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The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

Founded in 1986, IATP is rooted in the family farm movement. With offices in Minneapolis and Geneva, IATP works on making domestic and global agricultural policy more sustainable for everyone.

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August 2010

August 31, 2010

Floods, droughts and famines

In the late 1870s, a series of droughts and famines devastated a broad swath of the globe, including what is now Pakistan. The 1876-78 drought killed 6 million people in India; in China, 12 million people died of starvation and disease. Many millions more were plunged into agonizing poverty. The story of the famines and their connection to extreme weather are the subject of a 2001 book by University of Southern California professor Mike Davis, entitled Late Victorian Holocausts: El Nino Famines and the Making of the Third World

In the late 19th century, El Nino cycles were not understood. Today, the world is witnessing the accelerating pattern of extreme weather events, like the floods that have engulfed Pakistan.

What Davis tells us is that the suffering and deaths that occurred were not caused by weather but the colonial and free trade policies of Europe, the U.S. and Japan. In the midst of mass starvation in India, basic food exports continued to flow to England. As whole communities perished, Indian peasants were taxed to pay for British wars against Afghanistan. British policies in India were predicated on the population theories of Thomas Robert Malthus, who was employed by the British East India Company—too many people, too little land, too little food—a description better suited to England.

Today, the flood victims in Pakistan were poor and hungry before the rain started to fall and the rivers and canals overflowed their banks. It is estimated that over 60 percent of the population of Pakistan lives on under $2.00 a day. For many years after partition from India, Pakistan was making strides in its development, but the combination of military dictatorships, corrupt governments and Cold War proxy wars (and now counter-terrorism campaigns) have left Pakistani peasants destitute and under siege.

What is new—and what was unknown at the end of the 19th century—was that the industrial system, then in its infancy, would lead to global warming and extreme weather events. From Katrina to the overflowing Moscow morgues, the industrial model that causes extreme weather is also responsible for exhausting the people, land and resources of the world. When the two meet the consequences are disastrous.

Dale Wiehoff

August 19, 2010

Kansas: Goodbye wheat, hello corn

Farmers will harvest more corn than wheat this year in Kansas, according to Dan Piller at the Des Moines Register—a trend that's changing the state's traditional ag identity. Even crop-stressing record heat hasn't put a damper on the maize bonanza.

When I lived in Iowa, I always liked watching the crops change as I drove west. The greens of corn and soybeans would give way to golden wheat (and sunflowers, when I was lucky) as the land got drier. It wasn't real diversity, but at least it was different, a recognition that different land calls for different crops. Drought-resistant transgenes and increased irrigation—driven by demand for corn—have changed that. Of course it's not just Kansas; Nebraska and other dry-land regions have also upped their corn production.

Far be it from me to say one monoculture is better than another, but it's yet another sign that we're moving in exactly the wrong direction: toward less diversity, rather than more.

Julia Olmstead

Bringing EBT to Minneapolis farmers markets

One of the best places to find fresh, healthy food is your local farmers market. Our current food stamp program uses Electronic Benefits Transfer (EBT) cards (a kind of debit card) which were designed primarily for supermarkets. As a recent Community Food Security Coalition report found, there are a number of social, economic and technological challenges to expanding EBT use at farmers markets. Fortunately, a growing number of farmers markets around the country are overcoming these hurdles.  

This week, IATP along with Blue Cross and Blue Shield of Minnesota, the City of Minneapolis, Hennepin County and the Minnesota Department of Health announced a new program to expand EBT use at three of Minneapolis's largest farmers markets. Now that these farmers markets accept EBT cards, the challenge is to let EBT users know about it and take advantage of what these markets have to offer. As an added incentive, Market Bucks coupons matching the first $5 of purchases by EBT users, will be available at the markets. See more details in our press release below: 

Innovative Program Provides Incentive for Low-Income Minnesotans to Shop at Three Minneapolis Farmers Markets, Eat Healthy

[MINNEAPOLIS] Recipients of food assistance can now use their EBT cards to purchase affordable, healthy and tasty food at the Midtown, Minneapolis, and Northeast Farmers Markets in Minneapolis. These markets will also encourage EBT users to eat well by offering an incentive—Market Bucks coupons, which will match the first $5 an EBT user spends on fresh produce at these markets with an additional $5 in Market Bucks. That amounts to $10 in produce for the first $5 spent.

