Friday, April 29, 2005

Archer-Daniels Midland's man at USDA

"Charles Conner served as President of the Corn Refiners Association from 1997 through 2001. During his tenure, he expertly guided the industry through several challenging trade and biotech issues. His term coincided with significant growth in the industry and the development of several new uses of corn."
--From a Corn Refiners Association press release, dated April 28, 2005, praising Chuck Conners confirmation as Deputy Secretary of Agriculture

In his blistering polemic against industrial agriculture, Against the Grain, Richard Manning quotes The New York Times on Archer Daniels Midland's political influence: "Archer-Daniels does not have a lobbyist in Washington; it does not need one."

The Paper of Record meant that ADM has skillfully and quietly created a niche for itself within the US political economy, without need of a noisy team of lobbyists. ADM buys 12 percent of the nation's corn at a heavily subsidized price from farmers, and converts it into two main products: high-fructose corn syrup and ethanol. As I'll show below, both of those products owe their markets completely to government intervention. And in both cases, govermnent action benefits ADM without resulting in direct payments that the company's opponents can easily attack on the Hill.

Thus, no need for a lobbyist. However, despite ADM's lack of a lobbyist in Washington, it does boast a man in Washington, specifically in the Department of Agriculture.

Chuck Conner, recently confirmed as deputy secretary of the US Department of Agriculture, made his Bitter Greens Journal debut in this post, stroking his chin and declaring "intriguing" a mind-bendingly dumb idea involving ethanol, the fuel made from corn.

From 1997 to 2001, Conner served as president of the Corn Refiners Association. ADM is the dominant corn refiner: As stated above, it buys 12 percent of all field corn grown in the US, the country's largest crop. And it controls a third of the high-fructose corn syrup market, and about a third of the market for ethanol. The corn-refining industry is so highly concentrated that the association has only seven member companies, among them ADM and another shadowy agri-giant, privately held Cargill.

A 'perfect vehicle'
In 1996, the Corn Refiners Association became embroiled in a scandal involving ADM's scheme to fix the price of high-fructose corn syrup and other processed corn products. The Chicago Sun-Times reported on Nov. 3, 1997, that an FBI agent testified to a grand jury that ADM had used the association between 1992 and 1995 as cover to hold secret meetings with competitors for price-fixing purposes. (Article unavailable online; I pulled it from Nexis.)

The Sun-Times article states: "The trade group provided what the alleged conspirators called 'an easy cover-up' and 'perfect' vehicle for carrying out their plans, the agent said in an affidavit."

ADM eventually copped a plea, pleading guilty to fixing the price for lysine and citric acid (corn-processing byproducts) in exchange for immunity from charges involving high-fructose corn syrup. The company paid a then-record fine of $100 million, and executive Michael Andreas, son of legendary CEO Dwayne Andreas, did time in jail.

The Corn Refiners Association, however, walked away clean, although it might not be a coincidence that it needed a new president in 1997, the year Conner signed on.

And, indeed, ADM walked away clean, too. In 2004 alone, the company turned a profit of $318 million from its sweetener business. (Source: company financial report linked here.)

Conner's only notable activity that I can dig up as leader of that august group has been his attempt to bully Mexico into letting heavily subsidized high-fructose corn syrup from the US overwhelm its domestic sugar industry.

Sweetness and power
Now an aside. Why does high-fructose corn syrup (HFCS) exist? Richard Manning shows in Against the Grain that ADM financed the lobbying effort that led to the blatantly protectionist sugar-quota system that went into effect in 1982 and has held sway ever since. (Signed into law by one zealously pro-free trade president, Reagan, it now has the full support of another, GW Bush. Clinton, too, paraded his free-trade credentials while accepting the sugar quotas).

What does this have to do with HFCS? The world price of processed sugar has long been below that of HFCS, meaning industrial users such soft-drink bottlers have no real reason to buy it. That's where the sugar quota comes in. It props up the price of sugar in the US to twice the world level. With the sugar price artifiically inflated, ADM has a ready market for its HFCS. Here is Manning: "The cost of corn syrup hovers about halfway between world sugar and protected domestic sugar, a price designed to 'overcome [soft-drink] bottler resistence, a reluctance, it turns out, solely based on price.' " (He is quoting a Barron's article.)

Today, HFCS is the dominant sweetener in the US; 42 percent of the corn grown here goes into making it. If it weren't for ADM's efforts, no market for it woud exist.

This information puts an interesting spin on the sugar industry's opposition to CAFTA, and Conner's involvement in trying to rig up a sugar exception to that trade pact, discussed here.

A well-fed senator
Before taking the helm of the tainted trade group, Conner served as an aide to Sen. Richard Lugar, R-Ind., starting in 1980. During that long tenure, Conner attained the position of minority and majority staff director of the Senate Agriculture, Nutrition, and Forestry Committee.

