The
AGRIBUSINESS
EXAMINER
September 4, 2002   #186
Monitoring Corporate Agribusiness
From a Public Interest Perspective

EDITOR\PUBLISHER: A.V. Krebs
ADDRESS: PO. Box 2201, Everett, Washington 98203-0201

E-MAIL: avkrebs@earthlink.net
WEB SITE: http://www.ea1.com/CARP/
TO RECEIVE: Name and e-mail address
CONTRIBUTION$ WELCOME !!!
 

NEW YORK TIMES SEEKS TO REWRITE
U.S. FARM PROGRAM HISTORY

DARYLL E. RAY, DIRECTOR, UNIVERSITY OF TENNESSEE'S AGRICULTURAL POLICY ANALYSIS CENTER: Farm policy according to the New York Times: "Twenty or 30 years ago, farm policy actually had something to do with feeding the country. It was designed to ensure food security by continuing the Depression-era program to pay big grain farmers to grow food. But today there is no need to ensure food security. The United States has been self-sufficient in food for decades."

How's that for informed reporting?

The millions of people who read that story, which showed up August 25 on nytimes.com, now know less than nothing about depression-era farm policies. "Depression-era" programs were instituted and continued because U.S. farmers were producing too much. Never in my thirty-plus-year career has anyone but this New York Times reporter ever suggested that farm programs were put in place "to pay large farmers to produce more food." In fact, large farms were not even that large back then.

Yet, it is no wonder that this reporter and many others are confused about commodity policy. We have gone full circle. The Agricultural Marketing Act of 1929 established the Federal Farm Board, which was given $500 million to raise and stabilize market prices, but had no means to stimulate demand or to control supply. During this time in the late 1920s, the economic problems of agriculture were viewed as transitory rather than chronic and fundamentally caused the by the nature of agriculture and its markets.

Beginning with the triple A (Agricultural Adjustment Act of 1933), production curtailment was a central focus of commodity legislation. The idea was that while the ability to produce more than is needed is exactly what we want (and largely a benefit of publicly funded Land Grant Experiment Stations and Universities), it is important to gauge output to the quantity demanded at a profitable price.

After all, that is what other industries do. And this process works automatically for most other industries because if output becomes large relative to demand, prices decline, consumers buy more, and producers produce less. It's the magic of free markets and it works great for most things. But for some things it does not.

Do you think that diabetics would increase the quantity of insulin they demand just because the price of insulin dropped 20% ? I agree: not a chance. Which means, of course, an over supply of insulin can not be corrected from the demand side by user response to lower prices. Food is nearly as unresponsive to price changes as insulin, not quite, but close enough for government work.

To make matters worse, farmers do not significantly reduce acreage planted to crop production as price declines either. Existing farmers farm all their cropland until their equity runs out or until their bankers believe their equity has run out. If the existing farmer goes broke, does his plant, that is, his land, transfer to another industry as it would if a tire company shuts down a plant? No. Another, perhaps even more productive, farmer takes over the land. Hence, an over supply problem of all major crops cannot be corrected in a reasonable number of years from the production side either.

Given this pervasive understanding of the nature of crop agriculture and its markets, commodity programs, beginning in 1933, provided crop agriculture with mechanisms to control supply and expand demand. That is, commodity programs did for agriculture what it could not do for itself. It was understood that agriculture's inherent supply and demand characteristics would cause chronic price and income problems for major-crop agriculture as long as experiment stations and private companies pumped out yield-advancing technology at a faster rate than the combined growth of domestic and export demands.

Beginning with the 1996 legislation, the presumption was that the rate of export growth would overtake or at least equal the growth in crop productivity. Additionally, it was assumed-with virtually no evidence-that the production and utilization sides of agricultural markets would now respond to price declines just like other industries. Because of these beliefs, the mechanisms to control supply or expand demand in previous legislation were eliminated.

None of these presumptions and assumptions has proven to be true, but rather than admit that, we have gone back to the thinking of 1928: Let's spend government money to stabilize agriculture because depressed crop prices and incomes are transitory not chronic problems. The circle is complete. Now that I think of it, to have come to this point, we collectively cannot claim to be any more knowledgeable about how agriculture works and the purpose of commodity programs than that New York Times reporter.

Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of the UT's Agricultural Policy Analysis Center.
http://www.agpolicy.org.
 

SOIL CONSERVATION AND DOMESTIC
ALLOTMENT ACT OF1936 HELP REMODEL
AGRICULTURE FROM AN ECONOMIC ISSUE
TO A SOCIAL WELFARE ISSUE

A.V. KREBS, THE CORPORATE REAPERS: THE BOOK OF AGRIBUSINESS: .. . . . . It was shortly after the Supreme Court in January, 1936 ruled that the Agricultural Adjustment Act (AAA) of 1933 was unconstitutional that Franklin D. Roosevelt submitted to the Congress the Soil Conservation and Domestic Allotment Act of 1936.

Not only was this redrafted Act intended to side-step the Court's objections to the 1933 legislation . . . but it was also designed to correct the overcentralization of the AAA. Roosevelt's people pointed out that such changes had been in the planning stage even before the Court's ruling and that the Hoosac decision simply "precipitated as a sudden change that which had been planned as a gradual one."

The new Act was "to promote the conservation and profitable use of agricultural land resources by temporary Federal aid to farmers and by providing for a permanent policy of Federal aid to states for such purposes."

When one examines this act closely, however, and compares it with the 1933 legislation we see a fundamental policy change for American agriculture from a price objective to an income objective. It was a subtle change, but nevertheless an important one, for it was the first step in effectively removing agriculture from the economic market place and attempting to reformulate it structurally so it could be dealt with as a social welfare issue thereby allowing the taxpayer to underwrite it in times of need.

In the AAA of 1933 a balance between agricultural production and consumption was to be achieved by reestablishing, " . . . prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period." (emphasis added)

But, in the 1936 Act that balance would be achieved, "at as rapid a rate as the Secretary of Agriculture determines to be practicable and in the general public interest . . . the ratio between the purchasing power of the net income per person on farms and that of the income per person not on farms that prevailed during the five-year period August 1909-July 1914   . ." (emphasis added)

By basing the parity ratio on the net income of persons on farms as compared with the net income of non-farm persons rather than on the purchasing power of farm commodity prices as compared with the purchasing power of the non-agricultural sector, the Federal government in fact abrogated the marketplace's moral responsibility to provide farmers with reasonable prices for their goods.

The move in effect told farmers if they wanted to stay in business and accept what the market was willing to offer them for their raw materials then they must be willing to seek outside income or government help to survive. In the name of Federal assistance for the family farm in America this new legislation became a neat coup d'etat for corporate agribusiness. .. . . . .

When Roosevelt took office in 1933 the immediate problem regarding agriculture was to improve desperately low commodity prices while at the same time trying to domestically dispose of a purported accumulated stock of farm goods. In enacting the AAA of 1933, therefore, an effort was made to generate immediate economic relief while reducing production.

In 1936, after experiencing historic droughts the previous three years the focus of legislation was on soil conservation through crop cutbacks, but at the same time continuing the effort to transfer income to agriculture. The recession of 1937 and 1938, however, gave dramatic evidence that more permanent solutions were necessary if agriculture was to become a healthy part of the nation's economic life.

Some historians argue that the New Deal was overly concerned with the problems of large commercial non-family type farms and avoided in many cases giving genuine aid and relief to small, subsistence type farms. This strengthening of corporate style agriculture, rather than cooperative farming, would have two long-lasting consequences.

First, as University of the Pacific historian Donald H. Grubbs points out, large-scale, heavily capitalized, tax subsidized agricultural enterprises of the future, were owned by individuals and/or stockholders who would view labor simply as an input cost, rather than as a productive factor. That labor, capable of furnishing both management and muscle, would thus be progressively weakened in any effort to pressure middlemen and politicians for equitable compensation for its work.

Second, the New Deal tended to strengthen those established institutions within agribusiness for political reasons, which in turn allowed these same groups to solidify their own political and economic power base. Witness, for example, the ascendancy of the Farm Bureau Federations in farm politics while the voices of other farm organizations became fainter and fainter.

Obviously, agriculture's role in the society was quite different in the eyes of the New Deal than the role of labor, for which the Administration was openly encouraging an egalitarian future.