“Midtown Farmers Market was the first market in the Twin Cities to accept EBT cards,” says Jessica Ward-Denison, of the Midtown Farmers Market. “The Market Bucks program has already nearly tripled the number of EBT customers at the Midtown Market, compared to last year. We’re excited to see EBT services launched at the Minneapolis and Northeast Markets this summer, and equally grateful that community partners sponsored the extra incentive so more people can come out and purchase delicious, affordable food!”

According to a recent Blue Cross and Blue Shield of Minnesota (Blue Cross) study, only 15 percent of Minnesota adults eat the recommended amounts of fruits and vegetables daily. That means the vast majority of people are falling short of a balanced diet. The Market Bucks promotion provides greater access to fruits and vegetables, which can help people maintain a healthy weight and stay well. Access is especially important to EBT recipients, who don’t always have affordable fresh produce nearby— the closest stores may be convenience stores with little or no affordable and fresh produce.

“We’re all invested in this effort because we care about the health of Minnesotans and building healthier communities so that the healthy choice becomes the easy choice,” says Dr. Marc Manley, Chief Prevention Officer for Blue Cross. “With more than 60 percent of adult Minnesotans overweight or obese – and at risk for a host of serious diseases and conditions that drive up health care costs – access to affordable, fresh produce is an important step toward addressing the obesity epidemic.”

The program is the result of a unique community partnership between the three farmers markets, Blue Cross and Blue Shield of Minnesota, the Institute for Agriculture and Trade Policy, the City of Minneapolis, Hennepin County, the Statewide Health Improvement Program of the Minnesota Department of Health,
and the Communities Putting Prevention to Work initiative of the American Recovery and Reinvestment Act of 2009.

The partners also kicked off a promotional campaign aimed at welcoming EBT users to the farmers markets. The campaign features multi-lingual outreach at the markets and in the community, advertising on the radio, buses, and at transit stops, and signage at markets to make it easier for EBT shoppers to navigate the markets.

“We know that price and access are common barriers to eating healthier, and this program works to remove those barriers,” says JoAnne Berkenkamp at the Institute for Agriculture and Trade Policy. “Expanding EBT usage at these markets not only means more Minnesotans are eating healthier, it provides another market for local farmers to sell their produce. Already the results are promising.”

When the market season ends, the partners will engage in an evaluation effort to assess the program and capture lessons learned. As a pilot program, the evaluation will inform decisions about future efforts.

“In the future, we’d like to continue to see increased use of farmers markets and more people eating fresh fruits and vegetables,” says Gretchen Musicant, health commissioner of the City of Minneapolis. “We’re all invested in this effort because we care about healthy communities.”

# # #

Ben Lilliston

August 18, 2010

What health care reform means for rural communities

The challenges of providing adequate health care for rural residents has been a common theme throughout the Midwest Rural Assembly. Stephanie Larson of the Center for Rural Affairs discussed how the recently passed health reform law could benefit rural communities.

Many farmers are self-employed and must travel great distances to find health care. There are too few doctors in rural areas. Additionally, one in five farmers has medical debt. Larsen outlined several provisions in the new health care law that will help address these issues. 

Many aspects of the new health care law will take affect in 2014; however, some aspects of the law will be implemented more immediately. As of July 1, 2010 insurance companies must permit adult children under the age of 26 to remain on their parents insurance plans. Additionally, patients who fall into the Medicare “donut-hole,” a gap in prescription drug coverage that patients must cover out of pocket, will receive $250 to apply to drug costs that would not be otherwise covered. Also starting July 1, the government, at either the state or federal level depending on the state’s preference, will create “high-risk pools” for people with pre-existing and chronic conditions who have been uninsured for six months or longer. 

