

Finally, the title of the WSJ article--"What's for Dinner? Imports"--tells a grim story. Trend #1: "Thanks to cheap land and labor, Russia, Brazil, Argentina, China and other countries are emerging as powerful agricultural producers," i.e., importers into the U.S. market. Those amazing organic strawberries you found at Whole Foods last week were likely shipped in from Chile. And that box of organic soymilk could well have been made with Brazilian soybeans--which could have been contaminated by GMO beans.

Sunday, January 30, 2005

Buzz kill

In a recent post, I conjectured that pesticides might have had something to do with the collapse of North Carolina's wild-bee population. Sloppy wording made it seem like I meant that pesticides, and not mites, had caused the decline of domestictated honey bees, which clearly have been scourged by mites.

The AP article referenced in my post said this: "Twenty years ago the state had a healthy population of wild bees, but they have been ravaged by mites."

Since I don't really know much about the topic, I've been doing some research. I'll call the NC State professor quoted in the article to get his perspective Monday. In the meantime, here is a National Geographic piece from last fall on the decline of wild bees in North America. While it contains no information regarding the North Carolina in particular, the article does have this to say:

" 'Prior to the advent of large-scale monoculture agriculture [the practice of growing only one kind of plant in a given plot] in the fifties and the use of lots of chemical pesticides, native bees and feral honeybees pollinated everything. It [pollination of crops] wasn't an issue. People didn't cart bees all over the country,' [Scott Hoffman Black, executive director of the Xerces Society, an insect-conservation group] said.


While the mites that have proven so devastating to domesticated honeybee populations cause little effect to the wild bees, pesticide use and habitat loss are taking their toll, according to Black.

'Like any animal, native bees need a place to live,' he said. 'They need nest sites and floral resources, and if they don't have them, they won't be there.' "

Friday, January 28, 2005

Seedy situation

Monsanto quit selling seeds in Argentina last year, but that doesn't mean the seed giant plans to stop making money there.

According to this AP story, 95 percent of Argentina's expected 35 million metric-ton soybean crop for 2005 will emerge from GMO seeds, mainly Monsanto's infamous Roundup Ready seeds.

(Roundup Ready shines a harsh light on biotech's claims of environmental friendliness; these are seeds created to withstand Roundup, Monsanto's cash-cow herbicide. In other words, farmers using Roundup Ready seeds can dump as much herbicide as they want into the field and not affect their soy crops.)

The company claims that the great bulk of the soybean crops currently in the ground in Argentina came from seeds that farmers never paid for; they saved them from previous crops or bought them on the black market. Thus it plans to intervene in Argentina's export market, going to countries that import Argentine soybeans and demanding a 2% per-ton "licensing fee." According to an Argentine farmers' advocacy group, that would amount to $100 million annually into Monsanto's coffers from farmers' pockets. That's a pretty good revenue stream from a country where you've stopped selling your product.

There's really nothing good about this story. Argentina's GMO soybean crops are being sold internationally mainly as chicken feed, thus being shipped great distances for use in factory farms. Garbage in, garbage out, and a whole lot of energy spent and animal suffering in between.

But I will say a few things in defense of those Argentine soybean farmers. I just talked to a friend of mine who's been living in Salvador, Brazil, for a couple of months. Maverick Farms had charged him with scoring us some raw cocoa beans. He had bad news for me today. "All of the cocoa beans are GMO [genetically modified] here," he said. "It's Nestle. They planted so much GMO cocoa that the bugs got out of control for the rest of the cocao farmers. They all gave in."

I hope those farmers didn't pay some transnational company for the GMO seeds they planted. The economic relationship described by my friend amounts to extortion, not a free market. Who knows whether some similar factor didn't play a role in the GMO takeover of Argentina's soybean crop.

Also, seed-saving is an age-old practice. Maverick Farms just dropped $300 on seeds from Fedco, a sinisterly named but benign organic, heirloom seed specialist. Will Fedco come after us at the farmers market if we save our seeds from this year's crops and use them for next year's? Or will it demand some sort of licensing fee from us?

A pox on Monsanto, and a salute to any farmer who stiffs it.

Meanwhile, Brazil, world's biggest soybean producer, is trying to sort out its own mess with Monsanto.