Luger is a long-time proponent of government subsidies for ethanol, a stance I've critiqued here, among other places. Even ethanol's staunchest supporters acknowledge it would collapse if the government pulled the plug; here'sa Cal-Berkeley scientist who claims that, accounting for "the myriad energy inputs required by industrial agriculture, from the amount of fuel used to produce fertilizers and corn seeds to the transportation and wastewater disposal costs," ethanol burns more energy in its production phase than it delivers as fuel.

In the January/February 1999 issue of Foreign Affairs, Luger published a long essay hailing ethanol as just the thing to save the US from dependence on foreign oil. His co-author: James Woolsey, director of the CIA from 1993 to 1995. At the time, Woolsey served on the board of directors of BCI International, an ethanol start-up company. I'm not making this up.

Throughout his long career and tenure on the Agriculture, Nutrition, and Forestry Committee, Lugar has been a magnet for agribusiness cash. This link shows the goodies he received in 1996, Conner's last full year as his assistant; click around that site for more info.

Before becoming ADM's man in the USDA, Conner served from 2001 until just a few weeks ago as ADM's man in the White House, bearing the title of "special assistant to the president for agriculture, trade and food assistance."

It's not far-fetched to say that ADM does have a lobbyist in Washington, only the company doesn't pay his wages. You do. Salary:: $134,000.

When future historians gasp in horror at how Pax Americana ran the world's food system, obscure figures like Conner may become objects of derision. On the other hand, the way these guys are running the world, we may be lucky to have future historians at all.

Tuesday, April 26, 2005

CAFTA and industrial ag

Looking for ammunition in the fight to derail CAFTA, the Central American Free Trade Agreement that Bush is currently trying to ram through Congress, someone recently asked me how it would affect US farmers.

The answer depends on what sort of farmers we're talking about.

Commodity farmers--those who produce large amounts of corn, wheat, soybeans, and other bulk crops that fuel the global industrial food system--would likely benefit. For a commodity-corn farmer, for example, the prospect of dumping lavishly subsidized corn right into the southern heart of the tortilla belt must sound pleasant indeed.

Click on the above link, and you'll find that the U.S. government delivered $37.4 billion in direct payments to large-scale corn farmers between 1995 and 2003. To put that number in perspective, Central America's largest economy, Guatemala’s, boasts a GDP of about $56 billion.

It's no wonder, then, that American Farm Bureau president Larry Wooten, himself a tobacco and grain farmer, recently reiterated his group's "strong support" for CAFTA (also known as CAFTA-DR, because the Dominican Republic is also involved), which he declared would "overwhelmingly be a win-win opportunity for U.S. agriculture.”

He went on to analyze the pact in terms so stark that Bitter Greens Journal itself would have been proud to have authored them. He enthused:

The CAFTA-DR would put the United States in a position to underprice competitors and boost market share for almost every major commodity, while giving our producers access equal to or greater than that of our competitors.

Corn, cattle, and pork interests have also weighed in. National Corn Growers Association president Leon Corzine even hinted that CAFTA passage would temper corn growers' voracious appetite for government cash. He said: "It has always been NCGA's position that corn growers want income from the marketplace - the global market - and not from the government. To do this, we need the CAFTA-DR markets opened."

Yeah, right. I suppose NAFTA--which in 1994 opened Mexico's market to an avalanche of cheap, low-quality corn and threw untold thousands of corn farmers off the land and across the border--wasn't enough for him?

The only group of U.S. commodity farmers I know of who aren't cheering CAFTA are sugar producers. The Central American countries produce sugar, and thus CAFTA would mean easing United State's strict sugar-quota program, which went into effect in 1982 and has since survived many challenges.

While I bitterly oppose CAFTA, I have little sympathy for the sugar industry. In fact, it needs no sympathy from these quarters. The Financial Times reported on April 12 (the article is available only for a fee) that "Although sugar represents only 1 percent of US farm revenues, the industry accounted for about 17 percent of political contributions by agriculture businesses between 1990 and 2004--just over $20 million."

Those handouts have evidently won some influence in the Bush administration, that bastion of free trade. Last year, Bush capitulated to sugar interests and rammed an exemption for sugar into a free trade pact with Australia. The FT reports that the administration is busily trying to work some sort of sugar concession into CAFTA.

One possibility: to allow in a certain amount of Central American sugar but to "set it aside for conversion to ethanol--a prospect described as 'intriguing' by Chuck Conner, the president's advisor on food and trade issues." Don't get me started on the absurdity of that idea.

To sum, CAFTA, like NAFTA before it, looks like a great boon for most commodity farmers and the industrial-food interests they serve. (As for large-scale vegetable and fruit producers, I expect that CAFTA will provide them a new upsurge of cheap labor, as CAFTA wreaks havoc on local foodways and clears the land of subsistence and market farmers alike.)