September 23, 2010 is another important implementation date of the health reform law. Larsen reported that after September 23, insurance companies will no longer be able to use rescissions, a term that refers to denying patients health insurance based on previous health conditions or errors in paperwork, even if their premiums have been paid. 

Additional aspects of the law will continue to be phased in beginning in 2011 and continuing through 2014.  Some of these aspects relevant to rural communities include incentives for health care providers to increase primary and preventive care, incentives for doctors practicing rural medicine, a 50-percent discount on drugs that fall into the Medicare prescription drug benefit program donut-hole, and a provision that will require nearly all Americans to obtain health insurance either through programs like Medicare or Medicaid, government provided vouchers, or private coverage. 

By Wade Hauser

Ben Lilliston

August 17, 2010

USDA says “Think regionally”

Thinking regionally and strengthening VVasqconnections with urban centers are essential to strengthening economic activity in rural communities, Victor Vasquez, U.S. Department of Agriculture Deputy Under Secretary for Rural Development told participants at the Midwest Rural Assembly today.  

Vasquez talked about the need to think regionally on economic development, and to institutionalize that thinking in policy discussions. In particular, it's important for rural communities to strengthen connections with larger cities. "When it comes to food or fuel, you can’t walk into a store without finding something that has a relationship to rural America," said Vasquez. "The next few years are going to be tough due to the budget situation. We’ll hear more about what we can do to improve and how we can work together."

Vasquez outlined the key areas of focus for the USDA's Rural Development program in the next several years:

1. Local and regional markets for farmers through the Know your Farmer, Know your Food program. "We’ve seen nothing but success."

2. Expanding broadband access. It will make rural communities more competitive economically. "It’s not just about technology. It’s going to change the nature of education for children who live in poor, rural communities. It will change how they perceive education and the world."

3. Renewable energy. The Department is working closely with the Department of Energy and other partners to reduce and eliminate U.S. dependence on foreign oil. "Ultimately, this is how we view our natural resources and the environment and do things in a better way." He anticipated an enhanced level of collaboration with DOE that could result in more announcements supporting energy efficiency in the months to come.  

4. Better land management. USDA oversees tens of thousands of acres of public land. The agency is studying how it can work better with the communities around that land, along with state and local governments, to increase economic development and better manage the land.

After outlining these key priorities, he returned to the need to think regionally, like the Midwest Rural Assembly is already doing. When asked how those outside the USDA can help support the efforts of the agency, Vasquez urged participants to continue to educate people about the importance of agriculture and rural communities to the economy and the country. "We need to convince people that agriculture and people in rural communities are a huge part of this economic engine" and continue moving forward.  

 

Ben Lilliston

Not your grandfather's energy utility

The small town of Milan, Minnesota is trying an innovative approach to reduce it's energy burden. At the Midwest Rural Assembly today, Cheryl Landgren of the Greater Milan Initiative and IATP's Shalini Gupta told participants about setting up the first rural sustainable energy utility (SEU) to help reduce the town's energy costs while supporting larger community goals of job creation and population retention.

Homes and buildings in rural communities like Milan often use a lot of energy and are a high cost for rural residents. Winter heating bills are particularly tough on low-income residents. The Greater Milan Initiative is now setting up an SEU: a model developed by the Center for Energy and Environmental Policy at the University of Delaware. SEUs create long-term community infrastructure around reducing energy usage and costs and promoting energy production where it is used.

The Center for Earth, Energy and Democracy at IATP is continuing work with the Greater Milan Initiative to get this new SEU off the ground. Look for more details soon.

Ben Lilliston

Navigating the Farm Bill for beginning farmers

Thinking about getting back to your roots and farming/ranching? Well you might get help from an unlikely place—the farm bill. The 2008 farm bill established several new loans and grants specifically designed for beginning farmers. There might be something for you whether or not you are looking to go organic.

Traci Bruckner (Center for Rural Affairs) sat down with several of us at the Midwest Rural Assembly to talk about provisions in the last Farm Bill focused directly on beginning farmers and ranchers. She mentioned the Land Contract Guarantee Program, Direct/Guaranteed Loan and several other programs directed towards sustainability.