The passage of the Agricultural Adjustment Act of 1938 thus became an effort to forge a permanent and comprehensive legislative package that would provide for the adjustment of agricultural production at the same time an adequate agricultural income was being maintained.

Title I of the Act set forth new amendments to the 1936 Soil Conservation Act; Title II authorized the Secretary of Agriculture to intervene on behalf of agriculture in cases before the Interstate Commerce Commission regarding freight rates on agricultural commodities; Title III concerned loans, parity payments, consumer safeguards and marketing quotas; Title IV concerned Cotton Pool Participation Trust Certificates, and Title V was the new Crop Insurance Act.

The most important section of this act was Title III, which spelled out new policies regarding production control and price supports in addition to redefining parity prices and honing the parity income definition. As noted above, the 1936 Act, in defining parity, referred to the "ratio between purchasing power of the net income per person on farms and that of the income per person not on farms." In the AAA of 1938 it reads "per capita net income of individuals on farms from farming operations." The goal now permanently became an income objective for farmers rather than the long-sought after price objective.

By refashioning agriculture's major problem --- the receiving of reasonable prices for goods produced --- into that of proper income maintenance, the many and long-standing problems confronted by the "family farm system" of agriculture were now no longer structural questions, but were rather adroitly being redefined as welfare problems.

Farmers who could not survive in a changing "free market" ceased to be corporate agribusiness's responsibility, for they now became a societal problem, to be cared for and protected by the state. . . . . . .

--- The Corporate Reapers: The Book of Agribusiness, "Liberty vs. Paternalism (Chapter 17)," by A. V. Krebs, Essential Books: 1992 pp 194-196.
 

INDIAN FOOD AND TRADE ANALYST
QUESTIONS U.S "PRECISION FARMING" AND
"EFFICACY OF THE AMERICAN MODEL OF FARMING"

DEVINDER SHARMA: There isn't a time when an educated Indian doesn't search for answers from "America --- the dream land" for the problems that crop up time and again back home. Whether it is hunger, sustainable agriculture, kick-starting industrial growth, food habits, music, and of course the successful model of economic growth, India must follow the Americans.

No wonder, the intelligentsia, the economists and the scientists are always desperate for opportunities to travel and return with a bag full of answers to our multitude of problems.

The solutions to India's raging drought --- some call it the worst in recent memory --- which haunts and ravages 12 States, too rests in the way America has managed its crop lands. After all, the United States has put together a drought-mitigation strategy, which has been touted as something that India needs to follow immediately.

With hi-tech transformation, American agriculture, we all believe, has become insulated from the vagaries of drought. They apply laser, information technology and huge machines to crop farm land. They use satellite data, electronics and now genetic engineering for what is popularly called "precision farming."

For Indian agriculture, with its fragmented land holdings, subsistence farming methods, poor productivity and the exploitation of the natural resource base as a consequence have cast serious doubts over the sustainability and viability of the farms.

The only escape for the country, we are invariably told by agricultural scientists, is to follow the American model. Such an approach will provide an impeccable drought proofing. And it is primarily for this reason, corporate agriculture is being pushed as the way out from the crisis that afflicts Indian agriculture.

By a strange coincidence, America too is faced at present with its worst drought since the days of the great "dust bowl" of the 1930s. As many as 26 of the 50 American States are reeling under a severe drought, with "exceptional drought" conditions --- the worst level of drought measured --- prevailing in thirteen states, including New Mexico, Arizona, Colorado and Utah.

Such is the crop damage that like the drastic reduction expected in rice production this year in India, the U.S. wheat production is anticipated to fall to its lowest levels in nearly 30 years. There couldn't have therefore been a better time to study America's drought coping mechanisms and suggest its replication in a poor developing country like India and for that matter in South Asia, Africa and Latin America.

It comes as a rude shock. The American agriculture that we all studied in the universities and appreciated has crumbled with one year of severe drought. The drought proofing that we heard so much about the American agriculture appears to be a big farce. It is a known fact that Indian agriculture falters because of its complete dependence on monsoons. But with the kind of industrialization that took place in American agriculture,
and with the amount of investments made, we were always told that the U.S. agriculture is not dependent upon rains.