And how would CAFTA affect small-scale U.S. farmers geared to their local markets, like Maverick Farms?

Not much, probably.

However, it must be noted that for small-scale farming to be sustainable, it must turn a profit. (Unlike large-scale monocrop farming, it can't rely on government handouts.)

In our current system, small-scale, local-based farming relies for its existence on a healthy pool of expendable income—which is ultimately generated by exploiting cheap labor in places like Central America. I've discussed the class paradoxes of sustainable agriculture in this post and this post.

Sunday, April 24, 2005

Monsanto marches on

"Exponential growth, dwindling opposition--it all adds up to a windfall for Monsanto," I wrote in Bitter Greens Journal's very first post on Jan. 20.

I used the gene-splicing seed giant's blockbuster performance on Wall Street to argue that its attempted leveraged buyout of global agriculture is moving forward with nary a hitch. (The black, red, and green lines, respectively, represent the major U.S. stock indexes, trampled underfoot by Monsanto.)

Since that time, Monsanto has continued to thunder ahead of the broader market.

Here are a few recent developments.

• Monsanto continues its successful campaign in European courts to force Brazilian and Argentine soybean farmers to pay royalties for seeds. These cases illuminate the dark core of Monsanto's business model. Conventional seed companies sell farmers seeds and book a one-time profit; farmers are free to save seeds, as they have since the dawn of agriculture, for future use.

Monsanto, however, is developing a sort of software model. It sells not only seeds but also a license on the DNA contained within the seed, which it claims to own; farmers are expected to pay royalties each year for as long as the company holds a patent on the seed's DNA.

When Argentina opened its market to GM seeds in 1996, it shrewdly denied Monsanto a patent. Farmers bought Roundup Ready soy seeds (genetically engineered to withstand copious applications of Roundup, Monsanto's cash-cow weed killer) and proceeded to save them--without paying Monsanto. Meanwhile, these farmers quickly began smuggling GM seed for sale into Brazil--which only recently officially opened its doors to GM seeds.

As this Wall Street
Journal article
shows, Monsanto's strategy for shaking down Argentina's farmers is to file lawsuits in EU countries that recognize the company's soy patents and import Argentine soy. Since the company can't charge farmers royalties annually, it's demanding a 1 percent cut of the take when the nation's farmers sell their goods in Europe.

The same tactic has already been used to squeeze cash out of Brazil's soy farmers, the WSJ reports.

How critical is this tactic to Monsanto's profit prospects? The company's shares plunged 5 percent on April 4, the day after ministers from Brazil, Argentina, and Paraguay issued a joint statement deploring the export charge, the WSJ reports. With the US market rapidly maturing (see lead quote above), the company will need to squeeze cash out of rapidly emerging ag commodity-producing regions like Argentina and Brazil, investors figure.

Shares quickly recovered, however, as Wall Street analysts rallied round the company's stock.

Greenpeace, which has been helping defend Argentine farmers against these assaults, notes a sinister twist to Monsanto's strategy. The group's Emiliano Ezcurra told the Journal:

Monsanto has sold these seeds here since 1996, but it never went after farmers before because it was waiting for practically all of them to become users of Roundup Ready. Now that nearly everyone uses Roundup Ready, Monsanto is suddenly interested in collecting royalties. That is very suspicious.

It should also be noted here that Monsanto has not been shy about suing U.S. farmers who never bought Monsanto seeds, but whose crops were contaminated by Monsanto traits through cross-pollination, for non-payment of royalties. (See a recent report by the indispensable Center for Food Safety for details).

Greenpeace's Ezcurra is not sanguine about the Argentine farmers' prospects in EU courts. He added: "The most probable outcome is that Monsanto will win this case...But it's important that people in Europe be aware of Monsanto 's maneuverings in Argentina."

Surely, the whole business is sordid. By buying into the promises of GM, Argentine and Brazilian farmers are submitting to the ruinous trap of maximizing production for the global commodity market. The sort of input-heavy agriculture being practiced there is not only a poor business model for farmers, but it's also environmentally disastrous, as it depends heavily on nitrogen-rich fertilizers as well as Monsanto's Roundup.

Nevertheless, I wish those farmers well in their attempt to stiff this rogue company.

Here is an excellent WSJ article describing Monsanto's ultimately bungled attempt to bribe Indonesia's government into accepting GM seeds.

The punchline: Charles Martin, the company's main Asia hand, fired for his role in the botched bribery, now heads up the U.S. Chamber of Commerce's chapter in China, of which Monsanto is a dues-paying member.

Martin is the author of the following gem, quoted by the WSJ and revealed to investigators by an Indonesian official:

When the government plays classical music, we play classical music; when it plays jazz, we play jazz; if it plays bribery, we play bribery; but if it plays clean, that is what we like.