She cited a South Dakota grass-fed beef rancher who was able to get reimbursed for 90 percent of his expenses to establish his grass forage, new fencing and a watering system for each paddock through the Environmental Quality Incentives Program (EQIP).

But it may not be that simple. Lou Anne Kling and Loretta Jaus mentioned that some farmers who were eligible for various conservation programs were denied grants. And that is where the expertise of Bruckner comes into play—she works with farmers/ranchers to help them navigate the sometimes convoluted realm of Farm Bill grants and loans. 

So if you are thinking about starting up a farming or ranching operation the farm bill might be a great starting place. And if you are starting to look at the Farm Bill then Bruckner is a great resource.

By Andrew Gross

Ben Lilliston

Rural communities: Keep track of your water

The flooding in rural Iowa was terrible for the cattle, the corn and the people, but what about the wastewater treatment systems? Joe Dvorak and Dennis Siders from the Midwest Assistance Program have been thinking about Midwest wastewater system for years. At the Midwest Rural Assembly yesterday, they led a learning roundtable session to talk about the problems that rural Iowa faces and the water infrastructure challenges that we all face.

The day-to-day problems of aging infrastructure, lack of funds, declining budgets, and losing knowledgeable and skilled certified operators are all of major concern. Dvorak and Siders also noted that many small communities simply pay a flat rate for water coming into the town on a main pipe, but a lot of that water is lost to inefficient distribution systems and even holes down pipe from the main pipe meter. In a world where water is becoming the new oil, water inefficiency is no longer an option especially for rural communities.

So the answer is, well, complicated. Dvorak and Siders are clear: “keep track of your water.” And although the motto is simple, the implementation is anything but easy. Small communities are not keen on mandating water meters on end-usage sources because of the added cost. Plus local governments are not even charging the actual cost of the water usage because they don’t want to add any additional costs to struggling individuals. However, Dvorak and Siders maintain that through simple steps such as monitoring usage and plugging leaks to keep wastewater out and clean water in, small towns can lower their costs and conserve one of our most important resources.

Addressing water infrastructure in rural communities is very difficult, complicated and possibly expensive but still less than the cost of doing nothing.

By Andrew Gross

Ben Lilliston

Spinning wheels on rural broadband

At a learning roundtable at the Midwest Rural Assembly titled, "Broadband Regulation: What Title II Reclassification Means to Rural America" we tried to answer some tough questions: What does broadband access mean to rural America? How do different rural communities think of broadband access? What costs do rural communities bear that the urban areas don’t? Although, these questions are of central importance to rural America they are of little importance to the future of broadband. Why? The topic of broadband regulation has largely become a question of jurisdiction.

Pursuant to the 1996 Communication Regulation Act, the question of whether or not the Federal Communications Commission has regulatory authority over broadband has been anything but clear. Is broadband a communication service and therefore regulated by Title II or is it an information service and therefore not required to comply with Title II regulation? Without answering this question we won’t be able to talk about the more difficult questions of what to do about broadband access in rural locations, according to Parul Desai (Media Access Project) and Edyael Casaperalta (Center for Rural Strategies). We discussed the National Broadband Policy (proposed FCC regulation), but both Desai and Casaperalta stated that even if they thought the new policy to be wonderful, it will be locked up court because it’s impossible to know if the FCC has the regulatory authority to enact any of its proposals.

Desai and Casaperalta advocated for the importance of FCC regulation on broadband and mentioned some other possibilities to increase rural access to broadband. But in the end this roundtable was dominated by a single theme: The FCC needs to make clear its regulatory authority over broadband. Until this happens all wheels are simply spinning.

By Andrew Gross

Ben Lilliston

August 16, 2010

Listening to the call of your hometown

"I felt like I had nursed a low-grade feud with where I grew up" for many years, Debra Marquart told participants at the Midwest Rural Assembly in South Souix City, Iowa this morning. Marquart is an English Professor at Iowa State University and author of the book, The Horizontal World: Growing up Wild in the Middle of Nowhere.