"Precision farming" is the most-efficient farming method that needs to be adopted on a mass scale. At first impression, news reports appearing in the American media looks like emanating from a drought-stricken village in India's hinterland. Till of course you see the dateline. You continue to read in utter disbelief.

About 100 desperate farmers and rural residents praying for rain at the St. Patrick parish church in Grand Rapids, Ohio. With hands clasped and eyes cast downward, they seek divine intervention. "None of us have control over whether it is going to rain or not," said Sister Christine Pratt, rural life director for the Catholic Diocese of nearby Toledo told Reuters, the wire agency. "But the people are praying for one another and there is some hope."

Another report in the Washington Post states President George Bush was unwilling to extend anymore finances under drought relief than the support that can come from $180 billion farm bill he signed in May. The president however underscored his commitment to helping farmers under current programs, including the Agriculture Department's decision that provides $150 million in surplus milk --- "spoiled milk," as Democrats called it ---
to be made available for use in animal feed in four drought-stricken states, including South Dakota.

Cattle are dying and crops are shrivelling. Fodder has become scarce, and therefore the need to feed surplus "milk" instead. There is a scramble for new water sources as town and city residents are urged to stop watering lawns and washing cars. In heat-baked fields ranchers have sold off herds rather than let them starve for lack of pasture.

"I have never seen it like this and I'm 60 years old," said Richard Traylor, who owns 37,000 acres in Texas and New Mexico but has sold off much of his cattle herd. Serious hydrological problems with wells and reservoirs have emerged. Streams have gone dry. The groundwater table has fallen drastically.

Wildfires have become more rampant, and an estimated 4.6 million acres, has been scorched this year, twice the average acreage burnt in the previous decade. "It is pretty dire," said Mark Svoboda, climatologist for the National Drought Mitigation Center. From southern California to South Carolina and from Montana to New Mexico, individuals and industries are suffering, the news agency reports. In India, the total drought relief demanded by the affected States is around Rs 30,000 crore. In America, the drought relief being sought is in the range of US $ 5 billion.

In India, the government still hasn't banned watering of lawns. But in Monticello, Georgia, south of Atlanta, all outside watering has been banned, because creek levels were so low that the area could run out of water in 30 to 45 days.

And like the loss estimates being worked out by the Indian Ministry of Agriculture, the national estimates for drought-related losses are also being prepared by the U.S. Department of Agriculture waiting for harvesting of corn and soybean and other key crops to conclude before loss figures are compiled. Where are the genetically modified crops that one thought would be hardy enough to withstand the impact of the acute
dry conditions?

Lack of rain is the obvious factor for the prevailing drought in both India and America. But let us not forget that while India receives almost its entire rain in 100 hours during the monsoon season, it continues to rain intermittently in America. And still, water shortages are prompting battles between "upstream and downstream states and between individuals and businesses in Dodge City, Kansas." In Jasper County, South Carolina, a drop in an underground aquifer left households without water.

Rural residents, like In India, blamed business operators for using too much water. And as if this is not enough, North and South Carolina are fighting over North Carolina's refusal to release water from its reservoirs downstream.

In Colorado, Denver's water reservoir has already hit a historic low. Colorado Gov. Bill Owens has approved a $1 million emergency drought fund so that farmers and ranchers can buy water. "People are battling for water like we've never seen before," said Hope Mizzell, South Carolina's drought program coordinator. Like Rajasthan in India, which is faced with its fourth consecutive year of drought, some areas in America are also
experiencing their fifth consecutive year of drought.

The conditions are near those seen during the country's most devastating drought in the 1930s --- the "dust bowl" years, when some 60% of the United States was affected, media reports. Isn't it the same situation that India is also passing through? After all, if a severe drought some 70 years after the 1930 "dust bowl" years still results in such a massive devastation, isn't it time to question the efficacy of the American model of farming?

Isn't it a fact that the hi-tech American agriculture remains as vulnerable to dry weather as the subsistence farming systems that prevails in India?