U.S. authorities caught Monsanto doling out a total of $750,000 in bribes to officials, for which it slapped a fine of $1.5 million on the company.

• Meanwhile, Monsanto's bottom line swells.

Earlier this month, Monsanto reported net income for first-quarter 2005 had more than doubled compared with the same period a year before, surging to $373 million from $154 million. Moreover, the company told Wall Street it expects earnings to grow 17% overall in 2006 and 20% to 25% in 2007.

The company added that those numbers assume royalty revenue from Brazil and Paraguay but not from Argentina. "We hope we can finally reach a resolution [with Argentina] that allows us to be compensated for the value our technology has brought to that country's soybean farmers," a company official declared.

And if Monsanto succeeds, I suppose it plans to use its soaring profits to help clean up the environmental and social messes its technology is creating down there.

• I'll end on a bit of hopeful news. Monsanto recently announced it had received a "a broad subpoena from Illinois officials seeking information about the pricing and licensing of its genetically modified seeds" (quote from a WSJ article).

Details remain sketchy, but lots of interesting info can be revealed when state prosecutors go after big companies, as several Wall Street firms can attest. BGJ will be watching this story.

Friday, April 22, 2005

Squeezed the last drop: the vexed economics of small dairy farms

Any day now, Bill Sherwood will shut down his 50-cow dairy farm in Bethel, a stretch of pretty rolling pastureland outside of Boone, a town in the Appalachians of North Carolina.

“I sold my cows to a man in South Carolina,” he told me recently. “I’ll keep milking them until he comes and takes ‘em away.”

As late as the 1970s, there were 15 small dairy farms in Bethel. When Sherwood shutters the dairy business he started in 1959, there will be none. Similarly, the hills of Watauga County once teemed with dairy farms, most of them small in scale. According to Watauga County extension agent Frank Bolick, the county will only have one left when Sherwood retires, Tommy Tester’s 20-cow operation in the Silverstone Community.

The collapse of dairy farming in Watauga County stems from broad trends in the dairy industry and U.S. agriculture generally. Simply put, farmers have seen prices for their goods decline or stagnate, while the cost of doing business rises steadily.

According to the USDA’s Economic Research Service, in the early 1980s it cost farmers $11.90 to produce 100 pounds of milk, which drew an average market price of $13.40. That makes a 1.5 percent return. By the late 1990s, however, the average cost of doing business had actually run ahead of the average price. The economic return to the farmer went negative, to 1.6 percent.

Given those conditions, conventional dairy farmers face two choices: either get bigger, to try to make up on volume what they’re losing in price, or get out of the business.

A recent study by Geoff Benson, an agricultural economist at North Carolina State University, shows that the total number of U.S. dairy farms plunged from about 158,000 in 1993 to under 100,000 in 2001. Smaller farms showed a much higher tendency to go out of business than larger ones. Nationwide, about 15,000 farms in Sherwood’s size class—herds ranging from 30 to 100 cows--went out of business between 1997 and 2002, a 23 percent drop in just four years.

Meanwhile, the number of farms with herds of over 500 cows actually grew during that period, Benson reports. “Cows are being redistributed from small farms to larger ones and average herd size is increasing,” he writes.

Two major factors drive the low price farmers draw for their milk. The first is oversupply. Farmers have been squeezing as much milk as possible out of each cow to offset stagnant prices and rising costs. But doing so has caused a treadmill effect—the resulting glut of milk only makes it cheaper, forcing farmers to drive up production still more.

The second factor is consolidation of processors, the companies that buy the milk produced by Sherwood. The four largest processors buy 60 percent of the milk produced in the United States. In many regions, including this one, a single buyer exists for milk destined for fluid consumption (as opposed to cheese and other processed products). Most of Sherwood’s milk went for processing to Pet Dairy in Wilkesboro, a subsidiary of Dean Foods, the largest U.S. processor.

Dean recently announced plans to shut down the Wilkesboro plant, consolidating its business with another plant in Winston-Salem. Since farmers typically pay for trucking milk to the processing plant, that would have added to Sherwood’s cost burden.

When a single buyer controls a market, it wields tremendous leverage to minimize prices.

It’s not surprising, then, that Bill Sherwood’s son, James, has elected not to take over the farm when his father retires, choosing instead to work a county correctional facility.

“It just doesn’t make sense,” he told me recently. “Our costs keep going up, but the price the company pays stays the same.”

In a future post, I'll discuss ways in which communities can wrest control of dairy production from the mega-processors.

Thursday, April 21, 2005

Homogenized milk: the devil?