MidwestRuralAssembly108

The book, spurred by the death of her father and wanting to understand more about the North Dakota town where she grew up, is the culmination of 14 years of research in small town libraries, cemetaries and interviews. Marquart left the small town of Napolean at age 17, but always carried the photo of the long road leading to her house with her. She went to college, toured with rock bands and then found teaching. The book documents her journey to learn more about the hometown and farm she grew up on but didn't pay attention to during much of her childhood spent working on the farm. As she described it, people there "lived on the narrow margin of life."

Her great grandfather emigrated from Russia in 1886 and built a large house with a balcony to look out over his acreage with the hope that future generations of his family would live on the land. But growing up in the 60s and 70s, Marquart couldn't wait to leave.

Marquart's book highlights one of the central themes of the Midwest Rural Assembly: How to engage young people in ways that they see the value of small towns and the land—before they leave. Several of the panels here later this afternoon will look at this challenge more deeply. Marquart was optimistic, describing how her hometown has actually grown in the last ten years. Many people are returning who left when they were younger. Others are attracted to some of the same traits that brought her great grandfather to North Dakota: low housing and land costs and a connection to the land. 

Ben Lilliston

August 13, 2010

The next generation for rural communities

One of the big focuses at next week's Midwest Rural Assembly will be on retaining young people. One of the leading afternoon sessions on Monday will feature young and inspiring leaders from the Midwest talking about the challenges of living in rural communities, and solutions for addressing those challenges. Check out this excellent story by Public News Service on the Midwest Rural Assembly and its focus on strategies to retain young people. 

More on the Midwest Rural Assembly next week! 

Ben Lilliston

Thinking about the Midwest Rural Assembly

“Anyone who is passionate about the rural Midwest should plan on attending the Midwest Rural Assembly.”  I made that statement last year in a post about the assembly, and I want to repeat it again this year. If you are one of those persons, I hope I will see you in South Sioux City, Nebraska on August 16 and 17.

What is the Midwest Rural Assembly?
The Midwest Rural Assembly is an effort to gather people who are care about the rural Midwest and hold a conversation about its future. In many ways it provides an opportunity to regionalize and localize the efforts of the National Rural Assembly by “providing an opportunity for rural leaders and their allies to unite in a common cause, advocating for common-sense policies that improve the outlook and results for rural places, people, cultures and economies.” After all, rural means different things to people in different parts of the country.

Even within the Midwest, people have different ideas about what “rural” means and what needs to be done to build a vibrant future for our region. One of the things I like about the event is that the agenda is shaped by the people who show up and are willing to do the work. That’s a lot like how things get done in our rural communities.

What’s happening this year?
The program is being positioned around the four guiding principles of the National Rural Assembly:
1. Investments in our People; 2. Health of our People; 3. Stewardship of Natural Resources; and 4. Quality in Education.

Last year I met some great people from whom I continue to draw inspiration and ideas (i.e., Neil Linscheid, who I wrote about in my last post). Unfortunately, I was too wrapped up in a presentation and some other activities last year to fully engage myself in the conversations. Hopefully that changes this year.

What I’m interested in
Lately, I’ve been thinking about the role education plays in the future of our rural communities. Specifically, I’m interested in the ideas put forth in Hollowing out the Middle. I’d very much like to hear what others have to say about the concept that educators and community members over-invest in those most likely to leave our rural communities at the expense of those who are committed to staying.

I’m going to look for places where that conversation is most likely to emerge. If this year’s event is like last year’s, many good conversations will take place in the hallways between sessions. If this is a topic of interest to you, I hope you will seek me out. And if you know of places where that conversation is already taking place online, I hope you will share them with me. It would be great to have interesting food for thought before the assembly meets.

Details of the 2010 Midwest Rural Assembly
Website: www.MidwestRuralAssembly.org
Date: August 16 & 17, 2010
Location: Marina Inn and Conference Center (Phone: 1-800-798-7980)
Social Media: Be sure to follow the Midwest Rural Assembly on Facebook and Twitter as well.