Why then should India follow a faulty agriculture and farming system? It is time India realizes that it has to develop its own low-cost farming strategies suiting the needs of the country. It is time Indian agricultural scientists looked inwards for building up a farming system that meets the nation's requirements and also addresses problems of sustainability. It is time the developing countries realized the mistake of replicating a faulty agricultural system that will further exacerbate the economic crisis considering the massive investments required. Blindly aping the industrial farming system would only push the developing countries into a hitherto unforeseen crisis, much severe than the recurring drought.

Devinder Sharma is a New Delhi, India-based food and trade policy analyst
 

NEW YORK TIMES EDITORIAL DECRIES
CONFINED ANIMAL FEEDING OPERATIONS,
"THE CURSE OF FACTORY FARMS"

NEW YORK TIMES EDITORIAL, AUGUST 30, 2002: Factory farms have become the dominant method of raising meat in America. Agribusiness loves the apparent efficiency that comes with raising thousands of animals in a single large building where they are permanently confined in stalls or pens. Most of the human labor can be automated. It takes less land, because the animals live cheek by jowl their entire lives. And it allows the concentration of enormous stocks of animals in the hands of a few corporations whose goal is usually complete vertical integration --- the control of production from birth through butchering and packaging.

These plants, called confined animal feeding operations, or CAFO's, now exist in 44 states. The question is how to minimize their harmful environmental effects and prevent them from putting a final squeeze on smaller farmers, especially those who raise animals in more traditional, grass-based ways.

Factory farms have taken root mainly where zoning laws were lax or nonexistent, or in states where citizens were prevented from filing suits against agricultural operations. The inevitable byproduct of huge concentrations of animals is huge concentrations of manure, which is stored in open lagoons and eventually sprayed on farmland, though there is usually far more manure than local fields can absorb. In such quantities, manure becomes a toxic substance. Spills are always a risk, as is groundwater contamination. The bigger danger is airborne contamination of water from ammonia, which rises from the lagoons and falls into low-lying rivers and estuaries.

A new report from the Sierra Club, titled "The Rapsheet on Animal  Factories," draws a vivid portrait of the environmental violations caused by factory farms, many of which are owned by some of America's largest agricultural corporations, including ConAgra, Tyson Foods, Cargill and Smithfield Farms. What brought these factory farms to the Sierra Club's attention was a pattern of violations that resulted in criminal charges and fines, most often caused by toxic spills.

The federal government should at minimum serve as a neutral umpire in the fight between big and small farmers. In the case of factory farms it should try to control their threat to the environment through broader, more vigorous application of the Clean Water Act, typically invoked only in the most egregious cases. And it should never use taxpayer money to encourage a method of farming that works against the public's desire for open space, biodiversity and clean, non-malodorous air.

Unfortunately, the government has been putting its weight behind big business. The Environmental Protection Agency has issued basically toothless rules under which the states give permits to any factory farm that comes up with a plan for handling manure, mainly by building larger lagoons to hold it. The new farm bill that President Bush signed in May adds further insult by paying farmers up to $450,000 apiece to help them comply with regulations that don't mean much to begin with.

The regressive farm bill also continues the government's policy of throwing its weight behind the already hefty industrial farms and helping to drive smaller farmers out of business. In Iowa, for instance, the number of hog farms has dropped from 64,500 in 1980 to 10,500 in 2000, though the number of hogs, about 15 million, remains the same. The public's money, in this fight, is going in the opposite direction of the public interest.

The concentration typical of factory farms extends to the genetic level as well. The poultry and pork industries depend on just a handful of different types of turkeys, chickens and pigs, and the beef industry is headed in that direction too. There has been a precarious narrowing of the genetic resources that supply most of America's meat.

The danger is that of an inverted pyramid, an enormous number of animals all resting on the same narrow genetic base, exposing them to the risk of catastrophic disease and requiring an inappropriate use of antibiotics to ensure their health. Genetic diversity is no less important in domesticated  animals, like hogs and chickens, than it is in wild animals. The best way to guarantee it is to guarantee a diversity of farmers.
 

ANIMAL FACTORY FARMS  REAL BENEFICIARIES
OF "U.S. DEPARTMENT OF GRAVY" SUBSIDIES

GENE LOGSDON, THE LAND INSTITUTE: Journalism practically hemorrhaged with reports about the billions of dollars in subsidies that grain farmers were raking in from the Department of Gravy, formerly known as the U.S. Department of Agriculture. But I still haven't seen the whole story reported. And I'm not talking about the fact that most of that money goes right through the farmers to their agribusiness suppliers.