Bee here, now

Our area's small-farmer scene in buzzing about a new program to promote bee-keeping in North Carolina.

Seems that the ongoing, state-wide transition from tobacco to vegetable farming has created a shortage of bees for pollination. "I feel that if we don't do something now about (this) we may be heading toward an agriculture crisis in the state," David Tarpy, the state's cooperative extension apiculturist and assistant professor at North Carolina State University, told AP.

"Twenty years ago the state had a healthy population of wild bees, but they have been ravaged by mites. Farmers now rely on a dozen or so commercial beekeepers to pollinate their crops," the article states. Mites, huh? Might insecticide use have played a role in this problem?

At any rate, the state ag extension office, working with NC State University, is distributing $164,00 to promote small-scale bee-keeping. The grant will provide 250 lucky applicants with two hives of Russian honey bees and bee hives; they'll have to come up with their own protective gear, etc.

We at Maverick Farms were disappointed to learn that the program has already recieved 600 applications (deadline February 11). We'd love to score a couple of freebie hives; we adore raw, unfiltered, local honey. And we use it to make a mean Provence-style ice cream, every chance we get.

Thursday, January 27, 2005

That fertile Rockefeller cash

In his essay on the Green Revolution (referenced here), Harry Cleaver identifies the Rockefeller Foundation as a key force in spreading industrial agriculture to the so-called Third World.

The text is worth quoting at length (and well worth reading in its entirety):

"The story of the Green Revolution began in 1943 when the Rockefeller Foundation sent a team of agricultural experts ... to Mexico to set up a research program on local grains. The Foundation’s interest in Mexico at the time was stimulated by at least two factors. First was the recent expropriation of the Rockefellers’ Standard Oil interests by Mexican President Lazaro Cardenas in 1939. Second was the wartime bid of the Nazis to expand their influence in the hemisphere. The friendly gesture of a development project would not only help soften rising nationalism but might also help hang onto wartime friends."

More than 60 years later, the foundation is evidently interested in cleaning up the Green Revolution's messes by bankrolling the Gene Revolution.

There's a Philippines-based NGO called the Global Knowledge Center on Crop Biotechnology (KC), part of another entity known as the International Service for the Acquisition of Agri-Biotech Applications (based in the US, with offices in Kenya and Manilla), which seems to exist to promote biotech crops in the southern hemisphere. Its Web site contains a report on PDF hailing the "near-record growth" of biotech crop acreage in 2004.

The report contains much interesting information re: GMO penetration of the southern hemisphere. To wit: "[A]pproximately 8.25 million farmers in 17 countries planted biotech crops in 2004 — 1.25 million more farmers than planted biotech crops in 18 countries in 2003. Notably, 90 percent of these farmers were in developing countries. In fact, for the first time, the absolute growth in biotech crop area was higher in developing countries (7.2 million hectares) than in industrial countries (6.1 million hectares)."

Interesting stuff; this is clearly a study worth reading, a Web site worth monitoring, and a group worth investigating. But what really caught BGJ's eye was that the Rockefeller Foundation, along with an Italian outfit called Fondazione Bussolera Branca, had funded the study.

This opens whole new veins of research for Bitter Greens Gazette: What other biotech projects are U.S. foundations underwriting? And what is this Fondazione Bussolera Branca?

Wednesday, January 26, 2005

Cheap labor, cheap food, fat profits

Two recent reports highlight just how heavily the U.S. food system relies on cheap labor to maintain profitability.

Labor conditions have gotten so wretched in the meat and poultry-processing industry that Human Rights Watch was moved to issue a scathing report yesterday.

"In meat and poultry plants across the United States, Human Rights Watch found that many workers face a real danger of losing a limb, or even their lives, in unsafe work conditions. It also found that companies frequently deny workers’ compensation to employees injured on the job, intimidate and fire workers who try to organize, and exploit workers’ immigrant status in order to keep them quiet about abuses," the organization states in a press release announcing the study.

I haven't had a chance to look at the full report yet--my reading list is piling up--but the press release says its focuses on Tyson Foods Inc. and Smithfield Foods Inc, among others.

While these companies crack down on union activity and pinch pennies on shop-floor safety, their stocks have been doing fine for themselves in the stock market as Atkins-addled consumers load up on factory-produced meat. (The red line represents Smithfield, the blue Tyson, and the green the S&P 500, or the broader market. Read this post for more on how to read the stock market.)