This blog first appeared at Reimagine Rural. Written by Mike Knutson.

Ben Lilliston

August 12, 2010

Curious critique of Wall Street Reform bill

The New York Times ran an odd commentary yesterday from Minnesota farmer Betsy Jensen concerned about how the new Wall Street financial reform bill could negatively affect farmers and “change the way I do business on the farm.”  She fears that all speculators, even traditional ones, coulld be driven out of the market: “It would be as if I'd lost a third of my customers.”

The commentary's tone was eerily similar to a July 14 Wall Street Journal article that appeared right before final Congressional vote on the Wall Street reform bill, claiming that somehow farmers would lose their ability to use derivatives to hedge risks.

Jensen's take on the Wall Street reform bill is curious for two reasons. One, the bill exempts legitimate end users of commodities like farmers, ranchers and business owners. Its target is Wall Street—not farmers (See IATP's statement on the bill). Second, farmers and agriculture were among the hardest hit by excessive Wall Street speculation in  2007–2008. In other words, farmers needed this bill. This is why House Agriculture Chair Collin Peterson and Senate Agriculture Chair Blanche Lincoln played leading roles in ensuring it was a strong bill. It's why farm groups from the National Farmers Union and National Family Farm Coalition to cotton and peanut growers—and IATP—were part of the diverse Commodity Market Oversight Coalition fighting Wall Street tooth and nail to get meaningful reform.

As a wheat grower, Jensen should have an inkling into the role of Wall Street speculators in wreaking havoc in agriculture markets. Last summer, the Senate Permanent Subcommittee on Investigations issued a report finding that commodity index traders drove wheat prices up and disrupted the market.

Jensen's piece strongly echoed the crowd opposing the Wall Street reform bill, warning that too much reform is a bad thing. Jensen cautioned that “reform must come small steps and not rapid action.” This undoubtedly will become the battle cry of Wall Street lobbyists as they try to slow down efforts by government regulators to implement the new law.

But for agriculture, reform can't come soon enough. It's too bad the Times didn't run a recent commentary from Nebraska Farmers Union President John Hansen instead. Hansen wrote, “This is good news for rural America. Most farmers get the short end of the stick when commodity markets fluctuate wildly, or when everyday commodity values are manipulated by out of control derivative speculation. In the last few years, most farmers were not able to capture the value of higher commodity prices in order to offset the higher costs for inputs like fuel and fertilizer, which forced many of them out of business or eroded their equity. It is clear that farmers and ranchers need stability in commodity markets for the products they buy and sell and the recently passed legislation will help bring order to our economy.”

Ben Lilliston

August 10, 2010

Unlocking fresh produce

This month's Radio Sustain is all about farmers markets, community gardens and empowerment. First, we talk with Joe Rice, director of the Na-Way-Ee Center School in south Minneapolis, about the school's garden and how it connects students with the earth, their food and their native traditions.

Next, Pastor Steve Lomen, operator of the St. Olaf Community Campus Mini Farmers Market, fills us in on his expanding vision. What used to be an empty grass plot on the campus grounds is now a 40' by 60' garden providing fresh food to the community—and he has even bigger plans.

Finally, IATP Food and Society Fellow Andy Fisher, executive director of the Community Food Security Coalition in Portland, has co-authored a new report detailing what stands between those on federal food assistance programs and the fresh produce at farmers markets. 

Listen to the entire episode here (mp3) and let us know what you think: Radio Sustain Episode 28 (August 2010)

Andrew Ranallo

August 09, 2010

Financial services industry still in denial: “History, get me a rewrite!”