The real beneficiaries of grain subsidies are animal factories. They can buy grain below the cost of production on the open market while the government makes up the difference to the grain farmers. This amounts to a huge payoff to large animal confinement operations.

Let us say you are operating a 50,000-head sow factory, like Farmland Industries was doing in Missouri until recently. That many sows should birth about a million pigs a year. A sow needs about five pounds of grain a day. Five pounds of corn a day is about 30 bushels a year, or 1.5 million bushels for 50,000 sows.

Let's say that the corn cost you $2 a bushel on the market. (It is as high as $2.35 as I write this in July, because of a drought scare, but as low as $1.90 in the recent past.) The government sets a target price for corn, around $2.40 a bushel currently, and pays the farmer the difference between that and the market price, hoping to keep grain farmers growing grain in surplus without going broke. So the animal factory has actually
been saving about 40 cents a bushel on corn for the past few years. On my calculator, that comes to $600,000 annually for 50,000 sows.

To feed out those million pigs to market weight will require about 12 bushels of corn per pig. That's 12 million bushels times 40 cents saved, or $4.8 million. Nice piece of cash, and I'm not figuring in a parallel savings in soybean meal. If you don't agree with my production figures, use your own. The savings will still be huge. That's why there has been such a rush to concentrated animal feeding operations, even while on all sides red flags were being raised because of environmental pollution and antibiotic resistance endemic to animal factories.

Now hoist another red flag. If drought fears keep the market price of corn about at the level of the target price, animal factories are going to take a terrific hit in feed costs. Of course the Department of Gravy can find other ways to ladle out subsidies to them, like the one that the giants of animal factoryland --- Tyson, Perdue, Cargill, Smithfield, Murphy Farms, etc. --- managed to work into the new "farm" bill.

A little-publicized feature allows the Environmental Quality Incentives Program to pay animal factories as much as $450,000 each for "nutrient" management. "Nutrient" is a euphemism for manure and dead animal carcasses. Formerly, EQIP was not allowed to fund "nutrient" management. Quietly, both the House and the Senate, full of foaming mouths who get elected by preaching less government, slipped the change into the bill. Hey, we're lucky. The animal factories were asking for $1 million each.

And then, just to make sure that they could take full advantage of the Department of Gravy, the factory food monopolists got Congress to drop the proposal to ban meatpackers from owning livestock. This happened even though the ban had passed as an amendment twice in the Senate, and even though bipartisan support for it was growing in the House.

Meanwhile, how much subsidy do farmers get for raising livestock and hogs on pasture, the environmentally cleaner and less costly way? None. Well, to be exact, they miss out on most but not all of Gravytrain No. 1 because they feed much less grain. They miss out on all of Gravytrain No. 2 because their animals are spreading the manure for free as they graze and do not need any "nutrient" management.

What gripes me about all this is not so much the subsidies. The situation in agriculture is so impossible right now that government gravy may be the only answer, all things considered. But I find downright putrid the way so many agricultural economists continue to claim that large animal factories are the most efficient way to produce meat. They can only say that by blithely ignoring the true costs involved.

Oh, by the way. Farmland Industries? It went broke anyway.

Gene Logsdon is a member of The Prairie Writers Circle, a project of The Land Institute, a Natural Systems Agriculture research organization in Salina, Kansas. He is the author of more than 20 books, including The Contrary Farmer. He farms near Upper Sandusky, Ohio.
 

THIRD WORLD COUNTRIES SEEK
TO END U.S. AND EU FARM SUBSIDIES
"WHILE THE BIG COUNTRIES ARE FIGHTING,
THE REST OF US ARE SINKING,
WE HAVE NO WAY TO FIGHT BACK"

LAURIE GOERING, CHICAGO TRIBUNE: Over the past decade, as the United States and other wealthy nations have pushed for free trade and open markets worldwide, the developing world has found itself in a pinch.

Poorer nations, responding to the world call, have dropped their trade barriers at a rate three times that of the developed nations, the United Nations reports. But when they try to sell their own agricultural products --- the backbone of many Third World economies --- they cannot find buyers.