The natural homogenization of goat milk is, from a human health standpoint, much better than the mechanically homogenized cow milk product. It appears that when fat globules are forcibly broken up by mechanical means, it allows an enzyme associated with milk fat, known as xanthine oxidase, to become free and penetrate the intestinal wall. Once xanthine oxidase gets through the intestinal wall and into the bloodstream, it is capable of creating scar damage to the heart and arteries, which in turn may stimulate the body to release cholesterol into the blood in an attempt to lay a protective fatty material on the scarred areas. This can lead to arteriosclerosis. It should be noted that this effect is not a problem with natural (unhomogenized) cow milk. In unhomogenized milk this enzyme is normally excreted from the body without much absorption.
--excerpted from “Goat Milk versus Cow Milk,” by G. F. W. Haenlein and R. Caccese, University of Delaware, Newark, in the Extension Goat Handbook, fact sheet E-1, 1984.

The source for this rather astonishing claim is old; but it comes not from some blissed-out health guru peddling a product, but rather from an ag-extension scientist at a respected university.

It bears out what I consider a key theme: that the problem in the American diet isn't the amount of fat people consume, as the mainstream health authorities typically claim, but the quality of fat. In the popular imagination, the linguistic identity between fat as food and fat as excess body weight has caused great confusion--which could be cleared up by watching, say, rail-thin Italians enjoy copious quantities of virgin olive oil.

Has the case against homogenized milk been thoroughly tested and debunked? If not, why is virtually all the milk on supermarket shelves, including most organic milk, homogenized?

It's tempting to reply that the FDA surely wouldn't allow a practice known to be health-ruining to rise to the level of industry standard in a food as widely consumed as milk. But remember, the agency allowed itself to be cowed for decades by industrial food interests bent on using partially hydrogenated oil as a cheap and ubiquitous cooking fat.

I found the above quote in an excellent newsletter called Creamline, which is geared to small- and micro-scale dairy producers.

I'll be writing more about small-scale dairy in the days to come, because the second to last dairy in our county just announced it's shutting down--squeezed out by the impossible economics of conventional dairy farming.

Thursday, April 14, 2005

Saxby Chambliss gets his way

When Bush proposed steep cuts in agricultural spending for the 2006 budget earlier this year, targeting both commodity subsidies and conservation programs, industrial-agriculture interests and sustainable-ag proponents alike organized in protest.

It's no surprise which side won the day.

Bush's beleaguered ag scretary, Mike Johanns, announced April 12 that large-scale commodity farmers could rest easy: the 2006 budget will maintain them in the style to which they've grown accustomed.

Sustainable-ag schemes will not be so lucky.

The above-linked Associated Press story reports that the orginal cuts proposed by Bush would have totalled $8 billion over 10 years. The House's proposed budget would slash Agriculture Department spending by $5.3 billion in 2006, while the Senate's would slice off $2.8 billion.

"If cuts don’t come from payments to [commodity] farmers, they still must come from somewhere," AP writes. And it goes on to state that the likely targets will be conservation and food-stamp programs.

One program on the chopping block is the Conservation Security Program (CSP), described by the National Campaign for Sustainable Agriculture as an "an innovative federal program that provides financial and technical assistance to farmers and ranchers nationwide to help them implement sound conservation practices that improve soil, water, and ecosystem health."

The program essentially gives farmers an immediate financial incentive to break away from environmentally ruinous chemical inputs and begin treating their farms as living ecosystems. Rather than reward gross output, as do the commodity supports so dear to industrial-ag interests, these payments reward farmers for how they farm.

And also unlike commodity supports, which explicitly push farmers to scale up to grab more largesse, this program is structurally geared to human-scale farming. In its fact sheet on the Conservation Security Program, the National Campaign for Sustainable Agriculture points out that:

Several key rules of the CSP stipulate that eligible land must be privately owned, that an eligible applicant must have an active interest in the agricultural operation, and that an applicant must have control of the land for the life of the CSP contract. This discourages the kinds of land erosion and water pollution that can result from short-term land leases while encouraging the farmer's stake in his own land.

The 2002 Farm Bill, the Campaign reports, stipulates that the program should receive $649 million in 2006. To put that number in perspective, note that the U.S. government spent $2.8 billion subsidizing commodity corn farmers in 2003 alone.

But even $649 million is too much for a program that doesn't play into the hands of agribusiness. The National Campaign for Sustainable Agriculture reports that Bush's proposed 2006 budget would slash the program's funding to just $375 million. Now that Bush has yanked commodity supports off of the chopping block, you can count on even steeper cuts in that program.

Sen. Saxby Chambliss, R. Ga., Senate Agriculture Committee chair and champion of Georgia's fat and happy cotton farmers, has already been rubbing his paws together at the prospect of chopping the USDA's food-stamp program as a way of preserving the government's generosity to vast-scale farming enterprises.

A blog less cynical about national-level electoral politics might print that lout’s address and urge you to harangue him. This one will merely urge you to plant a garden and spend as much of your food budget as possible buying directly from small farmers.