Even before President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, articles and blogs had forecast the circumvention of the law by legions of clever lobbyists for Wall Street—many of them former regulators—through the federal rule-making process to implement the legislation. In more sophisticated techniques of circumvention than mere lobbying, some firms, such as Goldman Sachs, are reorganizing their trading operations and reapportioning their funds, so as to be able to reclassify their trades and thereby reduce regulatory scrutiny of their trade data reporting. For example, by moving personnel and funds from the proprietary trading division (trading on behalf of the firm itself) to the asset management division (trading on behalf of clients), Goldman hopes to circument the Volcker Rule in the legislation against trading with depositor's money, e.g., Federal Reserve funds almost donated by the government at historically low interest rates. It remains to be seen whether the Security Exchange Commission and Commodity Futures Trading Commission will judge the reorganized trading strategy as complying with the expressed will of Congress and the president.

Pecuniary interests, of course, explain part of the desire to remake the law to serve the perceived self-interest of the financial service industry. But underneath is a profound denial of the damage caused by deregulation and failure to enforce financial market regulation. This denial occurs even as the Bank of International Settlements and U.S. Federal Reserve Bank regulators reported in July that Goldman, Morgan Stanley, American Express and CIT were among the banks that underreported their credit derivative risk exposure (sub req.) by $400 billion in the first quarter of 2009, posing yet another systemic financial risk. Those who decry the new legislation as over-regulation do so not just for pecuniary reasons, but for reasons of self-exculpation. In a nutshell, if we can show there was no excessive speculation that triggered a financial meltdown, then there is no reason to re-regulate the financial services industry.

The strategy for denying the need to regulate financial services was aided by the Organization for Economic Cooperation and Development (OECD) in a “preliminary” study published during the last weeks of U.S. Senate debate on the financial reform bill. The study purported to show that excessive speculation did not occur in agricultural commodity futures markets and did not play a role in inducing extreme commodity price volatility. Indeed, the OECD authors claim that commodity index funds, such as those of Goldman and Morgan Stanley, helped to reduce price volatility by buying and selling more commodity futures contracts. Goldman cited the OECD report as proof in rebutting a July Harpers Magazine article by Frederick Kaufman that accuses the firm of  trading practices that increased food prices and led to widespread hunger in developing countries.

The OECD study has been thoroughly debunked by David Frenk and colleagues at Better Markets, Inc. Frenk et al. show that the OECD authors used a statistical analysis method, Granger causality tests, that is explicitly not designed to analyze “extremely volatile dependent variables,” such as commodity prices circa 2007–2008. Furthermore, the OECD attempts to demonstrate that supply-and-demand factors accounted for extreme price volatility is not coherent, according to actual trade data—especially for energy commodities. Despite the convincing rebuttal of the OECD study, we will not be surprised to see the study cited as authoritative by those who consider the new U.S. legislation to portend over-regulation.

Another tactic to circumvent U.S. legislation will be to fight the European Commission's proposal to expand its Market Abuse Directive to cover over-the-counter (OTC) trades that currently are all but unregulated. The weaker the EC regulation, the easier it will be for U.S. firms to continue business as usual in EU markets. The Wall Street reform legislation severely restricts OTC trades (i.e., firm-to-firm transactions whose price information is not reported in time to contribute to price discovery)—a U.S. legal requirement for commodity exchange operations. In a July 23 submission, IATP supported the commission's proposal to expand its rulemaking to cover OTC trades and responded to other questions that will be discussed at a public hearing on commodity derivatives regulation to be held September 21 in Brussels. If the new U.S. and EU financial and commodity market rules are successfully implemented and enforced, the opportunity for the financial services industry to rewrite the history of a decade of deregulation to justify its opaque and unfair trading practices will be greatly reduced.    

Steve Suppan

August 06, 2010

Climate, agriculture and immigration

Two of the biggest hot button issues in Congress this year have been climate change and immigration. Now, new research published in the Proceedings of the National Academy of Sciences indicates that the two issues are linked.

Researchers from Princeton University conservatively estimated the future impact of climate change on the yields of Mexican-grown corn and wheat. They looked at migration data in Mexico from 1995-2005 (the ten years following the passage of the North American Free Trade Agreement). After accounting for a number of variables, they concluded that a 10 percent reduction in crop yields would lead to an additional 2 percent of the Mexican population emigrating. Depending on how fast or slow climate change occurs, the result could be between 1.4 and 6.7 million Mexicans emigrating to the U.S. by 2080 as a result of declines in agricultural productivity.