Largely that is because, in an effort to protect their own farmers, the leading industrialized countries have boosted subsidies and tariffs on agricultural products by more than 20% during the past decade, say United Nations officials and international trade groups.

U.S. officials charge that Europe is the worst offender, spending up to $62 billion a year on domestic price supports, compared with up to $19 billion in the United States. Japan spends up to $31 billion a year.

The United States, however, is hardly moving to lift barriers. The 2002 U.S. farm bill, passed earlier this year, boosted farm subsidies and has been criticized in Johannesburg as a "major setback" to correcting market imbalances.

Subsidized U.S. corn and European wheat, sold at prices below production costs, have flooded into African and Asian markets, undercutting local farmers. In the past ten years, 30 million farmers have gone out of business around the world, trade analysts say. Third World leaders, long assured that free trade was the surest path out of poverty, are disillusioned --- and furious.

As the U.N. World Summit on Sustainable Development focused  . .. . . on agricultural policy, dozens of environmental, trade and agriculture ministers from developing countries demanded an end to farm subsidies in wealthy nations, calling them hypocritical and a key roadblock to economic progress around the world.

By warping market prices, subsidies are "imperiling the very survival of producers in West Africa," said Benin's environmental minister, who laid out the case of 12 million West African cotton farmers who cannot find markets for their crops.

And in Zambia "we've liberalized our markets and as a result our markets have been turned into dumping grounds," complained one of that nation's ministers.

The focus of the ten-day Johannesburg gathering is implementing the environmental and social promises made at the 1992 Rio Earth Summit and moving the world toward sustainable development. But in the early days of the summit, trade disputes have increasingly crept to the forefront.

In large part that's because trade and development have become inextricably linked as policy makers have pushed free trade as the fastest and surest route out of poverty. Now that assumption is being questioned by poorer nations that find the doors to the world's biggest markets --- and to their own development --- closed.

"Poor people cannot escape their level of poverty because of subsidies in the developed world," charged Ian Goldin, a director of development policy at the World Bank. While developing nations face plenty of other problems in selling their goods, from a lack of roads to get them to market to inconsistent supply, agricultural protectionism by wealthy nations is "particularly disappointing," Goldin said.

Agricultural subsidies in richer nations were never intended to hurt poorer countries. Europe, Japan and the United States have over the years adopted agricultural trade barriers largely to protect themselves from each other. Europe has a long tradition of supplementing the income of its farmers; the United States has in turn authorized price supports for key crops and subsidized exports to ensure food security in the country, keep farmers in business and make its products competitive.

The developing world, however, stuck between battling giants, has unfortunately taken most of the blows.

While poorer nations are not necessarily the most efficient producers of food, their lower labor costs should help make their products competitive. But subsidies spur overproduction in wealthy nations and as the excess grain floods world markets, prices collapse, leaving unsubsidized farmers unable to compete.

"The fact is the United States is dumping products into world markets below the cost of production, which drives farmers all over the world out of business," said Kristin Dawkins, vice president of the Minneapolis-based Institute for Agriculture and Trade Policy.

Worst of all, the subsidies don't do much to help small U.S. farmers, who operate at the fringes of bankruptcy. Instead, "the subsidies effectively go to highly capitalized farmers and larger corporations, the Cargills of the world," she said. "The system uses U.S. taxpayer dollars to subsidize international traders who are grabbing more and more market share and driving small producers out of business."

Developed-world agricultural subsidies today total between $300 billion and $350 billion a year, more than the entire gross national product of sub-Saharan Africa, and six times the amount wealthy countries spend on development aid to their poorer neighbors.

The Food and Agriculture Organization of the United Nations is urging wealthy countries to divert $8 billion a year, a small percentage of the money they spend on subsidies, to fight hunger in the developing world.

The Bush administration has proposed eliminating export subsidies over five years and eventually phasing out domestic price supports altogether. But the U.S. says it will do so only if Europe goes along. "We're not willing to do it unilaterally," one senior U.S. government official said . . . .. .