Here's an article describing hog giant Smithfield's robust financial results for the last quarter.

The Human Rights Watch report highlights the industry's heavy reliance on illegal immigrant labor: "All the abuses described in this report—failure to prevent serious workplace injury and illness, denial of compensation to injured workers, interference with workers’ freedom of association—are directly linked to the vulnerable immigration status of most workers in the industry and the willingness of employers to take advantage of that vulnerability."

Meanwhile, the U.S. Department of Labor infuriated immigrant-advocacy groups Monday when it unceremoniously halted its annual study of working and living conditions among the nation's migrant farm workers. According to the AP article linked here: "The information is part of a survey that is the sole authority on the work and living conditions of farm workers in the United States. The National Agricultural Workers Study affects immigration and guest worker policies and influences government programs that help the workers and their families."

The article states that the number of illegal-immigrant farm workers rose from 7 percent of total farm workers in 1989 to 52 percent in 2000. This figure shows an astonishing reliance on vulnerable, low-wage labor for our food supply.

Cheap labor means industrial food giants can keep consumer food prices down while remaining highly profitable. Cheap food means downward pressure on inflation, which has been miraculously low for about the last ten years. Low inflation means low interest rates, which fuels stock-market rallies.

Every prosperous person in the US--from rightwingers fulminating about how wetbacks are destroying the country to NPR-listening Whole Foods shoppers to me--owes much of their comfort to the exploitation of immigrant labor. Take it away and you'd have to radically transform the food (and thus the economic) system on both sides of the border.

Tuesday, January 25, 2005

The UN and the genius of industrial agriculture

"The genius of industrial agriculture is to take a solution and create two problems," writes Wendell Berry. On a small, integrated farm, animal waste enriches soil that will be used to grow vegetable crops or grazing grass. Under industrial agriculture, vast-scale animal farms, reliant on feed grown elsewhere, create huge amounts of waste that cloud entire counties with unhappy smells and need to be hauled away long distances for disposal. Meanwhile, huge mono-cropped vegetable farms, bereft of animal herds, rely on massive inputs of chemicals to enrich the soil.

That division, and the huge amount of energy and inputs needed to sustain it, lies at the heart of the Green Revolution--the post-World War II effort, financed largely by U.S. foundations, to codify industrial agriculture and take it international. Here's a link to a superb article on the Green Revolution by Harry Cleaver, econ professor at the U of Texas. (Click the link marked "The Contradictions of the Green Revolution.") Cleaver may be the only openly Marxist economist working as a full professor in the U.S. academy. In this 1972 article, he traces the Cold War foreign policy interests that lay at the heart of the Green Revolution campaign.

[Manifesto-in-progress interlude: Missing from Cleaver's analysis is any discussion of the broad destruction of local foodways wrought by the Green Revolution, or its casual ruin of delicious things. Industrial agriculture, whose genius seems nearly limitless, has succeeded in convincing middle-class Mexico City residents to make salsa verde out of a packaged mix (I've seen it with my own eyes) and in turning one of the great gifts of the earth--the tomato--into a highly profitable commodity of no more culinary value than the water used to irrigate it.

One of the goals of Bitter Greens Journal, and of its mother project, Maverick Farms, is to bridge the gap between political economy and aesthetics. We want to bring a hedonistic regard for flavor and respect for local foodways to the center of the critique of industrial agriculture; and to make sure the artisinal food movement we've aligned ourselves with retains a sharply honed political edge.]

Now the Green Revolution finds itself in tatters, its environmental and social ravages quietly acknowledged. Here is the UN, that bastion of and great hope for sustainable-development ideology (according to some): "The Green Revolution ... is not without its detractors, who argue that it promoted overuse of water, pesticides and chemical fertilizers, making poor farmers dependent on these inputs and in some cases seriously damaging the environment in the process."