While this research focuses on Mexico, there is little question that migration driven by a decline in crop yields is a big issue in many other parts of the world, including much of Africa, India, Bangladesh, and Latin America, according to the researchers.

The debate in Congress over climate change was dominated by the costs of implementing various strategies to reduce greenhouse gases. Less discussed were the costs of inaction. Perhaps this is why Congress failed to act.

Ben Lilliston

August 05, 2010

Food safety on the cheap

While billions of dollars are invested each year by food and agriculture companies in developing new technologies, only a small fraction is invested in ensuring food safety, writes IATP's Steve Suppan in the latest issue of the Global Food Safety Monitor.

The latest example of this unfortunate practice is the enormous investments being made in developing new food and agriculture applications for nanotechnology: the manipulation of molecular level matter. Governments and companies are developing nanotech applications in food packaging, plant production, animal breeding and food appearance, without establishing or investing in any clear system to ensure safety.

The Global Food Safety Monitor reports from this summer's NanoAgri 2010 conference in São Pedro, Brazil, where over 300 scientists and a handful of regulators and nongovernmental organizations discussed the latest nanotech applications and national and international regulatory issues.

The Monitor reports, "For governments hoping that nanotechnologies will create a new generation of jobs and wealth, product development, and not development of environmental, health and safety data about nanotechnologies, is the priority."

Ben Lilliston

August 03, 2010

Environments, individuals and the food gap

With 30 percent living below the Mwinnepoverty line, Hartford, Connecticut, is nearly the poorest city in the United States according to the 2000 Census. From 1979 until 2003, Mark Winne served as Executive Director of the Hartford Food System a grassroots nonprofit organization “dedicated to fighting hunger and improving nutrition." This experience, as well as co-founding multiple food policy organizations (including the Community Food Security Coalition) has given Winne a unique, multi-level view of food insecurity.

Our food system today is at an interesting junction: While the organic and local food movements are gaining momentum at an unprecedented rate, hunger, food insecurity and obesity are higher than ever. At IATP's event "Closing the Food Gap" last night, Winne continually returned to the central question: Where does responsibility lie? With the individual or in the food environments we have created? Winne proclaimed to have "one foot firmly planted in each camp," despite also being aware that in today's food environment—especially in low-income communities where healthy food is often scarce—one must be extremely strong, and discerning, to make healthy decisions.

So what changes are necessary to make healthy food more accessible and individuals more prepared to make the decision to eat healthy? Winne listed environmental changes as simple as building more supermarkets, altering bus routes to reach healthy foods, building farmers markets in food-scarce neighborhoods and efforts like community-owned grocery stores like People's Grocery in West Oakland.

On the individual level, Winne spoke of competing with the barrage of billboards, soda machines and television ads that children are exposed to by including more food education—cooking, preparation and nutrition—in our schools' curricula. And, on a larger scale, encouraging participation in "food democracy." As the food industry becomes more centralized, and more powerful, are we truly able to impact what food enters our communities? Yes, Winne admitted, as consumers we are able to vote with our dollars, but we are competing with powerful corporations. Low-income neighborhoods often become overrun with fast food operations while supermarkets are nowhere to be found—what good is a vote when nothing on the ballot is beneficial? 

Winne's answer? Food Policy Councils. Yes, the national fight must continue through avenues like the Farm Bill and the Child Nutrition Reauthorization Act, but local change can happen now. State and local policy councils are springing up across the country thanks to Winne's model of interacting constructively with local and state government to bring about change. Justice, not charity: Individuals, taking responsibility for the environment in which they live, to help bring healthy, sustainable solutions to hunger, and diet-related illness. 

For more information, check out Mark Winne's books Closing the Food Gap and the upcoming Food Rebels, Guerrilla Gardeners, and Smart-Cookin' Mamas: Fighting Back in an Age of Industrial Agriculture

Andrew Ranallo