Sunday, April 10, 2005

Citizen Ruth: A measured defense of Ruth Reichl

Gourmet editor and former New York Times chief restaurant critic Ruth Reichl has had such a meteoric career that some sort of backlash is inevitable.

Her latest memoir, Garlic and Sapphires, has thus far drawn lukewarm reviews from the
the Times and the New York Observer.(Adam Gopnik has some typically glib and forgettable things to say about it in a recent New Yorker.)

Bitter Greens Journal has just two things to add to this discussion.

• Reichl wrote an excellent review. I didn't live in New York during her tenure at the Times, but I read her religiously from the hinterlands of Austin, Texas. She was my stylistic model during my stint as a restaurant critic at the Austin Chronicle. She wrote tight, pungently argued reviews that attempted to place the restaurant under discussion in a broader context. Her catholicity of tastes contrasted brightly against the dull Francophile obsessions of her predecessors. She used the first-person voice as a tool of expression without making the reviews about herself. And she usually managed to write vividly about food without overwriting and lapsing overtly into food porn--a difficult task. Her model may have been the film critic Pauline Kael--personal, yes, but intensely devoted to the subject at hand, not herself.

• Alone (as far as I can tell) among the made members of the food-media mafia, Reichl cares about sustainability and the brutal economics of farming. When she took over Gourmet a few years ago, it focused on European travel and high-end NY and California restaurants. While it certainly retains those foci, Gourmet since Reichl's arrival has published articles on: a land-trust scheme that helps "land rich, cash poor" small farmers keep land under cultivation while freeing up cash for retirement, etc; Ronnybrook Dairy, a small, popular-but-struggling family-owned dairy in the Hudson Valley; the pioneering Virginia farmer Joel Salatin, who has taken the raising of animals for meat to new levels of sustainability; the food industry's long, successful, but ultimately doomed campaign to hide the health-ruining qualities of hydrogenated oil; and the sudden ubiquity of genetically modified food on supermarket shelves. These are just the examples I can remember off the top of my head (Gourmet has no online archive of features.) Not one of them is imaginable in any other high-circulation food magazine (Food and Wine, Bon Apetit, Savuer, etc.); or in pre-Reichl Gourmet.

Educating the well-heeled readers of glossy food magazines about sustainability and the plight of small farmers is certainly not sufficient for sparking fundamental change; but it sure is necessary. And Citizen Ruth (as I've taken to calling her, a nod to her social consciousness, which towers over that of her peers) is doing her part.

Saturday, April 09, 2005

The ethanol shakeout

Many commodity corn farmers, buffeted by decades of steadily falling prices for their goods and borne aloft only by government
subsidy, have been transfixed by the promise of ethanol, the corn-based fuel.

It's not hard to see why. For years, they've sold their product to Archer Daniels Midland, the world's biggest buyer of commodity corn, and watched the agribusiness titan turn that cut-rate corn into highly profitable ethanol. The company generates about half a billion dollars in profit each year; according to FTN Midwest Securities analyst Christine McCracken, nearly a quarter of that hoard comes from ethanol production.

As any seasoned Bitter Greens Journal readers knows, ADM's highly profitable ethanol business wouldn't make a dime if the U.S. government didn't prop it up through various tax credits and other subsidies (see this post, this post, and this one).

That means ADM benefits from a double-dose of largesse. Corn-production subsidies keep the price of corn down, cutting ADM's cost (not only for ethanol production but also for its other cash cow, high-fructose corn syrup). Ethanol subsidies boost the price it gets in the marketplace.

As Dwayne Andreas, the legendary fixer who heads up ADM, declared not long ago:

The free market is a myth. Everybody knows that. Just a very few people say it. If you're in a position like I am and do business all over the world, and if I'm not smart enough to know there's no free market, I ought to be fired.

The reason they don't call it socialism is that socialism is a bad word. [See Manning, Richard, Against the Grain, p. 144.]

So it's no surprise that farmers sick of being fleeced out of their corn for a pittance by the likes of Andreas would want to create their own ethanol plants to process their own corn, and they're doing so, pooling their own money to invest millions in new facilities.

I wish they wouldn't.

Rather than get involved with yet another highly inefficient project that wouldn't exist with government support--after all, they're already involved in large-scale monoculture corn production--these farmers might be better off scaling down, saving on input costs by going organic, diversifying their crop base, and focusing on local markets. Let ADM grow its own damned corn.

But the promise of fast profit glitters bright in the depressed cornbelt. As I've said before, if too many ethanol facilities come on line to fast, flooding the market with product, the price will drop. Small farmer-owned cooperatives will be much more vulnerable to a prolonged price slump than the likes of ADM, which has the resources--$1.4 billion of cash in the bank as of June 30, 2004--to sit out a downturn.