Strong stuff. The answer? What the UN hails as the Gene Revolution. Through broad adoption of GMO, declares the UN's Food and Agriculture (FAO) wing, "it may be possible to increase the availability and variety of food by improving agricultural productivity and reducing seasonal variations in food supplies. Pest-resistant and stress-tolerant crops can be developed to reduce the risk of crop failure due to drought and disease. More nutrients and vitamins may be bred into plants, combating the nutrient deficiencies that affect so many of the world's poor. Crops could be made to grow on poor soil in marginal lands, increasing overall food production. ...Biotechnology also offers the possibility of reducing the use of toxic agricultural pesticides, and may also improve the efficiency of fertilizer and other soil amendments."

Thus the genius of industrial agriculture is to sell policy makers a solution to the problems it created. That this solution will fatten the profits of transnational seed giants and exert further downward pressure on agricultural commodity prices (meaning more profit for industrial food processors, less for farmers) is beyond dispute. What it will do for the environment, local foodways, and the flavor of tomatoes remains to be seen.

Monday, January 24, 2005

More bad seeds

Bitter Greens Journal must seem so far like Monsanto Watch. That will change; I want this diary to focus at least as much on local issues and food-politics theory as it does on the political economy of the global food industry. But there's much to say about that the biotech behemoth, and little time to write. And I sense a complacency re: biotech among some in the sustainable-ag movement, who seem to think it will just go away because of popular protest. All the evidence I see points the other direction.

The latest on Monsanto is that it just today bought California-based Seminis, which the Financial Times calls the "world’s largest developer of fruit and vegetable seeds," for $1.4 billion (including assumed debt). Here's the Reuters version of the deal, widely distributed in the US press. the article has some interesting stuff in it: e.g., "Monsanto already controls an estimated 14 percent of the U.S. corn seed market and through licensing arrangements provides germplasm and technology traits that extend its influence into about one-third of the U.S. market."

The article dutifully reports the company's official rationale for the deal: That Monsanto bought Seminis to "capitalize on the trend toward healthier eating," and that it will continue to run its new charge as a conventional, non-GMO seed company in "the near- to mid-term." The company's CEO, Hugh Grant, added, however, that "In the long term, there may be an opportunity in biotechnology."

Isn't it a bit ominous that Monsanto just snatched up the world's biggest seed company, and is openly considering genetically manipulating its products?

The UK-based Financial Times adds a telling detail in its piece on the deal: "Seminis derives 40 per cent of its business from Europe, the Middle East and Africa." Those are just the places that Monsanto has been having trouble marketing its GMO seeds.

Monsanto shares plunged 7 percent on the news. Part of that is normal activity when a company announces a big buy; part of it reflects Wall Street concern that Monsanto overpaid for Seminis, according to the FT.

Friday, January 21, 2005

Wall Street's bet on Monsanto

I had planned to discuss an extensive new report from the Center for Food Safety on Monsanto's campaign to enforce its "property rights" viz. farmers. But I haven't had time to read through the 84-page document. Before I get to that, sometime next week, I'll go into a bit more depth about what Monsanto's stock-market performance is telling us about its prospects in the struggle over GMO.

Here's the company's stock chart over the past year, compared to the S&P 500. (Market watchers use the S&P, an index containing the 500 most valuable US stocks, as a broad indicator of how the overall stock market is doing.) The red line on the chart represents the S&P's performance, while the blue line represents Monsanto's share-price growth. Note that while the S&P has essentially flatlined over the past year, Monsanto's shares have risen by 100 percent, or doubled in price. Now, investors buy stocks based on expectations of future profit growth, not past performance. One way to read Monsanto's chart, then, is that investors are expecting its earnings to grow much faster than the earnings of the average large U.S. company. And since, as I show in my previous post, Monsanto relies increasingly on GMO for its profits, the stock's sharp recent rise represents a calculated bet on widespread acceptance of biotech crops.

Another indication that the financial community is betting big money on Monsanto in its fight with the environmentalists is what analysts call "valuation." To understand valuation, think of a small business--for example, an ice cream shop. Say your local ice cream shop generated $100,000 last year in profit. How much would it be worth, if the owner wanted to sell it? Well, it would depend on whether its annual profit is holding steady, growing, or shrinking. If profit were holding steady, the shop might fetch $500,000, or five times last year's profit; if profits could reasonably be expected to grow, say, 10 percent a year, someone might shell out, say, $800,000, or eight times earnings. If profit is shrinking, the price might be something like $200,000, or two times earnings.