In July, the administration said it was prepared to seek cuts in farm subsidies as part of a new global trade agreement and called for global tariffs on farm products to be cut. But President Bush signed into law a new farm bill in May that is expected to cost $190 billion over ten years, $83 billion more than the cost of continuing current programs. Lifting the subsidies will be tough. In both Europe and the United States, agricultural corporations and farmers are a powerful voting bloc, and producing food at home is a proud tradition.

Intermediate measures, however, could help. Dawkins' group advocates a worldwide ban on dumping agricultural products at prices below the cost of production, which would effectively curb U.S. and European overproduction of subsidized food, increase the competitiveness of products grown in developing nations and help ensure food is produced where it is needed rather than where it is not, a key to easing global hunger.

U.S. officials admit that removing agricultural trade barriers would increase developing-world exports by a quarter, raise agricultural commodity prices by 12% and boost by $21 billion a year the economies of developing nations.

Poor countries, hard hit by falling prices for minerals and other raw materials, and unable to expect much in the way of new international aid, say they need those improvements now. "While the big countries are fighting, the rest of us are sinking," said Chee Yoke Ling, a spokesman for the Third World Network, a nonprofit international network of organizations and individuals involved in issues relating to development.

"We have no way to fight back."
 

CORPORATE AGRIBUSINESS RESEARCH PROJECT
WEB SITE INITIATES RENEWED SUPPORT EFFORT

It is rather curious that as more and more people from literally around the world request
to regularly receive THE AGRIBUSINESS EXAMINER, lavish in their much
appreciated praise for the work it seeks to do, fewer and fewer people seem willing to
financially contribute to its support.

Those handful of regular contributors who have earned the editor's undying gratitude
over the past four years and the few other occasional welcome individual supporters
stand in marked contrast to those many who obviously have believed during that time
that their aid could be better applied elsewhere, particularly when it comes farm and
rural  organizations. Such neglect, however, when it comes to rural concerns is
recognized  from this desk as not uncommon in our modern affluent and well fed
society.

Since the AGRIBUSINESS EXAMINER first appeared some 185 issues ago it has been
the publisher's intent to make the work of the Corporate Agribusiness Research Project
(CARP) and the monitoring of corporate agribusiness from a public interest perspective
available to the widest possible audience, seeing that those few and available publications
that still concern themselves with corporate agribusiness are so prohibitively expensive,
to say nothing of their pro-corporate bias.

But, because there is a more a need today than ever before to make corporate
agribusiness more accountable to the common good, it is the wish and hope of THE
AGRIBUSINESS EXAMINER to continue to play a major role in that effort. Your
contributions will go far in helping to perpetuate that hope. Such contributions may be
sent to the editor at the above address.

As part of a major effort to keep those committed to bringing economic and political
democracy to rural America informed, educated and updated the Corporate
Agribusiness  Research Project is happy to point out that its web site has been updated
and  streamlined.
http://www.ea1.com/CARP/

Among the sites many features are:

> A complete index of THE AGRIBUSINESS EXAMINER'S  first 162 issues with a
"Search" engine to provide easy access to the subject matter of each edition.

> new edition of THE AGBIZ TILLER, the progeny of the one-time printed
newsletter, featuring the essay "The Merchants of Greed," an in-depth essay dealing with
today's corporate agribusiness. Likewise the "Search" engine is also available for past
editions of THE AGBIZ TILLER.

> In "Between the Furrows," besides a modern "Search" engine, there is a wide range
of  pages designed to inform and educate readers on the inner workings of corporate
agribusiness. They include:

* CARP's "Mission Statement," "Overview" and THE AGRIBUSINESS
EXAMINER'S  Editor\Publisher's "Resume."

*  "Fact Miners," an effort to assist the reader in the necessary art of researching
corporations

*  "Quotable Quotes" pertaining to agribusiness and corporate power

*  "Links," a page which allows the reader to survey various useful public interest,
government and corporate web sites;

* "Feedback" an opportunity for reader input:

* The Corporate Reapers: The Book of Agribusiness, a page where readers can order
directly the editor's 1992 published book from Essential Books.

The CARP web site was designed and produced by ElectricArrow of Seattle,
Washington.
http://www.electricarrow.com

Simply by clicking on the address below all the aforementioned features and information
are yours  to enjoy, study, absorb and sow.

http://www.ea1.com/CARP/