And the downturn is on. ADM saw its shares plunge 11 percent last Wednesday when above-mentioned analyst McCracken of FTN Midwest Securities cut her profit forecast on the agri-giant. She declared:

The primary issue driving our downward revision is that the expansion in the ethanol industry exceeds demand...Year-to-date ethanol prices have fallen 36 percent and prices are down 28 percent year-over-year.[Emphasis added]

If the fall in ethanol prices inspires investors to slash ADM's value more than 10 percent in one day, how will it affect small producers that don't generate half a billion dollars in profit each year and don't have $1.4 billion in the bank?

Corn-belt newspapers are full of hand-wringing, but no one's declaring a crisis just yet.

I'm haunted by something I read in the Wall Street Journal not long ago:

David Nelson, a farmer who's chairman of the two-year-old Midwest Grain Processors ethanol plant in Lakota, Iowa, is well aware of the overexpansion threat. "It's starting to get crowded around here," says Mr. Nelson, 52, sipping a Corona in the smoky bar of Cattleman's Steak & Provisions near his Belmond, Iowa, farm. "In the back of our minds, we know there is to be a day of reckoning."

But his solution isn't to cut back. It's to grow big enough to survive a shakeout. Midwest Grain Processors sold about $17 million more stock in January to double the size of its plant. That means this plant alone will be able to make 100 million gallons a year. And its farmer owners are already thinking about where to build a second plant. (Emphasis added.)

But there's only one player that's definitely "big enough to survive a shakeout," and it's not some farmer-owned cooperative.

Thursday, April 07, 2005

Maverick spring

Maverick Farms planted its first greens beds of the year yesterday--greens that Jim Leff, founder of that essential Web site, Chowhound, hailed as "hallucinogenic in their intensity and persistence of flavor; coated with a dab of oil and vinegar, they steal every meal they accompany." We planted the greens made famous around here by our mentor farmer Bill Wilson: spinach, arugula, Tokyo bikuna, mizuna, Russian red kale, and pepper cress. And we threw in a few new-to-us greens that we're excited about: mache, orach, and maruba santoh.

Happy spring to all the sustainable farmers, gardeners, and eaters world-wide.

The Way Forward

This post marks the debut of "The Way Forward," an occasional feature focusing on small-scale sustainable-food efforts that challenge the dominance of industrial and industrial-organic agriculture. Readers are urged to e-mail ideas for this feature.

Gardening in the Motor City
My friend the excellent Detroit funk/R&B musician Jonah Nadir Omowale (known universally as Nadir; check this guy's music out) alerts me to a new community-gardening initiative in the Motor City.

Even though I abandoned Brooklyn for the Appalachians, I'm no sentimental pastoralist. I'm a long-term disciple of the great urban theorist (and champion of cities) Jane Jacobs. Human history since the dawn of agriculture 10,000 years ago has been the history of cities. Cities are the future; as David Owen's superb article "Green Manhattan" (in the Oct. 18, 2004, New Yorker, unavailable for free online; get thee to the library) shows, they may be our only hope. The trick is to create agricultural systems within and just outside of cities, minimizing the ruinous effects of long-haul freight transit, maximizing availability of fresh delicious food, and boosting local and even neighborhood economies.

Farmers' markets have been the most visible effort at creating sustainable urban food networks. Equally if not more important, although virtually invisible to well-heeled urban foodies who laudably support farmers' markets, inner-city gardening projects represent a vanguard in the effort to overthrow industrial food and reintroduce sustainably grown, delicious food to populations that were knocked off the land a generation or two ago.

Nadir e-mailed me the following notice about just such a project budding in Detroit. There is much to be learned from it.

Shamba Organic Garden Collective Informational Meeting Set for April 9th at Black Star Communtiy Bookstore

Nsoroma Institute’s Shamba Organic Garden Collective will kick off its 2005 growing season with an informational meeting on Saturday, April 9th at 4:00 p.m. at Black Star Community Bookstore. Influenced by the Toronto-based Afri-Can Food Basket, the Collective was organized in 2002 to: promote African self-reliance through urban organic gardening; develop within the members of our community an appreciation for the interdependence of humans and our environment; promote collective work and cooperative economics; promote health and good nutrition. Shamba is a Kiswahili word that means garden or farm. Based at Nsoroma Institute, an African-centered K-8 school in Oak Park, the collective consists of students, parents and staff of Nsoroma Institute as well as community members interested in organic gardening. The collective maintains a network of organic vegetable gardens throughout the Detroit area..

Organic gardening can be simply defined as growing fruits, vegetables and herbs without the use of genetically modified seeds, chemical pesticides or fertilizers. Organic gardening is a proactive way to insure that we have greater access to high-quality life-sustaining foods. When done in an organized manner, it can also result in a visible reduction in our food bills and can become a source of revenue.