Similar calculations come into play when big-time investors buy stocks. Get this: Monsanto is currently trading at 70 times last year's earnings, while the average company in the S&P 500 trades at about 18 times earnings. That means that Wall Street is expecting (or "pricing in," in trader argot) serious growth from Monsanto.

Now, contrary to '90s-era popular-media hype, the stock market is not driven by sunken-eyed day traders or grandmas gambling away their retirements. What drives stock prices are the decisions of huge institutions--retirement funds, mutual funds, hedge funds. These places are run by people who manage billions of dollars and buy and sell millions of dollars worth of a single stock in a single swoop. They scour the market for growth opportunities, and they tend to do their homework. They're often wrong--in the '90s, they wildly overvalued tech stocks. But they're a lot more conservative about valuation today. If they thought biotech crops faced a bleak future, they would dump Monsanto instantly, as they did a couple of years ago, when GMO opposition seemed to be gaining force. Instead, they're bidding up Monsanto dramatically.

That's bracing news for anyone concerned about the future of small-scale, sustainable farming.

Note: the Barron's article mentioned in my previous post makes clear that Wall Street is very excited about Monsanto's global "growth opportunities." A future blog will discuss the company's activities in Brazil and Argentina, the world's emerging industrial-ag production centers.

Thursday, January 20, 2005

Monsanto on the March

Activists have won key victories in the battle against genetically modified food. Several industrial food purveyors--from baby-food giant Gerber to pet-food maker Iams to cereal producer General Mills--have renounced under pressure the use of GMO ingredients. McDonalds and Burger King promised in 2000 not to use GMO potatoes for their French fries (although the beef they use is raised on GMO corn). These and other blows to the growth of GMO have inspired a somewhat celebratory mood in some quarters of the foodie left. Writing in his much-celebrated Coming Home to Eat (2002), local-food guru Gary Paul Nabhan declared 2000 to have been a "watershed in the history of global food politics," marked by broad global protest against GMO and other schemes of industrial agriculture.

Yet, in the meantime, Big Ag has quietly regained its momentum in the GMO struggle. An article in the December 6, 2004, Barron's hails the resurgence of GMO-seed giant Monsanto. Entitled "Eat Up!: Why Genetically Modified 'Frankenfood' is gaining ground," the article makes the smart-money case for Monsanto. (Unfortunately, the article is available on the investment weekly's Web site only for a fee.) It points out that, despite all the protest, biotech crop acreage has surged to a 170 million acres since the technology's 1996 debut, making GMO "one of the most quickly adopted innovations in the history of agriculture, outpacing the emergence of animal-drawn plows, and the rise of tractors on the 1930s." Acreage under biotech cultivation jumped by 22 percent in 2003, a performance likely to be repeated in '04, the magazine stated.

Meanwhile, official opposition to biotech is unravelling. The European Union, which has been stalwart in refusing to accept GMO, last spring eased its ban on importing GMO crops and cultivating GMO seeds. Germany and Great Britain, which count among the world's greenest governments, now allow some. (Barron's reports that the first Frankenfoods have yet to hit Europe's supermarkets; it will be interesting to see how consumers receive them, since Europe does have strong GMO labelling laws).

And even NGO opposition to GMO shows signs of retreating. The Environmental Defense Fund, once a fierce critic, is backing off. A scientist for the group told Barron's that she'd like to see a "bit more regulation" of GMO, but that "this is not a big focus for us as it once was." And the UN has embraced biotech crops as "essential to the future of the planet," a rebuke to those who see that beleagured intitution as the planet's last hope for a global sustainable-development movement.

Exponential growth, dwindling opposition--it all adds up to a windfall for Monsanto. The ag-input giant reported last year that $2.3 billion of its total $5.5 billion in revenue for fiscal '04 came from its biotech arm. And that operation also was the company's biggest contributor to overall profits ($1.6 billion total), surpassing profit from herbicides for the first time ever.

Wall Street has taken note. The company's share price has surged from about $15 in summer 2002 to about $60 today--a staggering 300 percent gain. That means the so-called smart money is betting that Monsanto will defeat its opponents and create a world of bioengineered monocrops fuelled by patented seeds.

Tomorrow I'll post about how the company is continuing its egregious practice of suing farmers who dare save seeds from their own crops.