An abundance of information is available about the detrimental effects of the typical meat-based, highly-processed American diet. Heart disease, cancers and various other killers continue to impact America’s Black communities at astounding rates. In many of our homes, “fast-food” in Styrofoam containers has replaced meals lovingly prepared from real foods in our own kitchens. Surely, a people desiring to be free and independent must take control of both what they eat and the source of that food.

The April 9th informational meeting is open to those who have never gardened, but are interested in learning, as well as those who are experienced gardeners. Information will be shared on recommended crops for beginning gardeners, creating a garden plan, basic tools, composting, and 2005 spring planting dates. Additionally, organic seed and Shamba t-shirts will be available for sale.

The Shamba Organic Garden Collective’s promotion of organic gardening is essentially an effort to move our people toward sanity, wholeness and healing. It helps us to break our dependence on the multi-national agribusinesses that control food production and distribution for much of the planet’s population. It embraces an important part of our heritage that helped sustain our bodies and spirits for millennia. For more information on the Nsoroma Institute Shamba Organic Garden Collective call Donna Mayes or Malik Yakini at (248) 541-2548.

If Bitter Greens Journal ruled the world, the main task of city bureaucrats and politicians would be to identify and financially support grassroots programs like this one. But as Jane Jacobs demonstrated more than 40 years ago, they typically take aim at the projects that are actually working on the street, and focus instead on grandiose schemes to boost their supporters in the construction and real-estate trades. Example: the vicious, mostly unsuccessful attack by Rudolph Guiliani--that venerable thug and possible next president--on New York's robust and essential community-garden movement. The great "hero" denounced community gardens as a form of communism--even as he championed spending billions in public cash to rip out several west-side neighborhoods and build a pro football stadium.

At any rate, a salute to our fellow gardeners in Detroit from Maverick Farms.

The case of Cuba
Addiction to cheap, subsidized energy. Reliance on chemical fertilizers and insecticides. A fetish for high-tech "solutions" and huge, expensive, gas-guzzling machines. Dull, institutional food that requires enrichment to meet nutritional needs. Where will it all end? How can it be transformed into something that makes sense? One answer is economic calamity, as Bill McKibben's excellent article in the latest (April) Harper's shows. The article won't be available online until the next issue comes out; but it's there for the reading in most libraries.

Friday, April 01, 2005

Saxby Chambliss, R-Ga, villain

In their fight to protect industrial-farming interests in their home states, GOP congressmen and senators are predictably targeting food-aid programs for poor people, as well as sustainable-ag programs.

Here is an AP article documenting this sordid behavior. GW Bush, constrained by costly foreign adventures, has been forced into the politically unpalatable position of having to ask Congress to cut agricultural subsidies, the great bulk of which go to vast-scale commodity farms, a great many of them in the GOP-controlled heartland.

That won't do, retort GOP worthies on the Hill. According to the AP article:

Instead, Republican committee chairmen are looking to carve savings from nutrition and land conservation programs that are also run by the Agriculture Department. The government is projected to spend $52 billion this year on nutrition programs like food stamps, school lunches and special aid to low-income pregnant women and children. Farm subsidies will total less than half that, $24 billion.

Senate Agriculture Committee Chairman Saxby Chambliss, R-Ga., said the $36 billion food stamp program is a good place to look for savings.

Chambliss--who carries water for the well-heeled Georgia cotton farmers who are dumping their cheap subsidized cotton throughout the world, to disasterous effect for African cotton farmers--added that, "There's not the waste, fraud and abuse in food stamps that we used to see. … That number is down to a little over 6 percent now ... But there is a way, just by utilizing the president's numbers, that we can come up with a significant number there."

Normally, I oppose corporal punishment in all forms; this man, however, deserves to be horse-whipped. So-called conservatives of this ilk have never met a welfare program they didn't like, as long as it benefits a potential donor.

Meanwhile, I learn from the fine blog Four Seasons that these same scoundrels on the Hill are also defunding a farm-to-school program that would give schools grants to:

purchase adequate equipment to store and prepare fresh foods, develop vendor relationships with nearby farmers, plan seasonal menus and promotional materials, and develop experiential nutrition education related to agriculture.
[Quote from the Community Food Security Coalition.]

The program, which was voted into law in 2004 but never funded, would require $5 million "to get off the ground," Four Seasons reports. Keep in mind that Georgia's ten biggest cotton farmers gained that in subsidies in 2003 alone.

Clearly, the way forward is to spend the government's entire farm-subsidy budget--estimated this year to be $24 billion--on programs that develop sustainable local food systems and link small farmers with low-income consumers through farm-to-school and other programs.

And Chambliss? Once he's had his horse-whipping, let's send him to Africa to explain to cotton farmers there why he's worked so hard to wreck their livelihoods.